Jamsports and Entertainment v. Paradama Production, 02 C 2298.
| Decision Date | 19 August 2004 |
| Docket Number | No. 02 C 2298.,02 C 2298. |
| Citation | 336 F.Supp.2d 824 |
| Parties | JAMSPORTS AND ENTERTAINMENT, LLC, Plaintiff, v. PARADAMA PRODUCTIONS, INC., et al. Defendants. |
| Court | U.S. District Court — Northern District of Illinois |
Bruce S. Sperling, Greg Shinall, Robert David Cheifetz, Thomas David Brooks, Sperling & Slater, James David Roberts, Margaret Egan Lawler Piper Rudnick LLP, Jeffrey Singer, Phillip Mark Crane, Paul E. Wojcicki, Segal, McCambridge, Singer & Mahoney, Ltd., Heather Elaine Ross, Chicago, IL, for Plaintiff.
Steven F. Pflaum, Sandra A. Muhlenbeck, Matthew Boyd Steffens, McDermott, Will & Emery LLP, James David Roberts, Piper Rudnick LLP, Lee A. Freeman, Jr., James T. Malysiak, Chris C. Gair, Joseph Paul Adamczyk, Freeman, Freeman & Salzman, P.C., Chicago, IL, Kevin L. Shoemaker, Shoemaker, Winkler, Howarth & Taylor, LLP, Timothy J. Owens, Owens & Krivda Co., L.P.A., Columbus, OH, for Defendants.
This case involves the promotion of Supercross, a championship dirt track stadium motorcycle racing. JamSports and Entertainment, LLC, a sporting events promoter, sued Paradama Productions, which does business as AMA Pro Racing, for allegedly breaching a contract that would have given JamSports the right to produce and promote the AMA Supercross Series for 2003-2009.1 JamSports also alleges that by entertaining a competing proposal from a subsidiary of Clear Channel Communications while negotiations were ongoing with JamSports and by imposing conditions for approval that had not been discussed with JamSports, AMA Pro breached a written agreement to negotiate with JamSports exclusively and in good faith. JamSports also has sued Clear Channel Communications and two subsidiaries (all of which will be referred to as Clear Channel) for tortious interference with contract for allegedly enticing AMA Pro to contract with Clear Channel to produce the AMA Supercross Series for the 2003-2009 seasons. Finally, JamSports alleges that Clear Channel's methods for obtaining the AMA contract constituted violations of §§ 1 and 2 of the Sherman Act.
More than a year ago, the Clear Channel defendants moved to dismiss JamSports' amended complaint. The Court dismissed Counts 9 and 10, which raised antitrust market allocation claims. Jamsports and Entertainment, LLC, v. Paradama Productions, Inc., No. 02 C 2298, 2003 WL 1873563, at *14 (N.D.Ill. Apr. 15, 2003). The Court also dismissed Counts 5, 7, 11, 13 and 14 to the extent that they alleged monopolization or monopoly leveraging in a geographic submarket, as opposed to a national market for the promotion of supercross. Id., 2003 WL 1873563, at *8, *13. JamSports then amended its complaint for a second time and restated Counts 5, 7, 9, 10, 11, 13 and 14. AMA Pro argues that the Court should dismiss Counts 9 and 10 of the Second Amended Complaint. These claims are identical to claims we dismissed in the Amended Complaint, and for this reason the Court dismisses them for the reasons previously stated. Clear Channel argues that Counts 7, 8, 11, 13 and 14 no longer remain in the case either because they allege monopolization of geographic submarkets only. Clear Channel Mot. for Summ. J. at n. 2. JamSports has failed to respond to this argument. After reviewing the Second Amended Complaint, the Court agrees with Clear Channel that Counts 7, 8, 11, 13 and 14 are based on the geographic submarket theory that we have rejected. Therefore, those Counts are dismissed and are no longer a part of this case.
Clear Channel now moves for summary judgment on all of JamSports' remaining claims. AMA Pro seeks summary judgment on the breach of contract claims. JamSports seeks summary judgment on two issues that are part of its antitrust claims and on its breach of contract claims against AMA Pro. For the reasons stated below, the Court denies JamSports' motion regarding the antitrust claims and grants in part and denies in part the remaining motions.
AMA Pro began sanctioning supercross races in the 1970s. Clear Channel entered the supercross promotion market through acquisitions. In 1996, PACE Motor Sports promoted all but one of the races in the AMA-sanctioned supercross series. SFX Entertainment bought PACE in 1998, and Clear Channel acquired SFX in 2000. With the acquisition of PACE and SFX, Clear Channel succeeded to their contract to produce the AMA-sanctioned supercross series for the 1997 to 2002 seasons. The contract required Clear Channel to hold the races from January to May. Since 1998, sixteen supercross races have been held each year, except for in 2001, when only fifteen races were held.
