Full opinion text
MEMORANDUM OPINION AND ORDER HART, District Judge. BACKGROUND Plaintiff Hendricks Music Company (“Hendricks”) brought this action against defendant Steinway, Inc. (“Steinway”) alleging that Steinway’s conduct in seeking to terminate Hendricks’ Steinway dealership because of Hendricks’ agreement to handle the concert and artist (“C & A”) program of Yamaha Music Corporation (“Yamaha”) constitutes an exclusive dealing agreement, in violation of Section 3 of the Clayton Act, 15 U.S.C. § 14, and Section 1 of the Sherman Act, 15 U.S.C. § 1, as well as monopolization in violation of Section 2 of the Sherman Act, 15 U.S.C. § 2. Hendricks moved for a preliminary injunction to enjoin the termination of its dealership, originally scheduled to take place on January 19, 1988, pending a trial on the merits. Steinway and Hendricks agreed to maintain the status quo pending a ruling on Hendricks’ motion. The motion was referred to the assigned magistrate, who conducted a six-day hearing and then issued a thorough and detailed report recommending that Hendricks’ motion be denied. Hendricks has now filed objections to the magistrate’s report and recommendation; Steinway has also filed limited exceptions to a portion of the report. The magistrate’s recommended findings of fact in this ease are not substantially disputed by either party. What are disputed are the recommended conclusions of law. Pursuant to 28 U.S.C. § 636, therefore, these conclusions must be examined de novo, but this de novo legal review does not necessitate that a new hearing be conducted; an examination of those portions of the record referred to by the parties in their written submissions to the court is alone sufficient. United States v. Raddatz, 447 U.S. 667, 673-76, 100 S.Ct. 2406, 2411-13, 65 L.Ed.2d 424 (1980). The party seeking a preliminary injunction bears the burden of establishing five requirements for the issuance of such an injunction: (1) that it has no adequate remedy at law; (2) that it will suffer irreparable harm if the preliminary injunction is not issued; (3) that the irreparable harm it will suffer if the preliminary injunction is not granted outweighs the irreparable harm the defendant will suffer if the injunction is granted; (4) that it has a reasonable likelihood of prevailing on the merits; and (5) that the injunction will not harm the public interest. Baja Contractors, Inc. v. City of Chicago, 830 F.2d 667, 675 (7th Cir.1987), cert. denied, — U.S. -, 108 S.Ct. 1301, 99 L.Ed.2d 511 (1988). The magistrate concluded that Hendricks has met its burden of establishing that it has no adequate remedy at law, that it will suffer irreparable harm if the preliminary injunction is not issued, and that the injunction will not harm the public interest. The magistrate found, however, that the two remaining elements — concerning the balance of harms and the likelihood of success on the merits — have not been established; accordingly, she recommended that the motion for a preliminary injunction be denied. Hendricks objects to four separate aspects of the magistrate’s conclusions, each of which will be addressed fully below. First, Hendricks objects that the magistrate’s assessment of the balance of harms treats competition itself as a harm to be prevented — an assumption which, Hendricks urges, runs directly contrary to the purposes of the antitrust laws. Second, and related to this, Hendricks contends that the magistrate’s assessment of the probable effects of Steinway’s conduct on Yamaha’s ability to enter the market is contradicted by her assessment of the potential for irreparable harm to Steinway if the injunction is granted. Third, Hendricks argues that the magistrate premised her assessment of Hendricks’ likelihood of success on its ability to prove the existence of an “essential facility” and that in so doing, she misconceived applicable law and overstated Hendricks’ burden. Finally, Hendricks claims that the magistrate misapprehended the standard for finding monopolization by failing to find concert grand pianos (or a putative market for C & A services) to be the relevant product market and by requiring that “market share” be the “source” of the exclusionary power. Steinway, while concurring generally with the magistrate’s report, takes limited exception to two aspects of her analysis. Steinway first takes issue with the magistrate’s conclusion that, absent an injunction, Hendricks will suffer irreparable injury and not have an adequate remedy at law. Steinway also contends that the magistrate erred in concluding that nine-foot concert grand pianos constitute a distinct product submarket in which Steinway has market power. After reviewing the report and recommendation, the parties’ objections to the report, and the record of the case, this court denies both the objections of Hendricks and the limited exceptions of Steinway, adopts the magistrate’s report in full, and denies Hendricks’ motion for a preliminary injunction. DISCUSSION Likelihood of Success on the Merits In order properly to evaluate the parties’ objections to the magistrate’s report and recommendation, which focus largely on the issue of Hendricks’ likelihood of success on the merits, the court must separately examine the magistrate’s analysis with respect to each of the antitrust violations alleged. The first of these is Section 3 of the Clayton Act, which makes it unlawful to sell goods on the “condition, agreement, or understanding” that the purchaser “shall not use or deal in” the goods of a competitor of the seller, where the effect of such condition, agreement or understanding “may be to substantially lessen competition or tend to create a monopoly in any line of commerce.” The second violation alleged involves Section 2 of the Sherman Act, which simply prohibits unilateral “monopolization.” Section 3 Clayton Act Claims In Roland Machinery Co. v. Dresser Industries, Inc., 749 F.2d 380 (7th Cir.1984), the Seventh Circuit analyzed the elements of a violation of Section 3 of the Clayton Act: (1) the existence of an agreement, albeit not necessarily an explicit one, between the manufacturer and the dealer that the dealer not handle competing goods; and (2) a showing that the agreement is likely to have a substantial anti-competitive effect in the relevant market. Id. at 392. Relying heavily on Roland, the magistrate in this case found (and Steinway does not object to this finding) that Hendricks (unlike the plaintiff in Roland) can establish the probable existence of an agreement, and thus satisfy the first element under Section 3. The magistrate concluded, however, that Hendricks is not likely to satisfy the second element of Section 3 — a substantial anticompetitive effect. The Relevant Market In reaching her conclusions with respect to Section 3 of the Clayton Act (and Section 1 of the Sherman Act), the magistrate defined the “relevant market” as the manufacture and sale of all acoustic pianos in the United States. Although she concluded that the manufacture and sale specifically of concert grand pianos constitutes a distinct product submarket for antitrust purposes (a finding to which Steinway, as discussed below, takes exception), she determined that that submarket is not itself the relevant market for purposes of evaluating the impact of Steinway’s dealer restrictions on competition. The magistrate also rejected altogether Hendricks’ argument that there exists a “market” in any recognizable sense at all