Talks Delay Shoreline Suit

The long-running legal battle between Mountain View, Calif., and Live Nation over revenues at Shoreline Amphitheatre appears to be lurching toward possible resolution with last-minute settlement talks reportedly under way.

A scheduled April 10th trial date has been postponed to May 15th while the negotiations continue.

“It appears as if [Live Nation] is recognizing that this is a case they would like to get resolved, and from our perspective this is a positive development,” Councilman Michael Kasperzak told The Mercury News of San Jose.

A spokesman for Live Nation didn’t immediately confirm the settlement talks, but Judge Randall Schneider told the Mountain View Voice that the parties have already reached on agreement on the issue of past rent. The paper also reported that the talks continued behind closed doors through the following weekend.

According to a 50-year lease signed by Bill Graham in 1986, the city is entitled to up to 6.75 percent of gross receipts from Shoreline and revenue sharing of shows promoted at competing venues within a 35-mile radius, minus certain exclusions such as Oakland Arena.

An updated audit by Los Angeles-based Alix Partners reportedly uncovered some $58 million in unreported revenues from 1998 to 2004, resulting in a claim of $15.6 million in back rent and damages.

The Mountain View City Council last discussed the lawsuit in a closed session April 7th.

City Attorney Michael Martello said that any settlement would mean a lengthy lease renegotiation between Mountain View and Live Nation.

“Any settlement of this lawsuit is going to end up involving a new lease. I think that’s what both sides want,” Martello told the paper, adding that renegotiating the lease would take a considerable amount of time.

A settlement would end the 3-year-old dispute, triggered by a lawsuit filed by Clear Channel Entertainment in 2003 in response to the city’s relocation of a parking lot. The city countersued, claiming a share of a $4 parking fee for each ticket sold as part of the gross receipts. Mountain View also charged the company was withholding revenue and blocking an audit.

The city also claims Live Nation failed to report revenue when it rented out Shoreline to third parties, using as an example a 2001 appearance by the Dali Lama that earned the shed $317,000, according to The Mercury News. City officials also claimed the shed inflated expenses to hide its profit.

Terms of the settlement will likely be made public, the News said, but it may be preferable to a trial where alleged accounting fraud and racketeering charges would be publicly aired, and where Live Nation could incur punitive damages should it lose the suit.