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Coachella, Goldenvoice Win Antitrust Case Regarding Radius Clauses

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PORTLAND, Ore. (CelebrityAccess) A federal judge has ruled against Soul’d Out Productions in its anti-trust case versus Goldenvoice / AEG and the concern of radius clauses for the Coachella Music & Arts Festival.

Soul’d Out Productions, which operates a five-day multivenue R&B and jazz festival in Oregon, filed a lawsuit against Goldenvoice/AEG  in April, alleging antitrust and unfair competition, claiming that the promoter has artists who would play Coachella in Indio, Calif., must sign a radius clause that would prevent them from playing, for months on either side of the festival, at locations as far away as Arizona or Oregon. However, the artists can play at venues promoted or owned by AEG, which Soul’d Out argued was illegal tying between venues.

Soul’d Out also said that many artists opted out of playing at its festival citing pressure from Coachella or specifically pointing out the radius clause. Soul’d Out said the restrictions prevented them from thriving as promoters.

“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,” attorney Nicholas Aldrich said at the time.

Attorney Justin Bernick argued in court that Soul’d Out’s claims did not reach the threshold of an antitrust claim.

“There are tens of thousands, if not hundreds of thousands of artists that could perform at these events,” Bernick told the judge, according to Courthouse News. “All their arguments are about ticket prices and profits and the number of artists that perform, but they say nothing about the number of artists available. Anticompetitive arguments require a numerator and a denominator.”

AEG’s motion to dismiss argued that Soul’d Out showcases music of a specific genre whereas Coachella showcases a vast array of artists, and that the radius clause that is assigned to approximately 180 artists that play in Indio, it precludes the thousands that Soul’d Out can pick from.

Soul’d Out, on the other hand, argued that there was a big difference between promoting a multistage festival and a hard-ticket event for a specific artists, and AEG used its radius clause “as an anticompetitive tool to compete with concert promoters in distant hard ticket markets,” Soul’d out said in its complaint.

“The fact that Coachella is able to impose upon artists terms that are so unreasonable and counter to their interests is an indicator that they have market power,” Aldrich argued, according to Courthouse News.

However, Chief District Judge Michael W. Mosman reportedly tossed the case with the following comments:

“I think the more fundamental problem is that you have numerous facts alleged that show profitability and success in this market but they don’t show market power,” Mosman said. “Some get close, for example, the facts show the rise in ticket prices. That’s on the path, but they would have to show that in comparison to other ticket prices.”

“I also reject the sort of horseshoe argument that if you stack up enough facts about profitability you show market power,” he added. “But profitability doesn’t require a company to defend an antitrust claim. Because I see this as a case that is facts in search of a theory, I am granting the motion to dismiss with prejudice.”

Soul’d Out co-founder Nicholas Harris attributed AEG’s victory to “good lawyering.”

“The water got muddied and unfortunately the very simple facts that brought us to this place were not the basis of the language on which the judge ruled,” Harris told Courthouse News.

Original complaint available here.

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