Concert Revenue Suit Against Clear Channel to Go to Trial

Clear Channel Entertainment will have to defend itself in civil court against charges that it underreported revenue from live concerts to save on rent paid to the Northern California city of Mountain View.

The live entertainment division of San Antonio-based Clear Channel Communications Inc. that recently spun off as Live Nation is facing allegations of racketeering, conspiring to steal public funds and hiding revenue at the Mountain View venue it leases from the city.

A Santa Clara County judge last week ruled the city’s claims were valid enough to take its lawsuit to trial Feb. 6.

A city-commissioned audit last year found that Shoreline Amphitheatre’s operators underreported revenue by about $20 million between 1999 and 2004, in effect avoiding about $3.6 million in rent, late fees and other costs to the city.

The city’s lease with Shoreline sets the cost of rent at about 7% of gross revenue earned at the concert venue.

The two sides have had dueling lawsuits since 2003, when Shoreline sued the city for allegedly trying to claim additional revenue from parking fees. The city countersued, alleging that the operators were hiding revenue. Shoreline attorneys allege that the city is trying to extort money from the venue operators.