for C & A pianos and services, focusing on the fact (clearly borne out in the record) that neither Steinway nor Yamaha views its C & A program as a product (or even necessarily as a discrete service), but rather, as a promotional tool for the sale of acoustic pianos generally. Having thus defined the relevant market as the market for acoustic pianos generally, the magistrate determined (and the parties do not dispute) that Steinway controls only a 1.75% share of that market. The record also indicates that Steinway’s share of the submarket in concert grand pianos is at least 48% in unit volume — clearly a sufficient share to permit an inference of market power. See Valley Liquors, Inc. v. Renfield, Importers, Ltd., 822 F.2d 656, 666 (7th Cir.), cert. denied, — U.S. -, 108 S.Ct. 488, 98 L.Ed.2d 486 (1987). As noted above, however, this market share was not considered by the magistrate to be important since, in her view, the relevant market is the market in acoustic pianos generally, and not just the submarket in concert grands. Consistent with her determination that no relevant market in C & A pianos and services can be defined in any meaningful sense, the magistrate was unable to arrive at any conclusion as to what “share” of any such putative “market” Steinway could be said to control. The evidence does show that Steinway dominates the classical concert stage, but it also indicates that Steinway artists use C & A pianos for only 20-25% of their performances. Even Hendricks concedes that when the piano supply and rental business as a whole is considered, Steinway occupies an insignificant place in it. Numerous sources exist for loaned and rented pianos, and there is no suggestion in the evidence that Steinway C & A pianos are usually, or even frequently, the instrument of choice for musical events generally. The magistrate was correct when she stated: To define a market which Steinway dominates, one would have to define a market for the supply and service of performance pianos played by Steinway artists performing at concert venues which do not use their own Steinway pianos. This court has substantial doubt that a relevant market can be defined in such a “gerrymandered” fashion. This court thus concurs with the magistrate’s conclusion that the relevant market in this case for purposes of analysis under Section 3 of the Clayton Act (and Section 1 of the Sherman Act) is the manufacture and sale of all acoustic pianos (in which Steinway has less than a 2% market share) and not, as Hendricks contends, a putative market for either concert grand pianos or C & A services (where Steinway’s presence is significantly larger). With the relevant market thus defined, the conclusion is inescapable, as the magistrate found, that within that market, Steinway’s conduct is not likely to have a “substantial anticompetitive effect.” Hendricks complains that the magistrate, having found the probable existence of a separate product submarket for concert grand pianos, should also have concluded that such pianos constitute the relevant market for purposes of analyzing the impact of Steinway’s conduct on competition. Hendricks points out that the volume of sales of all concert grand pianos, and particularly of those made by Steinway, is substantial. For example, in 1986, Steinway, through its dealers, sold approximately 140 concert grands at an average price of $25,000, amounting to revenues to Steinway of $3,500,000 from such wholesale sales. Steinway also apparently sold, and still sells, a number of concert grand pianos directly from its own retail outlet in New York City, at approximately $43,000 each. Hendricks also points out that Steinway receives substantial revenues by providing its concert grands through its C & A program (more than $1 million a year from its New York C & A program and approximately $280,000 from its dealer-operated C & A programs). Adding these figures, Steinway’s revenues from either the sale or lease of concert grand pianos for concert performances amounts to approximately $5 million per year, representing at least 15% of its total annual revenues of $33 million. As Hendricks properly points out, the size of this market is hardly insignificant. Hendricks cites Sargent-Welch Scientific Co. v. Ventron Corp., 567 F.2d 701 (7th Cir.1977), cert. denied, 439 U.S. 822, 99 S.Ct. 87, 58 L.Ed.2d 113 (1978), for the proposition that a small submarket of a larger product market may itself constitute a relevant market for antitrust purposes. But Hendricks’ argument on this point overlooks the undisputed fact that, for both Steinway and Yamaha, the putative markets in concert grand pianos and in C & A services exist essentially only as a means to create a public perception that their respective pianos are the choice of artists. In so doing, they hope to convince the public of the prestige and quality of their respective brands, with the ultimate objective of promoting sales in the market for acoustic pianos generally. Sargent-Weleh itself makes clear that in determining what constitutes a relevant market for antitrust purposes, the goal is to “delineate markets which conform to areas of effective competition and to the realities of competitive practice.” Id. at 710 (citing L.G. Balfour Co. v. FTC, 442 F.2d 1, 11 (7th Cir.1971)). Sargent-Weleh involved a manufacturer of precision balances who had only an 8.2% share in the overall market for precision balances but a 90% share in a specialized submarket for electromagnetic micro-balances. The electronic microbalances constituting the submarket were typically purchased only by technically sophisticated customers for specialized applications. They followed a price structure apparently unrelated to the price structure for ordinary precision balances, and the demand for them had been found to be relatively insensitive to price changes. In these respects, the electronic microbalances in Sargent-Weleh, which the court found to constitute a wholly distinct relevant market for purposes of antitrust analysis, are similar to the concert grand pianos involved in this case, with their specialized buyers, low price elasticity, and unique physical characteristics. The crucial distinction, however, is that when the manufacturer in Sargent-Weleh introduced its electronic microbalances, “it saw itself appealing to a new end-user market.” Id. at 771. Here, by contrast, as already noted, it is clear that concert grand pianos and C & A services are viewed by both piano manufacturers not primarily as products or services at all, but rather, as promotional tools to promote their positions in the overall acoustic piano market. (In fact, it is clear that this was a primary factor motivating the development of Yamaha’s new concert grand, the CF-III.) It is this overall market, therefore, that constitutes the “area[] of effective competition,” as enunciated in Sargent-Weleh, between Steinway and Yamaha in this case. Hendricks’ objection to the magistrate’s conclusion that acoustic pianos as a whole — rather than just concert grand pianos (or C & A services) — constitutes the relevant market, is without merit. In this same connection, Steinway has taken limited exception to the magistrate’s treatment of concert grand pianos in defining the relevant market. Specifically, although Steinway concurs with the magistrate’s determination that concert grand pianos do not constitute the relevant market for antitrust analysis, it contends that the magistrate