Shoreline Asked For Audit

Clear Channel Entertainment and its Bay Area subsidiary, Bill Graham Presents, have been asked by city officials of Mountain View, Calif., to open the books on the Shoreline Amphitheatre.

Officials claim Clear Channel is dragging its feet by avoiding a full audit of Shoreline’s revenue. CCE believes the city is looking to grab money from beyond the lease agreement to help its negative cash flow.

City finance director Bob Locke sent a letter to the BGP office in San Francisco April 14th, demanding a full audit of the shed. The parties are battling each other in a lawsuit and BGP attorneys fired back that an audit of the company was already required in the legal action, so Locke’s demand was redundant and “meant only to cause our clients further expense.”

The city responded that the difference is getting to look at the actual accounting books because the “income and expense information” that has been provided “may have resulted in underreporting rent in this case.”

Bill Graham’s promotion company built the amphitheatre on city-owned land nearly 20 years ago. There have been some legal scuffles with lessor Mountain View over the years, but city attorney Michael Martello contends tensions increased after CCE bought the company in 2000.

That year, CCE sued the city to prevent an independent auditor’s report from being released, Martello told Pollstar. The city filed a countersuit. According to Martello, the city hasn’t been able to close its books on the years 2001 through 2003 because of CCE’s alleged reticence to provide a full audit.

Clear Channel said the situation is “simply a lease dispute that has been blown out of proportion,” adding that to date, the city has received more than $11 million in accordance with the agreement. The company said it has provided an audit every year, including after Mountain View decided to “expand their audit process.”

Martello cited Shoreline’s parking fee as a point of contention. Shoreline’s rent is 7 percent of gross receipts each year, in good or bad times – with 2004 having a smaller rent payment. According to Martello, the parking fee was kept off the rent, and it should have been included.

CCE claimed that money was not part of the lease agreement; Martello argued it is part of the gross receipts. The fee has since been included in the ticket price.

In a statement to Pollstar, Clear Channel denied all charges.

“The City has always had audit rights and has executed them every year,” CCE stated. “This year, they have requested to expand their audit process, and we have agreed in a prompt and timely manner. The monies that Shoreline has paid the City over the years were paid in accordance with the lease.”

“The city is facing declining revenues and is looking for ways to pay their bills. We are doing our part by providing the revenue as defined by our lease agreement.

“Shoreline has enjoyed being part of Mountain View’s history over the last 19 years and we look forward to the remaining 17 years of the lease.”

Joe Reinartz