By Holly Santapaga

Fans of live music festivals know the free-spirited feeling of seeing their favorite act on stage.  After waiting months or traveling long distances to attend, the feeling of finally experiencing the show is indescribable.  A recent lawsuit brought against Coachella Valley Music and Arts Festival (hereinafter “Coachella”) regarding the use of radius clauses in contracting with artists shows that the business of live music is anything but free-spirited.[1]

Coachella is held each year in Indio, California and takes place over two weekends in April.[2]  The outdoor festival draws crowds of 125,000 people per day[3], and general admission tickets alone cost $429 in 2018.[4]  The smaller and less polarizing Soul’d Out Music Festival put on by Soul’d Out Productions also takes place in April, and is located in Portland, Oregon.[5]  Coachella’s radius clause “[a]s part of its standard agreements with artists” forbids artists from “performing at any other festival or themed event within a distance that extends over 1300 miles” including “California, Nevada, Oregon, Washington[,] [and] Arizona from December 15, 2017 until May 7, 2018.”[6]

Coachella, along with co-defendants Anschutz Entertainment Group, Inc., The Anschutz Corporation, Goldenvoice, LLC, and AEG Presents, LLC, were recently involved in a lawsuit brought by Oregon based Soul’d Out Productions (“Soul’d Out”), for alleged anticompetitive behavior caused by Coachella’s extensive radius clause.^[7]  Ultimately, Soul’d Out’s claims that the contracts were unlawful restraints on trade were dismissed due to lack of “standing to challenge the disputed terms of contracts formed between Defendants and parties that are not before the [c]ourt.”^[8]  Soul’d Out’s remaining antitrust and trade restraint claims were also dismissed.[9]  However, Soul’d Out has until October 25, 2018, to amend their complaint.[10]

Soul’d Out claims that Coachella’s overbearing radius clause will create a monopoly on the market for popular artists by stifling competition up to 1300 miles away, even for festivals that do not have the same outdoor single venue structure.[11]  Additionally, Soul’d Out states that  competing venues may lose out on booking specific acts because tours are typically brief, whereas the radius clause covers several months.[12]

An overbearing radius clause can also limit the consumers choice of when and where they will see their favorite artists and how much money they will have to spend.[13]  Moreover, the artists themselves are harmed by radius clauses.[14]  While larger artists may benefit from the exchange of exclusivity for a higher price, smaller and mid-size acts are left without the ability to efficiently tour by booking nearby venues within driving distance.[15]  As Soul’d Out points out in their complaint, Coachella’s radius clause has expanded since previous iterations, which did not include Oregon or Washington.[16]  It remains to be seen whether this growing restriction on the free spirit of music will continue.

[1] See Compl. at *8, Soul’d Out Prod., LLC v. Anschutz Entm’t Grp., Inc., 3:18-cv-00598 (D. Or. Apr. 9, 2018). (Bloomberg Law) (stating that Coachella’s radius clause has a “chilling effect” on the live venue market).

[2] Josh Johnson and Lesley Messer via GMA, What is Coachella? Everything to Know About the Music Festival, ABC News (Apr. 13, 2018, 6:56 AM), https://abcnews.go.com/GMA/Culture/coachella-music-festival/story?id=54404096.

[3] George Varga, Coachella 2018 Preview: Beyoncé, Eminem, The Weeknd, New Food Court, Drones and a New Emoji, The San Diego Union-Tribune (Apr. 12, 2018, 6:05 AM), https://www.sandiegouniontribune.com/entertainment/music/sd-et-music-coachella-20180412-story.html.

[4]  Megan Leonhardt, What It Really Costs to Go to Coachella 2018, Everyday Money (Mar. 29, 2018), https://time.com/money/5217998/cost-coachella-2018-beyonce/.

[5] Compl. at *3, *6-7, Soul’d Out Prod., LLC v. Anschutz Entm’t Grp., Inc., 3:18-cv-00598 (D. Or. Apr. 9, 2018) (Bloomberg Law).

[6] Id. at *8.

[7] Id. at *2.

[8] Soul’d Out Prod., LLC v. Anschutz Entm’t Grp., Inc., 3:18-cv-00598, at *1 (D. Or. Oct. 12, 2018) (Bloomberg Law).

[9] Id.

[10] Id. at *2.

[11] Compl. at *11, Soul’d Out Prod., LLC v. Anschutz Entm’t Grp., Inc., 3:18-cv-00598 (D. Or. Apr. 9, 2018) (Bloomberg Law).

[12] Id. at *8-9.

[13] Ann-Derrick Gaillot, Radius Clauses Are the Least Rock and Roll Thing in Music, The Outline (Apr. 11, 2018, 9:44 AM), https://theoutline.com/post/4129/coachella-radius-clause-lawsuit?zd=1&zi=ed6jrpb2/.

^[14] See Katie Bain, How the Music Industry Uses a Pervasive Secret Weapon to Keep Bands From Freely Touring, LA Weekly (Apr. 18, 2018, 6:23 AM), https://www.laweekly.com/music/how-music-festival-promoters-use-radius-clauses-to-keep-bands-from-freely-touring-8140333 (explaining that smaller and mid-size act lose the ability to tour within drivable geographic areas).

[15] Id.

[16] Compl. at *8, Soul’d Out Prod., LLC v. Anschutz Entm’t Grp., Inc., 3:18-cv-00598 (D. Or. Apr. 9, 2018) (Bloomberg Law).