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Universal Sues Concert Consolidator

October 14, 1998|MARLA MATZER | SPECIAL TO THE TIMES

Los Angeles-based Universal Concerts, a unit of Seagram Co.-owned Universal Studios, has sued concert business consolidator SFX Entertainment for alleged breach of contract.

The suit, filed in Los Angeles Superior Court, is related to SFX's acquisition, announced in December 1997, of Houston-based concert firm PACE Entertainment.

The suit highlights the fear among many in the concert industry--including promoters, managers and ticketing executives--that SFX is seeking to corner the live-entertainment business as it engages in a billion-dollar string of acquisitions.

According to the complaint, Universal entered a partnership in 1988 to own and operate amphitheaters with PACE, and to co-promote concerts at these venues.

As part of the agreement, according to Universal, PACE and two of its key executives, Brian Becker and Allen Becker, agreed to not own or operate any other venues in the Atlanta and Dallas markets.

Also, according to the complaint, PACE agreed to not promote any other concerts in those markets unless it allowed Universal to participate on an equal basis.

After New York-based SFX acquired PACE, the complaint states, PACE and the Beckers became connected with Concert Southern, another SFX promoter that operates in the Atlanta area.

"The PACE defendants and their affiliates now have an economic incentive to steer profitable concert opportunities to competing venues . . . rather than to the partnership's venues," the suit contends.

Universal claims that although SFX stated in public filings that it planned to seek a waiver to the Universal agreement, "SFX never sought or obtained a waiver from Universal Concerts before or after consummating its acquisitions. . . . Since the closing of the acquisitions, the PACE defendants have steadfastly refused to comply with their non-competition and co-promotion obligations."

A Universal spokesman said it is the company's policy to not comment on pending litigation. SFX Chairman Robert F.X. Sillerman was on vacation and unavailable for comment Tuesday.

Michael G. Ferrel, chief executive of SFX, called the suit "a dispute over the interpretation of contractual issues. . . . We don't consider it to be material to the overall business of SFX."

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