The Legalities Surrounding Live Events
Unless you’ve been under a rock,
you’ve likely heard of (or watched one of the two documentaries about) the
debacle that is Fyre Festival. Ever eager to understand the legal
underpinnings, Froese Law is using this opportunity to illustrate some of the
legal issues that surround hosting live events.
What is Fyre Festival?
It’s quite possible that there may be some readers that may not know about Fyre Festival. So a quick review. New York based serial entrepreneur Billy McFarland and hip hop artist Ja Rule joined forces to launch an online music booking app. As part of the launch, they concocted a super VIP music festival that would be held on a private island in the Bahamas, specifically on an island owned by Pablo Escobar. The duo embarked on a massive social media campaign enlisting social media monarchy such as Kendall Jenner and Bella Hadid to promote the event. Through a series of poor planning, breaches of contract and incredibly bad decision making, the event was cancelled. But what makes this failed event so fantastical is that it culminated in at least 8 class action suits, a criminal investigation launched by the FBI, a securities fraud investigation launched by the SEC, 6 years jail time and a cumulative fine of $53.4 million. Yes. Fyre Festival was a failure of seismic proportion. But, as always, there’s lessons to be learned.
Top Legal Considerations For Live Events
Planning and hosting a live event, be it a fashion show, summer festival, or a music concert, is complicated with a lot of moving parts, a lot of third parties and a lot of exposure to risk and liability. Preparedness is your best friend. So is budgeting. Below is a summary of the salient legal issues you should consider:
1. Create your business plan.
There are a lot of moving parts. Before ‘doing it for the ‘gram’ map out your business plan. Factor in costs, profit, revenue, budget, logistics, infrastructure, insurance, venue, municipal bylaws, liquor licensing etc.
2. Structure your entity.
Do not undertake the venture without seriously considering the legal entity structure: a corporation, a not for profit or a charity.
3. Build out your team.
Who is playing what role and what is their position? Who are the founders? Who are the investors? Who gets equity? Are there employees? Or are you relying on independent contractors and consultants? Will you use volunteers? Consider this and establish the correct paperwork to formalize these relationships.
4. Negotiate your commercial agreements.
You simply cannot run this event without entering into a myriad of commercial agreements. If structured properly, they will be your best friend if the bleep hits the fan. The commercial agreements will cover a myriad of scenarios and relationships, including vendor, sponsorship, talent/artist, venue, promoters, ticket company, etc. Careful consideration should be given to indemnification, non-performance and force majeure provisions.
5. Intellectual Property and Licensing.
At the crux of every live event is creative ingenuity. Intellectual property laws are the foundation of protecting, commercializing and using that creative ingenuity. Either you will be creating IP or licensing in IP. Either way, careful consideration over the protection and use of IP should be made.
Oftentimes, sales from branded merchandise sold at the event are a significant revenue generator. Consider how the merchandise will be manufactured. Is it proprietary to your legal entity? Are you cross-branding with a celebrity? Do you get all of the profits or is there a revenue share?
7. Be careful with your marketing
Make sure that your marketing is onside. Comply with influencer marketing laws. Architect a CASL compliant digital marketing campaign.