erred in her subsidiary finding that such pianos may constitute at least a distinct submarket. Steinway argues that there are no distinct buyers or sellers of concert grand pianos, that no manufacturer makes only a nine-foot concert grand, that no dealer sells only nine-foot concert grands, that manufacturers advertise concert grands along with smaller grands and other pianos, that pianists play on more than one type of piano, that there are no barriers to entry to the manufacture of concert grands, and that concert grands compete even with non-acoustic pianos. Given the magistrate’s conclusion that Steinway’s 48% share of the concert grand piano submarket is not the controlling feature for purposes of antitrust analysis, her finding that there is a likely distinct sub-market in concert grands (and Steinway’s objections to this finding) does not affect the overall analysis under Section 3 of the Clayton Act. Nevertheless, the court notes that Steinway's limited exceptions on the submarket issue are without merit. There can be little question but that under Sargent-Welch, as discussed above, concert grand pianos satisfy the criteria for a recognizable submarket, even if not for the overall relevant product market for antitrust purposes. See Brown Shoe Co. v. United States, 370 U.S. 294, 325, 82 S.Ct. 1502, 1523-24, 8 L.Ed.2d 510 (1962). Approximately 250 concert grand pianos were sold in the United States in 1986. The evidence established that while a small number of individuals may purchase such pianos for residential use, the primary buyers are concert halls, institutions and concert artists, whose needs require specific qualities that can only be provided by a concert grand. Concert grand pianos cost more than other pianos, and prices can be raised significantly without causing consumers to seek substitutes. The evidence also shows that concert grand pianos have certain unique physical characteristics essential to their specialized functions, and that some piano manufacturers have separate production facilities for their manufacture. The Seventh Circuit has identified the “uniqueness of the product’s functions and therefore its uses” as the most important factor in delineating a relevant submarket. Sargent-Welch, supra at 710. Here, the evidence clearly establishes that there are functions and uses for which a concert grand piano is designed and for which no other type of piano can substitute. As the magistrate put it: A concert grand piano is designed to provide — and only a concert grand piano can provide — the power, volume and control essential for virtuoso piano performances and for all performances of a pianist with a symphony orchestra. Concert grand pianos are manufactured because such uses demand them, and for such uses, there are no substitutes. Steinway’s exceptions to the magistrate’s determination that there exists a likely sub-market in concert grand pianos (even though not a relevant overall product market) are therefore denied. The “Essential Facilities” Doctrine Hendricks next objects to the magistrate’s discussion of the “essential facilities” doctrine, arguing that the doctrine is altogether inapplicable to the Section 3 Clayton Act (and Section 1 Sherman Act) claims at issue in this case. Hendricks is correct that the “essential facilities” doctrine does not apply in the circumstances of this case, but, as discussed below, a review of the report shows that the magistrate did not, in fact, treat the “essential facilities” test (or, more precisely, Hendricks’ apparent inability to satisfy it) as the basis (or, at least, as the sole basis) for her conclusion that Hendricks has not established a likelihood of success on the merits. As Hendricks points out in its objections, and as the magistrate herself noted, the “essential facilities” doctrine usually arises only in connection with claims under Section 2 of the Sherman Act (for monopolization); it imposes an affirmative duty, in certain circumstances, upon a monopolist with control over an “essential facility,” to share that facility with its would-be competitors. A refusal to do so may be unlawful “because a monopolist’s control of an essential facility ... can extend monopoly power from one stage of production to another, and from one market into another.” MCI Communications Corp. v. American Telephone & Telegraph Co., 708 F.2d 1081, 1132 (7th Cir.), cert. denied, 464 U.S. 891, 104 S.Ct. 234, 78 L.Ed.2d 226 (1983). See also Flip Side Productions, Inc. v. Jam Productions, Ltd., 843 F.2d 1024 (7th Cir.1988); Olympia Equipment Leasing Co. v. Western Union Telegraph Co., 797 F.2d 370, 376 (7th Cir.), reh. denied, 802 F.2d 217 (7th Cir.1986), cert. denied, — U.S. -, 107 S.Ct. 1574, 94 L.Ed.2d 765 (1987). Hendricks properly points out that the circumstances under which the “essential facilities” doctrine can successfully be invoked are rare and are largely confined to situations where physical conditions virtually prohibit the obtaining of duplicate or comparable facilities. Although Hendricks now apparently concedes that it cannot satisfy the requirements for application of the “essential facilities” doctrine in this case, it complains that the magistrate erred in even considering the doctrine. Hendricks’ argument here is perplexing, however, since the magistrate’s treatment of the “essential facilities” doctrine appears to have been undertaken at the behest of Hendricks itself; Hendricks had explicitly argued before the magistrate that Steinway’s conduct (i.e., its Section 3 Clayton Act “agreement”) deprived Yamaha of access to certain “essential facilities” controlled by Steinway. But regardless of the reasons the magistrate had for entertaining the “essential facilities” doctrine, it was discussed only as a possible alternative basis for liability; the magistrate’s conclusion that Hendricks could not satisfy the requirements for prevailing under that doctrine plainly was not necessary to her overall determination that Hendricks was not likely to succeed in showing a substantial anticompetitive effect so as to prevail on its claims under Section 3 of the Clayton Act (or Section 1 of the Sherman Act). That Steinway’s conduct is not likely substantially to lessen competition in the market affected by the C & A program (i.e., the market for the manufacture and sale of all acoustic pianos), is readily apparent once the interrelationships among the various markets and submarkets involved are scrutinized, even without reference to the “essential facilities” doctrine. And even if a putative market for just concert grand pianos is viewed in isolation, no showing has been made that Yamaha, which clearly has the capacity (albeit only over time) to develop an independent dealer network and adequate supporting technical services, will be significantly hindered from challenging Steinway’s dominance in that market. Under Roland, a plaintiff seeking to establish the unlawfulness of an agreement under Section 3 of the Clayton Act must show “that the anticompetitive effects (if any) of the exclusion outweigh any benefits to competition from it.” Roland, supra at 394. As the magistrate correctly inferred from the evidence presented: The fact is that the introduction by Yamaha of a Yamaha C & A program in Chicago will, if Hendricks cannot represent both Yamaha’s and Steinway’s programs, result in the existence of two competing C & A dealers. This will not only give artists a choice of dealers, along with a