BUSINESS NEWS: S.T.A.R.S. Productions To Amicably Resolve Jimmy Buffett Claim Of Trademark Infringement Over Mark Of Tribute Band

(CelebrityAxxess MediaWire) — S.T.A.R.S. Productions, a New Jersey-based entertainment booking agency, is cooperating with Jimmy Buffett to resolve an asserted infringement of Buffett’s trademark rights. The issue arose out of S.T.A.R.S.’s creation, development and representation of the Jimmy Buffett tribute band, Parrotville. S.T.A.R.S. first used the “Parrotville” mark on March 20, 1999.

Last week, a Frederick, MD roadside grill, 'Cheeseburgers ‘n Paradise,' bowed to pressure from Buffett to change its name. Buffett had asserted trademark infringement based upon his 1978 hit song, “Cheeseburger in Paradise.” The Associated Press reported on April 9, 2004 that the Maryland eatery was the second restaurant in two months to change its name under pressure from Buffett.

Through counsel, Greenberg Traurig, LLP in Atlanta, Buffett provided notice to S.T.A.R.S. that he was the owner of federally-registered trademarks in the names, “Parrothead” and “Margaritaville.” It was asserted that Buffett had long used and promoted the marks in association with products and services. He claimed that S.T.A.R.S.’s “Parrotville” mark both infringed upon and diluted the Buffett-owned marks. He further asserted that S.T.A.R.S.’s use of the “Parrotville” mark created a likelihood that consumers would mistakenly believe that “Parrtoville” services were somehow associated or affiliated with or endorsed by Jimmy Buffett. S.T.A.R.S. was therefore directed to cease and desist from further use of the “Parrotville” mark.

“S.T.A.R.S. routinely represents bands whose acts pay tribute to national and international performers,” said S.T.A.R.S.’s President Stephen Tarkanish. He observed that he was not aware of any prior trademark challenges to tribute bands. Tarkanish stressed that S.T.A.R.S.’s cooperation with Buffett was borne out of respect for Buffett’s long, pre-existing intellectual property rights.

S.T.A.R.S.’s trademarks include “THE NERDS,” a New Jersey-based act whose career and popularity have spanned twenty-years.

S.T.A.R.S. and Tarkanish have been active participants in the entertainment industry, particularly in the market segment that relates to musical performing groups, since 1966. S.T.A.R.S. has been licensed by the State of New Jersey to operate as an entertainment agency since 1988. S.T.A.R.S. is represented by Terence Camp, Esq. with the law firm of Budd Larner, P.C. in Short Hills, NJ. –Bob Grossweiner and Jane Cohen

Report: Time Warner May Face SEC Charges

NEW YORK (AP) — Federal regulators are close to accusing Time Warner Inc. of faulty accounting for $400 million in revenue it booked in 2001, a newspaper reported Tuesday.

The company declined to comment on the report in The Washington Post, saying only that it was continuing its efforts to cooperate with the investigations being done by the Securities and Exchange Commission and the Department of Justice.

Regulators have been investigating Time Warner's accounting for two years, including a $400 million ad deal with the German media conglomerate Bertelsmann. The investigations are still under way, and authorities have yet to announce a conclusion.

The company has previously disclosed in regulatory filings that it disagrees with the judgment of the SEC that its accounting of the $400 million Bertelsmann ad deal was wrong, and has said it may be required to make further restatements. Time Warner already restated $190 million in revenue in 2002 because of incorrect accounting at its online division.

The Washington Post, quoting unidentified people familiar with the situation, reported in its Tuesday editions that the SEC plans to send a formal notification, called a Wells notice, to Time Warner by early summer with allegations of wrongdoing. After that, the company and regulators would begin talks to negotiate a settlement.

In Washington, SEC spokesman Matt Well declined comment.

Time Warner's shares were off 47 cents to close at $16.90 on the New York Stock Exchange.

Overall Music Sales Declining Among Teens And Their Parents

(CelebrityAccess MediaWire) — Less excitement about new releases and more competition for entertainment spending dollars causing teens to spend less on CDs, says The NPD Group. According to recent news reports, the music industry began to show some positive signs of fiscal recovery beginning in 2003. The NPD Group, Inc. reports, however, that teen consumers are not on the leading edge of this industry up-turn.

Overall dollar sales of music CDs fell eight percent last year compared to 2002. NPD estimates that three quarters of this decline can be directly attributed to unit sales declines last year, while the rest is attributed to recent retail price reductions. Among teens aged 13 to 17 years old, sales declines were even steeper reaching 15 percent in 2003.

