For this question, I turned to Bernard Coleman, an attorney in my law firm who has the really fun job of representing musicians, producers, recording artists and everything related to the music industry (actually, he has the second best job as a lawyer – representing broadcasters remains the best lawyer job!)
Bernard predictably observes that the issues raised by Niki Minaj cancelling out of Summer Jam can impact radio stations as either concert promoters or sponsors. Bernard tells me that, in order to limit liability when an artist or performer becomes a no-show, consider taking the following precautions:
First, always include contract terms that specifically address cancellations. When a listener purchases a ticket for an event, he or she enters into a contract with the seller of the ticket. The law allows for parties to a contract generally to negotiate a contract’s terms. Include any terms important to your radio station in the contract.
Contract terms can be written on the ticket itself. Take a look at the back of any sports event ticket and you will see fine print. The terms are generally valid as long as they are conspicuous to the buyer at the time of sale.
By purchasing a ticket, a listener agrees to the terms of sale. The law will generally honor the terms as written on the ticket. nclude on the ticket all terms that you want to enforce. Simple phrases such as “date and time subject to change”, “radio station not responsible for cancelation of event”, “event may be canceled or postponed by promoter, team, band, or venue”, “no refunds”, or “refunds will only be issued in the event that . . .” will help a radio station limit its liability in the event that the concert or event needs to be cancelled or postponed.
If tickets are being sold by a third-party vendor (like Ticketmaster), be sure you are aware of the third-party vendor’s terms and conditions of use. Courts have upheld vendor’s terms, regardless of whether the customer actually read them, as long as the terms and conditions were conspicuous at the time of purchase. Therefore, before choosing a third-party vendor to sell tickets to a station event, review their terms and conditions to ensure that they protect the stations’ interests.
Second, when scheduling multiple performers for the same concert, event or festival, state that artists are subject to change. Just like with terms pertaining to cancellation, include terms on the ticket that address the possibility that an artist may not show up and must be replaced. For instance, include the simple phrase “artists subject to change” on the ticket and all promotions and advertisements. Therefore, the purchaser of the ticket is agreeing to purchase the ticket with the knowledge that there is no guarantee as to who may perform.
Third, be knowledgeable about the laws and requirements in your state. Each state has different laws pertaining to the sale of tickets for events and concerts. For example, New York law requires that all advance proceeds from the sale of tickets to entertainment events be held in an escrow account and that, with some exceptions, each ticket purchaser is entitled to a refund of his or her ticket price in the event that the concert or show is cancelled or rescheduled. This may or may not be the law in your state. If you are unsure about your state’s requirements, contact a local business or entertainment attorney.
Finally, purchase contingency insurance in addition to general liability insurance. Several risk management companies, such as Aon Risk Solutions, offer contingency insurance that will transfer the risk of unforeseen events from you to them. Contingency coverage policies can include protection from the impact that adverse weather may have on revenue sources such as parking, concession stand and food sales and attendance, and expenses related to the cancellation, postponement or abandonment of an event.
As a sports and entertainment attorney, Bernard has the perspective of artists and performers in questions that arise such as the Niki Minaj cancellation. With any big event, hope for resounding success but at the same time prepare for the worst. Bernard can be reached in my Atlanta office at (404) 962-7576.