Lollapalooza Reportedly Under Anti-Trust Investigation By Illinois Attorney General

06/25/2010 04:39 pm ET | Updated May 25, 2011

Reports have surfaced that Illinois' attorney general may be investigating Lollapalooza for anti-trust violations, based on the restrictive contracts it gives performers.

Jim DeRogatis, former pop music critic for the Chicago Sun-Times, wrote on his blog yesterday that Attorney General Lisa Madigan's office has subpoenaed music business agents and executives at C3 Presents, the company that sponsors Lollapalooza.

The investigation is apparently based on the "radius clause" in the contracts that Lollapalooza artists sign. Language in the contracts prohibits every band playing at the festival, from headliners on down, from playing within a 300-mile radius of Chicago for months around the festival.

From DeRogatis:

Sources have said that the most extreme of these clauses stretch from six months before Lollapalooza to three months after it, and that they encompass a 300-mile radius--which would include concert markets as far away as Milwaukee, Madison, Iowa City, Detroit and Indianapolis.

Many local Chicago club owners and independent concert promoters have said that these radius clauses are decimating the local music community and significantly hurting their business for much of the year, and that they constitute unfair, anti-competitive practices. Lollapalooza promoters respond that the clauses are standard practice in the concert industry, and that they waive them for any artist who asks to be excused from their requirements.

Greg Kot, Chicago Tribune music critic, also reported the story, saying that industry sources started hearing about the investigation last week.

He spoke with a number of club owners around Chicago, who seemed encouraged by the prospect of an investigation.

"A lot of us (club owners) have been talking about this," said Ray Quinn, owner of the Lincoln Avenue club Martyrs. "It's encouraging (if there is an investigation). The radius clauses are so huge I can't believe booking agents go along with them. They really hurt our business in the summer."

Bruce Finkelman, owner of the Empty Bottle, said, "There are enough people who are screaming about this that it merits looking into. Is it a good idea? I'm of two minds about it. If I put 300 million, trillion dollars into a festival I would want these clauses. But as a small club that lives and dies by the talent that's available, it would be nice to present these acts without those clauses restricting them."

DeRogatis also spoke with a number of club owners, all of whom seemed quite unhappy with the restrictive clauses. Sean Duffy, talent booker at the Abbey Pub, told him, "Lollapalooza alone probably wiped out about 60 club shows last summer, and we've just got to rein that in."

Neither the Attorney General's office nor C3 had any comment on the issue.

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