The U.S. Justice Department said Monday that it will file a civil antitrust lawsuit to block the proposed merger of Orange County's two giant outdoor rock and pop music facilities.
"It appears that the proposed transaction would create a monopoly in concert venues in Orange County," said James F. Rill, assistant attorney general in charge of the antitrust division. "We found no circumstances that would justify this result, which we believe would adversely affect consumers."
The government, which has been investigating the case since March, will allege that the proposed merger of Pacific Amphitheatre in Costa Mesa and Irvine Meadows Amphitheatre in Irvine would violate the Clayton Act because it might substantially lessen competition in the rental of concert venues in Orange County, Rill said in a prepared statement. These are the county's only two rock and pop concert venues larger than 2,500 seats.
The Nederlander Organization, a New York firm that owns and books the Pacific Amphitheatre, had proposed buying controlling interest in the Irvine Amphitheatre in partnership with Ogden Corp., a national concessionaire. Irvine Meadows has an exclusive booking contract with Avalon Attractions, the Southland's largest independent concert promotion firm.
Arguing in support of the deal, Nederlander officials said competition would be increased because they would allow access at both theaters to any interested booking agency.
But Justice Department investigators apparently did not accept the Nederlander argument that a joint operation ultimately would benefit ticket buyers.
In San Francisco, Assistant Atty. Gen. Howard J. Parker, the lead attorney on the case, declined comment other than to say that the case will be filed this week in Los Angeles.
Nederlander attorney Neil Papiano said Monday that he believes the government's case is baseless.
"But that's what the courts are for and we'll see," he said. The Justice Department has "lost two similar cases lately (including) a big one in Las Vegas about a month ago," Papiano said. "They've been consistently wrong in that respect."
Papiano said the Las Vegas antitrust suit was "a stronger case" than the Orange County case because it involved the merger of three firms, leaving only one theater operator for the entire city.
The pending antitrust suit could give a boost to a separate bid to purchase the Irvine Amphitheatre by one of its current partners, Robert Geddes, and former MCA Chairman Irving Azoff. Geddes declined comment and Azoff could not be reached for comment Monday.
Geddes is Irvine's managing partner. He also owns 50% of Avalon Attractions. Developer Donald M. Koll, chairman of the Koll Co., heads the private consortium that owns Irvine Meadows.
The Nederlander Organization, which books and promotes concerts nationwide, and Ogden Corp. reportedly hoped to acquire 75% interest in Irvine Meadows for about $8 million. In return, Nederlander had offered a 25% interest in the operation of the Pacific to the private consortium that owns Irvine.