HOWARD J. PARKER 1 PHILLIP R. MALONE JOHN F. COVE, JR. 2 JAMES E. FIGENSHAW Antitrust Division 3 U.S. Department of Justice 450 Golden Gate Avenue 4 Box 36046, 16th Floor San Francisco, 94102 5 Telephone: (415) 556-6300

6 ROBERT L. BROSIO United States Attorney 7 JAN L. LUYMES Assistant United States Attorney 8 Central District of California Telephone: (213) 894-6739 9 Attorneys for the United State s

UNITED STATES DISTRICT COURT 11 FOR THE CENTRAL DI STRICT OF CALIFORNIA 12 UNITED STATES OF AMERICA, ) 13 ) Ci vi 1 No . Plaintiff, ) 14 ) SUIT FOR PRELIMINARY v. ) AND PERMANENT INJUNCTION 15 ) AGAINST ACQUISITION PACIFIC AMPHITHEATRE PARTNERSHIP; ) 16 IRVINE MEADOWS AMPHITHEATER ) 15 u.s.c. § 18 PARTNERSHIP; and ) 17 OGDEN ALLIED SERVICES CORPORATION, ) ANT I TRUST ) 18 Defe ndants. )

19 COMPLAINT

The United States of Ame rica , plaintiff, by its attorneys, 21 acting, under the direction o f the Attorney Genera l of the United 22 States, brings this civil act ion to obtain equitable and other 23 r elief against the defendants n amed here in and comp l a i ns and 24 allege s a s fol lows : 25 I. 26 JURISDICTION AND VENUE 27 1 . Thi s comp l aint is fil e d a nd this action is institu ted

under Section 15 of t he Clayton Ac t , as ame nde d , 15 u.s.c. § 25, i to prevent and restrain the violation by defendants, as 1 hereinafter alleged, of Section 7 of the Clayton Act, as amended, 2 15 u.s.c. § 18. 3 2. Irvine Meadows Amp h itheater Partnership transacts 4 business and is found within the Central District of California. 5 3. Pacific Amphitheatre Partnership transacts business and 6 is found within the Central Di strict of California. 7 4. Ogden Allied Services Corporation, directly or through 8 subsidiaries, transacts business and is found within the Central 9 District of California.

5. Venue is proper in the Central District of California 11 under Section 12 of the Clayton Act, 15 U.S.C. § 22, and 28 U.S.C. 12 § 139l(c). 13 II. 14 DEFINITIONS 15 6. "Concert amphitheater" means an outdoor facility used on 16 a regular basis for the presentation of concerts by performing 17 artists. 18 7. "HHI" means the Herfindahl-Hirschman Index, a measure of 19 market concentration. It is calculated by squaring the market

share of each firm competing in the market and then summing the 21 resulting numbers. For example, for a market consisting of fou r 22 firms with shares of thirty, thirty, twenty, and twenty percent , 23 the HHI is 2,600 (302 + 302 + 202 + 202 = 2,600). The HHI takes 24 into account the relative s i ze and distribution of the firms in a 25 market and approaches zero when a market consists of a large 26 number of firms of relativel y equal size. The HHI increases both 27 as the number of firms in the market decreases and as the 28 disparity in size between those firms increases.

Page 2 COMPLA I NT 8 . "Performing artists" means the most popular contemporary 1 musical entertainers, and comedians, who perform a t concert 2 facilities. 3 9 . "Promoter" means the person who contracts with the 4 performing artist, pays the expenses of the concert , and assumes 5 t he risk of profit or loss for concerts. 6 III. 7 THE DEFENDANTS 8 10. Irvine Meadows Amphitheater Partnership ("Irvine 9 Meadows") is made a defendant herein. Irvine Meadows is a California partnership that owns and operates a concert 11 amphitheater in Laguna Hills, California. Donald Koll, who is 12 Chairman of the Board and owner of The Koll Company, which is 13 engaged in real estate development in five states, owns a majority 14 interest in and controls Irvine Meadows. Robert Geddes owns a 15 minority interest in Irvine Meadows and is an owner and executive 16 o f Avalon Attractions, Inc., which is engaged in concert promotion 17 in California and other Western states. 18 11. Pacific Amphitheatre Partnership ("Pacific") is made a 19 defendant herein. Pacific is a California partnership that owns

and operates a concert amphitheater in Costa Mesa, California. 21 James M. Nederlander, James L. Nederlander, Robert E. Nederlande r, 22 and the Nederlander Realty Company of Illinois, wh i ch do busines s 23 under the name of The , together own a 5 0% 24 interest in Pacific. The Nederlander Organization is involved in 25 the operation of concert amphitheaters and in concert promotion 26 across the United States. Neil Papiano, Esq. and the Santa Ana 27 Broadway Theatre Corporation, which is owned by real estate 28 Page 3 - COMPLAINT developer Michael Forman, each own a 25% interest in Pacific. 1 12. Ogden Allied Servi ces Corporation ("Ogden") is made a 2 defendant herein. Ogden is a De laware corporation. It is a 3 subsidiary of Ogden Corporat ion, which had annual sales of over 4 $1.3 billion in 1989. Through its subsidiaries and affiliates, 5 Ogden provides concession services for sports and entertainment 6 facilities and manages various such facilities, including the Los 7 Angeles Forum. 8 I V. 9 TRADE AND COMMERCE

