Running a music festival is no easy task. You have to book bands, build hype, and, of course, make sure no one within 1,300 miles of you can book the same artists in the following five months. That’s how festivals like Coachella do it, at least, by writing what’s known as a “radius clause” into contracts to prevent fans from looking at their bill and saying, “Well, I’ll just see the Arctic Monkeys when their tour comes through in the fall.”
Now, Soul’d Out Productions, an Oregon company that puts on Portland’s Soul’d Out Festival every year, is taking the Indio, California mega-festival to court, arguing that the radius clauses in its artist contracts are unenforceable under California and Oregon law, and violate federal antitrust laws. According to the complaint, Coachella’s “Radius Clause” led SZA and Tank and the Bangas to drop out of this year’s Soul’d Out festival, despite the fact that Portland is 1,091 miles away from Indio in a completely different state. “Such a clause has a substantial chilling effect on the market for music venues within the territory covered by the Radius Clause,” the complaint states.
In a public statement, lead attorney Nika Aldrich said, “It is remarkable that Coachella thinks it is reasonable to exert its market power over 1000 miles away, to harm a much smaller, regional music event. We look forward to having a Portland jury hear Soul’d Out’s complaint.”
“...prior years’ versions of the Radius Clause did not extend to Oregon and Washington.”
Radius clauses are nothing new, and though Soul’d Out Productions’ lawsuit is important in its visibility, another important anti-radius clause lawsuit is well underway in Illinois. In 2016, promotion company React Presents filed a lawsuit against Eagle Theater Entertainment for fraudulent bookkeeping while it was in a partnership with the venue to promote its shows. Eagle then countersued React last year, alleging that the company signed several EDM artists into contracts containing radius clauses that “prohibited artists from playing anywhere up to within a 500 mile radius of React's event for periods of 60, 90, or 120 days prior to and following the date of the event” for their Chicago-area festivals. The counterclaim says that React then used those contracts to threaten Eagle, based in Detroit, into entering 50-50 profit split deals when booking contracted artists in exchange for releasing them from the radius clause.
The React/Eagle case is much further along than Soul’d Out’s recent lawsuit against Coachella, but when it comes the music industry at large, all eyes are on the West Coast. According to antitrust law expert and Rutgers University Professor of Law Michael A. Carrier, the case will primarily come down to what effect Coachella’s radius clause has on competition and consumers. “The argument that consumers would be hurt is that the artists don't have a choice [of where to play],” Carrier told The Outline by phone. “On the other hand, there is an argument that [the radius clause ensures] promotion is something that Coachella can do without worrying about being undercut by a competitor that can free ride on their work.” Carrier added that Coachella’s use of radius clauses would be more concerning if they teamed up with other festivals to coordinate their radii rather than just doing it independently.
To a lesser extent, the well-being of people working within the music industry will also be considered. Soul’d Out’s complaint cites a 2012 dissertation that looked into the effect radius clauses have on music venues. It concluded that anti-competition dealings used by Coachella, Austin City Limits, Bonnaroo, and Lollapalooza have negative effects on venues in their cities “either through foreclosure, which dampens competition, or increased barriers to entry.” In any event, Carrier says that the Coachella case could have a significant impact in an industry where such clauses are commonplace.
One big mystery in this entire ordeal is just how wide Coachella’s radius has grown over the years. (Representatives from Coachella did not immediately respond to The Outline’s request for comment about how the extent of the radius clause has changed over the years.) The artist contracts holding such details are largely private, though Soul’d Out’s complaint states that “prior years’ versions of the radius clause did not extend to Oregon and Washington.” Few major artists have been vocal about radius clauses’ effects on their business, and the terms of specific radius clauses themselves.
The people behind the festival are not staying completely silent, however. In a statement to Celebrity Access, Goldenvoice (a Coachella partner and a co-defendant in the lawsuit) said: “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.”