top of page

The Consequences of Coachella's Contract Clauses

Credit: Andrew Ruiz | Unsplash

Every April, the small desert town of Indio, California welcomes the young to old, hipsters to hip replacements, music aficionados to influencers, and everyone in between to the Coachella Valley Music Festival. While approximately 125,000 daily fans eagerly wait to see their favorite artists, what is often overlooked are the extensive hours of work and preparation that make this event possible. Without the contracting work of entertainment lawyers, agreements between the organizers and entertainers would not be completed, and the show would simply not go on.

To ensure the success of the event, entertainment attorneys need to work year-round to solidify talent agreements, complete vendor agreements for food and merchandise, reduce liability through safety precautions, and handle many other legal issues pertaining to large outdoor entertainment events. One specific example is highlighted when examining entertainment attorney Molly Madino’s work with the festival. Madino is annually tasked with ensuring “the safety of each and every guest on the festival grounds, as well as the thousands of employees operating the festival at any given time. Within this pursuit for a perfect show, I have contributed to multi-million dollar capital stage construction projects and, just a few hours prior, stood in front of a group of Milwaukee’s underserved job-seekers, recruiting hopeful employees at the Department of Workforce Development.

Entertainment law involves a melting pot of highly specialized scenarios resulting in the culmination of various legal areas. These include, but are not limited to: labor and employment law, technology law, corporate and finance law, contracts, and intellectual property law. However, when it comes to facilitating one of the world’s largest and widely known festivals, contract law takes the main stage. This article will provide a backstage pass into the contracts and negotiations that take place months prior to your favorite artist taking the stage. This year’s headliners consisted of international superstars Bad Bunny, Frank Ocean, and BlackPink, and while an artist’s line of negotiation may simply consist of “show me the money,” their intelligent team of attorneys might have a little more to say.

As with any festival or concert—through various rounds of negotiation—the artist’s counsel and Coachella’s representation analyze their respective benefits and risks to enter into an agreement. An entertainment lawyer’s goal is to make their client the most amount of money while protecting their interests and shielding them from any potential liability. However, it is important to remember that Goldenvoice (the entertainment company that puts on the Coachella) has extremely strong bargaining power, and all but the headliners may be left with no option but to accept Goldenvoice’s terms. After all, for many artists, performing on a Coachella stage is a once in a lifetime opportunity.

Furthermore, there are various issues that arise in concert contracts, particularly due to the popularity of Coachella. One major issue specific to the festival is the inclusion of a radius clause. This clause consists of specific non-compete provisions, which prohibit artists from participating “at any other North American festival from December 15th to May 1st [and] in the counties of Los Angeles, Orange, Riverside, San Bernardino, Santa Barbara, Ventura, or San Diego from December 15th to May 1st.” When artists commit to performing at Coachella, the contract they sign allows the owner, Anschutz Entertainment Group, to freeze the time and geographic market of a performer’s appearance. Because of this, Coachella artists submit themselves to the radius clause, limiting where and when they can perform surrounding the dates of the festival. The radius clause also mandates the artist’s ability to promote any performance that interferes with Coachella’s marketing schedule. According to Kahn Media Law, these radius clauses can last up to six months, which is where issues have arisen due to the clause’s similarities to non-compete agreements—which are not enforceable in California.

In a 2018 lawsuit, Oregon Producer Soul’d Out sued affiliates of the Coachella Music Festival because several artists refused to perform at Soul’d Out’s festival due to the Coachella radius clause. In looking at instances such as this one, the legal question arises of whether or not a radius clause to this extent is legally permissible. Soul’d Out claims that the clause is an “illegal monopoly” due to its broadness. While Soul’d out acknowledges that each performance deserves a level of exclusivity, there are limits to that. Soul’d Out also claims that the Coachella radius clause violates Section 1 of the Sherman Antitrust Act. Section 1 of the Sherman Antitrust Act states that “every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce . . . is declared to be illegal.” 15 U.S.C. § 1.

According to Rolling Stone Magazine, affiliates of the festival defend the radius clause as policy protection against competitors “unfairly free-riding on its creative choices in selecting its artist lineup.” Coachella believes that it is more important than ever to maintain individuality as more festivals continue to expand with each passing year.

In contrast, competitors believe that with the industry becoming more consolidated, smaller festivals should not be penalized for trying to engage in a common art form. Although, from an artist's perspective, as exciting as performing at a prestigious festival like Coachella may be, some smaller artists may struggle financially when being restricted from performing for such an extended period of time. “Such a clause has a substantial chilling effect on the market for music venues,” the lawsuit declared.

Until radius clauses are determined to be invalid, entertainment lawyers—oftentimes alongside talent agents—must weigh the risk against the reward based on these various factors in play before making a binding decision. A smaller artist might risk foregoing several gigs to play Coachella because the opportunity the festival provides likely dwarfs even a handful of other local performances. However, this exposure for larger artists must be weighed against what other opportunities may bring. An entertainment lawyer must know when to walk away from a deal that does not make sense for the artist. To do so, an entertainment lawyer must weigh the pecuniary disadvantage with the exposure advantage.

It will be interesting to continue to monitor how the festival industry develops in terms of the radius clauses’ legality and how courts affect the ever-shifting power dynamic of artists and festivals. However, when you’re dancing in the desert, keep in mind the hard-fought negotiations that entertainment lawyers labored over so you could see your favorite artists.

*The views expressed in this article do not represent the views of Santa Clara University.


bottom of page