"Certainly illegal peer-to-peer music file sharing continues to plague the music industry, but that's only part of a larger story" said Russ Crupnick, vice president of The NPD Group. "Another aspect of these sales declines is based on competition we're seeing from alternative entertainment-related spending options for teens, such as cell phones and video games. As music sales continued to fall, video games software unit sales rose 12 percent in 2003 among teens aged 13 to 17 years old."

NPD's information also suggests that the 2002 repertoire of new releases was more appealing to young consumers than were last year's releases. Thirty releases sold more than 500,000 units to teens in 2002, compared with only 15 releases that reached that level in 2003. Top-selling 2003 releases to teens included albums by such artists as 50Cent, Good Charlotte and Simple Plan; however, the overall music line up last year did not reach the levels seen in 2002, when Eminem, Nelly, Avril Lavigne and Linkin Park dominated the charts.

Sales to the 35- to- 44-year-old age group also declined sharply (down 13 percent), while gift purchasing of music among this demographic fell 20 percent. According to NPD's data, the younger age groups buy more music, but the 35- to 44-year-old group is the most important in terms of buying music for others. No artist approached the gift levels of Lavigne, Nelly and Pink among this age demographic.

"There are two negative effects here," according to Crupnick. "If kids aren't clamoring for music, not only do we lose sales to younger consumers, but also parents will be less likely to shop the music section on behalf of their children. On top of that, DVD's are to older demographics what video games are to teens. An October 2003 NPD survey showed that 26 percent of DVD purchases were made by 35 to 44 year olds. That's fierce competition for the consumer's entertainment dollar."

One bright spot in the CD sales landscape was found within an older demographic group. Dollar sales to the 55- to 64-year-old age group actually increased six percent, driven strongly by the continued sales of Norah Jones's 2002 release. In addition, new releases from Clay Aiken and Rod Stewart were also popular among this demographic, as were country music artists, like Alan Jackson and Toby Keith.

The NPD Group's MusicWatch tracking service, which reports consumer buying patterns for music based on NPD's online panel. The data represent annual 2002 and 2003 periods, from a sample of over 100,000 music purchases per year. The video games data is sourced from NPD Funworld Video Games service. –Bob Grossweiner and Jane Cohen

Virtual Orchestra Goes Off-Broadway

NEW YORK (AP) — It may be called "The Joys of Sex," but a new off-Broadway musical has much more than hanky-panky on its mind.

Among the show's three musicians is one who plays a so-called virtual orchestra _ a computerized system that mimics acoustic instruments. The machines became a rallying point for theater musicians in New York last year, when producers planned to use them in place of live players.

Musicians went on a strike that shut down all but one of Broadway's 19 musicals playing then. The four-day walkout cost the city $10 million in lost box-office receipts and revenue from other businesses, such as restaurants and hotels, according to city tourism officials.

Although "The Joys of Sex" is an off-Broadway show and therefore not under union jurisdiction, Local 802 of the American Federation of Musicians plans to rally outside the Variety Arts Theatre beginning with the show's first preview performance Tuesday night. The musical opens May 12.

The union said protesters will return for every performance thereafter until the production closes or the machine is removed.

"It's obvious to us that what is really going on here is that producers are attempting to do indirectly what they weren't able to do on Broadway last year," David Lennon, Local 802's president, said. "We believe the goal is to eliminate live music with this machine to reap greater profit."

The show's composer said his decision to use the virtual orchestra was motivated entirely by creative concerns.

"The show has a lot of jokes where I wanted to play with the music," David Weinstein, 28, said. "In one song, (a character) is talking to an old friend about when they were in eighth grade, and there's a Pac-Man reference accompanied by a little Pac-Man music. I could do a lot of special effects … and that's why I chose to use it. It does all these fun tricks."

Ben Sprecher, the show's producer, said that when the show was first produced at the New York International Fringe Festival two years ago, it had three musicians playing acoustic instruments _ the same number it has now.

When Sprecher decided to stage the show off-Broadway, Weinstein asked him if one of the musicians could play the virtual orchestra to get the musical the sound he wanted. Sprecher consented despite the equipment's high price tag: $25,000 plus $400 a week to rent it.

"We are not replacing musicians," Sprecher said. "The show always did have three musicians and it always will have three musicians. Am I going to let a union legislate what I can and can't use, as long as I'm not taking jobs? Not in a million, zillion years."

