US v. Columbia Artists Management, Inc.
| Citation | 662 F. Supp. 865 |
| Decision Date | 16 June 1987 |
| Docket Number | No. 104-165 (WCC).,104-165 (WCC). |
| Parties | UNITED STATES of America, Plaintiff, v. COLUMBIA ARTISTS MANAGEMENT, INC., et al., Defendants. |
| Court | U.S. District Court — Southern District of New York |
Ralph T. Giordano, Chief, Antitrust Div., U.S. Dept. of Justice, New York City, for plaintiff; Robert Einstein, Antitrust Div., of counsel.
Rosenman, Colin, Freund, Lewis & Cohen, New York City, for defendants; Seymour D. Lewis, of counsel.
Columbia Artists Management Inc. ("Columbia"), and Community Concerts Inc. ("Community") have moved this Court to terminate the Final Judgment entered in this action on October 20, 1955. The United States has consented to the entry of an order terminating the Final Judgment and has submitted a legal memorandum in support of that result. For the reasons outlined below, the motion is granted.
On October 20, 1955, the United States filed in this Court a civil complaint against Columbia, its subsidiary Community, National Concert and Artists Corporation, and its subsidiary Civic Concert Service, Incorporated. Columbia and National were managers of concert artists and their subsidiaries were engaged in the organization and maintenance of audience associations. The complaint charged the defendants with conspiracy to restrain and monopolize trade in the management and booking of concert artists and in the formation and maintenance of organized audience associations in violation of Sections 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1, 2. The complaint alleged that the conspiracy began in or about 1933 and continued up to the date of the filing of the complaint.
As a result of the foregoing activities, the complaint charged that competition in the management and booking of artists and in the maintenance of organized audience associations was suppressed; artists were compelled to subject themselves to the management and control of the defendants in order to obtain adequate bookings; organized audience associations were deprived of access to artists not controlled by defendants; and independent concert services were excluded from the concert service business and were subject to the domination and control of Columbia and National.
The Final Judgment was entered into on October 20, 1955. Section IV of the Final Judgment contains traditional injunctions against illegal conduct, barring defendants from agreeing to allocate or divide territories or markets or otherwise refrain from competing in the organization or maintenance of audience associations, or agreeing to exclude any person from engaging in the organization or maintenance of audience associations. Section V of the Final Judgment imposes various affirmative duties upon defendant Community, and Section IV enjoins defendants from a variety of anticompetitive activities.
The government has consented to termination of this Final Judgment because it believes that continuation of the Final Judgment no longer serves the public interest in "free and unfettered competition." Northern Pacific Railroad v. United States, 356 U.S. 1, 4, 78 S.Ct. 514, 517, 2 L.Ed.2d 545 (1958). According to the government, the Final Judgment's prohibitions regarding the organization and maintenance of audience associations and the affirmative requirements imposed upon the defendants are no longer necessary in view of the current state of the concert industry, and may actually inhibit rather than promote competition.
In addition, maintaining the judgment in perpetuity, as it is currently written, would not be consistent with the current Department of Justice Antitrust Division policy of limiting consent judgments to a period of ten years, even in the case of per se violations of the Sherman Act. In 1955, the year of entry of the Final Judgment, the maximum penalty for violation of the Sherman Act by a corporation was a $50,000 fine. At that time, the Antitrust Division sought perpetual decrees so that, in the event of subsequent violations, more substantial penalties could be levied through criminal contempt proceedings. In 1974, however, when Sherman Act violations were made felony offenses, the maximum fine which could be levied against a corporation was increased to $1,000,000. See 15 U.S.C. §§ 1-3. Because of this change, and for other reasons, the Antitrust Division adopted a policy several years ago of generally limiting consent judgments to a term of ten years. According to the government, termination of the Final Judgment at this time would be consistent with that policy.
The government believes that the substantial changes that have taken place in the presentation of concert artists since 1955, the year the decree was entered, justify termination of the Final Judgment. At the time the complaint was filed, Columbia and National were the two largest managers of performing artists in the country, managing or representing, according to the complaint, artists whose bookings accounted for more than 80% of all artists' bookings in the United States. In addition, both Columbia and National, through their respective subsidiaries, Community and Civic, conducted concert service businesses engaged in forming and maintaining organized audience associations throughout the United States. According to the complaint, Columbia had more than 800 organized audience associations and National had more than 400. Both Columbia and National followed a similar pattern in organizing and maintaining audience associations. Each entered into contracts with its audience associations whereby it was made exclusive agent to engage all artists performing before such associations.
The complaint against the defendants stated that there were three outlets for concert artists at the time the decree was entered: local impresarios, educational institutions, and "most important of all, organized audience associations." The complaint asserted that "the majority of bookings are made with organized audience associations." According to the government and defendants, in the 30 years since entry of the decree, the audience association has become an increasingly less significant presenter of concert artists.
A number of factors have contributed to the audience association's diminishing segment of the market. The greatest change in the market has been the dramatic increase in the number of presenting organizations. Colleges and universities, which were acknowledged in the complaint as one of three primary groups of presenters of concert artists, have grown in prominence and constitute the single largest segment of the market for presentation of concert artists.
Since entry of the Final Judgment, there has also been a proliferation in the number of civic organizations presenting concert artists. In large part, this is attributable to subsidization of arts programs by federal, state and local governments. In 1956, one year after the Final Judgment was entered, Congress created the National Foundation on the Arts and Humanities, an independent agency of the Executive Branch of the federal government. The Foundation is composed of the National Endowment for the Arts, the National Endowment for the Humanities and a coordinating council on the Arts and Humanities. The National Endowment for the Arts supports dance programs, musical performances, and other cultural events by providing direct grants to performing artists, music centers, choruses, symphony orchestras and local art councils. Appropriations to the NEA for fiscal year 1984 were over $160 million.
In addition to federal funding of arts programs, there are arts councils in practically every state in the United States. At the time the decree was entered, state and local arts councils were virtually non-existent. In 1981-82, in New York alone, the State Council on the Arts spent over $32 million on its local assistance program to support a wide variety of the arts in New York. Through its Music Program, the Council helps support orchestras, opera companies, choral societies, and numerous other musical performers and presenters of musical performances. The Council's Dance Program and Theatre Program help support dance companies and theatre groups throughout the state. The Council's Presenting Organizations Program is dedicated to supporting a wide range of organizations committed to the presentation of quality performing arts programs in their communities.
The result of this massive increase in federal and local assistance of art programs since entry of the Final Judgment has been a dramatic increase in the number of local organizations sponsoring concert performances. When the decree was entered, in many communities the only organization which presented concert performances was the local audience association. Today, in large part the audience association has been supplanted by one or more presenters, many of which receive subsidization from governmental sources. In addition, many local presenters of concert performances are supported by local citizens as well as local businesses.
Orchestras have also become an increasingly important presenter of concert artists. According to the Chief Executive Officer of the American Symphony...
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