Lizzo can keep her $5 million booking fee for 2020’s canceled Virgin Fest in Los Angeles, a California judge ruled earlier this month.
After two years of litigation, LA Superior Court judge Mark Epstein ruled on Sept. 1 that the cancellation clauses added by attorneys for talent agency WME to its clients’ performance contracts shifted the financial risk of cancellation onto the festival. That means the agency and its acts — also including Ellie Goulding and Kali Uchis — are not required to pay back performance fees that were paid in advance of the planned June 6-7, 2020, festival at Banc of California Stadium, even though their performances never happened.
Judge Epstein wrote that Virgin Fest’s standard artist contract force majeure clause protected the promoter from liability if the festival had to be canceled due to a natural disaster or a situation beyond its control. That changed, however, Epstein wrote, when attorneys for WME insisted on several revisions to the force majeure clause to make the contracts more “artist friendly.” Epstein said those changes ultimately shifted the financial risk of cancellation onto Virgin Fest and its owners Marc other Sharon Haglepaving the way for Lizzo to receive one of the biggest pay days of her career.
The ruling pushes the Hagles’ financial losses in the festival business to approximately $23 million, court records show. The Florida couple — who made their fortune in commercial real estate — decided to invest in live music after meeting Jason Felts, the producer of the KAABOO festival in Del Mar, California. The Hagles bought KAABOO from previous owner Bryan Gordon in September 2019 for $10 million, saving it from cancellation, and agreed to fund Felt’s idea for Virgin Fest, named after Richard Branson‘s famous media, airline and telecom company.
Branson’s involvement with Virgin Fest was mostly that of a figurehead, promoting the festival online and in a splashy announcement video, while the Hagles funded the event.
Emails and communications produced in the lawsuit show that agents at WME — including former co-head of music Marc Geigerand WME head of festivals and partners Josh Kurfirst and Lizzo’s direct agent Matthew Morgan (who now represents Lizzo at UTA) — were vocally skeptical about Virgin Fest’s prospects for success and repeatedly warned Felts that staging the festival in Los Angeles was a bad idea. Geiger told Felts — who announced his retirement last May — that hosting a festival in a market dominated by Live Nation, Goldenvoice and several well-established independents was “suicide” and said that WME would demand payment upfront because neither the artists nor the agency believed Virgin Fest would be successful.
Undeterred, Felts pushed ahead with the festival and booking Lizzo as a headliner, in part at the insistence of Sharon Hagle, who regularly texted Felts expressing her admiration for the “Truth Hurts” singer, court documents show. “Lizzo is hot up for everything at [Grammys],” she wrote in a Dec. 11, 2019, email to Felts. By then, Virgin Fest talent buyer Zach Tetreault had already raised his original offer to Lizzo from $1.35 million on Oct. 29 to $2.5 million on Nov. 27, only to be rejected by Lizzo’s agent Matthew Morgan. Desperate to book a headliner, on Jan. 26, 2020, Felts authorized Tetreault to offer Lizzo $5 million to perform, noting, “Sharon just texted me saying please just make Lizzo happen.”
Lizzo accepted the offer and eventually, Goulding (represented by WME partner and global co-head of music Kirk Sommer) accepted $600,000 to play the festival and Uchis (represented by WME partner Kevin Shivers) agreed to play for $400,000. Another $300,000 was paid to WME to book five additional acts, among them the Marcus King Band and banks. WME insisted that Lizzo be paid 100% of the fee prior to the festival announcing her as a headliner and that Uchis and Goulding be paid 50% upon signing and the remaining 50% paid 90 days prior to their performances, emails produced for the lawsuit show .
Hoping to avoid any additional risk, according to emails turned over to the court by WME, Kurfirst instructed attorneys at WME in February 2020 to make sure the contracts were “100%,” meaning WME artists would be paid even if the festival was canceled. A month later, all events were indefinitely postponed due to the COVID-19 pandemic. Felts, like many other festival promoters at the time, petitioned the artists booked for Virgin Fest to return the deposits they had been paid, citing the festival’s force majeure clause. WME, believing that the contracts its artists signed granted them the right to keep the money paid by Virgin, steeled itself for a fight.
“One or more of the artists including a headliner are now going to take a position and not return the money,” Sommer wrote in a June 4 email to Goulding’s managers at TAP Management. “We have seen all unsuccessful festivals collapse and attempt to claw back artists guarantees, this festival was addressed upfront with stronger language and deposit terms for this reason.”
Sommer then laid out Goulding’s options: “Opt out, return the money and tell them they must honor the offer and terms if and when they return, …. Watch and wait (hold the money),” or dig in and “declare client is keeping the money.” After a meeting between Sommer and TAP managers Aimée Jessiman, Ben Mawson other Ed Milleton June 4, 2020, the decision was made to keep the money based on the language of the contracts.
That language, Epstein ruled, was negotiated between WME’s contract lawyer and the festival’s lawyer with the intent of making the contract’s cancellation language more artist-friendly than what appeared in the festival’s standard contract.
“The original force majeure clause was relatively straightforward and favored the promoter,” Epstein wrote in his ruling. “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.” That changed after WME’s attorney “modified the clause to become more Artist-Friendly,” Epstein’s ruling continues. “Rather than limit the artist’s recovery to situations where she had already started performing, she could retain the money so long as she was ‘otherwise ready, willing and able to perform.’ That change, in context, lends support to the artists position here. Rather than require the artist to have started the actual performance, so long as she would otherwise have done so she could keep the money.”
Expecting the case to be appealed, judge Epstein noted, “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.”
Epstein also ruled in favor of WME, dismissing four counts filed against the agency by Virgin Fest including conversion and violations of California’s unfair competition law as well as a request for punitive damages. The judge found that WME was simply following the wishes of its clients Lizzo, Goulding and Uchis, noting that WME did agree to return money to Virgin Fest for other clients who instructed them to do so.