Lennon said he was "not impressed" by Weinstein's argument that he composed the score with the virtual orchestra in mind. "That's about as valid as claiming to compose for a tape recorder," he said.

As in a similar dispute last year, when the Opera Company of Brooklyn planned to use the virtual orchestra, Local 802 is also concerned that the show is being used as an advertisement for the technology, manufactured by RealTime Music Solutions under the brand-name Sinfonia.

In the Brooklyn dispute, the union eventually reached an agreement with the opera company barring future use of the machine or any other type of synthetic music. RealTime challenged the deal, but the agreement was upheld in a recent decision this month by the National Labor Relations.

The use of virtual orchestras became more mainstream in March, when British producer Cameron Mackintosh moved his long-running London production of "Les Miserables" to a smaller theater. Nine of its 21 musicians were replaced by the Sinfonia _ a decision Mackintosh insisted was made because of lack of space in the pit.

Weinstein and Sprecher denied using the Sinfonia to demonstrate its capabilities. Weinstein said he had been using the technology for at least five years to compose film scores, and that when it came time to produce "Sex" off-Broadway, the producers approached RealTime _ not vice versa.

Weinstein, who is a member of the Los Angeles-area musicians' union, Local 47, wrote a letter to chapter president Hal Espinoza seeking his advice on the dispute. Espinoza wrote back asking Weinstein to pull the Sinfonia.

"He gave me a stock answer and said, 'It's not an issue with your show but we have to think about the long term,'" Weinstein said.

"Their concerns are rational, but on this particular show they're not really. I would be a lot more nervous and scared if I were replacing musicians."

Disney To Reshuffle Management At ABC

LOS ANGELES (AP) — The Walt Disney Co. is planning a management shake-up at its fourth-place ABC network to stem a ratings slide and placate dissatisfied investors.

The moves include the departure of Lloyd Braun, who has served as chairman of the ABC Entertainment Television Group since 2002, according to company sources familiar with the matter. Meanwhile, Anne Sweeney, a rising star credited with expanding the reach of Disney's non-sports cable networks, will likely be given a more prominent role at the struggling network, sources said.

The changes are seen as an effort to buy more time for a Disney recovery while fending off critics of the media conglomerate, including large pension funds and dissident ex-board members.

"The resident management will take the blame," said Harold Vogel, CEO of Vogel Capital Management in New York. "They are going to do something just to show there is some momentum to the shareholders."

Analysts point out that broadcast television is a notoriously cyclical business, with turnarounds often taking years and hinging on shows becoming mega-hits like NBC's "The Apprentice" or Fox's "American Idol."

As a result, analysts view the ABC shake-up as more symbolic than effective — at least in the short term. Pilots for the fall season are already in production and the networks will present their lineups to advertisers in a few months.

"Everybody understands if you put a new management into a network you're not going to see results overnight, and if you do it's just luck," said Tom Wolzien, an analyst with Sanford C. Bernstein & Co..

In the week ended April 4, ABC had an average of 7.4 million viewers a night, compared to 13.2 million for ratings leader CBS, according to Nielsen Media Research.

Though ABC has developed sitcoms like "According to Jim" that partly stemmed its ratings slide on some nights, it needs to find a hit reality show or a compelling drama to hook viewers, analysts said.

The network could benefit if the shake-up reduces the number of hoops programmers must jump through to get a show on the air.

"From a Wall Street perspective, it's tough to know who runs what," said David Miller, an analyst with Sanders Morris Harris. "As it stands right now, there's too much bureaucracy, and you can't make creative decisions in a bureaucracy."

Poor ratings also hinder recoveries because producers tend to take their best shows to more successful networks.

"When you're at the bottom of the heap, you're not the first stop for the good stuff," Wolzien said. "The first stop will be CBS and NBC."

The executive changes, which are still being discussed, include a new role for Alex Wallau, who has been president of ABC since 2000 overseeing news, sports, daytime and children's programming as well as the prime-time schedule. His revised duties have yet to be determined.

Susan Lyne, president of ABC Entertainment, is expected to remain and be given more authority over the prime-time schedule.

Braun previously served as co-chairman of Disney's television division with Stu Bloomberg, who was fired when ABC slipped to third place among the networks after the collapse of its once-hot quiz show, "Who Wants to Be a Millionaire."

Disney is expected to elevate Sweeney, chief of ABC Cable Networks, to a more prominent role, possibly taking on some of the responsibilities held by Braun and Wallau.

