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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Re-file date granted for Coachella antitrust suit
The anti-competition lawsuit filed against AEG and Coachella by Oregon promoter Soul’d Out has been partially dismissed by US federal judge Michael Mosman, who granted AEG’s motion to dismiss the antitrust claims – but declined to rule on other elements of the suit.
In an interview with Billboard, Soul’d Out’s lawyer, Nika Aldrich, who filed the suit against Coachella, revealed that several artists, including Bangas, SZA and Daniel Caesar, approached to perform at Soul’d Out Festival in Portland, Oregon, were unable to do so owing to Coachella’s ‘radius clause’ – an alleged 1,300-mile restriction on artists playing other festivals for five months around their Coachella show.
According to Aldrich, Soul’d Out has also been given the option of re-filing the antitrust suit should the plaintiff revise its definition of “relevant markets”.
“Establishing the correct product market is something the courts require with a degree of particularity [when assessing an antitrust dispute],” he explains.
Soul’d Out has been given a deadline of 25 October to re-file.
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AEG moves to dismiss suit by ‘free rider’ Soul’d Out
AEG has asked the US district court for Oregon to toss a competition lawsuit by Soul’d Out Productions, saying the Oregon promoter seeks to piggyback on the success of its Coachella festival by disputing the latter’s controversial ‘radius clause’.
Soul’d Out, which organises Portland’s Soul’d Out Music Festival, sued AEG in April on competition grounds, arguing Coachella’s radius clause – a contractual restriction that prevents acts on the festival’s 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, and unfairly targets other, smaller festivals.
At the time, AEG suggested the lawsuit was frivolous, arguing that radius clauses are “an industry standard used by festival, concert and tour promoters designed to protect the integrity and exclusivity of their events”.
In its motion to dismiss, filed on Friday, AEG argued that Soul’d Out’s complaint alleges that Coachella intentionally interfered with its business by strong-arming its acts into accepting the clause – something that cannot be the case because, of the three acts Soul’d Out claims to have lost, two of the three had already agreed to play Coachella by the time they were approached by Soul’d Out.
Additionally, AEG argues, as the radius clause applies to almost every act playing Coachella, Soul’d Out cannot claim it was specifically targeted by the clause.
“Soul’d Out’s true gripe with the radius clause is that it prevents plaintiff from free riding on the popularity of Coachella
Soul’d Out 2018 (15,000-cap.) was headlined by De La Soul, Wyclef Jean and Erykah Badu. It is unclear which three acts were ‘lost’ to Coachella.
As spotted by Amplify, the documents also reveal that, contrary to the previously reported 1,300-mile figure, the radius clause actually extends to any festival in North America from 15 December to 1 May. (Coachella takes place in mid-April.) Coachella artists are also not permitted play any ‘hard ticket concerts’ in southern California – nor announce other festival appearances in California, Nevada, Oregon, Washington or Arizona (the 1,300-mile radius) – during that period.
Additionally, clause-bound acts are forbidden announce festival appearances in any of the other 45 US states until after the Coachella line-up is announced in January (with the exception of South by Southwest, EDM event Ultra Miami and AEG’s New Orleans Jazzfest).
Imploring judge Michael Mosman to dismiss, AEG’s lawyers, Justin Bernick of Hogan Lovells and Casey Nokes of Cable Huston, argue: “[Soul’d Out]’s true gripe with the radius clause is that it prevents plaintiff from free riding on the popularity of Coachella and the investment AEG has made in developing its artist line-up and ensuring those artists play at Coachella.
“It is more than reasonable for AEG to take steps to prevent this type of free riding from taking place.”
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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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