13. Irvine Meadows and Pacific own the only two concert 11 amphitheaters in Orange County, California. The Irvine Meadows 12 concert amphitheater has a capaci ty of approximately 15,500 seats, 13 consisting of 10,500 fixed seats and 5,000 lawn seats. The 14 Pacific concert amphitheater has a capacity of approximately 15 18,000 seats, consisting of 8,000 fixed seats and 10,000 lawn 16 seats. The two concert amphitheaters are centrally located in 17 Orange County and about eight miles apart. Both are designed 18 s pecifically for concerts by performing artists. Both have box 19 offices, food and beverage facilities, souvenir stands , restrooms

a nd other concertgoer amenities, stages and dressing rooms. Both 21 have electrical and sound systems suitable for concerts by 22 performing artists that are designed to deliver high quality sound 23 t h roughout the amphitheater. Both have ample parking and are 24 located near freeways with roads that provide easy access for 25 concertgoers. 26 // 27 // 28 Pa ge 4 - COMPLAINT 14. Total revenues from concerts at both Irvine Meadows and 1 Pacific Amphitheaters are approximately $16 million to $19 mil l ion 2 a nnually. 3 15. Irvine Meadows and Pacific compete against each other in 4 supplying venues for concert s in Orange County by performing 5 artists. For promoters, performing artists, and concertgoers, 6 there are no practical subst itutes for these two concert 7 amphitheaters, because, as more fully set forth below, of their 8 capacity, location, availability, cost of operation and overall 9 appeal to concertgoers and performers as a location for concerts. 16. Over two million people live in Orange County. Many 11 performing artists have sign ificant numbers of fans who reside in 12 the area. Frequently, artis ts perform in concert at the Pacific 13 or Irvine Meadows facilities as part of a national tour of concert 14 amphitheaters. Most of these touring artists who perform at t he 15 Pacific or Irvine Meadows concert amphitheater also perform at a 16 venue in the Los Angeles County area as part of the same tour . 17 For the performing artists and promoters who present concerts, the 18 Orange County area constitut es a distinct geographic area for 19 concerts that is separate f r om t he Los Angeles County area and

from other areas. 21 17. There is no r e a s ona b l e s ubstitute venue for the Pac ifi c 22 or Irvine Meadows amphitheaters to wh i ch promoters or performing 23 artists would switch a signi f i cant numbe r of conce rts in r e sponse 24 to a small but s ignifican t a nd nontra n s itory increase in the price 25 of using the se two Ora nge Coun ty concert amphitheat ers f or a 26 concert. Possible a ltern at i ve faci lities a r e po o r s u bs t itutes to 27 either o f the Orange Co u n t y concer t amp hithea t ers for a ny of 28 5 - several possible reasons, such as higher rental fee; lower seat ing 1 2 capacity; lesser ability to attract concertgoers or performers due

to location and other facility characteristics; lower revenues 3 from parking, concessions, merchandise and endorsements; higher 4 costs of operation, such as providing security and constructing 5 stage and sound systems; and fewer desirable dates available for 6 concerts. 7 18. For a significant number of concertgoers who attend 8 concerts at the Pacific or Irvine Meadows amphitheaters, indoor 9 concert facilities and concert amphitheaters outside Orange County

a re not good substitutes for one of the Orange County 11 amphitheaters. Many concertgoers prefer to attend concerts 12 outdoors in the warm months from late spring to early fall. The 13 nearest concert amphitheaters to the Pacific and Irvine Meadows 14 facilities are about forty miles away. There is no reasonable 15 s ubstitute for the Pacific or Irvine Meadows amphitheaters to 16 which a significant number of concertgoers would switch in 17 response to a small but sign ificant and nontransitory increase in 18 the price of attending concerts at the two Orange County concert 19 amphitheaters.

19. Supplying the use of concert amphitheaters for concerts 21 by per.forming art ists constitutes a line of commerce and releva nt 22 product market within the meaning of Section 7 of the Clayton Act. 23 20. Orange County, Ca l iforni a is a section of the country and 24 a relevant geographic market f or concert amphitheaters within the 25 me aning of Section 7 of the Cl ayton Act. Although concertgoers 26 from outside Orange County attend concerts at the Pacific and 27 Irvine Meadows concert amphi theaters, Orange County is the 28 Page 6 - COMPLAINT v relevant geographic market because concert facilities outside 1 Orange County are not good subst i tute venues for the concert 2 amphitheaters within Orange County for a significant number of the 3 performing artists and promoters who present concerts at the 4 Orange County concert amphitheaters, or, for a significant number 5 of the concertgoers who attend concerts at the Orange County 6 concert amphitheaters. 7 21. Supplying the use of concert amphitheaters in Orange 8 County is the relevant market ("Orange County concert amphitheater 9 market") in which the violation alleged below will occur.