She joined Disney in 1996. As president of Disney Channels Worldwide, she presided over the expansion of the Disney cable channel from 14 million homes to more than 80 million homes as cable companies moved the channel from a pay service to the basic cable tier.

She also oversaw the launch of Disney channels in other countries, as well as the creation of cable channels Toon Disney and SoapNet domestically.

Several months ago, Sweeney was given the task of turning around the ailing ABC Family channel, which Disney acquired as part of its $5.2 billion purchase of Fox Family Worldwide in 2001.

ABC is only part of Disney's larger media networks division, which includes the profitable Disney Channel and ESPN sports network. Analysts said improvement in Disney's theme park and animated film operations are more important for an overall corporate recovery.

"I'm sure Disney management would like to see improvement in any area sooner rather than later," said Janna Sampson, co-manager of the AmSouth Select Equity Fund and director of Portfolio Management at Oakbrook Investments.

"But as I rank the problems, my concerns over ABC are bottom of the barrel."

Still, ABC has become a growing source of embarrassment and frustration at Disney, especially after cable giant Comcast Corp. made an unsolicited $54 billion bid for the company in February and singled out the network for improvement. Disney's board has rejected the bid as too low.

Analysts said doing something — anything — will likely please Disney investors.

"They have to show they are doing something about it and the only clear way to do that is move people around or get rid of people," said Paul Kim, an analyst at Tradition Asiel Securities. "It's probably a very smart thing to do."

Over 250,000 Members Join MusicNet@AOL

(CelebrityAccess MediaWire) — Just over a year after its launch, MusicNet@AOL has signed up more than 250,000 subscribers making it the leading on-demand music subscription service available online. AOL integrates MusicNet@AOL throughout its music programming and products. AOL Music represents the #1 music destination online with more than 19 million visitors per month (comScore MediaMetrix).

America Online has added an enhancement to MusicNet@AOL that lets subscribers to the music subscription service buy individual songs a-la-carte for 99 cents each. The option to purchase and burn songs to CD is now available to all subscribers who will pay one flat rate membership fee of $8.95 which allows them to download and stream on demand any of the 600,000 songs in MusicNet@AOL's catalog.

"A legal digital revolution is underway, and more than a quarter million fans experience it every day on AOL, where members have made MusicNet@AOL the nation's No. 1 on-demand music subscription service," said Bill Wilson, senior vice president, AOL Entertainment. "And now we've made the MusicNet@AOL experience better than ever. For less than the cost of a single CD a month, members have at their fingertips more than a record store's worth of music, letting them discover and explore a vast world of musical entertainment."

Alan McGlade, CEO of MusicNet, commented: "We couldn't be more thrilled about our successful partnership with AOL. In less than a year MusicNet@AOL has established itself as the largest on demand music subscription service with new customers coming on at a rapid pace. This is what happens when two leaders in their respective businesses join forces to deliver a great experience for consumers." –Bob Grossweiner and Jane Cohen

Gaylords To Sell Entertainment Company Shares

NASHVILLE, TN (AP) — The Gaylord family plans to sell more than half of its shares in Gaylord Entertainment Co., ending its status as the largest shareholder in the hotel and entertainment company.

In a filing Thursday with the Securities and Exchange Commission, the Gaylord family said it plans to sell 5.8 million of its approximately 11 million common shares in a public offering at $31.01 per share. If completed at the offer price, the sale would generate nearly $180 million.

The sale, scheduled for later this month, would make New York-based Gabelli Funds the top shareholder in Gaylord Entertainment with 6.4 million shares, or about 16 percent of Gaylord's 39 million outstanding shares.

The Gaylords of Oklahoma City, Okla., formed the business in the 1980s when they purchased the Grand Ole Opry, Opryland Hotel and a theme park. The company went public in 1991 and brought in an outside management team in 2001 led by president and CEO Colin Reed.

The stock sale follows the announcement that Christine Gaylord Everest, daughter of the company patriarch, the late Edward L. Gaylord, is resigning from the company's board to concentrate on the family's media holdings in Oklahoma.

Shares of Gaylord closed at $30.60 on Thursday. The stock market was closed Friday for a holiday.

Gaylord Entertainment

Clear Channel Drops Stern On FCC Threat

WASHINGTON (AP) — The nation's largest radio chain dropped the country's best-known shock jock Thursday after federal regulators proposed fining it $495,000 for sexually explicit material on the Howard Stern show.