choice of pianos, but it will create real competition for the placement of C & A pianos at musical events, competition that would not exist if Hendricks controlled both programs---- Having Yamaha’s and Steinway’s major promotional programs in competing dealerships will almost certainly result in the more vigorous promotion of each program ____ With both manufacturers vigorously represented by competing dealers in a major market like Chicago, and with each manufacturer responsible for promoting its own line and its own dealer, the most likely effect is expansion of piano sales and the creation of a larger and more vigorous marketplace. Since the magistrate did not need to resort to the “essential facilities” doctrine in order to find that Hendricks has failed to establish a likelihood of success on the merits of its Section 3 Clayton Act (and Section 1 Sherman Act) claims, Hendricks’ objections relating to the magistrate’s treatment of the “essential facilities” doctrine are denied. Section 2 Sherman Act Claims Hendricks’ objections to the magistrate’s treatment of its monopolization claims under Section 2 of the Sherman Act are twofold. Hendricks first reiterates its objection that the magistrate erred in concluding that the market for concert grand pianos, while constituting a distinct product sub-market, does not constitute the relevant overall product market for purposes of antitrust analysis. This objection has already been discussed above, in connection with Hendricks’ claims under Section 3 of the Clayton Act, and as set forth in that analysis, under Sargent-Welch, it is without merit. That leaves for consideration only Hendricks’ second objection to the magistrate’s monopolization analysis: Hendricks’ claim that the offense of monopolization does not require that the defendant’s dominant market share be the “source” of the exclusionary conduct at issue. The offense of monopolization under Section 2 of the Sherman Act requires proof of monopoly power “plus conduct designed to maintain or enhance that power improperly.” Olympia Equipment, supra at 373. The magistrate found that Steinway’s share of almost 50% of the sub-market for concert grand pianos is sufficient to permit an inference of market power in that submarket, but that such a market share is not the source of Steinway’s ability to exclude competition by Yamaha’s C & A program. The magistrate found that what gives Steinway leverage over its dealers is rather its good name and reputation, deriving from its historic superiority and its own artists roster. Hendricks concedes that Steinway’s market power in concert grand pianos was lawfully acquired, and the law is clear that a firm with lawful monopoly power has no general duty to help its competitors. Olympia Equipment, supra at 375. Hendricks maintains, however, that Section 2 of the Sherman Act prohibits not only the use of market power for improper ends, but also the maintenance of such power by methods that are exclusionary in purpose or effect. See Aspen Skiing Co. v. Aspen Highlands Skiing Corp., 472 U.S. 585, 105 S.Ct. 2847, 86 L.Ed.2d 467 (1985). Specifically, Hendricks argues that: (1) Steinway has a monopoly in concert grand pianos, a monopoly that Yamaha is threatening with the introduction of its new CF-III; and (2) Steinway is maintaining that monopoly (and along with it, its prestige in the broader market and its position in the “hearts and minds of concert artists”) by exclusionary means (threats to terminate dealers who cooperate with Yamaha’s C & A program) that have been adopted for exclusionary purposes (to prevent Yamaha from obtaining services that will enable it to sell the use of its CF-IIIs to outstanding concert artists, whose adoption of that instrument will enable Yamaha to enhance its position in the larger acoustic piano market). It is true, as Hendricks points out, that certain exclusionary means that might conceivably be legitimate for a non-monopolist are forbidden to one who has monopoly power, even if only in a submarket. Sargent-Welch, supra at 711-12. But Hendricks’ argument is beside the point, because no showing has been made that Steinway really has monopoly power — defined as the power to control prices or exclude competition, see United States v. Grinnell Corp., 384 U.S. 563, 571, 86 S.Ct. 1698, 1704, 16 L.Ed.2d 778 (1966) — even in the limited submarket for concert grand pianos. That Yamaha plans to sell its CF-III for $10,000 more than the most-closely-equivalent Steinway nine-foot concert grand sells for shows that Steinway does not have the power to control prices. And nothing in the evidence suggests that Steinway has done or can do anything to impede Yamaha’s ability to capture a share of the concert grand piano market once Yamaha offers a competitive instrument for sale. There is no indication that Steinway has attempted to discourage its dealers from selling the CF-III, and all the evidence indicates that the market for concert grands is one with relatively insignificant barriers to entry. Given Steinway’s inability to control prices or exclude competition even in the putative submarket for concert grand pianos, where it controls a nearly 50% market share, its lack of monopoly power in the overall acoustic piano market — which the magistrate correctly determined to be the relevant product market and in which Steinway has only a 1.75% share, is readily apparent. Hendricks’ objections to the magistrate’s analysis under Section 2 of the Sherman Act are without merit. Irreparable Injury and the Balance of Harms The remaining objections to the magistrate’s report and recommendation go primarily to the magistrate’s assessment of the “balance of harms” and to her overall application of the standards for determining whether the issuance of a preliminary injunction is warranted in the circumstances of this case. Hendricks focuses specifically on the magistrate’s statement that “it [Hendricks] has clearly demonstrated a fair ground for litigation” (even though the magistrate ultimately concluded that it had not demonstrated a likelihood of success on the merits); Hendricks also points to the magistrate’s recognition that its loss of the Steinway line will irreversibly change its business and “substantially diminish it and damage it in ways that are not susceptible to quantification.” Hendricks argues that such statements contained in the magistrates’s analysis cannot be squared with her conclusion that the “balance of harms” tips in favor of Steinway. Steinway, on the other hand, while concurring generally with the magistrate’s determination that it (Steinway) will be more seriously and irreparably injured by the erroneous entry of a preliminary injunction than Hendricks would be hurt if the injunction were denied, argues that the magistrate still overstated the potential for harm to Hendricks — which harm, Steinway claims, will be minimal. As discussed below, both parties’ objections to the magistrate’s analysis here are without merit. Steinway’s contention that Hendricks will not, in fact, suffer irreparable injury (and that Hendricks does not lack an adequate remedy at law) can be disposed of first. In this regard, it is true that the evidence shows that the loss of Hendricks’ Steinway dealership will not put Hendricks out of business, and that even without Steinway, Hendricks will remain solvent and able (with some help from Yamaha) to finance this litigation. The law is clear, however, that a plaintiff need