Judge Sides with AEG/Goldenvoice, Dismissing Coachella 'Radius Clause' Lawsuit

Coachella security guards.

According to a federal judge, Coachella’s highly-restrictive radius clause doesn’t violate any laws.

Coachella remains one of the largest, most popular, and most profitable music festivals in the world.  Yet, for years, the music festival has imposed a controversial contractual clause with artists.

To perform at the major music festival, artists must 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 reveal their own tour stops in California, Arizona, Washington, and Oregon.  This doesn’t apply to casinos in Las Vegas.

That’s obviously bad news for smaller music festivals.

Taking on Coachella, Soul’d Out Productions, a Portland-based music festival promoter, filed a lawsuit against Coachella owners AEG/Goldenvoice last April.

The promoter claimed that Coachella and AEG aimed to “monopolize the market for popular music” in the West Coast.  Specifically, as with other smaller music events, Soul’d Out had problems with Coachella’s ‘radius clause.’  Major artists, including SZA, continually backed out of performing at the production company’s music festival.

Nika Aldrich, a lawyer for Soul’d Out Music Festival founders Nicholas Harris and Haytham Abdulhadi, said Goldenvoice operated “an illegal monopoly in the market for live music festival performances.”  Coachella was accused of “unreasonably restricting the price and cost of competition among live concert venues” with “[limited] entry or expansion of competitors.”

Now, a judge has made a key ruling in Soul’d Out’s case against the major music event.

Yes, radius clauses are perfectly legal.

In an Oregon courtroom, US District Court Judge Michael Mosman ruled in favor of AEG/Goldenvoice.

Attorneys for Coachella’s owners had argued that artists could decide to play smaller festivals instead of Coachella if they found the conditions too restrictive.

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.

Judge Mosman agreed.  He didn’t find any antitrust injury from Coachella’s radius clause to Soul’d Out Productions.  Thus, Judge Mosman dismissed the lawsuit with prejudice.  This means Soul’d Out Productions can no longer refile the case against Coachella, AEG, or Goldenvoice.

Praising the ruling, Shawn Trell, AEG/Goldenvoice’s General Counsel and Chief Operating Officer, said,

We’re pleased with the court’s decision today to dismiss the lawsuit challenging the agreements between Coachella and artists.

Coachella is focused on providing an incredible festival experience for both fans and artists, and looks forward to another special event next month.

 


Featured image by Malcolm Murdoch (CC by 2.0).