As part of its stepped-up enforcement of indecency regulations, a unanimous Federal Communications Commission fined Clear Channel Communications the maximum $27,500 for each of 18 alleged violations. Regulators departed from their norm by citing Clear Channel for multiple violations in a single broadcast rather than simply issuing a single fine for an entire show.

John Hogan, president of Clear Channel Radio, said the government's crackdown on indecency has gotten his company's attention.

"Mr. Stern's show has created a great liability for us and other broadcasters who air it," said Hogan, who suspended Stern in February from the six Clear Channel stations that carried him. "The Congress and the FCC are even beginning to look at revoking station licenses. That's a risk we're just not willing to take."

Clear Channel has 30 days to contest the fine. The company last month agreed to pay a record $755,000 indecency fine for broadcasts by the disc jockey known as "Bubba the Love Sponge," who was fired.

In a statement posted on his Web site, Stern characterized the fine as furtherance of a "witch hunt" against him by the Bush administration, which he says is punishing him for his criticism of the president.

"It is pretty shocking that governmental interference into our rights and free speech takes place in the U.S.," he said. "It's hard to reconcile this with the 'land of the free' and the 'home of the brave.'"

Stern's nationally syndicated show features graphic sexual discussion and humor. It appears on more than 30 stations — most of them owned by Viacom Inc.'s Infinity Broadcasting unit — and draws millions of die-hard listeners.

Infinity spokesman Dana McClintock said the company has no plans to take any action against Stern.

Last month, the FCC proposed fining Infinity $27,500 for a Stern show broadcast July 26, 2001, on WKRK-FM in Detroit. Infinity paid $1.7 million in 1995 to settle various violations by Stern.

The Center for Public Integrity, a watchdog group, said fines against Stern accounted for almost half of the $4 million in penalties proposed by the FCC since 1990.

Critics who bemoan a growing coarseness of the public airwaves say the FCC and Congress need to dramatically increase fines and enforcement to ensure major broadcasting companies don't see occasional fines as simply a cost of doing business.

The House has voted to raise the maximum fine to $500,000 and to require the FCC to consider revoking a broadcast license after three indecency violations. Similar legislation is pending in the Senate.

"A $27,500 fine to a company that does $27 billion worth of business is less than a mosquito on a windshield," said L. Brent Bozell III, president of the Parents Television Council, a conservative advocacy group. "It is just so insignificant as to be laughable."

Federal law bars radio stations and over-the-air television channels from airing references to sexual and excretory functions between 6 a.m. and 10 p.m., when children may be tuning in. The rules do not apply to cable and satellite channels or satellite radio.

A listener complained about Stern's April 9, 2003, show on a Fort Lauderdale, Fla., station. The show contained discussions about sex accompanied by flatulence sounds. The FCC action came at the end of the one-year deadline for it to act.

Previously, when the commission has fined broadcasters it has been for the contents of an entire show. And it normally only levied the penalty against stations mentioned in a complaint.

In this case, though the complaint only involved the Fort Lauderdale station, the commission determined there were three indecency violations during the program and fined Clear Channel for all six of its stations that aired the show for a total of 18 citations.

"Today's decision is a step forward toward imposing meaningful fines," Commissioner Michael Copps said.

Though the commission received no complaints from listeners to Infinity stations, it is looking into fining that company, too.

Clear Channel Drops Stern On FCC Threat

ATLANTA (AP) — Clear Channel Communications fired two radio station hosts Friday for broadcasting sexual dialogue during a commercial.

Larry Wachs and Eric Von Haessler, also known as "The Regular Guys" in their show on Atlanta radio station WKLS-FM, aired a skit on March 19 called "backward smut," which involved recording a pornography star talking explicitly, then playing her voice backward over the air.

The hosts left a microphone on after the prank, however, causing listeners to hear sexual talk during a commercial. Wachs blamed "technical difficulties," and Clear Channel Communications, which owns the station, said at the time the prank appeared to be an accident.

Clear Channel Vice President Pat McDonnell announced the end of the show Friday because of violations of a "zero-tolerance" indecency policy. Clear Channel is the nation's largest radio chain.

A message left at company headquarters in San Antonio was not immediately returned Friday, and Wachs and Von Haessler were also unavailable.

Earlier this week, Clear Channel dropped shock jock Howard Stern from its stations for alleged indecency and received notice it was being fined $495,000 by the FCC for 18 indecency violations.

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