Coachella owner hit with antitrust suit over ‘coercive’ artist clauses

A lawsuit has been filed against Coachella Valley Music and Arts Festival owner Anschutz Entertainment Group Inc., along with its subsidiaries and affiliates, in an Oregon federal court. The suit was filed by the producers of a Portland music event, Soul’d Out Music Festival, claiming that the California mega-festival employs anti-competitive practices, such as “strong arming,” to block competition in ways that violate federal antitrust laws as well as Oregon and California state laws.

The suit alleges that Coachella’s “radius clause” stretches much too far, barring artists from performing at any other musical event within a distance of approximately 1,300 miles and for a period surrounding Coachella of nearly five months. According to the complaint, artists often turn down offers to perform at Soul’d Out, a festival located over 1,000 miles from Coachella, citing the Coachella contract clause as the sole reason, “under threat from the defendants.”

“Because defendants have substantial market power, they are able to coerce artists into agreeing to these unlawful restrictions on trade,” the suit states.

The restriction prevents live concert promoters in California, Nevada, Oregon and Washington from securing popular talent as well as hurts music consumers, who must ultimately pay exorbitant ticket prices and travel expenses just to be able to hear Coachella’s artists, the suit claims.

Coachella’s 2017 event was attended by 250,000 people and grossed $114.6 million. Soul’d Out Music Festival, which focuses mostly on jazz, reggae, and hip-hop, has grossed under $2 million in its nine year history.

Nika Aldrich of Schwabe Williamson and Wyatt PC, attorneys for Soul’d Out Productions, said in a statement that it wants a jury to take up its complaint.

“It is remarkable that Coachella thinks it is reasonable to exert its market power over 1,000 miles away, to harm a much smaller, regional music event,” Aldrich said.

The suit also claims that AEG’s anti-competitive behavior also selectively waives the radius clause when Coachella artists perform at other venues if AEG gets a cut or other benefits. Thus, competing venues will likely have trouble booking certain acts the same year they perform at Coachella.

An AEG spokesperson for it’s subsidiary, Goldenvoice Inc., which produces Coachella, said in a statement, Monday, April 9th,

“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,” the statement 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.”

Coachella and Soul’d Out are both scheduled for later this month. Coachella’s headliners include Beyoncé, The Weeknd, and Eminem. Performers taking the stage in Oregon include Erykah Badu, De La Soul, and trip-hop producer Tipper.

Via: Law360