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Coachella Faces Another Legal Fight Over Its ‘Radius Clause’

Posted on March 02, 2018 by Scorpion
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Antitrust Lawsuit Filed Once Again Against Coachella's 'Radius Clause'

Should Coachella have the right to force artists into highly restrictive ‘radius clauses’?

Last April, Soul’d Productions, a Portland-based music festival promoter, filed an antitrust lawsuit against Coachella and AEG/Goldenvoice.

The promoter claimed that Coachella and AEG aimed to “monopolize the market for popular music” in the West Coast.  Specifically, Soul’d Out had problems with Coachella’s ‘radius clause.’

Speaking with Billboard, Nika Aldrich revealed this clause prohibited top artists from performing at the promoter’s Soul’d Out Music Festival.  AEG/Goldenvoice prevents artists, including Bangas, SZA, and Daniel Caesar, from performing at festivals within a certain distance and timeframe.

The previously hidden radius clause forces artists to agree to the following.

Artists playing at Coachella can’t perform at any festival in North America from December 15th to May 1st.

They also can’t play at hard ticket concerts in Southern California during that time.

They can’t “advertise, publicize, or leak” performances at competing festivals taking place in California, Nevada, Oregon, Washington, or Arizona that take place after May 1st until after May 7th.  This also applies to headliner concerts in Southern California.

Artists also can’t announce festival appearances for 45 states in the US until after Coachella reveals its lineup in January.  Exceptions include SXSW, Ultra Miami, and New Orleans Jazzfest.

Artists must also wait for the January unveiling to unveil their own tour stops in California, Arizona, Washington, and Oregon.  This doesn’t apply to casinos in Las Vegas.

In a court filing, lawyers for Coachella defended the festival’s restrictive clause.

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.  As more festivals proliferate, maintaining a unique festival lineup is crucial for Coachella to remain competitive.

Earlier this month, District of Oregon Judge Michael Mosman partially granted AEG’s motion to dismiss the lawsuit.  Yet, Mosman allowed Soul’d Productions to refile a claim once it amended its definition of ‘relevant markets.’

Now, Soul’d Productions has refiled its lawsuit with key changes.

Redefining radius.

In the refiled lawsuit, the Oregon promoter claims Coachella’s restrictive clause harms the Pacific Northwest concert promoter market.  AEG also negotiates the California festival’s radius clause with other promoters.  Aldrich claims this constitutes an “unlawful horizontal restraint on trade.”

Soul’d Productions has also asked a court for an injunction, suspending Coachella’s ability to enforce the radius clause.  In addition, Aldrich has asked for the court to rule against AEG.  Soul’d Productions wants AEG to pay triple damages “as a result of [its] antitrust violations and anticompetitive behavior.”

Soul’d Productions adds the radius clause “reaches far beyond the open air festival market in which Coachella competes.”  This has an anti-competitive effect in the US, Canada, and Mexico.

By restricting artists who perform at Coachella from performing at other festivals, AEG is reducing the supply of artists, which increases the costs for other festivals, limits consumer choice, and reduces artist, promoter, venue, and agent income.

Soul’d Productions also made a final request should a court rule in its favor.  AEG would have to notify artists playing Coachella they can also perform at the Portland event.

You can read the new lawsuit below.

 


Featured image by Drew Ressler (CC by 3.0).