SMG Sued By DeltaPlex Owner
UPDATED: Imagine Joel Langlois’ surprise when he opened an e-mail and found attached what appeared to be a preferred promoter agreement that took money from concerts at his venue and gave it to the competing Van Andel Arena. Then imagine him suing.
Langlois owns the DeltaPlex in Grand Rapids, Mich. The apparently misdirected e-mail contained a draft proposal of a promoter agreement between SMG and Live Nation that included a provision that Live Nation would pay one-third of its profits from certain shows it promotes in western Michigan, including at the DeltaPlex, to the Van Andel Arena.
In a press release issued June 9th, Langlois attributed the misdirected e-mail to SMG, which Pollstar initially reported. His attorney, Doug Van Essen, later confirmed to Pollstar that Live Nation was actually the sender of the message and the attached agreement.
In any event, the incident drives home the old admonishment to double-check one’s e-mail before hitting the "send" key.
"I am outraged," Langlois said in the statement announcing that he has filed suit on behalf of his company, Delta Turner Ltd., against the Grand Rapids-Kent County Convention/Arena Authority and SMG.
"We pay taxes to support and subsidize the Van Andel Arena and then also have to suffer the indignity of having it intentionally driving up costs at the DeltaPlex to injure it and drive all concerts to the Van Andel," Langlois said. "This isn’t the way government should act."
Though it appears Langlois’ primary beef is with the local arena authority, both Live Nation and the Van Andel Arena quickly issued statements in support of their relationship and of the Grand Rapids music community.
"Live Nation is committed to bringing quality live entertainment to the Grand Rapids community. We have worked closely with local venue operators to bring our events to their building including Van Andel and the DeltaPlex," Live Nation’s John Vlautin told Pollstar. "Any claims that our building agreements have had a negative effect on the local music scene are incorrect. In fact our relationships have benefited Grand Rapids’ music fans by enabling us to bring a high volume of world class artists to a variety of West Michigan venues.
"The SMG management at the Van Andel arena have operated the venue in a first-class manner. They have worked closely with our office and marketed their facility to ensure that Grand Rapids is consistently included on the top tours. We stand committed to continuing our history of bringing great live music to Grand Rapids."
The Grand Rapids-Kent County Convention/Arena Authority responded to Pollstar’s inquiry to Van Andel Arena GM Rich MacKeigan, with a statement of its own.
"…Unquestionably, [the arena authority] and SMG, its management, have worked hard to present as many high quality concerts as possible, in competition with comparable arenas in other mid-sized Midwestern cities outside of West Michigan. Ultimately, the artist chooses the desired venue, just as the artist authorizes ticket prices. Our primary objective is to make the experience pleasurable for the artists, the promoters and our customers, so that we can continue to attract the best performances for the benefit of our public."
What’s interesting from an industry perspective isn’t so much the fact that a promoter and facility manager would have a preferred promoter agreement, but the usually closely held, sensitive details of such a proposal becoming public.
Though it is labeled as a "preferred promoter agreement," the draft document reads more like a co-promoter agreement with two-thirds of the profit and/or downside risk going to SMG with Live Nation guaranteeing them a $1.4 million profit.
It also provides for payments to SMG on behalf of Van Andel for designated events from specific competing venues.
According to the document, when Live Nation promotes shows at "designated venues" specified as DeltaPlex, Kellogg Arena in Battle Creek, Wings Stadium in Kalamazoo and LC Walker Arena in Muskegon, "Live Nation shall pay SMG for the benefit of the [Van Andel] Arena one-third of the net revenues it receives from such event(s) and the promoter loss after account for ordinary and customary expenses from such Designated Events."
Although the numbers are reversed for events outside of Van Andel, it does not include volume discounts one might expect to see in a preferred promoter agreement.
The suit, reportedly filed June 9th, seeks damages and injunctive relief against the arena authority and SMG for violations of federal and state antitrust laws, civil rights violations and violations of Michigan’s Open Meeting Act and Freedom of Information Act, among other causes for action. Live Nation is not named in the action.
Langlois said he had heard rumors to the effect that such a deal was in the works and Delta Turner submitted a Freedom of Information Act request to the arena authority. In announcing the filing of the suit, Langlois claimed that his company was "formally advised that no such agreement was in [the arena authority’s] possession and it had no documents pertaining to such an agreement."
The arena authority disputed that contention in its statement.
"DeltaPlex’s owner, Joel Langlois, and his counsel requested a meeting to discuss their concerns, at which they requested a number of documents, which we provided. In turn, we asked for DeltaPlex documentation that would be directly relevant to DeltaPlex’s claims, which Mr. Langlois and his counsel refused to provide. Nor did they offer any legal precedent that would tend to support their claims.
"We concluded DeltaPlex’s claims had no merit, and could only infer from their failure to provide any information that they had nothing to support their Complaint," the statement concluded.