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.
6. Merchandising.
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.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.