A court has recently ruled that Lizzo can keep a five million dollar fee she was paid to headline the 2020 LA Virgin Fest festival which was set to have its first event in Los Angeles on June 6 and 7, 2020. The festival promoter, VFLA Event LLC wanted Lizzo to headline the festival.
Billboard magazine reported that the Virgin Group was involved in the festival and Richard Branson was working on promotion. But the real people behind the event were Marc and Sharon Hagle (they had also invested in the Kaaboo festival). Sharon was very interested in having Lizzo headline the event. So, they raised their initial offer for Lizzo from $1.35 million to $2.5 million and eventually to five million. It was unusual that Lizzo received 100 percent of her fee up front. A more typical provision would be to receive 50% of the fee up front and the other 50% at least 90 days before the performance.
As it turned out, Lizzo was paid in full, and thereafter the Covid pandemic forced the cancellation of the festival.
Lizzo’s contract had a standard “Force Majeure” clause in it. These clauses provide that a party can be excused of liability on a contract due to certain unforeseen circumstances, such as earthquakes, hurricanes, tornadoes, wars, or other unforeseen events that prevent a party from performing. In this case, the court said the force majeure clause excused Lizzo from returning the five million dollars even though the festival was cancelled due to the Covid pandemic. It would appear that the Covid pandemic would qualify as adequate grounds under most Force Majeure provisions.
VFLA sued Lizzo’s touring company and her booking agent, WME. VFLA contended that the five million dollar fee should be returned once the festival was required to be cancelled due to Covid. WME alleged that even though some of the other artists scheduled to perform had returned their up-front fees, Lizzo was entitled to keep hers due to the wording of the Force Majeure clause in the contract.
WME has doubts about the success of this new festival because Live Nation and AEG’s Goldenvoice had been the dominant forces in the market. So that is why WME demanded 100 % of their clients’ fees up front. They wanted to protect their clients to the extent possible if the festival was cancelled. The parties had originally had a standard type Force Majeure clause in Lizzo’s contract. WME was able to negotiate amendments to the Force Majeure provision which were much more artist friendly than before. The revised provision stated that WME’s artists would be able to keep their up-front fees so long as they were “Otherwise ready, willing and able to perform,” even if the event was cancelled.
It may seem to some that this is an unfair result, but parties are generally free to negotiate the terms of their contracts. So, it appears that Lizzo has received a windfall unless the case is overturned on appeal.