RIVALS NOW PARTNERS IN GREEK MARKETING DEAL COMES AFTER CONTRACT FIGHT.

Byline: Beth Barrett Staff Writer

After more than two years of vicious corporate battling to win the lucrative Greek Theatre concession, House of Blues Concerts and longtime operator Nederlander-Greek Inc. announced Tuesday they have joined forces by creating a marketing partnership.

Nederlander formally became the sole bidder for the controversial deal when the city's deadline for seeking a 10-year operating contract passed Tuesday afternoon. House of Blues had twice blocked the deal but dropped out when its earlier high bid was rejected.

House of Blues, which has exclusive programming rights at the Universal Amphitheatre, and Nederlander agreed to jointly promote and market the two concert venues under a profit-sharing agreement, said Nederlander attorney Adam Burke with Iverson, Yoakum, Papiano & Hatch.

House of Blues Concerts announced the agreement as the City Council was approving a $1 billion expansion around Staples Center sought by billionaires Philip Anschutz and Rupert Murdoch, and featuring a 7,000-seat concert and performance arena.

Anschutz's Concerts West company reportedly is trying to buy a controlling interest in House of Blues.

House of Blues Concerts Executive Vice President Adam Friedman said there is no offer on the table and denied the company has serious cash flow problems. ``I can't tell you there hasn't been interest.''

Michael Roth, director of communications for Anschutz Entertainment Group, declined comment.

A third company, SFX, which had joined Nederlander previously, dropped out after being purchased by Clear Channel Communications.

SFX, the nation's largest concert promoter, decided the Greek was no longer a ``good economic deal,'' said attorney Mark Armbruster, who represented the firm.

Mark Siegel, a board member of the Los Feliz Improvement Association, said the Greek saga is about a ``legitimate process'' being undermined.

In late 1999, the council gave Nederlander a five-year extension without bidding but was forced to back down after House of Blues Concerts funded a petition drive to put the matter to voters. The politically well-connected operators of the Greek netted millions over 25 years while the city paid for most repairs, utilities and capital improvements.

House of Blues was recommended for the concession by city staff, an independent panel and outside consultants, but the Recreation and Parks Commission rejected both bids, leaving $11.1 million in improvements and about $1 million more in city revenues annually on the table.

``The result is at the expense of the taxpayers and the people of Los Angeles,'' Siegel said.

Recreation and Parks Commissioner Lisa Specht said she was disappointed by the lack of competition. A House of Blues backer, she said would support Nederlander's bid if it meets city requirements.

``They've operated it for years, they have the experience,'' Specht said.

Burke said the bid meets city requirements for improvements and $1.2 million in annual rent, compared to $50,000 under the old contract.

Recreation and Parks General Manager Ellen Oppenheim estimated it will take the city 60 to 90 days to evaluate and process the Nederlander bid.

Both sides said the deal began several weeks ago when both Nederlander and House of Blues officials ended up at the same table at a arena management conference in Los Angeles. Both sides soon recognized the feud was costly while they shared similar goals.

Friedman said the city will get the highest guaranteed rent in the country for such a venue. ``That's unbelievable. It's the result of the competition in the first round.''

Burke said it became clear it was time to ``stop the craziness'' and work together. ``Sometimes the most antagonistic situations force you to sit down. We'd been at each other's throats so long.''

Sources said House of Blues Concerts' officials felt they could not beat City Hall politics, anticipating the reappointment of Mike Roos - who testified on Nederlander's behalf last year - to the commission.

Roos said he hasn't been notified, but would like his old job back. Specht, a top official in Mayor James Hahn's campaign, and who backed House of Blues, also is expected to be reappointed.