22. The Irvine Meadows and Pacific concert amphitheaters each 11 have close to the same capacity, revenue potential, and cost of 12 operation. Each held approximately one-half of the major concerts 13 by performing artists in Orange County over the past three years. 14 Treating Irvine Meadows and Pacific as equally significant 15 competitors, each with a 50% share of the relevant market, yield s 16 an HHI of 5000 before the combination of the two under a single 17 ownership. This is a highly concentrated market. 18 23. Irvine Meadows and Pacific have negotiated an agreement 19 to combine their assets and operations. As a result of that

combination, sources supplying the use of concert amphitheaters in 21 Orange, County will be reduced from two to one. One firm will own 22 both amphitheaters, resulting in a monopoly in the relevant 23 market; the HHI will be increased by 5,000 to 10,000, which is the 24 maximum. 25 24. Entry into the Orange County concert amph i theater marke t 26 is difficult and time consuming. Entry obstacles i nclude the 27 d i fficulty and expense of (a) f i nding a suitable s i te that bot h 28 Page 7 - COMPLAINT

,I has good freeway and road access .and is removed from residences and other incompatible neighbors , and (b) obtaining all necessary 2 environmental, land-use, and other regulatory approval . 3 25. Concert amphitheaters in Orange County are frequently 4 used by performing artists as part of national tours. Irvine 5 Meadows and Pacific obtain substantial quantities of goods and 6 services from sources outside the State of California. Supplying 7 the use of concert amphitheaters in Orange County is within the 8 flow of and substantially affects interstate commerce. Irvine 9 Meadows, Pacific, and Ogden each are engaged in interstate

commerce and in activities substantially affecting interstate 11 commerce. 12 V. 13 VIOLATION ALLEGED 14 26. Irvine Meadows, Pacific and Ogden, through its wholly 15 owned subsidiary Ogden Allied Lei sure Services, Inc., have 16 negotiated and prepared for signature a document entitled 17 "Agreement and Plan of Merger " and related papers. The prepared 18 documents contemplate an acquisition of assets through a series of 19 transactions to be effected simul taneously that will result in

combining the assets and operations of Irvine Meadows and Pacific 21 under the ownership of a single entity, which will be a successor 22 limited partnership to Paci f ic. The current partners in Pacific 23 will own a 50% interest in the new entity. The current Irvine 24 Me adows partners will hold a 25% interest in the new entity. 25 Ogden, in return for a capital contribution of approximately 26 $8 million, consisting of cash and a note, will own the remaining 27 25% interest. The current Pacif i c partners, on behalf of the new 28 Page 8 - COMPLAINT entity, will then manage and operate both facilities . The part ies 1 plan to consummate the combination of Irvine Meadows and Pacific 2 shortly after the stipulateq waiting period ends at 12:01 a.m. on 3 July 20, 1990. 4 27. The effect of the combination may be substantially to 5 l essen competition, or to tend to create a monopo l y, in the Orange 6 County concert amphitheater market in violation of Section 7 o f 7 the Clayton Act in the following ways, among others: 8 a. Actual and poten tial competition between Irvine 9 Meadows and Pacific in supplying the use of concert amphitheaters for concerts in Orange County wi l l be 11 eliminated; 12 b. Competition generally in supplying the use of 13 concert amphitheaters for concerts in Orange County 14 may be substantially lessened. 15 28. The effects of the combination may be manifested in the 16 following ways, among others: 17 a. Artists may receive lower financial consideration 18 for performing at Orange County concert 19 amphitheaters;

b. Concertgoers may pay higher prices to attend 21 concerts and may have fewer concerts in Orange 22 County from which to choose. 23 PRAYER 24 1. That pending final adjudication of the merits of this 25 Complaint, a temporary r estraining order and a preliminary 26 injunction be issued against the defendants preventing and 27 restraining each of them and all persons acting on their behal f 28 Page 9 - COMPLAINT from taking any action, either d i rectly or indirectly, in 1 furtherance of the proposed combi nation of Irvine Meadows and 2 Pacific; 3 2 . That the proposed combination of Irvine Meadows and 4 Pacific be adjudged to be in violation of Section 7 of the Clay ton 5 Act; 6 3. That the defendants be permanently enjoined from carrying 7 out any agreement, understandi ng, or plan, the effect of which 8 would be to combine the assets and operations of Irvine Meadows 9 and Pacific; 10 4. That the plaintiff have such other and further relief as 11 the Court may deem just and p r oper; and 12 5. That plaintiff recove r the costs of this action. 13 Dated: 14 15 James F. Rill Howard J. Parker Assistant Attorney General PHILLIP R. MALONE JOHN F. COVE, JR . JAMES E. FIGENSHAW 18 Judy Whalley Attorneys 19 U.S. Department of Justice Antitrust Division 450 Golden Gate Avenue Gary R. Spratling Box 36046, Room 16216C 21 San Francisco, CA 94102 Attorneys Telephone: (4 1 5) 556-6300 22 Antitrust Division U.S. Department of Justice ROBERT L. BROSIO 23 United States Attorney JAN L. LUYMES 24 Assistant United States Atto rney Central District of Californ ia 25 Telephone: (2 13) 894-6739 26

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