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Wednesday, May 11, 2011

Merch rep says Harold MacKay still owes $63,000 for Black Eyed Peas show

David Bluestein warns this might affect the Metallica show.

Posted By on Wed, May 11, 2011 at 4:24 PM

click to enlarge gigtrouble.jpg
On Monday it was announced that Metallica will perform on Citadel Hill on July 14. The promoter is none other than Harold MacKay, whose Power Promotional Events company put on the failed Black Eyed Peas show at the heart of the city’s concert loan scandal. Power Promotional Events has since gone out of business; the Metallica show is being put on by MacKay Entertainment, Inc., which is registered to Harold MacKay’s wife, Michele MacKay.

But fans might not be able to buy Metallica CDs, t-shirts and other merchandise at the Halifax show, says David Bluestein, whose company, Bluestein Export Import Inc., handles logistics for the companies that license rock show merchandise in Canada. Bluestein claims that MacKay owes the companies Bluestein represents $63,000 from merchandise sales at the Black Eyed Peas show.

“I would suggest you tell all the Metallica fans that if they’re hoping to buy something, they should probably go to another show or buy it online before the show because Harold is less than forthright and doesn’t communicate like a professional,” says Bluestein in a phone interview with The Coast from his Toronto office. “It’s going to be very difficult for the Metallica merchandizers to show up.”

The concert loan scandal involves $5.6 million of secret loans made from 2008 to 2010 through a bank account for the Metro Centre. While the account was city money, it was managed by Trade Centre Limited, a provincial crown corporation. The loans, which violated both the city charter and normal city financial controls, were made at the authority of Wayne Anstey, who in 2008 and 2009 was deputy CAO for the city, but was named acting CAO in 2010. Anstey says mayor Peter Kelly was aware of the loans, but no one notified the Halifax council of the financial arrangement. After the improper loans became public knowledge in March, Anstey resigned.

The last of the loans, for $400,000, was arranged through a loan agreement signed by Anstey, MacKay and MacKay’s financial backer, Edgar Goguen. MacKay signed that document in his capacity as president of both Power Promotional Concepts, Inc. and of the now-closed Power Promotional Events, Inc. That loan was never repaid, and city taxpayers are left holding the bag.

At the time of the last loan agreement, MacKay was co-owner of Power Promotional Concepts with Goguen. According to Don Fahie, general manager at the company, after the failed Black Eyed Peas show last July, Goguen bought out MacKay and Goguen is now the sole owner of Power Promotional Concepts. Goguen is listed as Power Promotional Concepts’ president with the Registry of Joint Stock Companies.

Both Bluestein and Fahie say that Power Promotional Concepts was the concessionaire for the companies Bluestein represents. Bluestein says he had a successful relationship with Fahie for both the Paul McCartney and KISS concerts in 2009.

“We dealt with Don,” explains Bluestein. “He’s the seller, you consign your stuff to the seller---it’s my stuff, I didn’t sell it to anybody---I consign it to the seller for the venue, they sell it, they take a percentage for the venue for the right to sell and they take a percentage for doing the actual sale, and the rest belongs to the licensee that I represent.

“For McCartney and KISS,” Bluestein continues, “Don sent me a cheque, everything was great. But what happened for Black Eyed Peas was that Don gave the money---that was my licensee’s money, it wasn’t Harold’s money, it wasn’t ticket sales’ money, it wasn’t rights’ fees---it was my [clients’] money---to Harold.”

After the Black Eyed Peas show, “I turned over the money [from merchandise sales] to Harold [MacKay],” says Fahie, agreeing with Bluestein’s account. Fahie says that he was MacKay’s employee, and had no right or reason to object.

Bluestein says that in the months since, he’s received one $10,000 payment from MacKay for the merchandise, but his clients are still owed $63,000.

The bulk of the money, $57,000, is owed to Live Nation, the licensee for Black Eyed Peas merchandise, says Bluestein. But he says the remaining $6,000 is owed to Bravado International, the licensee for Weezer, which opened for Black Eyed Peas. Bravado is also the licensee for Metallica.

“You should call Scott Ferguson at the Metro Centre,” says Bluestein, referring to the president of Trade Centre Limited, which manages the Metro Centre. “Scott knows the old boy network. He called me and basically said he didn’t think anything good would come of it, that I wasn’t going to get paid.”

Ferguson remembers it slightly different. "[Bluestein] called me," says Ferguson, "because he deals with a bunch of our customers, and they suggested that he might want to call and get some advice from me. I recall the conversation; it was along the lines of 'we were involved in that end of the business, but the show was obviously experiencing difficulty, and I wasn't able to further his cause at all and how he would get paid, because I just didn't have any connect with that side of the business.'"

Bluestein insists that he was particularly wronged by MacKay.

“It’s not a services invoice,” says Bluestein, making a distinction between the money owed his clients and the money owed to Halifax-area vendors who were not paid by MacKay. “They [local vendors] got stiffed, but that’s different.”

As Bluestein sees it, the local vendors were out because MacKay “didn’t have enough revenue to cover expenses.” But in the merchandizers’ case, MacKay “went into the office and took the money. It’s not really a crime, because no cop’s going to pursue that; they’re going to say, ‘ah, you had an agreement, you gave them the stuff...’ But still, it’s different.

“It’s not that it was his revenue and then he has to pay suppliers---that was the Black Eyed Peas’ money. He merely under his agreement got a percentage and had the right to sell, but it wasn’t his money. That money was supposed to be paid immediately.

“How do you get blood from a stone?” Bluestein asks rhetorically to explain why the licensee companies haven’t taken legal action against MacKay. “The guy’s got no assets, he’s got nothing that you can see, the city is going to run and hide and say they had nothing to do with it.”

Is Bluestein certain there won’t be any Metallica merchandise at the Citadel Hill show?

“We hope there will be merchandise there,” answers Bluestein. “We’re just not going to bring it if [MacKay’s] selling it. I guess my client could take the chance in the end, but they believe me when I tell them they’re not going to get paid. If you see an armoured truck parked by the merchandise stand, you’ll know that we’re doing it ourselves.”

MacKay did not respond to a request for comment.

For The Coast's complete coverage of the Common concert financing scandal, click here.

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