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Lizzo can keep $5m Virgin Fest fee, judge rules

Cancellation clauses added by attorneys for WME shifted the financial risk onto the festival, which was shut down due to Covid-19

By IQ on 13 Sep 2022

Lizzo is represented by Matthew Morgan, now at UTA

Lizzo is represented by Matthew Morgan, now at UTA


image © Andy Witchger/ Flickr

Lizzo can keep her US$5 million booking fee for 2020’s cancelled Virgin Fest in Los Angeles, a California judge ruled earlier this month.

The company that was promoting Virgin Fest, VFLA Eventco LLC, filed a lawsuit against WME in July 2020, as well as artists Lizzo, Ellie Goulding and Kali Uchis, saying the parties had agreed to return monies they had been advanced in the event of cancellation due to “an uncontrollable factor”.

The acts had been scheduled to play the debut outing of the festival at the Banc of California Stadium (22,000-cap.) and Exposition Park (160-acre) in LA on 6 and 7 June 2020 before it was cancelled due to the coronavirus pandemic.

After a two-year legal dispute, LA Superior Court judge Mark Epstein ruled on 1 September that the cancellation clauses added by attorneys for WME to its clients’ performance contracts shifted the financial risk of cancellation onto the festival.

Attorneys for WME insisted on several revisions to the original contract – especially to the force majeure clause – to make the contracts more “artist friendly.”

Thanks to those revisions, Lizzo, Goulding and Uchis are not required to pay back performance fees that were paid in advance of Virgin Fest.

Following the ruling, Virgin Fest owners Marc and Sharon Hagle are looking at financial losses in the festival business of approximately $23 million, court records show.

The festival was funded by the couple – who made their fortune in commercial real estate – and run by Jason Felts, CEO of the Virgin Group’s festival arm.

Richard Branson’s involvement with Virgin Fest was mostly that of a figurehead, promoting the festival online.

Agents at WME — including former co-head of music Marc Geiger, head of festivals and partner Josh Kurfirst, and Lizzo’s agent Matthew Morgan (who now represents her at UTA) — were vocally sceptical about Virgin Fest’s prospects for success, according to emails and communications produced in the lawsuit.

WME insisted that Lizzo be paid 100% of the fee prior to the festival announcing her as a headliner

Geiger warned Felts that staging the festival in Los Angeles, a market dominated by Live Nation, Goldenvoice and several well-established independents, was a bad idea.

Regardless, Felts pushed ahead with the festival and after Virgin Fest talent buyer Zach Tetreault raised Lizzo’s performance fee three times, ultimately landing on $5 million, the artist accepted the offer.

Goulding (represented by WME partner and global co-head of music Kirk Sommer) accepted $600,000 to perform at the festival and Uchis (represented by WME partner Kevin Shivers) agreed to play for $400,000. Another $300,000 was paid to WME to book five additional acts, among them the Marcus King Band and Banks.

WME insisted that Lizzo be paid 100% of the fee prior to the festival announcing her as a headliner and that Uchis and Goulding be paid 50% upon signing and the remaining 50% paid 90 days prior to their performances, emails produced for the lawsuit show.

Hoping to avoid any additional risk, Kurfirst instructed attorneys at WME in February 2020 to make sure the contracts were “100%,” meaning WME artists would be paid even if the festival was cancelled.

A month later, all events were indefinitely postponed due to the Covid-19 pandemic and WME steeled itself for a fight.

“One or more of the artists including a headliner are now going to take a position and not return the money,” Sommer wrote in a 4 June email to Goulding’s managers at TAP Management. “We have all seen unsuccessful festivals collapse and attempt to claw back artists guarantees, this festival was addressed upfront with stronger language and deposit terms for this reason.”

On 12 March 2021, Epstein issued an order that said the agreements the parties signed protected WME from being sued for what is essentially a dispute between the artists and the promoter.

That meant Epstein later dismissed four counts filed against WME by Virgin Fest including conversion and violations of California’s unfair competition law as well as a request for punitive damages.

The judge found that WME was simply following the wishes of its clients Lizzo, Goulding and Uchis, noting that WME did agree to return money to Virgin Fest for other clients who instructed them to do so.

 


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