Are Festivals Going Too Far In Their Radius Clauses?

John Davisson – Coachella Valley Music And Arts Festival
Coachella takes place April 13-15 and 20-22 this year, featuring headliners The Weeknd, Beyoncé and Eminem.

With a lawsuit filed on April 9 by Soul’d Out Productions of Portland, Ore., against Goldenvoice and AEG over Coachella’s 2018 contracts, the issue of radius clauses has once again come to the fore and begs the question, what’s different about this year’s iteration? 

The size of the territory covered by Coachella’s radius clause, for one thing, is the size of a country. Eight years ago, Coachella restricted performances in six Southern California counties in California, and all of Arizona and Nevada, from Dec. 1, 2009 until 30 days after the 2010 event. This year, Coachella’s contract forbade artists from playing “any festival or themed event in the states of California, Nevada, Oregon, Washington or Arizona,” for five months——from Dec. 15 through May 7, as the Soul’d Out Productions suit stated.

Soul’d Out Productions alleges the radius clauses violate antitrust laws and harmed its business, despite being more than 1,000 miles from Coachella’s Indio, Calif., home.  

“Everyone has some kind of a radius clause,” said Entertainment lawyer Ed McPherson, who counts Linkin Park, Tool, Evanescence and the Go-Go’s among his artist clients. “Most artists sign contracts that have some sort of radius issues. But generally, they are not as restricted. If you play at the Staples Center in Los Angeles they won’t say you can’t play in San Diego.”

Goldenvoice, in its response, argued that it is only trying to protect Coachella’s brand and its multi-million dollar investment: “Radius clauses are common in the concert business where promoters take great risk and spend huge sums to produce marquee festivals, tours and other shows,” according to an AEG Presents spokesperson.

“With over 100,000 fans attending each of its two weekends, Coachella is the premier festival destination attracting visitors from across the region and around the world,” the statement continued. “The producers of Coachella will vigorously defend against this lawsuit, which calls into question a long-standing industry practice that is crucial to our ability to continue offering fans the unrivaled experience for which Coachella has become known.”

This may be true, but one has to wonder what possible impact an indie band playing 1,000 miles away could have on a behemoth festival like Coachella.

“I don’t see anyone saying, ‘Gee, they’re playing in Oregon next month, so I’ll skip out on Coachella this year,’” McPherson said.  “That doesn’t make any sense… These days bands are making most of their money on tour and if they have five months that they can’t spend playing anywhere on the West Coast, that is pretty difficult for them and they could lose a lot of money, and, theoretically, a lot of fans. It seems like something Coachella should compromise on.”

And sometimes that happens, or at least festivals turn a blind eye. Lollapalooza in Chicago was criticized for its 300-mile, five-month radius clause in 2010, which was routinely broken by smaller acts. Still, that was a calculated risk for a band unable or unwilling to seek a waiver from promoter C3 Presents, who, according to a report by journalist Jim DeRogatis, was under investigation by the Illinois Attorney General over antitrust concerns at the time.

Bonnaroo’s radius clause also casts a wide net, as AC Entertainment told The Tennessean in 2014 that its contract prevented artist from playing for a 120-day period surrounding the event in a 300-mile radius from its home in Great Stage Park in Manchester, Tenn. That forbids artists from playing major markets such as Nashville, Atlanta, and Cincinnati for four months.

Bonnaroo did note that it is somewhat flexible with its contracts, as that year it allowed Phosphorescent and Grouplove to play shows in Nashville before the festival.

In Soul’d Out’s case, the promoter says up-and-coming soul and funk outfit Tank And The Bangas backed out of their Soul’d Out commitment because of the radius clause in its Coachella contract. Their last gig, April 17 at the Belly Up Tavern in Solana Beach, Calif., had a capacity of 450 and still had tickets for sale at press time. 

A similar situation happened with SZA – a better-known and Grammy-nominated artist – who declined to play Soul’d Out after Coachella who, perhaps more reasonably, refused to waive the radius clause in her contract.

