U.S. Sues to Block Merger of 2 County Amphitheaters : Antitrust action: Justice Department says combination might result in higher prices for concert-goers and lower pay for performers. A temporary restraining order is sought.

The U.S. Justice Department filed an antitrust lawsuit Thursday to block the planned merger of Orange County’s two biggest concert venues, the Pacific Amphitheatre and Irvine Meadows Amphitheatre, contending that the move would create an illegal monopoly.

In a complaint filed in U.S. District Court, Justice Department officials said the two huge amphitheaters dominate the concert-venue market in Orange County. Combining the two would leave few other suitable alternatives for promoters, performers and concert-goers in the event that the merger resulted in higher prices for booking or tickets, the lawsuit said.

“The effect of the combination may be substantially to lessen competition, or to tend to create a monopoly, in the Orange County concert amphitheater market in violation of (the Clayton antitrust act),” the suit said.

The proposal under attack would combine the assets and operations of the two venues under a single limited partnership. The current Pacific Amphitheatre partners would own a 50% interest in the new entity and would operate both facilities, the lawsuit said. The current Irvine Meadows partners would hold a 25% interest, and Ogden Corp., a national concessionaire, would own the remaining 25% interest in exchange for $8 million, the suit said.

The parties planned to consummate the merger at one minute past midnight today, the suit said.

The Justice Department sought a temporary restraining order halting the merger, but the judge assigned to the case was not available to hear it Thursday. It was not immediately known if another hearing date was set.

Justice officials said the merger would eliminate or lessen “actual and potential” competition between concert venues in Orange County. As a result, artists could be paid less for performing at the two facilities and concert-goers could have to pay higher prices and have fewer concerts to choose from, the lawsuit said.

Pacific Amphitheatre in Costa Mesa, with 18,000 seats, and the 15,000-seat Irvine Meadows, eight miles away in Irvine, together bring in between $16 million and $19 million in concert revenues annually, the suit said. Each hosted about half of the major concerts by performing artists in Orange County in the last three years, officials said. Combining the two would double the market share of the resulting partnership in a market that is already “highly concentrated,” the suit said.

None of the attorneys on the case could be reached for comment. Officials of New York-based Nederlander Organization, which owns a 50% interest in the Pacific Amphitheatre, were also unavailable. But they have said in the past that joint operation of the two venues would stimulate competition because booking agencies would have equal access to both.

Robert Geddes, the managing partner of Irvine Meadows Amphitheatre who has teamed with former MCA chairman Irving Azoff to try to buy that facility for a sum that Geddes will not disclose, endorsed the Justice Department’s action.

“We view it as the appropriate thing for Justice to do,” Geddes said. “To the extent that it doesn’t affect what we’re trying to accomplish, we’ll go forward with our negotiations and hope to close them as quickly as possible.”

Geddes said he and Azoff are talking with Irvine partners Donald Koll, Paul Hegness and Charles Hoffman about their buyout offer. Geddes said he thinks that their negotiations are “making progress.” And although the specter of a defense against the Justice Department is “ominous,” Geddes said, he and Azoff have not received any indication that the suit might prompt quicker acceptance of their offer as a way of solving the Justice Department’s concern over creation of a monopoly.

Other Irvine partners could not be reached to discuss the negotiations.

In Santa Ana, meanwhile, the trial continued in an unrelated lawsuit filed by the Pacific Amphitheatre’s neighbors over noise complaints. In testimony Thursday, the amphitheater’s financial controller said the concert venue has never turned a profit since it opened in 1983.