not demonstrate that its total business will be destroyed in the absence of a preliminary injunction in order to establish irreparable injury. See, e.g., General Leaseways, Inc. v. National Truck Leasing Ass’n, 744 F.2d 588, 591 (7th Cir.1984) (irreparable injury found where denial of injunction “might be a grievous, though probably not lethal blow”). See also Sealy Mattress Co. of Michigan, Inc. v. Sealy, Inc., 599 F.Supp. 1494, 1503 (N.D.Ill.1984), rev’d on other grounds, 789 F.2d 582 (7th Cir.1986) (irreparable injury found where plaintiff stood to lose only 16-20% of total sales). Here, approximately 40% of Hendricks' sales during its last fiscal year were of new Steinway pianos, and Steinway accounts for more sales of new pianos than either Yamaha or Samick, the other piano brands Hendricks carries. The evidence shows that Hendricks stands to lose approximately $1.6 million in sales of new Steinway pianos annually; Hendricks will also experience an unquantifiable loss of sales of its Yamaha and Samick pianos if it is forced to lose the drawing power of the Steinway name. In addition, it will no longer be able to sustain all of its four locations or its 32 skilled employees (though the exact extent of this anticipated loss is difficult to determine from the record). Steinway points to the fact that Hendricks recently opened three stores in the Minneapolis area, none of which carry the Steinway line, and that those stores do not appear to be suffering. A closer review of the record indicates, however, that Hendricks’ Minneapolis stores are not expected to show a profit for at least two or three years. Hendricks’ Chicago stores, on the other hand, have been built and centered around the Steinway piano, at considerable expense to Hendricks. The fact that Hendricks’ relationship with Steinway has been longstanding, dating back to 1974, makes this case different from Jack Kahn Music Co., Inc. v. Baldwin Piano & Organ Co., 604 F.2d 755 (2d Cir.1979), cited by Steinway for the proposition that the only potential loss to a terminated piano dealer is lost sales which can be adequately quantified in dollars and remedied by money damages. In Jack Kahn, the plaintiff was terminated from its dealership — described as only “tentative and exploratory” in any event — after just IV2 years. Here, by contrast, the evidence shows that Hendricks’ entire business and reputation have been based on the prestige of the Steinway line. The loss of goodwill Hendricks will suffer if it must discontinue carrying that line is thus alone significant and impossible to quantify. Contrary to Steinway’s assertions, therefore, the magistrate properly determined that loss of the Steinway dealership will cause irreparable harm to Hendricks. Although the magistrate thus properly found that Hendricks will suffer irreparable injury (and lack an adequate legal remedy) if the injunction is improperly denied, she also found, as noted above, that Steinway would suffer irreparable harm if the injunction were granted, and that the overall balance of harms weighs in Steinway’s favor. Hendricks objects, however, that the magistrate’s findings regarding irreparable harm to Steinway cannot be reconciled with her findings regarding Hendricks’ likelihood of success on the merits. Thus, Hendricks argues, one of the two findings must necessarily be wrong, and in either case, a preliminary injunction is warranted. This argument, however misconceives the distinction between the merits and harm, and cannot be accepted. For the reasons already discussed, it is unlikely that Hendricks will ultimately be able to prove that Steinway’s conduct constitutes either (1) an unlawful agreement under Section 3 of the Clayton Act (or Section 1 of the Sherman Act); or (2) monopolization under Section 2 of the Sherman Act. These “merits” issues are entirely separate from — and consistent with — the inference that Steinway will be irreparably harmed by the divided loyalties that Hendricks can be expected to display if it is permitted to handle the two competing C & A programs. The magistrate’s findings with respect to harm to Steinway focus not on protecting Steinway from competition from Yamaha, but on preserving Steinway’s ability to compete with Yamaha in the all-important Chicago market. Steinway is wholly dependent on the efforts of its network of exclusive independent dealers to promote its name and its product line. Steinway’s chief promotional tool has been and is its C & A program, and it may reasonably insist on its dealer’s agreements to fully and vigorously implement that program. The magistrate properly concluded that allowing the existence in one dealership of two competing C & A programs could create conflicts of interest within the dealership in attempting to represent the two different programs. Hendricks claims that Steinway’s conduct was calculated specifically and solely to obstruct Yamaha’s plans to become a major force with a rival C & A program, and it argues that the purpose with which a restraint is adopted is significant evidence of its probable effect. The law is clear, however, that “if conduct is not objectively anticompetitive, the fact that it was motivated by hostility to competitors ... is irrelevant.” Olympia Equipment, supra at 379. Hendricks also claims that Steinway’s tactics have already succeeded in depriving Yamaha of the cooperation of its most reliable dealers in seven of the 22 markets which Yamaha targeted for the first phase of its C & A program. But the flip side to this is that Steinway’s demand for exclusivity has not prevented Yamaha from establishing its C & A program in the other 15 of those 22 markets. Yamaha’s ostensible need to create an instantaneous network of dealers around the country who can provide its C & A services is belied both by its own phased-in planning for the development of its C & A sites and by the fact that it has already signed up a number of artists (for example, and most notably, Andre Watts) based on the C & A sites it presently has available. Hendricks also has no response to the point that the introduction of Yamaha’s C & A program by dealers other than Steinway dealers will promote competition among those dealers. Hendricks’ contention that the magistrate’s findings on likelihood of success conflict with her findings on harm to Steinway is thus unsupportable. The Seventh Circuit has adopted a “sliding scale” approach to determining the propriety of issuing a preliminary injunction. Under this approach, first explicitly described in Roland, the benefit of injunctive relief can be determined by combining the probability of success on the merits with the magnitude of harm to the plaintiff. “The more likely the plaintiff is to win, the less heavily need the balance of harms weigh in his favor; the less likely he is to win, the more need it weigh in his favor.” Roland, supra at 387. See also Curtis v. Thompson, 840 F.2d 1291 (7th Cir.1988); Illinois Psychological Ass’n v. Falk, 818 F.2d 1337, 1340 (7th Cir.1987); Lawson Products, Inc. v. Avnet, Inc., 782 F.2d 1429, 1432-36 (7th Cir.1986); American Hospital Supply Corp. v. Hospital Products, Ltd., 780 F.2d 589 (7th Cir.1986). The record before the court is fully developed, and on this record, as already discussed, it appears extremely doubtful that Hendricks will be able to succeed in establishing that Steinway’s conduct is in violation of any provision of the antitrust laws. To counterbalance this very