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Lizzo can keep $5 million fee from COVID cancelled Virgin Fest, judge rules

By | Published on Tuesday 13 September 2022


Lizzo can keep the $5 million fee she was paid to play the 2020 LA Virgin Fest that never happened because of COVID, a judge has ruled. This is because her agents amended her contract when she was booked fearing that the event might not go ahead even before the pandemic hit.

The company that was promoting the festival that never happened, VFLA Eventco LLC, sued the touring companies of Lizzo, Ellie Goulding and Kali Uchis – and their booking agency WME – in July 2020.

It argued that – based on the clause in its artist contracts dealing with what would happen in extraordinary circumstances like a pandemic, ie the good old force majeure clause – anyone booked to play should return all and any upfront fees they had received once COVID rules forced cancellation.

The promoter said that other agencies had agreed the festival’s force majeure clause applied when it was COVID rules that forced the cancellation and that their artists had therefore returned any monies they had been advanced.

But, it then said, WME was insisting that the clause did not apply – and that its artists therefore didn’t need to return any cash – because said artists were “otherwise ready, willing and able to perform”, even if the event itself was not going ahead.

It transpires that WME took that different position to the other booking agencies because of amendments its lawyers had made to is client’s contracts with VFLA Eventco LLC, due to pre-pandemic concerns regarding whether or not the new festival would go ahead.

According to Billboard, although the Virgin Group was involved in the event – with Richard Branson endorsing and promoting the project – the festival’s main backers were actually Marc and Sharon Hagle.

They are a Florida-based couple who made lots of money from the commercial property sector and then started investing into the entertainment world via a partnership with Jason Felts, previously CEO of the Virgin Produced film and TV business, who was also involved in the Kaaboo festival brand, which the Hagles also invested in.

When Felts approached WME about the plan to launch a new Virgin Fest in LA, agents there were seemingly skeptical about the prospects of a new festival launching into a market dominated by Live Nation and AEG’s Goldenvoice.

Indeed, legal papers show, WME’s then co-Head Of Music Marc Geiger told Felts that launching a new festival into that market was basically ‘commercial suicide’. As a result, he added, any WME artists booked to play would expect to be paid upfront.

It seems that Sharon Hagle in particular was keen for Lizzo to be booked as headliner for the debut Virgin Fest LA, which is why an initial declined offer of $1.35 million was subsequently increased to $2.5 million and ultimately to $5 million.

Which was an offer it was going to be hard for Lizzo to turn down. So she didn’t, despite her booking agency’s concerns regarding whether or not the festival would go ahead.

But because of those concerns, WME had their lawyers look at the contract that came with the mega-bucks booking, with the agency’s festivals chief Josh Kurfirst telling the legal people to ensure the contract was “100%” solid for Lizzo and the other WME artists set to play the festival.

Amendments were made to the contracts, with Lizzo getting her entire $5 million fee upfront, while for Goulding and Uchis – being paid $600,000 and $400,000 respectively – they would get 50% upfront and the remaining 50% no later than 90 days prior to the show.

Those deals were done and payments made. And then the COVID-19 pandemic hit, lockdowns went into force across the world and the Virgin Fest was cancelled.

And the event’s promoters – like the promoters of many other events – began seeking the return of upfront payments that had been made to artists, citing the good old force majeure clauses in their respective contracts.

However, WME argued, under the amended force majeure clauses it had negotiated with VFLA Eventco LLC, its artists were not actually under any obligation to return the money. And that included’s Lizzo’s five million.

In a ruling earlier this month, LA judge Mark Epstein agreed with the agency’s position. He wrote in that ruling: “The original force majeure clause was relatively straightforward and favoured the promoter. It stated that in the event of a force majeure, the promoter would be entitled to the money unless the artist had already begun to perform”.

But WME’s lawyers, he added, had “modified the clause to become more artist-friendly. Rather than limit the artist’s recovery to situations where she had already started performing, [Lizzo] could retain the money so long as she was ‘otherwise ready, willing and able to perform’. That change, in context, lends support to the artist’s position here”.

“Rather than require the artist to have started the actual performance”, he went on, “so long as she would otherwise have done so she could keep the money”.

Anticipating that VFLA Eventco LLC is likely to appeal – Billboard reckons that the cancelled Virgin Fest resulted in losses for the company of $23 million if these artists fees remain unreturned – the judge added: “This would appear to be only the first stop on the parties’ journey to resolution. Even so, the court believes that the inference it draws is most consistent with the clause’s overall structure and the bargaining history”.

So, for now all least, Lizzo gets to keep the five million. Party time over at Lizzo’s place, I reckon.