The Pacific Amphitheatre's operators were beaten on two key fronts Tuesday in their efforts to stave off noise restrictions and to eliminate profit-sapping competition with the rival Irvine Meadows Amphitheatre.
An Orange County Superior Court judge imposed new noise limitations on the 18,765-capacity rock and pop concert facility on the same day that Pacific officials learned that they had lost their bid to acquire a controlling interest in their longtime competitor.
In the wake of a U.S. Justice Department suit filed last week to stop a merger between the two amphitheaters, the consortium of private investors who own Irvine Meadows accepted a rival offer that will keep it out of Pacific's control. Robert Geddes, a minority shareholder in the 15,000-capacity Irvine facility, has teamed with Irving Azoff, a veteran record industry executive, to buy "a substantial interest" in Irvine Meadows. As a result, competition will continue. The deal is expected to put an end to the government's antitrust action.
The Pacific Amphitheatre is owned by the East Coast-based Nederlander Organization, which had hoped by merging with Irvine Meadows to solve both problems. If the merger had gone through, Nederlander could have shunted louder acts to the more remote Irvine Meadows and offered the Pacific's Costa Mesa neighbors softer pop shows.
At the same time, a merger would have ended fierce bidding wars for top pop and rock concert attractions that Pacific officials blamed for driving up the cost of business and for losses that they said totaled more than $2 million in 1989. According to documents filed in the Justice Department suit, combined revenues at the two facilities are between $13 million and $20 million annually. Each amphitheater has presented between 35 and 55 concerts a year.
Under the new noise ruling, Superior Court Judge Richard J. Beacom ordered Pacific officials to keep sound levels within five decibels of the county's sliding-scale noise ordinance. Noise from the amphitheater will not exceed 55 decibels for more than 30 minutes, nor be louder than 75 decibels at any time, the judge's order states.
Because there was only one plaintiff in the noise complaint, Costa Mesa resident Laurie Lusk, noise levels will be measured from Lusk's property.
Ending a two-week trial, Beacom said the noise from concerts at the amphitheater had exceeded 55 decibels for more than half-hour periods for years. He said he believes that such noise levels constitute a nuisance to the Lusk family members and that they deserved relief.
Beacom's ruling brought Lusk to tears. She had waged the legal fight against the amphitheater with financial backing from about 300 of her neighbors.
"I can't believe it," Lusk said. "I can't believe it's over." When asked if the long court fight was worth it, Lusk said: "Every minute of it."
But the ruling may not be the end of the issue. In the past, Nederlander officials have had noise restrictions against them overturned on appeal.
Pacific attorney Deborah M. Nesset said she would have to consult with Nederlander officials, but she did not rule out the possibility of an appeal of Tuesday's decision.
The judge assigned the county marshal's office to monitor the sound from a point near the Lusks' property--or hire someone to do it--and to report any violations. Violations would be punishable by contempt-of-court citations. At another hearing Nov. 30, the marshals will report on the amphitheater's compliance.
Nederlander officials have contended that noise limits would cause top rock attractions to bypass the Pacific, crippling its efforts to compete.
Meanwhile, the entrance of music industry magnate Irving Azoff as a new Irvine Meadows partner snuffs out the last chance for a merger with the Pacific Amphitheatre.
Azoff, former chairman of MCA's Music Entertainment Group, joins Donald Koll, one of Orange County's leading developers, and Robert Geddes in a new business troika that will control the amphitheater. In accepting a joint bid by Geddes and Azoff to acquire what a press release announcing the deal termed a "substantial interest" in Irvine Meadows, Koll, who had held a majority interest in Irvine Meadows, rejected a rival bid by the Pacific Amphitheatre's owners to merge the two facilities.
The Justice Department stepped in last Thursday to block the merger proposal, filing an antitrust suit that contended joint operation would create an illegal monopoly in the Orange County concert market.
Paul Hegness, an attorney for Koll, said Tuesday that the government's antitrust filing played a part in determining the outcome as two suitors vied to strike a deal with Koll over Irvine Meadows.
Nederlander, in its bid, had teamed with Ogden Allied Services Corp., which operates arenas and entertainment concessions around the country. After that offer surfaced in March, Geddes and Azoff parried with a counter-bid of their own.
The Justice Department action "really put us in the position where in order to go forward with the Nederlander transaction, we had to step up to a fight with the government," Hegness said. "All of us had reservations about that. It's real time-consuming and very expensive. We felt it was a fight better avoided.
"We don't view (the Azoff-Geddes offer) as a second choice at all," Hegness added. Geddes, a concert industry veteran and former National Football League linebacker, and Azoff, who recently launched his own entertainment company and record label, Giant Records, will jointly oversee day-to-day operations at Irvine Meadows, Hegness said.
Under the Nederlander-Ogden merger proposal, Irvine Meadow's owners would have sold a 75% interest for $8 million but would have gained a 25% share in the Pacific in return.
The Irvine Meadows principals would not release any details about how much money Geddes and Azoff paid for their new stake in the amphitheater, nor would they reveal what percentage each partner now holds. According to documents in the Justice Department suit, Geddes held a 25% share. Hegness said he retains a small percentage of Irvine Meadows, but that another minority shareholder, business consultant Larry Hoffman, was bought out as part of the deal, which was completed on Monday.
"With Irving and Bob at the helm, I anticipate many more years of successful operation at Irvine and look forward to working with both of them," Koll said in a prepared statement.
Neil Papiano, a partner in the Pacific Amphitheatre, expressed surprise Tuesday when told of the Irvine Meadows deal. Papiano, who also is Pacific's lawyer, said he had been planning to fight the Justice Department's antitrust case in court in hopes of eventually winning the case and completing the proposed Irvine-Pacific merger.
"It's a complete surprise to me," said Papiano, who was reached while on a trip to San Francisco. "As of (Monday), the Koll lawyers were working on (fighting) the (antitrust) case. I thought we had reached an agreement in principle" to merge, subject to the antitrust suit's outcome.
Christopher S. Crook, assistant chief of the Justice Department's antitrust division in San Francisco, said that "we're going to have to find out exactly what transpired," but that with the merger derailed, the government may "put to rest" its antitrust suit.
Geddes, who has been overseeing Irvine Meadows' operations as managing partner, said that little will change outwardly at the amphitheater, and that the competition with Pacific will go on as before. Avalon Attractions, the independent concert promoter in which Geddes owns a 50% share, will continue to book and promote Irvine Meadows' shows. However, Geddes said, "having Azoff on our side obviously strengthens our position. He is definitely an important player, who didn't become what he is without being involved on every level in the industry."
Azoff's contacts in the music business could help Irvine Meadows land some shows it otherwise might not have been able to promote, Geddes said.
Azoff first became a major figure in the pop music business in the 1970s as manager of the Eagles, Steely Dan, and other acts. He left his post at MCA last year to launch Giant Records, with financial backing from the huge Warner Brothers label. Azoff and Geddes had previously been partners in a vending company.
Under terms of Judge Richard J. Beacom's order, noise from the Pacific Amphitheatre may not exceed:
55 decibels for more than 30 minutes;
60 decibels for 15 minutes;
65 decibels for 4 minutes;
70 decibels for 1 minute;
Sound levels are to be measured at the home of plaintiff Laurie Lusk and monitored by the county marshal's office.