In May 1999, AMA Pro and Clear Channel began negotiating a new promotion contract for the 2003 season and beyond. While these negotiations were in process, AMA Pro began discussions with three other promoters, including JamSports in 2001. On November 2, 2001, AMA Pro and JamSports signed a letter of intent regarding the promotion of the AMA-sanctioned supercross series for the 2003-2009 seasons. The portions of the letter of intent that are relevant to the Court's decision read as follows:
AMA Pro Racing, owner of the Supercross Series, and JamSports hereby express their intent to enter into an agreement to promote AMA Supercross events and undertake related sales and marketing matters....
1. Framework. AMA Pro Racing and JamSports shall agree to produce and promote not less than fourteen (14) and up to a mutually agreed upon number of AMA Supercross events per season (currently January 1 through the first week of May) for a seven (7) year period beginning January 1, 2003, with an opportunity to extend the term based on criteria such as operating issues, financial issues, brand development and event attendance and such other criteria as to be further clarified by the parties hereto....
. . . . .
12. Confidentiality. AMA Pro Racing and JamSports each agree that the terms of this letter agreement, and, in particular, its financial terms, are private and confidential. Neither party hereto shall divulge the terms of this letter of intent to any other persons in any manner, except each party may so inform its attorneys, accountants and financial consultants as reasonably necessary for the performance of its obligations hereunder and under the Promotion Agreement, who, however, shall be instructed not to divulge its terms to any other persons except and unless as they may be finally required by law or court process. In the event of a breach of the foregoing, the damaged party may seek recovery of all damages as allowed by law, including, without limitation, injunctive relief.
13. Exclusivity. Each of the parties agrees that for a period of ninety (90) days after the date this letter is fully executed by the parties hereto and for a period of [sic], AMA Pro Racing and JamSports shall negotiate exclusively and in good faith with one another, and neither party shall enter into any discussion or negotiations with any third party with respect to the subject matter hereof. If a party hereto shall receive any offer from a third party with respect to the subject matter hereof, the receiving party shall promptly notify the other party hereto of the offer, the name of the offeror and the terms thereof. The parties shall use their best efforts, negotiating in good faith, to enter into the Promotion Agreement within thirty (30) days from the date this letter is fully executed by the parties hereto.
14. Final Contract. Except for the obligations set forth in Sections 12, 13 and 16, this letter of intent is not binding in any way upon the parties hereto. This letter of intent is expressly conditioned upon the parties entering into the Promotion Agreement. JamSports' counsel shall prepare and submit to AMA Pro Racing, and its counsel a draft of the Promotion Agreement as soon as is reasonably possible after the date upon which this letter of intent is fully executed by the parties hereto.
15. Closing. The transaction contemplated hereby shall close no later than ninety (90) days from the date this letter is fully executed by the parties hereto and at such time and place as the parties hereto shall agree upon, subject to the satisfaction or waiver of any conditions precedent to closing which are agreed upon by the parties.
16. Publicity. Neither party hereto shall issue any press releases or other announcements regarding this letter of intent or the transaction contemplated hereby unless such release or announcement first shall be approved by the other party or shall be required by law.
Three days after signing the letter of intent, AMA Pro sent a letter to facilities managers advising them that AMA Pro "has entered into an agreement with JamSports, a division of Chicago-based Jam Productions, for the exclusive promotion of AMA Supercross events for the 2003-2009 seasons." 2d Am. Compl., Ex. B. The letter "authorize[d] JamSports and/or Jam Productions to negotiate with your facility, on an exclusive basis, regarding the organization and production of future AMA Supercross events." Id. The following day, AMA Pro announced on its website that it had "selected JamSports and Entertainment as its new promoter partner for the AMA U.S. Supercross Championship Series commencing with the 2003 seasons and extending through the 2009 season." 2d Am. Compl., Ex. C. The website further explained that "[t]he decision was made by the Board of Directors of AMA Pro Racing after evaluating proposals from several companies, including Clear Channel Entertainment, the current promoter of AMA Supercross events." Id. On November 21, 2001, AMA Pro's attorney, Kevin Shoemaker, sent JamSports' attorney, Vicki Baue, a draft of the sanctioning agreement, accompanied by a letter stating he had provided "a copy of this agreement to Tim Owens, counsel for the American Motorcyclist Association ("AMA")," stating that "the final...
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