/ Coachella Sued Over Radius Clause /

Coachella Sued Over Radius Clause

04.18.2018


By Jessica Mauceri

On April 9th, Soul’d Out Music Festival, a Portland, Oregon musical event located more than 1,000 miles from Coachella, filed a lawsuit against Goldenvoice, Coachella Music Festival, Anschutz Entertainment Group, The Anschutz Corp. and AEG Productions. Soul’d Out’s claim is that Coachella engages in practices they deem “anti-competitive” in order to block competition from other music festivals within the area and creates an “illegal monopoly in the market for live music festival performances.”

One such practice is the use of a Radius Clause, which is a type of non-compete clause commonly used in the live music industry. With this clause a performer agrees that for a certain length of time prior to or following the appearance at a concert or festival, they will not perform or hold concerts in other locations within a certain radius of the city in which they are to perform. These clauses are used primarily to ensure that the performer doesn’t book concerts with competing venues in nearby areas, which has the ability to undermine ticket sales for their main event.

The Coachella “Radius Clause” prevents artist from performing at other musical events within a 1,300-mile radius of the festival for a period of five months (December-May) preceding the Indio, California music festival. Soul’d Out attempted to book several artists for their festival, but these acts ultimately declined, citing the Coachella Radius Clause.

Soul’d Out claims that a radius clause of this magnitude has a substantial chilling effect on the music market within the territory covered by the clause. According to Soul’d Out, it’s not hard to see why Artists would find this anti-competitive. Artists are essentially blocked from live concert performances in California, Nevada, Oregon and Washington. This could mean that artists are forced to play secret sets in which they are unannounced until the moment they take the stage. Soul’d Out also asserts that Coachella, with its substantial market power is able to “coerce artists into agreeing to these unlawful restrictions on trade.” Additionally, this drastically affects consumers, as they are forced to pay high ticket prices and incur significant travel expenses to hear an artist that is unable to perform anywhere else in the area for a significant period of time.

However, there is another side to radius clauses that are essential in the age of music festivals. This kind of clause can ensure that when an artist does perform, it has the maximum effect on the market, because fans won’t be able to see this artist anywhere else in their area. These clauses are commonly utilized to create the most buzz possible, and to maximize the festivals potential to growth with both their audience and fan base for years to come.

Radius clauses are just one of the many legalities artists and music festivals face. If you are an artist or festival host, contact Savur Threadgold LLP to speak about any music festival related questions that you may have. We are here to help!