With an agreement for back rent already reached, the city of Mountain View seems to be on its way to resolving a contentious court dispute with the huge entertainment conglomerate Clear Channel Communications — or whoever operates Shoreline Amphitheatre these days.
Although virtually no details were made public as of the Voice’s press time, it appears that the city will win at least a portion of the $15.6 million it claims concert promoter Live Nation — which was spun off by Clear Channel in December of last year — owes for failing to pay the city according to a lease signed more than 20 years ago.
Word of the settlement, which requires the parties to reach a lease agreement, came Monday from Superior Court Judge Randall Schneider, who is presiding over the multi-million dollar lawsuit involving various claims and counter-claims. Although the trial was to start Monday, Judge Schneider postponed it for a month, until May 15, to give the parties time to resolve the remaining issues in the case.
If the recent city-commissioned audit is accurate, the concert promoted Bill Graham Presents (now owned by Live Nation, although it was a subsidiary of Clear Channel at the time) has systematically hidden millions of dollars in revenue that resulted in significant underpayments of rent to the city, which owns the 65-acre Shoreline property. With penalties, the amount exceeds $15 million, according to the city.
During the run-up to the trial, Clear Channel continued to deny responsibility for the back rent, despite what appeared to be persuasive evidence contained in the city’s $484,000 audit. The bulk of the payments in dispute are from various side deals in the lease, which include an agreement that Shoreline’s operator pay the city a percentage of revenue from other venues it operates nearby, such as HP Pavilion in San Jose and AT&T Park in San Francisco.
The city’s legal team, led by city attorney Michael Martello, has been tenacious in its pursuit of the Shoreline revenues, and has been able to convince the city council to go along. Martello views the case in David-and-Goliath terms, with tiny Mountain View (annual budget of about $80 million) taking on Clear Channel, one of the largest entertainment conglomerates in the country (with revenues in excess of $20 billion when the case was filed).
Now that the operator has agreed to negotiate the dispute, it appears that the city will at least recover the back rent it is owed. If other parts of the case are equally solid, the city will take home a substantial settlement, and face a party much more willing to sign a new rental agreement which would avoid the pitfalls that nearly brought this case to trial.
That would be in the best interest of all parties, and it would mean that Live Nation, the largest concert promoter in the country, would continue to book acts at Shoreline. Without Live Nation, the city would be hard-pressed to find a promoter that could generate even a fraction of Shoreline’s current revenue.
