Friday, July 30, 2010

The Radius Clause and Lollapalooza

A radius clause is an agreement that business signs where they agree not to open another branch in a given area. It is most commonly used with anchor stores in malls. For example, if Target is the anchor store, they sign an agreement that they will not open another store close to that mall. The radius is usually a short distance from the mall in that potential customers will not be drawn away from the mall with the Target but into the mall with the Target (hence the phrase anchor store).

This makes a lot of sense to me when it comes to retail which are generally stationary and have some staying power. It does not make so much sense when it comes to concert promotion. A lot of the big Summer concert festivals have their artist sign a radius clause. The artist agrees that they will not perform anywhere else near the festivals for a given amount of time. The largest radius in the industry is the 300 square mile for 90 days clause for the performers at Lollapalooza. So if you are a fan of Green Day or The Strokes and you live within the 300 mile radius of Grant Park, Chicago, you better see them at Lollapalooza or not see them at all.

For extremely popular bands like Green Day, this isn't huge deal, but for the 100 or so lesser known bands like Alberta Cross, Metric, Deer Tick or The Cold War Kids (some of my favorites) this is a big deal. Not only for the bands, but for the small clubs that attract these bands. 300 square miles is huge. This means that these bands cannot perform in Madison, Minneapolis, Detroit, St. Louis, Indianapolis and whatever ever market 300 square miles encompasses. This means slim pickings for the Midwest during the Summer concert season.

The Illinois Attorney General is investigating Lollapalooza for possible anti-trust issues. I will be following this. I don't live in the Midwest, but I could imagine what would happen to a town like Burlington VT (near my home) if a huge festival came to NYC, Boston or Montreal and had a radius clause like this one. Our concert scene and our economy would be hurt along with every other little town in New England.

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