Some Taylor Swift fans had their wildest dreams crushed by her Eras Tour. Swift, who played six sold-out shows last week in Singapore, was allegedly offered up to $3 million USD from the Singaporean government to abstain from performing elsewhere in Southeast Asia. Amidst criticism from some Thai and Filipino public figures that such a limitation is "unneighbourly," it's time to shine a spotlight on a powerful tool in the live entertainment industry: the radius clause.
What are radius clauses?
Radius clauses are a form of non-compete obligations commonly found in live music performance agreements. These provisions generally prohibit an artist from performing and/or publicizing other performances within a designated radius around the location where they are engaged to perform for a period of time leading up to and after the performance.
These clauses often form part of the larger performance agreement and can be enforced in various ways. Most commonly, if the performer violates the radius clause, the promoter/organizer can reclaim or withhold a portion of the performer's fees.
Why are radius clauses used?
Radius clauses are used to protect the up-front costs and initial investment of planning, hosting, producing and promoting a live music event. By securing some level of exclusivity in respect of an artist's performance, engagers can ensure that they do not lose potential attendees to a nearby venue some time before or after their event.
In the post-COVID-19 era, geographical regions are looking to reignite tourism. Singapore reportedly used its "post-COVID tourism recovery effort" funding to support its deal with Swift. While the exact economic return to Singapore from attracting the Eras Tour is still unclear, one might anticipate significant revenues considering that Swift's tour is expected to generate close to $5 billion in consumer spending in the United States alone. In this context, adding a radius clause sweetener to the deal with Swift could serve to prevent competing countries from potentially siphoning away some of these revenues.
How broad can radius clauses typically be?
The breadth of radius clauses can vary. Temporally, the clauses could range from a few weeks to several months. Geographically, these clauses can limit the artist from performing within a few miles around a city to hundreds of miles away, including bordering states, provinces or even countries in the case of Taylor Swift and Singapore. That being said, as Susan Abramovitch explained in the New York Times article "Singapore Has Taylor Swift to Itself This Week, and the Neighbors Are Complaining," the geographical breadth of the radius clause in Swift's purported Singapore deal is unusually broad, making it Taylor's version of the industry standard.
For instance, the Coachella music festival's radius clauses have contained extensive lists of geographical and temporal restraints as revealed in a 2018 lawsuit. According to this claim, the April-scheduled festival barred Coachella line-up artists from performing in any other North American festival or hard ticket concerts in Southern California from Dec. 15, 2017 to May 7, 2018. Artists were also restricted from advertising, publicizing or leaking performances, tour stops and festival appearances in several states for various lengths of time.
Bad Blood associated with radius clauses
Radius clauses can become problematic if they are too broad. For example, they can dissuade prominent acts from appearing in smaller towns, lest that restrict their ability to perform in larger nearby metropolises, thereby curtailing local venues' ability to secure major acts. On the other hand, artists who depend financially on touring may be negatively impacted by the restricted list of venues where they are permitted to perform.
There has also been a growing consolidation of music festivals by major companies including Live Nation and Coachella's parent company, Anschutz Entertainment Group (AEG). These mergers enable artists to participate in multiple festivals while remaining in compliance with the radius clause. However, these consolidations simultaneously prevent other promoters outside the Live Nation and AEG umbrella from securing bookings.
Coachella is not the only festival to receive scrutiny over the inclusion of radius clauses in their agreements. The use of radius clauses by Chicago's Lollapalooza festival was investigated by the Illinois Attorney General for antitrust violations. It was alleged that the festival was restricting artists from performing within a 300-mile radius, including Detroit, Indianapolis and Milwaukee. Additionally, these limitations allegedly spanned from six months before and three months after Lollapalooza. This investigation was closed in 2012 with no subsequent actions.
In Canada, the Toronto NXNE festival announced in June 2014 that it would eliminate a 45-day radius clause that it had initially implemented for its 2014 festival following protest by both fans and artists. This decision underscored the impact of radius clauses on emerging artists and the importance of maintaining a balanced approach.
Radius clauses require a Delicate balance
Radius clauses should be approached with caution in the live entertainment industry. While they can protect the exclusivity of events and encourage robust ticket sales, overly broad clauses can limit artists' opportunities and restrict consumer choice. To avoid backlash among performers and fans, these concerns should be taken seriously by anyone engaged in the live entertainment industry. Consult your legal counsel if you are considering accepting or including a radius clause in your performance agreement.
Read the original article on GowlingWLG.com
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