low likelihood that Hendricks can succeed on the merits, Hendricks would need to show that the overall balance of harms weighs heavily in its favor. This it has not done. As the magistrate correctly concluded, though the harm to be suffered by Hendricks if the injunction is improperly denied is significant, the harm to be suffered by Steinway if the injunction is granted is at least equally so: Steinway’s problem ... is not simply that it faces being tied into an irrevocable dealership with a dealer with whom it no longer wishes to do business. Its problem is that it faces such a possibility in the third most significant music market in the nation, under circumstances in which it needs, perhaps as never before, its dealer’s undivided loyalty and commitment, and when it has a very sound basis for believing that it cannot get that undivided loyalty and commitment from Hendricks. Hendricks argues that the magistrate’s conclusion as to the greater harm Steinway will suffer if the preliminary injunction is granted rests on the improper assumption that Steinway must somehow be protected from lawful competition by Yamaha. But this claim is not substantiated either by a reading of the magistrate’s report or by a review of the evidence. As previously discussed, the magistrate’s findings with respect to harm to Steinway focus not on protecting Steinway from competition from Yamaha, but on preserving Steinway’s ability to compete with Yamaha in the all-important Chicago market. The record here reflects that Hendricks already has closely aligned itself with Yamaha and that, because of this, it may no longer be able to give its undivided loyalty to Steinway. Hendricks is already receiving substantial financial assistance from Yamaha. It is reasonable to conclude, as the magistrate did, that Hendricks will be more inclined to promote the Yamaha line during the pendency of this case because a loss will mean that it will be almost totally dependent on Yamaha. Moreover, because of Steinway’s system of exclusive dealerships, it cannot rely on the presence of another dealer in the Chicago market to act as a competitive spur and counteract any lack of vigor on the part of Hendricks in its promotion of the Steinway line. The harm to Steinway from the issuance of the injunction, therefore, lies not as Hendricks claims in the potential loss of sales to Yamaha as a result of legitimate competition, but rather, in the denial to Steinway of a devoted dealer in one of its most critical markets. As Steinway points out, and as the magistrate concluded, it is perfectly legitimate, and, in fact, procompetitive, for manufacturers to insist that their dealers devote their undivided loyalty to their products and not to those of their competitors. Cf. Sally Beauty Co. v. Nexxus Products Co., Inc., 801 F.2d 1001 (7th Cir.1986). Hendricks claims that no showing has been made of any economic efficiencies that will be served by restricting it to representing only one of the competing C & A programs, given the absence of any industry-wide practice of exclusive dealing. The evidence does show that Steinway’s own dealers, including Hendricks, regularly handle other makes of pianos besides Steinway, and that Steinway also permits its dealers to cooperate with C & A programs of manufacturers other than Yamaha, such as Baldwin. The evidence shows, however, that Baldwin’s program, which involves only an occasional concert service, is too insignificant to be deemed in actual competition with Steinway’s. And, as noted, even in terms of dealing with ordinary piano consumers, the existence of two C & A programs in a single dealership creates a significant conflict. As the magistrate points out in her report, Steinway has obviously made a business decision in the past that it is willing to allow its dealers to sell other brands, even though the sales of those brands benefit from Steinway’s advertising and reputation. But that it does not wish to give this free ride to Yamaha, in dealerships “spearheading” Yamaha’s attack on Steinway’s reputation for classical concert preeminence, is a legitimate procompetitive response. A Steinway dealer can easily argue the special superiority of the Steinway even though he sells Yamaha pianos and despite the existence of a Yamaha C & A program and a roster of Yamaha artists. But if that dealer is providing C & A services for those Yamaha artists and promoting Yamaha C & A pianos for use at major public events, it is difficult to see how he or she can argue Steinway’s superiority with any persuasiveness. Hendricks also points out that no dealer has control over whether any concert pianist chooses to play on a Steinway or a Yamaha. But this argument ignores the fact that dealers are promoting and offering for sale all pianos. As the magistrate noted, “concert service is but a small part of what the Yamaha and Steinway C & A programs are about.” In addition, the evidence clearly shows that dealers frequently are called upon to recommend pianos to institutions that do not involve Steinway’s concert artists. Hendricks’ objections are without merit. IT IS THEREFORE ORDERED that the objections of Hendricks and the limited exceptions of Steinway to the magistrate’s report and recommendation are both denied. The magistrate’s report and recommendation is adopted in full and Hendricks’ motion for a preliminary injunction is denied. REPORT AND RECOMMENDATION This matter came on to be heard on the motion of plaintiff, Hendricks Music Company, Inc. (“Hendricks”), for a preliminary injunction to enjoin the termination of Hendricks’ Steinway, Inc. (“Steinway”) dealership. Hendricks’ complaint alleges that Steinway’s conduct in seeking to terminate Hendricks’ Steinway dealership because of Hendricks’ agreement to handle the “Concert and Artist Program” of Yamaha Music Corporation (“Yamaha”) constitutes an illegal exclusive dealing agreement, in violation of § 3 of the Clayton Act and § 1 of the Sherman Act; an unlawful tying agreement under § 3 of the Clayton Act; monopolization and attempted monopolization of putative markets for “supplying pianos for concert performances” and for “concert grand pianos” in the United States and various regional and local areas thereof, in violation of § 2 of the Sherman Act; violations of the Illinois Antitrust Act and breach of contract. Hendricks’ motion for preliminary injunctive relief seeks an order enjoining the termination of Hendricks’ Steinway dealership, originally scheduled by Steinway to take place on January 17, 1988, pending trial on the merits. This court heard evidence on the motion on January 11, 12, 13, 14, 15 and 21. Having heard the evidence and the arguments of the parties and having reviewed the proposed findings of fact and conclusions of law submitted by the parties, this court recommends that the district court adopt the following proposed findings of fact and conclusions of law: RECOMMENDED FINDINGS OF FACT The Parties 1. Hendricks Music Company (“Hendricks”) is an Illinois corporation, having its principal place of business at 421 Maple Avenue, Downers Grove, Illinois. (Complaint ¶ 4.) Hendricks is a piano retailer, having been in the business of selling new and used pianos and providing the services incident thereto since 1974. Hendricks has sold Yamaha brand pianos continuously since 1974. In 1979, Hendricks became Steinway’s exclusive piano dealer in the Chicago area. Today, in its Chicago-area stores, Hendricks sells Steinway, Yamaha and Samick pianos and is the exclusive Steinway dealer for Cook, DuPage, McHenry and Lake counties. (Tr. Jan. 11 at 34-38, 60.) 