Tic-X-Press, Inc. v. Omni Promotions Co. of Georgia, TIC-X-PRES

Citation815 F.2d 1407
Decision Date01 May 1987
Docket NumberTIC-X-PRES,Nos. 86-8243,INC,86-8528,s. 86-8243
Parties, 1987-1 Trade Cases 67,551 , Plaintiff-Appellee, v. The OMNI PROMOTIONS COMPANY OF GEORGIA, Atlanta Coliseum, Inc., S.E.A.T.S., Inc., Defendants-Appellants., Plaintiff-Appellee, Cross-Appellant, v. The OMNI PROMOTIONS COMPANY OF GEORGIA, Atlanta Coliseum, Inc., S.E.A.T.S., Inc., The Omni Promotions Company, Limited, Defendants-Appellants, Cross- Appellees.
CourtUnited States Courts of Appeals. United States Court of Appeals (11th Circuit)

William G. Vance, June Ann Kirkland, Atlanta, Ga., for defendants-appellants.

John C. Butters, Atlanta, Ga., for plaintiff-appellee.

Appeals from the United States District Court for the Northern District of Georgia.

Before HILL and JOHNSON, Circuit Judges, and HENLEY *, Senior Circuit Judge.

JOHNSON, Circuit Judge:

I. INTRODUCTION

This is an appeal and cross-appeal from a judgment and award of damages and injunctive relief in an antitrust case brought under Section 1 of the Sherman Act. Plaintiff Tic-X-Press (TXP), a ticket-selling service located in Atlanta, Georgia, brought suit against the Atlanta Coliseum, Inc. (ACI), the Omni Promotions Company of Georgia (TOPCOG), the Omni Promotions Company, Limited (TOPCOL), and S.E.A.T.S., Inc. (SEATS). TXP's complaint alleged that the defendants violated the Sherman Act's prohibition against anticompetitive tying arrangements by conditioning the lease of the Omni Coliseum upon the use of SEATS, a ticket-selling agency affiliated with ACI, TOPCOL and TOPCOG. The district judge found that the defendants had violated the antitrust laws and awarded the plaintiff treble damages and injunctive relief as well as attorney's fees. ACI, TOPCOL, TOPCOG and SEATS appeal the district court's finding of antitrust liability and TXP cross-appeals both the damages award and the injunctive relief ordered by the district court. Both parties appeal the award of attorney's fees. We reject the arguments raised on all of these issues and affirm the district court.

II. FACTS AND PRIOR PROCEEDINGS

TXP filed suit against the defendants/appellants/cross-appellees (hereinafter "appellants") in federal district court on September 15, 1982, alleging violations of Sections 1 and 2 of the Sherman Act. 1 15 U.S.C.A. Secs. 1 & 2. Following a bench trial on the Section 1 claim, the Honorable Charles A. Moye entered the findings of fact and conclusions of law summarized below.

The Omni Coliseum is an enclosed facility in the City of Atlanta used for sporting events, musical concerts, and various other events. The Omni is the only arena in the Atlanta area with seating capacity adequate to accommodate in excess of 16,000 people, and the only enclosed arena with capacity to seat more than 4,000 people. There are other facilities in the Atlanta area for the production of concerts, but all are smaller or are not enclosed. 2 The district court concluded that the Omni's size and configuration make it a unique facility with a substantial economic advantage for the presentation of concerts where the audience attendance is expected to range between 4,000-16,000.

Pursuant to a series of agreements with the City of Atlanta and Fulton County Recreational Authority, the governmental body which owns the Omni, ACI and TOPCOL 3 have the exclusive right to control the use and rental of the Omni. SEATS is a computerized ticketing service in the business of selling tickets for events at various facilities in the Atlanta area. ACI, TOPCOL, and SEATS are under common ownership and management and essentially function as a single entity.

ACI and TOPCOL frequently rent the Omni to promoters seeking to stage various musical concerts and other events in the Atlanta area. 4 In negotiating with outside promoters for the use of the Omni, TOPCOL uses a standard form contract called the "Producer's Agreement." Paragraph 23 of the Agreement provides in pertinent part that "[a]ll ticket sales relating to the PRODUCER'S [i.e. the outside promoter's] use of the Premises under this Agreement shall be made by PROMOTIONS' [i.e. TOPCOL's] box office or at other ticket agencies approved by PROMOTIONS ..." Although TOPCOL technically does not have a box office (ACI does), there was no real dispute that the phrase "PROMOTIONS' box office" referred to SEATS. Some of the agreements also had typed-in language providing that promoters were required to pay all fees and expenses immediately following the show, "including rent [and] a 3.5% ticket charge." The 3.5% ticket charge represented the amount due SEATS for providing the ticketing services for the event. Promoters contracting to use the Omni never signed a separate contract or engaged in separate negotiation with SEATS.

