PHILADELPHIA – In its antitrust litigation against The Philadelphia Orchestra and The Kimmel Center, The Philly Pops have charged that the defendants engaged in anticompetitive conduct designed to monopolize the market for similar-style concerts in the Greater Philadelphia Metropolitan Area – and is now seeking a preliminary injunction to further prevent such conduct.
Encore Series, Inc. (doing business as “The Philly Pops”) first filed suit in the U.S. District Court for the Eastern District of Pennsylvania on April 13 versus The Philadelphia Orchestra and Kimmel Center, Inc. (doing business as “The Philadelphia Orchestra, The Kimmel Center and Ticket Philadelphia”) and Matias Tarnopolsky. All parties are of Philadelphia.
(Tarnopolsky was removed as a defendant on May 17.)
“The relevant product and geographic markets in this case are live symphonic popular music concerts advertised and available to patrons located in the Greater Philadelphia Metropolitan Area which includes several counties in South and Central New Jersey and Northern Delaware. Symphonic popular music includes Broadway show music, movie music, jazz, R&B and rock and roll,” the suit says.
“Popular symphonic music is highly differentiated from classical symphonic music, historically played by the Philadelphia Orchestra, in that it is marketed to different potential patrons and is attended by audiences with little duplication to those of the Philadelphia Orchestra. However, the Philadelphia Orchestra has entered the symphonic case popular music market by scheduling and selling tickets for popular music concerts in Spring 2023.”
The suit adds that beginning in Fall 2021, both the Philly POPS and the Philadelphia Orchestra, resumed their concerts at the Kimmel Center’s Verizon Hall for the 2021-2022 Season.
“Beginning in early 2022, however, and continuing to the present time, defendants POKC and Tarnopolsky using their the leverage of their newly acquired ownership and control of the Kimmel Center and Ticket Philadelphia, willfully and intentionally embarked on a series of unlawful, anticompetitive and predatory conduct with respect to the Philly POPS, with the purpose and intent to force the Philly POPS to go out of business, so that the Philadelphia Orchestra could eliminate competition between the Philly POPS and the Philadelphia Orchestra for concert dates and audiences at Verizon Hall and for corporate sponsorship, foundation, state and local grants and take over and to monopolize the market for live symphonic popular music in the Greater Philadelphia Metropolitan Area,” the suit states.
According to the plaintiff, the defendants engaged in the following anticompetitive and predatory conduct:
• Substantially and unreasonably increasing the Kimmel Center fees for the Philly POPS to perform popular music concerts at Verizon Hall;
• Slowing down the production, distribution and/or sale of seasonal tickets by Ticket Philadelphia for previously scheduled concerts by the Philly POPS at Verizon Hall;
• Proposing to the Philly POPS that it go out of business at the end of its 2022-2023 season and transfer its assets and business to the Philadelphia Orchestra;
• Hiring a public relations firm to create media messaging that the Philly POPS would go out of business at the end of the 2022-23 season and that the Philadelphia Orchestra would take over some or all of POPS concerts at Verizon Hall and elsewhere.
• The POPS considered this proposal but ultimately informed POKC that it was unable to accept it. Then defendants POKC and Tarnopolsky demanded immediate payment of substantially-escalated fees for the POPS’ Christmas Concert Series in December 2022 and ticket fees for the remainder of the season, refused to negotiate a reasonable payment plan for these fees (as the Kimmel Center had done in many prior years) and summarily evicted the POPS from the Kimmel Center, forcing the POPS to cancel and postpone its concerts at Verizon Hall and scramble for different but substantially less viable indoor venues for its already scheduled concerts;
• Defendant Tarnopolsky acting on behalf of the Philadelphia Orchestra and on his own behalf attempted to redirect grant monies previously earmarked for the Philly POPS to the Philadelphia Orchestra;
• Denying the POPS access to the Ticket Philadelphia Website for the purpose of ascertaining ticket sales for previously scheduled concerts at Verizon Hall and other venues.
