Forum Owners Sue AEG
The Los Angeles church organization that owns
Forum Enterprises Inc., a division of the Faithful Central Bible church, filed a federal lawsuit September 6th against AEG and subsidiaries including
The suit alleges the promoter committed a handful of other violations including monopoly, fraud, conspiracy, breach of contract and unfair business practices.
At the time AEG sold The Forum to the church in 2000, it entered into an exclusive booking contract but, following disputes in 2002, the agreement was terminated. FEI and AEG entered into a restated contract in April of 2003 that again gave AEG exclusive booking rights, but this time with a minimum annual revenue guarantee of $500,000.
FEI says AEG chose to pay the church the $500,000 minimum and took its shows elsewhere.
“AEG has actual knowledge that $500,000 per year is insufficient to sustain The Forum’s operations and that in order to remain in business The Forum must be booked at significant levels,” the lawsuit alleges. “Thus, AEG has attempted to keep The Forum from competing with Staples Center and force The Forum out of business for the mere sum of $500,000 per year.”
“AEG has been doing such a poor job that The Forum took it upon itself to start doing certain activities to increase bookings,” FEI attorney Johnny Griggs told Pollstar. Griggs said that 10 of the 12 events at The Forum in the last year “were the result of the increased activities by The Forum, although AEG technically was the booking agent for those 10.”
The suit claims AEG threatened legal action when FEI attempted to book any events on its own.
“Although these activities are increasing the events and the booking at The Forum, AEG contends that is a breach of the agreement,” Griggs said.
The lawsuit states that there are only two indoor entertainment venues in the Los Angeles area that can seat more than 10,000. As for the 13,500-capacity
AEG disagreed with the claims.
“We categorically deny all the allegations made by FEI in their complaints and view these actions as nothing more than an effort to circumvent the exclusive booking rights granted to AEG by FEI,” company spokesman Michael Roth told Pollstar.
“Not only will we vigorously defend ourselves against these meritless allegations, we intend to pursue claims against FEI for their breaches of the booking agreement which has been in place since they acquired The Forum from AEG nearly six years ago.”
The church was having financial difficulties, which led to AEG making concessions, Roth said.
“Not only did we make several significant financial concessions since the agreement was signed, including the guarantee, we have honored all of our obligations under the original agreement. It’s also incorrect that AEG did not play a role in the booking and promoting of the majority of the non-church events.”
FEI is seeking damages exceeding $5 million for lost revenues and stated in the suit that it hopes to rescind its agreement with AEG.
– Dana Parker-McClain
