a wicked concert cartel?

 An article in today’s Schenectady Daily Gazette suggests that fears we expressed and explained in 2014, here and there, were warranted as to the likely anticompetitive and anti-consumer nature of the so-called Fair Game Theater Coalition. See “Rivers Casino, Proctors team up for entertainment: ‘In no way, shape or form do I feel like we’re competitors” (Daily Gazette, by Brett Samuels, A1, March 8, 2017). The article highlights the lack of rivalry and the depth of cooperation between Proctors and Rivers Casino, and the importance of the Upstate Theatre Coalition for a Fair Game in nurturing this chummy state of affairs between entities that clearly are two of the most prominent members of the live-entertainment and leisure activity market in Schenectady and the Capital Region.

Ironically, Proctors CEO Philip Morris seems to be bragging about the very kinds of restrictions that we warned about back in 2014, when we said:

feelin’ blue

 “[T]he “Fair Game” Coalition (a/k/a The Concert Cartel) may end up achieving joint booking and venue-size limitations, and a revenue-sharing agreement with each of the 3 or 4 winning casinos.  That could mean the equivalent of territorial exclusivity, and joint booking and ticket pricing, for all/each of FairGame members, across all of the eastern portion of Upstate New York, through midState locations such as Utica and Syracuse, and apparently stretching to their members in the Western end of the State.”

On the one hand, Proctors CEO Philip Morris asserts in the Gazette article that Proctors and Rivers Casino are not competitors (a contention that would clearly by rejected by objective economists and antitrust experts); on the other hand, he makes it clear that the Fair Game theater coalition is protecting its members from casino competition across Upstate New York. According to the Gazette:

Without the Fair Game agreement, Morris said, he likely wouldn’t be feeling quite as optimistic about the relationship between the two entertainment entities moving forward.

slicingthepie “It set the stage for a collaboration that probably was critical for any next step,” Morris said. “I think if there was no Fair Game, we probably wouldn’t be doing the booking, and we might be in competitive mode.”

Casino applicants were encouraged under the Act authorizing new commercial casinos to enter into arrangements with local entertainment venues, demonstrating that the local casino “actively supports the mission and the operation of the impacted entertainment venues.” [§1320(3)(2)(D)]. The members of the Fair Game coalition were expected to help their members and the applicants gather necessary information that would facilitate such agreements. Coalition members were not given the freedom to eliminate competition among themselves, nor to prevent competition from all casinos within a large (seemingly unlimited) region. Consumers will surely lose out, with fewer choices and higher prices.

trust-buster needed

In 2014, I asked the New York Attorney General’s Antitrust Bureau to take a look at the operation of Fair Game. Although they replied to me that a preliminary investigation was being undertaken, no further communications were received from the AG suggesting that Fair Game raised antitrust concerns. In 2017, the casinos are in operation in Tyre (near Syracuse), Tioga Downs (near Binghamton), and Schenectady. The AG can now see in more detail and in action the restrictions adopted by Fair Game’s group of the largest Upstate entertainment venues and by each of the new casinos. I hope the Antitrust Bureau will therefore take a close look this time. Restrictions that unnecessarily limit competition between and among the theater-arena venues and the new casinos should be barred, allowing consumers the broadest array of entertainment and location options, and hopefully the best value for their entertainment dollars.

The creation of the Fair Game theater coalition, with its potential to limit competition from casinos and other major venues, transformed Proctors CEO from a strong opponent of having a casino in town, to a fervent casino supporter. Does any one believe this cooperation will result in more entertainment choices and lower ticket prices (beyond token gimmicks and give-aways) for the people of our community? Moreover, will lesser-known entertainment venues and options benefit, or just lose market share to the Big Guys in Town? Did our Legislature really mean to greatly reduce competition across the state between and among casinos and major entertainment venues, when it tried to reassure theaters like Proctors that they would not be run out of business if a casino came to town?

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