UPDATE
After an amended version of the complaint was submitted on May 17, the Philly POPS filed a motion for a limited preliminary injunction on June 8, where it requested the defendants to 1) Reinstate it at Verizon Hall in the Kimmel Center for the Performing Arts for the upcoming concert season (September 2023 – May 2024), and 2) Require The Philadelphia Orchestra to cease and desist from utilizing the Philly POPS’ proprietary customer database and related information at Ticket Philadelphia, pending trial on the merits of the this litigation.
“The Philly POPS is likely to be successful on the merits of its claims under both Section 7 of the Clayton Act and Section 2 of the Sherman Act since there is substantial evidence that the defendants willfully and intentionally attempted and conspired to force the Philly POPS to go out of business by evicting it the Philly POPS from Verizon Hall, an essential facility for the performance of both classical and popular symphony concerts in the Philadelphia Metropolitan Area, and also engaged in predatory practices with the purpose and intent to force the Philly POPS to cease doing business in the Philadelphia Metropolitan Area leaving the Philadelphia Orchestra as the sole competitor for the regular performance of symphony concerts in the relevant product and geographic markets,” the injunction motion stated.
“The Philly POPS will suffer irreparable harm without the requested preliminary injunctive relief because there are currently no other feasible venues in the Philadelphia Metropolitan Area for it to perform the approximately 25 symphony concerts during the 2023-24 concert season, many of which are necessary to make up for the concerts that the Philly POPS sold tickets for through Ticket Philadelphia that were scheduled to be performed after the Philly POPS was wrongfully and illegally evicted from Verizon Hall by defendant POKC. Thus, without the ability to reschedule these concerts at Verizon Hall during the 2023-24 concert season, the Philly POPS will be forced to consider filing a bankruptcy petition given the situation with unredeemed tickets that were already sold.”
Moreover, the plaintiff argued that the Philadelphia Orchestra or POKC would not suffer any harm, since the Philly POPS concerts can be scheduled for dates and times not already scheduled by the Philadelphia Orchestra during the 2023-24 concert season – and rather, POKC would likely gain revenues from the sale of tickets to these concerts that they would otherwise forego with only the Philadelphia Orchestra occupying Verizon Hall during the 2023-24 season.
“We respectfully submit that it is in the public interest for the Philly POPS to continue to perform live symphony concerts at Verizon Hall pending trial on the merits of this litigation. The Kimmel Center including Verizon Hall was built largely with public and private charitable funding. For years, the public along with many local merchants have had the benefit of two symphony orchestras performing live classical and popular symphony concerts at Verizon Hall. Consumers of live popular and classical concerts have also had the benefit of competition between the Philly POPS and the Philadelphia Orchestra,” the motion continued.
“Moreover, many tickets were already sold by the Philly POPS through Ticket Philadelphia which have yet to be redeemed due to the Philly POPS sudden eviction from the Kimmel Center by POKC. Ticket Philadelphia has refused to honor refund requests from the patrons, so the only option is the performance of concerts by the Philly POPS during the 2023-24 season.”
For one count of attempted monopolization in violation of The Sherman Act, the plaintiff is seeking three-fold damages, along with the appropriate interest, and costs of suit including reasonable attorney’s fees, plus an injunction to preliminarily and permanently enjoin the defendants from continued predatory conduct directed to the Philly POPS, an order compelling the defendants to take affirmative action to reinstate the Philly Pops at Verizon Hall and to take other steps to reverse the effects of the anticompetitive and predatory conduct alleged in this complaint.
The plaintiff is represented by William A. DeStefano and Terri A. Pawelski of Saxton & Stump, in Philadelphia.
The defendants are represented by Steven A. Reed and Olanike Akande Steen of Morgan Lewis, both also in Philadelphia.
U.S. District Court for the Eastern District of Pennsylvania case 2:23-cv-01421
From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at nick.malfitano@therecordinc.com