Sharp Darts: Rooting for the Big Guy 

Why local music fans should be glad Jam won the battle for the Uptown Theatre.

On July 29 the city ordered the Uptown Theatre onto the auction block, and the sale had one immediately obvious benefit—it eliminated the tangle of owners, partial owners, mortgages, and liens surrounding the property and made it clear who's actually responsible for the place. Chicago-based Jam Productions won with a bid of $3.2 million—and surprisingly, the only other bid accepted was from the holder of the first mortgage, not from one of Jam's competitors.

A benefit that's perhaps less obvious is that the sale prevents any of those competitors—notably Clear Channel spin-off Live Nation, Lollapalooza and Austin City Limits organizer C3 Presents, or Coachella producer AEG Live—from controlling a little more of the Chicago concert landscape. Middleweight venues like the Uptown (which has about 4,300 seats, making it comparable to the Congress and Arie Crown) are a particularly competitive segment of the business—they seem to change hands constantly all over the country—and any headway Jam makes there is progress denied to a bigger player that's less obliged to care about Chicago.

Live Nation, C3, and AEG are all national or multinational companies, without Jam's inherent interest in the health of the local music scene. Though Jam has relationships with venues all over the U.S. and produces events in Wisconsin, Minnesota, and downstate Illinois, most of its shows happen in Chicago. It owns the Park West, the Vic, and the Riviera and works with smaller clubs like Double Door, Schubas, Metro, Martyrs', Beat Kitchen, and Subterranean. Of course Jam made its share of enemies when it was the big kid on the Chicago playground, before the Telecommunications Act of 1996 cleared the way for the consolidation of media companies, but now it looks like a scrappy underdog.

Opened in 1925 as a movie palace, the Uptown has been deteriorating since it was shuttered in 1981, and ownership disputes and mounting costs have prevented any one party from bringing it back into active service. And the building's landmark status means it can't simply be demolished. "It's an unbelievable theater," says Jam cofounder Jerry Mickelson. "Jam started doing shows there in 1975. We've been trying to purchase it for seven or eight years." Live Nation and AEG had expressed interest too—both were scheduled to submit proposals for the theater in December 2006—and earlier this year Live Nation stepped up its talks with city officials.

In fact it's a bit of a shock that Jam won the theater, since the city seemed to have another favorite. Mary Ann Smith, alderman for the 48th Ward, told the Sun-Times's Jim DeRogatis in April, "I have a deep-seated hope that Live Nation and their folks will prevail." And in May the city's housing court insisted on its right to impose requirements on the sale that Jam claimed were tailored to Live Nation's advantage. Mickelson has called those requirements "onerous"—the new owner has to place $5 million in an escrow account within 30 days and submit a budget and financing plan within 90—but also told Crain's that they probably scared away other bidders. (Calls to Live Nation for this story had not been returned at press time.)

Mickelson also says the cost of renovating the Uptown—estimated at about $40 million—will be more than the company can afford, and that he expects to enlist the city's help. He'll probably get it: old Loop theaters like the Chicago and the Oriental were restored in part with public funds, and conveniently the Uptown is in the Lawrence-Broadway TIF district.

Most of Jam's competitors are well established in the Chicago area already. LA-based Live Nation owns the House of Blues and owns or controls the First Midwest Bank Amphitheater and Charter One Pavilion. In addition to producing Lollapalooza, Austin-based C3 has an exclusive deal with the Congress Theater and puts on events at Soldier Field. And on Friday AEG Live, which operates Toyota Park in Bridgeview, will launch the Venue at the Horseshoe Casino in Hammond, Indiana, a 3,300-capacity space that's booking big names from Alicia Keys to Smashing Pumpkins.

But those Chicago holdings are only a fraction of their business. C3 produces many other festivals and has several venues in Austin (though it's also already angling for a piece of a Chicago 2016 Olympics). Live Nation owns the House of Blues chain and produces or owns a stake in companies that produce all kinds of festivals in America and Europe, from Glastonbury to Ozzfest. And LA-based AEG Live, in addition to producing Coachella, owns about 30 venues, from clubs to arenas, in major U.S. markets, London, and Berlin.

The fallout from Lollapalooza demonstrates how big operators can affect local businesses. The "radius clauses" in Lollapalooza contracts, which prohibit the artists from playing in or around Chicago before and after the fest, deplete club schedules for months. Empty Bottle owner Bruce Finkelman recently told Time Out that his club has had trouble filling dates this summer, while Tim Tuten of the Hideout said he had to push this year's Block Party back because of Lollapalooza-related complications.

Jam produced Lollapalooza's Chicago stops back when it was a much smaller, one-day touring event, and "never had noncompete agreements with the acts," says Mickelson. "Nor did we have a contract that said Jam had to be the promoter of any other shows of those same acts which occurred on or around the date." One has to wonder if Jam, put in the same position as C3, would exert the same stresses on the scene. It does much of its business with many of the same clubs now getting starved by Lollapalooza.

Then there's the negative effect on music itself when fewer and fewer entities control more and more of the business—look what happened to radio in the 1990s. Live Nation's Mike Luba insists he was joking when he told an audience of Florida city commissioners in June that there'd be no jazz at a Fort Lauderdale festival because "we're doing everything we can to eliminate jazz from American culture," but all the same it's scary to think that big production companies with agendas—like, hypothetically, they have a problem with top-selling artists saying they're ashamed that the president's from Texas—are becoming dominant enough to squeeze certain acts, or certain entire genres, out of the concert circuit.

And then there are Live Nation's famous 360 deals, where it not only produces and hosts the artists' tours but manages them, manufactures and sells their merchandise, and puts out their records. The concert industry isn't suffering the way the record industry is, so Live Nation can offer more cash up front. Madonna's ten-year, $120 million contract with Live Nation Artists has removed from the major-label system one of its most reliable profit machines. For an increasing number of artists—Shakira, Jay-Z, Nickelback—deals like this are too much to pass up. And if you think the major labels are so risk averse and bottom-line focused that they only attract toothless artists now, just wait till it's not a label in charge but a company with a stake in every aspect of the artist's professional life.

A couple things give me hope. Maybe these megacompanies will overreach and get burned—if the record industry continues to slide and selling recorded music becomes a sufficiently difficult way to make giant piles of money, they may abandon 360 deals as inefficient. And then there are the smaller companies, like Jam and Knitting Factory Entertainment, going head-to-head with the giants. "It's tough to compete against, but we've managed to do that," Mickelson says. Jam prevailed in a federal case against Clear Channel in 2005, after accusing it of anticompetitive practices in connection with Supercross promotion, and even though the $90 million jury award was at least partly tossed out on appeal (Mickelson won't comment on the status of the case), Jam's victory stood. And now it's won a small victory in snagging the Uptown.

Supersize concert producers have their place. If it weren't for C3, I don't know that anyone could or would have brought Daft Punk and their insane pyramid stage setup to the States, for instance. But once apex predators like that enter your ecosystem, you've got little choice but to wait and see how the battles between the big boys shake out. It makes sense to pull for the local giant—and hope it knows better than to shit where it eats.v

Care to comment? Find this column at chicagoreader.com. And for more on music, visit our blogs Crickets and Post No Bills.

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