The district court determined that Paragraph 23 of the "Producer's Agreement" gives promoters the right to select a ticket agency approved by the appellants. The district court also determined that the appellants had legitimate business interests in approving the ticket agency for Omni events, such as the safety of ticket sale proceeds, the adequacy of the ticket distribution network, and the financial integrity of the agency. The district court found, however, that the appellants had never established any written specifications or procedures for approving other ticketing services.

TXP is a ticketing agency primarily in the business of selling tickets for musical concerts in the Atlanta area. TXP requested permission to sell tickets to Omni productions on a partial or entire basis on a number of occasions without success. TXP and SEATS are the only two companies which provide remote ticketing services in the Atlanta area. 5 Remote ticketing services sell tickets for an event at various outlet locations throughout a metropolitan or geographical area, thereby expanding the sites where would-be spectators may buy tickets to an event beyond the box office of the facility housing the event.

Although both TXP and SEATS are engaged in the business of selling tickets to events in the Atlanta area through various outlet locations, there are some differences in how the two companies operate. TXP uses "hard tickets" which are preprinted, divided up, and distributed to various locations to be sold. SEATS, on the other hand, uses a centralized computerized system with terminals at various locations which print the ticket at the time of purchase. In addition, TXP services on a per-ticket basis are "somewhat less expensive" to promoters than the services of SEATS. 6

The district court found that SEATS has sold the tickets to every musical event at the Omni since the ticketing service's inception. 7 SEATS sold more than one million tickets to Omni events between 1978 and 1982, representing a gross intake of between 9 and 13.5 million dollars in ticket sales. The court found that the major local promoters who staged concerts in the Omni during the relevant period understood from years of dealing with TOPCOL and from repeated use of the "Producer's Agreement" that they had to use SEATS as the ticketing service for concerts at the Omni, although it also found that no promoter had actually requested approval of another ticketing agency, including TXP. In contrast the court found that some promoters used TXP a large percentage of the time for concerts performed at facilities other than the Omni.

The court did find, however, that several promoters had inquired into the possibility of "split-ticketing"--that is, where one ticketing agency (SEATS) provides only part of the ticketing services for an event, while another agency (TXP or some other hard-ticketing company) provides the balance of the ticketing. 8 The court found that the defendants had a policy against split-ticketing due to the nature of their centralized computer ticketing system, but that this policy was not in any way unlawful. 9

The court concluded that the lack of requests to use other ticketing agencies for entire performances was attributable to the language of the "Producer's Agreement" and the negotiating process for use of the Omni, which "appear[ed] to indicate the necessity for using SEATS". It described the language of the contract as falling "only slightly short of requiring promoters of concerts at the Omni to use SEATS as their ticketing service." It also concluded that, but for the language of the contract and other incidents of negotiation between TOPCOL and promoters, at least two promoters would have used TXP on one or more occasions, although one of the two promoters would probably have been interested only in using TXP to sell a portion of the tickets in a split-ticketing arrangement with SEATS. It also concluded that there was no other credible evidence to determine what other promoters would have used TXP to sell tickets for entire performances.

Based upon these factual findings, the district court concluded that 1) the lease of the Omni facilities and the sale of tickets to Omni concerts constituted two separate products and that 2) the two products were "tied" as a matter of antitrust law "in that the lease of Omni facilities is, as a practical matter, conditioned upon use of SEATS ticket selling services". In accordance with these findings, the court entered judgment in favor of TXP.

The district court's order awarding relief on the basis of the defendants' violation of Section 1 originally awarded TXP $30,624 in damages. Acting upon the defendants' motion for additional findings of fact to clarify the basis for the damage award, the district court subsequently reduced the single damage award to $10,091.07, which was then trebled to $30,273.21. In addition, the court issued an injunction enjoining the defendants from conditioning the lease of the Omni upon the use of SEATS as a ticketing service. The terms of the injunction permitted TOPCOL to require ticketing services to post a large guarantee bond for each concert as a precondition to selling tickets for an Omni event. Fin...

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