Legal Eagles On AEG’s ‘Statement of Commitment’ For Ozzy’s Last Tour
Rich Fury/Forum Photos – Ozzy Osbourne Forum
OZZY OSBOURNE AND BLACK SABBATH perform at the Forum in Los Angeles Feb. 11, 2014. Whether the Prince Of Darkness returns to the venue on his upcoming “No More Tours 2” farewell outing may depend on the outcome of a dispute over block-booking.
When Sharon Osbourne released on Feb. 7 an unsigned “Statement of Commitment” contract from AEG Presents, representing an agreement that her client and husband, Ozzy Osbourne, would perform at least one of his farewell shows at Staples Center if he is to play Los Angeles as a condition of booking The O2 in London, it was but the latest salvo in a nearly year-long public battle over so-called “block-booking” policies.
Her action resulted in a flurry of heated emails and statements as Sharon Osbourne accused AEG Presents chairman Jay Marciano of “blackmailing” her husband. Marciano responded that “the beef is between Staples Center and the Forum.” Azoff MSG Entertainment CEO Irving Azoff (a co-founder of Pollstar parent company Oak View Group), AEG Presents’ competitor, called Marciano’s comments “a pack of lies.”
What Sharon Osbourne’s open letter did, besides set off a fresh round of bickering among business rivals, was make public just what such a contract looks like after AEG Presents made good on its promise last summer to institute block-booking between The O2 and Staples Center as policy after it claimed Azoff MSG Entertainment tied plays at its Madison Square Garden and Inglewood, Calif., Forum properties (an allegation Azoff has denied).
Kevin Winter / Getty Images for Live Nation – Ozzy and Sharon Osbourne
MITCH SCHNIEDER OF MSO introduces Ozzy and Sharon Osbourne at their Beverly Hills, Calif., home Feb. 6 as they announce Ozzy’s “No More Tours 2” global farewell tour.
What also stands out in the dispute is an eye-catching line from Osbourne: “If you do not confirm the date for OZZY at the O2 in London then I will be forced to take legal action against AEG Presents without delay,” an action that could put this whole matter into the hands of the courts. With this in mind, Pollstar reached out to three respected entertainment lawyers – Dina LaPolt, Howard King and Ed McPherson – to find out if she would have a case.
“It depends,” says LaPolt, whose clients include Fifth Harmony, Britney Spears, Deadmau5, and Steven Tyler. “This whole thing with tying is interesting because … they all try to do it. You’ve got to be careful because in California it can violate the law. In California we have strict laws in the Business and Professions Code that say it’s unlawful for folks to do stuff like that.
“In California it depends upon whether Ozzy’s business is in California, and I think it is. In general, it tends to lessen competition. The way I would argue if I was Ozzy’s lawyer is it unfairly stifles his ability to negotiate in a free market,” LaPolt continued.
“What happens, should they agree to this, if several months from the (proposed February 2019) O2 date Ozzy’s guarantees go up so much more in the marketplace, he’s already agreed to play the Staples Center, and the Forum wants to make him a better offer? I would think if The O2 refuses to book him under those conditions, I would think that in California [Sharon] would have a case.”
King, whose clients include Metallica, Dr. Dre, Pharrell, and Kanye West, approached the question from a different angle and arrived at a different conclusion.
“The fact is, AEG owns The O2, which is a very desirable venue and, obviously, they want to book Staples, which they also own,” King said. “From a legal standpoint … the question is: is it some sort of illegal, monopolistic tying arrangement?
“The O2 has limited availability. Why shouldn’t the owner of the building be able to impose whatever conditions they want for someone to book the venue, including saying you have to use the other venue if you ever come to Los Angeles? It’s not like you’re being deprived of food or water, and it’s not like you don’t have another venue in London to go to. There’s lots of venues in London. Where did everybody go before The O2 was built?
“From a PR standpoint, Sharon may be right but from a legal standpoint, it’s not like AEG controls the market for venues in London,” King said, although The O2 is the only 20,000-capacity arena currently operating in the city. “They just happen to have what some people consider the best venue. They’re not a public utility; they don’t have to make it available to everybody.”
McPherson, who numbers Linkin Park, Tool, Evanescence, David Lee Roth, and the
“It’s typically not a good thing, but that’s because there is usually some detriment to the artist,” McPherson told Pollstar. “I don’t think in this particular case there is any real detriment to the artist to have to play at Staples rather than the Forum.
“Ozzy is using the same promoter in the same city, it’s the same audience, and not in some lesser venue or some inferior building. I don’t see it as that big a deal. I see some of these going on and some of them I could have an objection to, clearly. But this one doesn’t seem that onerous.”
LaPolt took note of the fact that the “No More Tours 2” outing is advertised as Ozzy Osbourne’s farewell tour, and that fact alone could drive his market value up – and a commitment agreement could stifle his ability to negotiate the best guarantee.
“That’s [Sharon Osbourne’s] issue. If they play O2 in February, and it’s a farewell tour, by the time they get around to Los Angeles his guarantee could increase by two times,” LaPolt said. “What happens if the Forum makes them a better offer, and they can’t take those offers because they’ve tied themselves to the Staples Center? It just is not good, and that’s her issue as a business person. And by the way, that’s exactly what California’s Business and Professions Code is there for.”
King agreed in part, saying, “What [the California code] says is you can’t condition a sale based on somebody not buying something from your competitor,” but splits from LaPolt by adding, “where the result is basically going to create a monopoly of any line of trade or commerce. Yes, if it ended the marketplace for live performance venues or unduly restricted the marketplace for live performance venues and, in essence, put the Forum out of business.”
King noted that the beneficiary of such a suit would be the Forum, not Osbourne. “But that would be a pretty high hurdle to show that the effect of this is basically depriving the Forum of business and giving Staples a monopoly on live performances in Los Angeles. That’s not happening; the Forum has a robust schedule of acts now.”
King also took note that AEG’s letter of commitment was addressed to Live Nation and not Osbourne, making the promoter the party with standing to file any complaint.
“The contract is not with Ozzy, it’s with Live Nation – so Live Nation must have the exclusive tour,” King said. “Sharon’s made a deal with Live Nation, it would appear, and they are doing the tour … and they’re not going to make the complaint.”
McPherson agreed that Live Nation, not the artist, is actually the entity being asked to book Staples Center and has the standing to legally object to a perceived tying arrangement.
“So Sharon basically said, ‘If the promoter has to do it there, then I have to do it there, and I object.’ They can promote at the Forum or Staples. … If this was a choice between a venue like the old Sports Arena, which was kind of run down and a bit smaller, that would be one thing. But that’s not really the case here. These are two prime venues in the same city. I could see where an artist might prefer one to the other, but I don’t see that it’s that huge a deal.”
All of which begs the question: who benefits from the block-booking dispute should it manage to land in court?
“For some of the law, there’s no damages available. It’s about public policy,” LaPolt said. “So what would be the incentive to sue?”
King was quick to answer the question of who benefits. “I’ll tell you who it’s been good for: my clients,” King said, laughing. “My clients are getting ridiculous deals now. Fantastic deals. Metallica just got their best deal ever from Live Nation for their tour, because AEG wanted it.”
Pollstar reached out to AEG but received no comment at press time.