Coachella's Radius Clause Details Exposed in Legal Fight With Oregon Festival
Portland's Soul'd Out is alleging anti-competitive behavior against Southern California promoter Goldenvoice.
We now know more details about the radius clause Coachella organizers impose on artists playing the massive Southern California festival, thanks to an ongoing legal fight with an Oregon festival organizer.
Artists playing Coachella are not allowed to perform at any festival in North America from Dec. 15 to May 1, Amplify has learned, casting a much wider net than had previously been known -- the original complaint in the case incorrectly stated that the clause only extended to five Western states -- California, Oregon, Washington, Nevada and Arizona.
An amended civil complaint filed by promoters behind the Soul'd Out Festival included a May 15 email between lawyers detailing previously unreleased provisions of Coachella's radius clause (read it here). The letter outlined a strict set of non-compete rules for the festival, which regularly sells out, including:
- Artist playing Coachella are barred from performing any festival in North American from December 15 to May 1.
- Artists are also barred from playing any hard ticket concerts in Southern California during that same time period.
- Artists can't "advertise, publicize or leak" performances at competing festivals in California, Nevada, Oregon, Washington or Arizona or headliner concerts in SoCal that take place after May 1 until after May 7.
- Artists can't announce festival appearances for the other 45 states in North America until after the Coachella lineup is announced in January, with exceptions made for Austin's South by Southwest, Ultra Miami and the AEG-backed New Orleans Jazzfest.
- Artists must also wait for the January announcement before publicizing tour stops in California, Arizona, Washington and Oregon, with an exception made for Las Vegas casinos, but not Las Vegas festivals.
Lawyers for Coachella, defended the policy, explaining in a court filing "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," adding, "As more festivals proliferate, maintaining a unique festival lineup is crucial for Coachella to remain competitive."
AEG's lawyers also wrote that they opposed the release of the radius clause letter, saying it was given to lawyers for Soul'd Out Music Festival founders Nicholas Harris and Haytham Abdulhadi's as part of a confidential effort to negotiate a possible compromise between the two sides.
"AEG's counsel made clear in providing the text of the radius clause to Plaintiff's counsel that it was for settlement purposes only," AEG Presents attorney Casey Nokes wrote to Chief U.S. District of Oregon Judge Michael W. Mosman in a lengthy filing.
"Rather than confer with AEG about the propriety of including this information in an amended complaint, or whether the text of the radius clause is confidential," lawyers for the Oregon promoters "made the unilateral decision to include this information in a public filing as the basis for its claims against AEG. This is improper and reflects bad faith."
On Friday, attorneys for Goldenvoice, which owns Coachella, submitted a 48-motion to dismiss, arguing that Harris and Abdulhadi's antitrust claims against the festival were no more than "threadbare allegations" that were "insufficient to state a single claim for relief."
In April, Soul'd Out attorney Nicholas F. Aldrich filed suit days before Coachella kicked off Weekend 1, arguing that the indie promoters had tried to book three acts also performing at Coachella -- Tank and the Bangas, SZA and Daniel Caesar -- for their Portland event, but were turned down because of Coachella's 2018 radius clause. This year's Coachella festival took place April 13-15 and 20-22, while Soul'd Out festival, headlined in 2018 by Erykah Badu, De La Soul and Wyclef Jean, took place April 18-22.
In his complaint, which was amended in June to include the "confidential radius clause letter," Aldrich says numerous artists have turned down participating in Soul'd Out, citing "the unlawful radius clause in their contracts with Coachella as the sole reason that they cannot do so." In a federal lawsuit filed in April, Aldrich asked an Oregon judge to tear up Coachella's radius clause and award his clients damages as a result of AEG's alleged unfair competition and intentional interference.
Lawyers for AEG are asking Judge Mosmon to dismiss the case, arguing that Harris and Abdulhadi lack antitrust standing and have failed to "plausibly allege essential elements of an antitrust claim." Nokes also argues that the Oregon promoters aren't party to the radius clause agreements and can't challenge their enforceability, nor can they claim interference or unfair competition due to their lack of standing in the case.
"The antitrust laws are designed to protect competition, not competitors," Nokes writes, calling Harris and Abdulhadi's claims "naked assertions" regarding "how the radius clause has allegedly harmed competition."
Nokes goes on to argue that radius clauses are enforceable and legal if they are limited in time and scope and are considered reasonable and says Soul'd Out's "true gripe with the radius clause is that it prevents (Soul'd Out) from free-riding on the popularity of Coachella and the investment AEG has made in developing its artist lineup."
AEG's attorney says his client was surprised to see the Oregon promoters include the details of the radius clause in their amended complaint, arguing they obtained the letter during "compromise negotiations" between lawyers and is not admissible because Aldrich violated confidentially rules.
Nokes said Soul'D Out's lawsuit fails to prove "any other festival has been unable to enter the market or expand as a result of the radius clause. Nor are there any facts showing any reduction in quality across music festivals."
This article was originally published by Amplify.