“Numerous artists have declined to perform at the Soul’d Out Music Festival and have cited the unlawful Radius Clause in their contracts,” the suit stated, “with Coachella as the sole reason that they cannot do so.”

It must be noted that Soul’d Out festival takes place April 18-22, coinciding with Coachella’s second weekend, which may help explain its enforcement. 

Travis P Ball / Getty Images – Tank and the Bangas
Tank and the Bangas perform on the Pandora stage at Stubb’s Bar-B-Q during SXSW in Austin, Texas March 15, 2018. The band allegedly backed out of their set at Soul’d Out festival in Portland, Ore., because of the radius clause in their Coachella contract.

When it comes to headliners such as Beyoncé, Eminem, or The Weeknd, most agree, promoters should have the right to forbid them from playing nearby festivals or venues because of the large investment.

According to a New Yorker profile of Paul Tollett last year, Coachella headliners Radiohead, Kendrick Lamar, and Beyoncé (who postponed to this year following her pregnancy) stood to receive a hefty payout of “between three and four million dollars for playing” which, considering just the ticket grosses for Coachella –  nearly $114.6 million in 2017 according to Pollstar Boxoffice data – is well within reason.

At the same time, the article pointed out that the bands in the smaller fonts at the bottom of the famed Coachella poster “make less than $10,000,” which is barely enough for any band to get through one month let alone the five stipulated in the radius clause.

Promoters argue that although lesser known acts may not be earning the big bucks, what they receive in exposure more than makes up for it. 

“Like any contract or any legal condition, there’s more prohibitive and less prohibitive,” said Briggs Mitchell, an Austin-based festival promoter. “With larger festivals, yes, it can be prohibitive to musicians and talent, but on that larger scale they’re also providing a platform for those artists, which is something to consider when trading that.”

Mitchell explained the festivals he works on try to strike a balance.

“We do have limited-scope radius clauses for most of our larger artists,” Mitchell said. “It’s more of an understanding that we have a right to market the event in our market and not have something that’s duplicate that dilutes what we’re doing.  It’s certainly much more of a limited scope than what you would see at the larger events.”

Seth Hurwitz, chairman of I.M.P., owner of the 9:30 Club and The Anthem in Washington, D.C. and operator of the city’s Lincoln Theatre and Maryland’s Merriweather Post Pavilion, told Pollstar he agrees with AEG’s right to protect Coachella, but thinks it’s asking too much of artists.

“It’s important to protect any big play in a market, but it’s gotten out of hand as agents close deals. Either the buyer or seller says well OK, for that much money, nobody plays this far from it,” he said. “The seller doesn’t think this through because they are so overjoyed at getting that big number to impress everyone, it doesn’t occur to them how it hurts surrounding markets. Or they don’t care.”

“The buyer has no reason to care,” he continues. “The fact is, the further a radius clause, the more you might force someone far away to go to your show. It’s incredibly short-sighted to let these borders creep and make new bad precedents. Serves nobody except that one deal.”

Ryan Howes of Ontario’s Lower Level Entertainment based in Ontario, which produces boutique events and festivals, notes that radius clauses use zip code data from ticket sales. “The radius clause is based off where tickets are currently being sold and the reach they’re getting from other major markets in California and Nevada and the surrounding states,” said Howes, who’s worked for House of Blues Concerts Canada and Live Nation Canada. “So when you’re able to build up a brand at such a high ticket price with a huge gross, you’ve got opportunities to make some pretty specific clauses,” added Howes

In the end, most believe the industry will strike a balance between protecting promoters’ investments while allowing smaller acts to support themselves.

“I think promoters will possibly have shorter time periods and definitely have the geographical restriction in the radius smaller,” McPherson says. “I don’t think it will be a game changer, but I think it will make promoters listen a little bit more and hopefully act a little more reasonably.”

Goldenvoice/AEG and Soul’d Out declined to comment for this story.

*Correction Appended: An earlier version of this story erroneously claimed SXSW enforced radius clauses when in actuality the festival has never had radius clauses.