2. Hendricks began business with only one store, located at 4936 Main Street, Downers Grove, Illinois. Today, Hendricks has four stores. Its flagship store, which has 9,000 square feet displaying between 85 and 115 pianos, is located at 755 North Wells Street, Chicago, and opened in June 1980. A store at 3446 West Peterson, Chicago, opened in 1985, and a store at 534 Green Bay Road, Kenilworth, opened in 1986. Hendricks maintains its original store in Downers Grove as well as a 16,000 square foot service center in Downers Grove, opened in November 1981. Hendricks also had a store in Palatine from 1983-1986. (Tr. Jan. 11 at 36-37, 66.) 3. When it opened in 1974, Hendricks had only one employee, Edward A. Hendricks (“Mr. Hendricks”). Today, it has approximately 32 employees including eight in sales, four in finishing, ten in technical services, and six in administration. (Tr. Jan. 11 at 39.) 4. [Finding #4, which relates to Hendricks’ revenue, is being filed separately, under seal. The finding indicates that for the fiscal year ending September 30, 1987, Hendricks’ sales were divided among Steinway pianos (40%), Yamaha pianos (31%), Samick pianos (14%) and Everett pianos and used pianos.] (Tr. Jan. 11 at 51-52, 134.) 5. Hendricks has three piano stores in the Minneapolis, Minnesota area, the first of which opened in September 1987. (Tr. Jan. 11 at 83-84.) In its Minnesota stores, Hendricks sells new Yamaha, Samick and Bosendorfer pianos, as well as used pianos. Hendricks does not sell new Steinway pianos in its Minnesota stores. Hendricks does not anticipate that it will derive profits from these stores until the second or third year of operation. (Tr. Jan. 21 at 989-990.) 6. Steinway Musical Properties, Inc. is a holding company formed in 1985 to purchase four music companies from CBS, the largest of which is Steinway & Sons. Steinway & Sons is a New York corporation, incorporated in 1853. It has two subsidiaries, one in New York and one in Hamburg, Germany. The New York subsidiary is Steinway, Inc., a Delaware corporation, having its principal place of business at Steinway Place, Long Island City, New York. Steinway, Inc. does business under the name Steinway & Sons. (Steinway, Inc., as well as the pianos manufactured by Steinway, Inc., will be referred to herein as “Steinway.” The Hamburg company and the pianos it manufactures will be referred to as “Hamburg Steinway.”) (Tr. Jan. 14 at 766-768.) 7. Steinway has been in the business of manufacturing and selling grand and vertical pianos continuously in the United States since 1853. The Steinway name is world famous and is generally associated with the finest pianos made. (Tr. Jan. 11 at 125, 180; tr. Jan. 14 at 767-768.) 8. Steinway has 110 dealers in North America. Steinway grants its dealers exclusive territories. Accordingly, a Steinway dealer has no competitors in its territory for the sale of new Steinway pianos during the pendency of its dealership agreement. Steinway dealers are free to sell competing brands of pianos as well as used pianos. The Steinway dealership is very much in demand. (Tr. Jan. 13 at 475, 483, 511, 513; PX 1.) Hendricks’ Steinway Dealership 9. In 1979, Hendricks entered into its first dealership agreement with Steinway. The parties’ most recent agreement, dated August 7, 1986 (“the 1986 Agreement”), expanded Hendricks’ territory to include Lake County. (Tr. Jan. 11 at 48, 50, 60; tr. Jan. 13 at 492-495.) 10. The 1986 Agreement allows either party to terminate the agreement for any reason upon 60 days written notice to the other party. It states: This Agreement is subject to cancellation by either party at any time for any reason upon 60 days written notice or such shorter notice as may be reasonable given the circumstances. (PX 1, art. XI.) 11. The 1986 Agreement also provides: Dealer will use maximum efforts to foster and develop the sale of Steinway pianos in his territory. He will always represent Steinway in his advertising and sales presentations as the unquestioned leader over other pianos he may handle. Dealer will be aware of, and maintain regular contact with all colleges, universities and music schools in his Territory. He will actively and at all times promote the musical life of the community in which the Steinway piano can play a part. Dealer will avail himself of and utilize the marketing, merchandising and other programs offered to him by Steinway to actively and regularly promote the sale of Steinway pianos, whether such programs are in the areas of product presentation, promotional activities, concert and artist activities, technical activities, institutional sales and advertising or in other areas. (PX 1, art. VII.) 12. Steinway’s dealership agreement does not restrict its dealers from carrying other manufacturers’ pianos. It requires only, as indicated above, that the dealer “represent Steinway in his advertising and sales presentations as the unquestioned leader over other pianos he may handle.” 13. Through its advertising, promotional and related activities, Steinway has developed a reputation for leadership in the piano industry which is unsurpassed by its competitors. The Steinway name is recognized throughout the United States and the world as representing the preeminent piano. The Steinway trademark is an extremely valuable trademark. (Complaint ¶ 28; Answer IT 28; tr. Jan. 14 at 769.) 14. The Steinway name carries a connotation of quality, integrity and prestige which “rubs off” on the dealer. The appointment as a Steinway dealer has traditionally established that the dealer is the preeminent piano dealer in its marketplace. (Tr. Jan. 11 at 59-60; PX 12 at 2; PX 13.) 15. The Steinway name draws customers into Hendricks’ stores and facilitates Hendricks’ ability to sell other brands of pianos, including Yamaha and Samick pianos. (Tr. Jan. 11 at 132-133.) Pianos 16. Most piano manufacturers, including Steinway and Yamaha, manufacture both vertical pianos and grand pianos. A grand piano displaces its soundboard and its mechanism horizontally, whereas a vertical piano, frequently called an “upright,” displaces its soundboard vertically. (Tr. Jan. 11 at 55.) 17. Vertical and grand pianos are manufactured in different sizes. Vertical pianos range from approximately 36 inches in height, to 44 or 45 inches (called studio verticals), to approximately 52 inches (professional size verticals). Pianos styled as grand pianos may be as small as approximately 4 feet 6 inches in length, although pianos shorter than 5 feet may not be considered true grand pianos. There are no uniform industry sizes. (Tr. Jan. 11 at 54-56.) 18. The largest and most expensive pianos manufactured are “concert grand pianos.” The term “concert grand” is a recognized term in the piano industry and refers to a piano which is designed and built specifically for concert use. Concert grand pianos are approximately 9 feet in length and are frequently referred as “9-foot” pianos. However, as is the case with other piano models, there is no uniform industry size. Steinway’s 9-foot concert grand, its “Model D,” is actually 8 feet 11% inches in length. The concert grand piano manufactured by Fazioli, an Italian manufacturer, is 10 feet 6 inches in length. The concert grand piano manufactured by the German manufacturer, Bosendorfer, measures 9 feet 6 inches in length. (Tr. Jan. 11 at 57-58; tr. Jan. 14 at 574.) 