First Amendment and Trade Secrets Issues In Government/Private Promoters' Live Events

Many local governments operate live event venues. Unlike dealing with private venues, concert promoters and producers might bring First Amendment free speech claims against government-controlled event facilities over how a local government chooses which promoters/producers with which to work. There's also the issue of whether the governmental authority or a private promoter owns ticket subscriber information that the private promoter generates through its live events work at a government-controlled venue.

Celebrity Attractions Inc. v. Oklahoma City Public Property Authority, CIV-15-1267 (W.D.Okla.), is a case in point. Though it had no written exclusivity provision, Celebrity Attractions presented the Broadway theatrical season at the government-controlled Oklahoma City Civic Center Music Hall (CCMH) for 24 years. There is a formal process for obtaining a use permit (that states the CCMH use dates, venue rental fees), as well as a written box office agreement between the Public Property Authority and a permittee covering ticket sales and related concerns. The box office agreement provides the CCMH with the sole right to sell event tickets, but stipulated Celebrity as “Primary Box Office” ticket seller for season renewals. The Public Property Authority/Celebrity agreement also stated: “All account information collected for storage and use on [the box office] ticketing system, is considered the intellectual property of T.H.E. Box Office and the Oklahoma City Public Property Authority.”

But the property authority and the Civic Center Foundation, which was created to raise money for the CCMH, decided the foundation should co-promote CCMH events as a way to raise $38 million needed for venue improvements. But the Public Property Authority denied Celebrity Attractions a use permit for the 2016-2017 season, instead choosing Nederlander Producing Co. of America as its co-promoter.

Celebrity Attractions responded with a lawsuit against the Public Property Authority and the Civic Center Foundation in the U.S. District Court for the Western District of Oklahoma. The suit sought monetary damages and an injunction requiring the city to issue a 2016-2017 permit to Celebrity Attractions and to bar the foundation from using Celebrity Attractions' consumer information from shows Celebrity produced at the CCMH.

On the use permit issue, Celebrity Attractions in part argued violation of its First Amendment rights. But Chief U.S. District Judge Joe L. Heaton decided in January 2016 that Celebrity Attractions failed to show the irreparable harm required for an injunction. “There is no suggestion that the Authority contracted with the Foundation, or that the Foundation selected Nederlander, in an effort to bring in or keep out certain Broadway shows or types of Broadway shows,” Chief District Judge Heaton wrote. “The evidence at the hearing indicated that defendants were concerned with the timeliness of shows (i.e., whether they came to Oklahoma City relatively quickly after appearing on Broadway, rather than several years later), but that is not the same as 'viewpoint[]'” discrimination under the First Amendment.

The chief district judge added: “The decision of the city (i.e., the Authority) to adopt a sort of private-public partnership for operation of the CCMH, or to use a related, nonprofit entity as an arm for fundraising and other purposes, is consistent with the approach of many other cities around the country and among the range of reasonable options available to a city for operation of its facilities. The decision to attempt to fund CCMH operations and improvements by having the Foundation assume a 'promoter' role ( i.e. , becoming an equity player in the enterprise, with participation in the financial upside of the venture, rather than just charging flat fees) is within the zone of reasonable options.”

(The district judge did find that Celebrity may have a viable breach of contract claim over language in the January 2015 use permit it got from the city that stated Celebrity and the city would “review previously held dates and endeavor to negotiate and execute a successor permit” for the following season.)

On Celebrity's request for injunctive relief based on a claim of trade secrets misappropriation ' over the foundation's use of Celebrity-generated ticket-subscriber information ' the district court did note: “If Celebrity in fact owns the data or otherwise has the exclusive right to use it, there is no apparent interest of the public [in denying Celebrity an injunction] which would outweigh those private property rights or the reasonable contractual expectations of the parties.” The court also acknowledged: “The identification of an existing customer base obviously provides a substantial advantage in marketing efforts for futures shows or seasons,” but added, “However, the same can be said of the Foundation or its co-promoter.”

In the end, Chief District Judge Heaton concluded: “Even if the [Public Property Authority/Celebrity Attractions] box office contract's reference to Celebrity as being the 'Primary Box Office for season ticket renewals' puts Celebrity in the position of being the 'T.H.E. Box Office,' that still does not negate the language of the agreement which says the lists are the property of the box office 'and the Oklahoma City Public Property Authority.”

Conclusion

The primary takeaways from the Celebrity Attractions ruling are that local governments have wide latitude, outside of content-based considerations, in deciding which live event promoters and producers should be their partners, and can clearly enforce contractual rights to the consumer information its private partners collect through their co-promotion/production activities.

Stan Soocher is Editor-in-Chief of Entertainment Law & Finance and a tenured Associate Professor of Music & Entertainment Studies at the University of Colorado's Denver Campus. His most recent book is Baby You're a Rich Man: Suing the Beatles for Fun & Profit (ForeEdge/University Press of New England). For more, visit www.stansoocher.com.