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Coachella radius clause lawsuit dismissed

Judge Michael Mosman has dismissed a lawsuit brought by Oregon promoters Soul’d Out Productions against Coachella Music Festival (125,000-cap.), and organisers AEG and Goldenvoice, regarding the festival’s so-called ‘radius clause’.

Federal judge Mosman dismissed the lawsuit with prejudice earlier this week (Tuesday 11 March), preventing Soul’d Out Productions’ Nicholas Harris and Haytham Abdulhadi from re-filing their suit.

The judge found that there was no antitrust injury to Harris and Abdulhadi, founders of Soul’d Out Music Festival (1,480-cap.).

The Portland, Oregon, festival promoter first filed the lawsuit in April 2018, claiming that the contractual restriction preventing acts on the Coachella bill from playing at any other festival in North America from 15 December to 1 May, amounts to anti-competitive behaviour on the part of organisers.

Harris and Abdulhadi also say that the radius clause has damaged their event, Soul’d Out Music Festival.

Mosman granted an AEG motion to dismiss the antitrust claims and partially dismissed the lawsuit in October 2018. The plaintiffs were allowed to re-file their complaint, granted they revised their definition of “relevant markets”. However, the re-filed lawsuit has been rejected.

“Maintaining a unique festival lineup is crucial for Coachella to remain competitive”

“We are pleased with the court’s decision today to dismiss the lawsuit challenging the agreements between Coachella and artists,” says Shawn Trell, general counsel and chief operating officer for Goldenvoice and AEG Presents.

“Coachella is focused on providing an incredible festival experience for both fans and artists, and looks forward to another special event next month.”

Despite the unsuccessful lawsuit, the Oregon promoters did bring attention to Coachella’s radius clause requirements, publishing previously-unreleased provisions of the agreement.

In addition to avoiding North American festivals and headline concerts in five states, Coachella also forbids artists from announcing plans to play other events until after the Coachella line-up release in January. Artists are also prohibited from publicising appearances at West Coast festivals until weeks after Coachella closes.

Coachella attorneys defended the policy, explaining in a court filing accessed by Amplify that “the entire purpose of the radius clause is to protect AEG from competitors unfairly free-riding on its creative choices in selecting its artist lineup.”

The lawyers stated that “maintaining a unique festival lineup is crucial for Coachella to remain competitive.” AEG’s lawyers also protested against the release of the radius clause letter, that was provided “for settlement purposes only”.

In addition to dismissing the antitrust claims, Mosman also noted that he planned to dismiss claims of unlawful restraint of trade, unfair competition and tortious interference. Harris and Abdulhadi have 30 days to appeal the ruling.

 


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Oregon promoter Soul’d Out sues AEG over Coachella clauses

A Portland, Oregon, festival promoter has filed a lawsuit against Coachella Music Festival, along with organisers AEG and Goldenvoice, over what it calls attempts by the companies to “monopolise the market for popular music” on America’s west coast.

Soul’d Out Productions, which organises Soul’d Out Music Festival in April, says a contractual restriction (dubbed the ‘radius clause’) that prevents acts on the Coachella bill from playing at “any other festival or themed event within a distance that extends over 1,300 miles” amounts to anti-competitive behaviour on the part of organisers.

According to Soul’d Out, AEG/Goldenvoice prohibit performers from playing any other west-coast festival, as well as those in Arizona and Nevada, for five months around their Coachella show (from 15 December 2017 to 7 May 2018).

Such radius clauses, say Soul’d Out’s lawyers at Portland-based Schwabe, Williamson & Wyatt, “are expressly forbidden by California” and intended to use “Coachella’s market power in the music festival market to suppress competition by other festivals”.

Coachella 2017 was attended by 250,000 people and grossed $114.6m – the highest figure of any festival globally.

“We seek no less than to operate in a fair and open environment,” says Soul’d Out Productions’ co-owner and co-founder, Nicholas Harris, in a statement.

“We seek no less than to operate in a fair and open environment”

“But as our industry has become more consolidated, it is subjected to more and more corporate tactics that penalise the public. Music, and the culture that births it, is not a commodity to be exploited. It is meant to inspire and enrich our lives.”

According to court documents obtained by IQ, Soul’d Out seeks to bar Coachella and AEG from “enforcing any performance contracts that contain such a radius clause”, as well as damages and attorneys’ fees.

A spokesperson for AEG says the company will “vigorously defend” itself against claims of abuse of radius clauses, which they describe as “an industry standard used by festival, concert and tour promoters designed to protect the integrity and exclusivity of their events.

“While Coachella is a marquee brand, with close to 250,000 people attending from across the world and is a premier performance stop for 120 artists and bands, there are hundreds if not thousands of artists available to perform at venues around the country. The producers of Coachella will vigorously defend ourselves against this lawsuit, which calls into question the common industry practice employed by promoters and producers throughout the year.”

Soul’d Out Music Festival 2018 takes place from 18 to 22 April across multiple venues in Portland, with performers including De La Soul, Wyclef Jean and Erykah Badu. Coachella, meanwhile, is headlined by Beyoncé, Eminem and the Weeknd, and runs from 13–15 April and 20–22 April in Indio, California.

 


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