19. Despite these differences in size, there is no dispute in the industry as to which pianos are concert grands. In contrast to all other pianos, concert grands have longer keys, heavier hammers, longer strings and larger soundboards. These differences provide an artist with a greater dynamic range, a greater range of coloration and more control and power. A concert pianist performing with a symphony orchestra requires the power, control and dynamic range which only a concert grand piano can provide. (Tr. Jan. 11 at 57-58; tr. Jan. 15 at 876-877.) The Piano Industry 20.1986 is the most recent year for which reliable piano industry statistics are available. The ranking of all piano manufacturers, domestic and foreign, for sales of new pianos in the United States market, is as follows: Manufacturer Units Sold Baldwin 32,600 Kimball 29.000 Wurlitzer 21,300 Yamaha 20,330 Kawai 12,800 Young Chang 10,750 Samick 10.000 Sojin 6,000 Schafer & Sons 5.000 Schumann Maeari 4.000 Steinway 2,900- Sohmer 1,750 Hyundai Tokai 1,650 Tadashi 700 All others 6,420 Total 165,200 Steinway’s sales of 2,900 pianos represented 1.75% of the total new acoustic piano market in terms of volume. Yamaha’s sales represented a 12% market share by volume. (DX 38.) 21.There were 39,330 grand pianos sold in the United States in 1987. Steinway sold 2,100 for a market share of 5.34%. Yamaha, by Steinway’s estimates, sold 8,700 grand pianos in 1987, a 22% share. Yamaha’s figures indicate 6,800 sales “last year.” While it appears that Yamaha was the industry leader in grand piano sales in 1987, its sales did not greatly exceed those of its closest rival, Kawai. (Tr. Jan. 12 at 89; DX 39.) 22.While no entirely reliable figures exist, it is estimated that approximately 250 concert grand pianos were sold in the United States during 1986. Steinway was the industry leader in such sales. Terry Lewis, the general manager of the Acoustic Piano Division of Yamaha Music Corporation U.S.A., estimated that sales of new concert grand pianos in the United States in 1986 were as follows: Manufacturer Units Sold Steinway 140 Baldwin 40 Yamaha 8 Falcone 10 Samick and Young Chang 12 Kawai 10 Bosendorfer 30-35 Hamburg Steinway 6-15 The court accepts these figures as the best available estimate except with respect to Steinway, as to which more reliable evidence of approximately 120 unit sales was provided by its Vice President of Sales and Marketing, Frank Mazurco. This amounts to approximately 48% of concert grand pianos sold by unit volume if Steinway’s estimates are accepted and approximately 56% if Yamaha’s estimates are accepted. 23.Steinway’s next most significant competitor in the sale of concert grands was Baldwin, selling approximately 40. Yamaha sold 8 in 1986, accounting for approximately 3% of unit sales. Steinway’s share of this putative market in dollars in all likelihood substantially exceeds its share in units since the wholesale and retail prices of the Steinway concert grand are approximately 150% of Baldwin’s prices, and the evidence indicated that the Korean pianos (such as Samick and Young Chang) are relatively inexpensive. (Tr. Jan. 12 at 104-112; tr. Jan. 14 at 580; tr. Jan. 15 at 881.) Steinway’s Concert and Artist Program 24. For many years, the cornerstone of Steinway’s efforts to promote the sale of its pianos to consumers has been to advertise the fact that its pianos are the instrument of choice of concert artists. By adopting such a marketing strategy, Steinway seeks to convince consumers of the superiority of its pianos. (Tr. Jan. 14 at 584-585, 600-601, 645-646.) 25. Steinway’s dealer agreements, including its agreement with Hendricks, require that its dealers participate in Steinway’s Concert and Artist program (“C & A program”). The Steinway C & A program is a promotional program by which Steinway consigns performance instruments to its dealers throughout the United States so that the dealers can make such instruments available for concert use and for use by concert artists. Each Steinway dealer agrees to maintain in “concert ready condition” the inventory of pianos consigned to it by Steinway. The dealer is required to pay Steinway an annual fee for each C & A piano consigned to it ($1,025 in 1986) and, among other things, to do the following: a. Employ a staff of trained concert technicians to maintain the C & A pianos in concert-ready condition; b. Provide at the dealer’s cost insurance on all C & A pianos; and c. Maintain adequate, environmentally-controlled space in which to store the C & A pianos (which must be stored on their legs), and provide trained crews experienced in moving nine-foot concert grand pianos. (PX 1; Complaint ¶ 11; Answer ¶ 11; tr. Jan. 11 at 75; tr. Jan. 14 at 640.) 26. In the New York City area, Steinway maintains its own C & A pianos. Elsewhere, C & A pianos are maintained by Steinway’s local dealers. There are about 350 pianos in the Steinway C & A piano “bank” with a total retail value of approximately $12,000,000. (Tr. Jan. 14 at 637, 719.) 27. The Stein way dealer agreement provides that when a dealer supplies a C & A piano for concert use, the dealer is permitted to charge the artist or concert sponsor “the cost of transportation, ‘in-the-hall’ tuning, check-over and a fair share of the up-keep.” It further provides, “Concert service bills should be in keeping with actual costs.” (PX 1 at 13.) 28. Steinway maintains a roster of “Steinway Artists.” (PX 5.) These artists are not paid endorsers of the Steinway piano. Rather, to become a Steinway artist, an individual must be an active performer who personally owns a Steinway and who has agreed to perform on a Steinway piano professionally whenever possible. (DX 34; tr. Jan. 14 at 632-634.) Steinway’s roster of Stein way artists currently includes more than 400 internationally acclaimed concert artists and ensembles including such world-renowned pianists as Claudio Arrau, Vladimir Ashkenazy, Daniel Barenboim, Van Cliburn, Vladimir Horowitz, Murray Perahia and Rudolf Serkin. Each Steinway artist agrees to permit Steinway to use his or her name in advertisements and program announcements stating that the artist uses the Steinway piano. In return, Steinway agrees to make a concert-ready piano available through its dealers whenever the artist performs publicly, in exchange for the out-of-pocket expenses of delivery and in-hall tuning. In this way, each Steinway artist is assured that a Steinway piano will be available wherever and whenever he or she performs, even if the performance venue does not have its own Steinway piano. Steinway artists are entitled to priority use of Steinway C & A pianos. While Steinway artists make a commitment to use a Steinway piano whenever they perform, they do not necessarily require a Steinway C & A piano since many concert halls and institutions own Steinway pianos. Steinway artists are free to terminate their relationship with Steinway at any time. (DX 34; tr. Jan. 14 at 632-640, 697.) 29. The fact that a performer has chosen to play a Steinway piano is customarily listed in the concert program. (Tr. Jan. 14 at 647.) For example, at a series of concerts with the Chicago Symphony Orchestra in January 1988, Ivan Moravec, a Steinway artist and renowned pianist, performed. On the title page of the program appears the statement: “Ivan Moravec uses a Steinway Piano.” (DX 30 at 29.) 30. Steinway regards this type of endorsement as superior to any o