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The day the music died | 1, 2, 3


Since the day SFX went public in early 1998 -- with CEO Robert Silberman ringing the bell of the New York Stock Exchange, flanked by loyal sidekick Rod Stewart, who Silberman guaranteed in excess of $350,000 a night -- the company has radically transformed the concert industry. In going public, SFX sought to guarantee a season-to-season predictability in a notoriously volatile business dependent on the ebbs and flows of artists' popularity and fans' willingness to spend money on tickets to see them. The collapse earlier this month of Diana Ross and the ersatz Supremes "reunion" tour is a sign that the SFX formula -- big names and high prices -- doesn't always work.

"You cannot assume that because everyone is flocking to Mötley Crüe one year they're going to go in the same numbers to James Taylor the next year," comments a skeptical Ben Liss, who left Don Law's concert production company in Boston shortly after Law sold out to SFX in 1998. Liss went on to found the North American Independent Concert Promoters Association (NAICPA), which is attempting to defy SFX by coordinating national-scale tours with the remaining independents. (Scher's Metropolitan and Jerry Michaelson's Chicago JAM Productions are the largest remaining indie producers).




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"SFX is the 800-pound guerilla," says Gary Bongiovanni, editor of the concert industry trade journal Pollstar, "and nobody else is anywhere near 200 pounds."

SFX's modus operandi from the outset has been to squash competition from the independents by offering unprecedented guarantees to artists -- a practice that has led to astronomical ticket prices and rise in 'facility' fees, adding as much as $4 to $5 to the price of a ticket at SFX venues (on top of the $5.50 or so usually charged by Ticketmaster, with which SFX has an exclusive relationship). This year alone, the company locked up at least 20 national touring acts with outright purchases -- including N'Sync, Ozzy Osbourne, Tina Turner and Pearl Jam.

SFX has such a lock on concert venues that it is nearly impossible to launch any national tour without dealing with the company in one form or another. Its dominance of venues has been marked by an epidemic of renaming, as one arena after another is christened in honor of new corporate sponsors: Fleet Pavilion, Continental Arena, Staples Center. In April the company unveiled its latest addition to the legacy of rock 'n' roll: Pringles as the new "official salty snack of SFX venues," featuring upturned potato chip canisters cum conga drums for concertgoers anxious to try their hand at percussion, courtesy of a multimillion-dollar promotional deal with Procter & Gamble.

Now, the accumulated might of SFX and Clear Channel threatens to occupy the terrain of live rock 'n' roll with an overpowering concoction of marketing muscle and promotional overkill.

Three years ago, Clear Channel was a provincial power in the San Antonio radio business. In 1996, the company took a leading role in lobbying Congress for the Telecommunications Reform Act of 1996, which expanded the number of stations that could be controlled by a single owner from four to eight in major national markets. Clear Channel went on a blitzkrieg of acquisitions after the act was passed. It took just 18 months for control in the radio industry to shift overwhelmingly to two companies: Clear Channel and Infinity/CBS, whose combined billings, according to the trade publication Duncan's American Radio, are 10 times those of its closest competitor, ABC.

Ironically, listenership appears to have suffered as consolidation has intensified. According to Duncan's, the radio audience has dropped an alarming 12 percent over the past decade. The antidote, Duncan's suggested, would be "a commitment to localism -- local operations, local research, local programming decisions, local promotion, local news and events."

. Next page | Smells like payola
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