A US appeals court has upheld a ruling that allows Lizzo to keep the $5 million she received from the COVID-cancelled LA Virgin Fest, which she was due to headline in 2020. Ellie Goulding and Kali Uchis - repped by the same agents - can also keep the million dollars they were collectively paid, after appeal judges accepted the artists' interpretation of a force majeure clause in their contacts with the festival.
A force majeure clause sets out what happens if extraordinary circumstances - such as a global pandemic - impact on the delivery of a contract.
When the COVID lockdowns forced festivals to cancel, many artists returned any fees they had already been paid because of those clauses in their contracts. But agents for Lizzo - who had already received her ridiculously high LA Virgin Fest fee in a deposit payment before the event - argued that an amendment made to the force majeure clause in her contract meant she could keep the cash. And the Californian appeals court agrees.
Reaching that conclusion required the appeal court judges to undertake some slightly tedious and rather confusing analysis of the way the force majeure clause was worded in the Lizzo contract, and also those for the bookings of Goulding and Uchis.
The WME negotiated contracts did include a basic provision about returning fees in a force majeure scenario, but then said "however, if the artist is otherwise ready, willing and able to perform, [promoter will pay the artist] the full guarantee unless such cancellation is the result of artist’s death, illness, or injury, or that of its immediate family".
"The artists claim their right to the deposits is conditioned on them demonstrating they were 'ready, willing and able to perform' but for the occurrence of the force majeure event", the judges explained in their ruling. "[The festival] claims the artists’ right to retain the deposits is conditioned on a showing that the artists were 'otherwise ready, willing and able to perform' in spite of the occurrence of the force majeure".
Don't spend too much time trying to figure any of that out. All you need to know is that the appeals court backed a lower court in concluding that the artists and their agents were interpreting the contract correctly and can therefore keep the money.
WME didn't add the all important extra clause to their artists' contracts because of any premonitions that a global pandemic was incoming.
Instead the agency wasn't convinced promoters of the LA Virgin Fest would be able to pull off the event in a market dominated by Live Nation and AEG. Although the festival was endorsed by the Virgin group, its main backers were Marc and Sharon Hagle, who made their money in the commercial property sector before getting involved in live entertainment.
Such were the concerns about the event, WME would likely have advised Lizzo against committing to perform had the festival's promoters not increased their original offer of a $1.35 million fee to $2.5 million and then $5 million. Sharon Hagle, it seems, was a big Lizzo fan and really, really wanted her to perform.
With a fee too big to decline, WME got its lawyers to work to provide some protection in the contract given the agency's concerns about the commercial viability of the festival. Having done so, Lizzo then got a very big pay day for doing nothing at all once the pandemic hit, while the backers of LA Virgin Fest are six million worse off than originally anticipated as a result of the COVID cancellation.