Corporate Festivals vs. Concert Venues

Are Corporate Festivals Killing Music Venues?

As the former Director of Operations at a mid-sized concert venue, I was granted the opportunity to see a side of the live music business that most people don’t have access to. Because of our capacity, we were tasked with a specialized endeavor: we weren’t large enough to host performance acts in their prime, for the most part; the superstars of their time played amphitheaters and high-capacity concert halls. So it was our job to either book artists that were a little past their prime – the nostalgia acts – who couldn’t fill stadiums any longer, or find up-and-coming acts who were poised to play the larger venues but were still gaining momentum. The former is not too much of a challenge; the latter took some foresight and recognition of potential.

The latter – rising stars, if you will – presented an obstacle that was two-fold. First, there was the risk factor: is this act popular enough to fill the room sufficiently, which could be determined by analyses of how well they had previously performed in other markets; and a best estimate of their popularity in the market within which we operated. The second part of the challenge is the main topic of this article: the radius clause, as it relates to nearby music festivals and other venues. A radius clause is part of the contractual agreement between the performer and the concert promoter, and addresses both a range of area and a length of time. The clauses themselves vary from contract to contract, but generally stipulate a range of 300 miles and a period of 6 months.

In principle, the radius clause is a necessary element of doing good business in the live music industry; it prevents poaching of performers from one venue to the next. For instance: if we booked “Artist X” to play our room on August 15^th, but the venue across town then booked them on August 1^st, chances are that our show would flop and we’d lose a lot of money in the deal. So in essence, it’s a very protective legality. But this is where things get tricky: enormous, corporate music festivals that attract several tens of medium- to large-sized acts. When these performers sign on to play these sprawling events, they of course agree to a radius clause that keeps them from performing at any venue pretty much in the entire region. And you can’t really blame them, as the festival has the capital to pay them much higher than the smaller venues because of the amount of corporate sponsorship money the festivals draw in.

An entertainment lawyer once relayed to me an antidotal story about an up-and-coming act’s experience with a festival promoter trying to book them: This band was of a size that would command a ~$20k fee to play a venue, and the festival offered them as much. The performer, being reasonably conscionable, turned it down as they recognized the value of touring a region and building a fan base show-by-show in intimate settings. The festival then upped the ante, offering $50k; another refusal by the band led to what the lawyer described as somewhat of a prank-like test of the promoter’s resilience. After a lengthy back-and-forth, the performer inevitably relented to an offer of over $100k. In their defense, touring is expensive as a band, what with buses, crews, lodging, etc., and as Vito Corleone would say: it was an offer they couldn’t refuse. This is a testament to the buying power of large corporate festivals with mega-corporate sponsors; an example of too-big-to-fail status often seen in industries outside of the live music business. There is one glaring exception: when a huge corporate entity owns both a festival and a venue in the area, they are not required to adhere to the radius clause. I won’t name any names, but if you know anything about the live music industry, you can probably guess.

For a more reality-based and relatable example, the venue I helped operate tried to keep a diverse rotation – genre-wise – of acts booked; everything from Rock to Country to Jazz to Hip-Hop to Blues to Electronic to Folk to R&B, etc. To be honest, Rap/Hip-Hop was our weakest link; maybe one of every 20 concerts was targeted toward the urban demographic. Having a personal history in the field made me the ambassador of endeavoring to strengthen this aspect of our booking. So when two particular acts – Big Grams, a collaboration between Phantogram and Big Boi of OutKast; and Run The Jewels, comprised of Killer Mike from Atlanta’s Dungeon Family and The Weathermen’s El-P – hit the scene, I was immediately adamant about bringing them into the market. I figured it was quite feasible as both Big Boi and Killer Mike were based in a city only two hours away. My attempts to draw these acts were immediately shut down because they had already signed on to do corporate festivals in the region; this negated the possibility of booking them for the entirety of the year because of overlapping radius clauses. Another example of festival domination is Chance the Rapper, who was barred by festival radius clauses from playing shows in his hometown of Chicago for the majority of a calendar year. I seriously can’t count the number of times I espied an act that would do well at our venue and in our market but was refuted by our talent buyer because of such-and-such corporate festival.

Don’t get me wrong, I’m not purely hating on music festivals; I think they are a great concept insofar as bringing an extremely large group of people together to experience music, some of which they may not otherwise be exposed to. Enjoying live music with your friends is a unique and invaluable occurrence. What I am in fact criticizing is the relationship between large festivals and music venues; in my eyes, the two experiences are wildly different and should be treated as such. Just because an act is one of fifty performers at a festival 300 miles away should have no impact on their ability to draw a crowd in my city, nor should it detract from the festival’s ability to sell passes. It also goes without saying that I’m not railing against homegrown music festivals that feature a lot of local acts as well as regional and occasionally national acts, but also promote small businesses from the area and utilize local services. There are some questions of conflict of interest when these festivals take place in the summer months, when it’s somewhat of an off-season for club venues, but to each their own. There is a time and place for it all, but for the survival of small businesses that rely on the limited patronage in a small market such as ours, the rules deserve to be re-thought. Music festivals are much more collective, whereas venues are a locally concentrated and intimate individual experience. To that point, a lot of these sprawling corporate festivals sell out before the line-up is even announced, confirming the suspicion that the draw for a festival is more about the atmosphere than the music itself. Furthermore, just examine the types of crowds drawn to festivals as opposed to venues: mostly youthful, active, and ‘free-spirited’ attendees gather in large fields versus a wide array of patrons filling a music hall in a controlled environment. These crowds rarely overlap, yet we allow the big business of corporate festival promotion to treat them exactly the same insofar as the radius clause is concerned.

Imagine if we condoned this sort of treatment when applied to other industries; perhaps not allowing Minor League baseball games to take place in the same stadium or in the same month as a Major League contest. Not only does it discourage healthy competitive business, but it also highly favors mega-corporations over small businesses; this is a trend seen much too often in America, and there is a cornucopia of examples proving that this philosophy is destructive to the tenets of the American Dream. When we let those with the biggest bank accounts write the rules, it’s no surprise that the little guys get left in the dust. It’s past time to redress the policies of contractual radius clauses in regards to corporate music festivals versus live music venues, and it’s up to not only the performers and promoters who sign the agreements but also the awareness of patrons who support the businesses.

(As published by al.com)