After Kanye West was denied entry into the UK to perform at Wireless Festival, event organisers announced the cancellation of the three-night event, making headlines globally.
But with watertight contracts no doubt in place for the headline act, sponsorship providers and a whole host of third-party suppliers, how much money will be lost, and who will be held responsible for paying the bills?
Brady Tagg and Tom Rook, our legal experts have answered some of the biggest legal questions surrounding the event, below.
How much money is set to be paid out by Wireless?
“Without knowing the fees agreed in everyone’s contracts, it’s pure speculation to know how much money will be paid out, and if Wireless Festival will be responsible for paying any money out.
“Insurance will also likely be in place to cover losses, but it isn’t known what this would cover and how much would be covered. One of the biggest questions needed to answer these questions is on responsibility, which is where legal expertise is required.”
How does English law treat the cancellation of an event where a headline artist’s visa is withdrawn?
“This largely depends on the terms of the contract. Lawyers on all sides (festival, artist, sponsors, suppliers) will now be looking over the terms of the contracts they agreed, with a view to establishing what they are entitled to be paid (or keep if they’ve already been part-paid), and/or what they might be able to claim from the other parties involved.”
Does a withdrawn visa automatically excuse the artist from performing?
“Simply put, no.
“If Kanye’s team has contractually agreed to take responsibility for his immigration requirements, a withdrawn visa may well be treated as his ‘fault’ rather than an unavoidable external event.
“Lawyers will be zoning in on any clauses relating to exceptional events outside the parties’ control. Typically, events qualifying as what is called a ’force majeure’ under a contract will be clearly defined. If visa withdrawal isn’t listed as one of these qualifying events, the courts will interpret this point narrowly.
“Whilst a visa withdrawal is a government action that may, on the face of it, qualify, a visa withdrawal caused by a party’s conduct is much more ambiguous.”
Where will sponsors and smaller suppliers stand, given the cancellation?
“Headline sponsors will likely have put in place fully negotiated contracts that ensure they pay no more than is strictly ‘reasonable’ given the far lower levels of exposure that they will now receive.
“They may have benefitted from some publicity associated with the festival before the cancellation, in which case, any advance payment may well be retained by the festival organisers. Future payments will almost certainly be voided.
“Smaller suppliers are often in a much more uncertain position. If the contracts are heavily one-sided in favour of the festival organiser, with minimal room for negotiation being afforded at the outset, they will be left in a difficult position.
“We’d hope that payment to suppliers would be linked to services and goods delivered up to cancellation, rather than any link to the event having actually taken place.”
What should suppliers and organisers cover in their contracts to best protect themselves where similar situations arise in future?
“Parties should make sure their contracts clearly cover payments on cancellation, unavoidable external events, and other early termination triggers (e.g. ‘morality clauses’ enabling a party to terminate where reputational damage is caused by something the other party does or says).
“Dealing with liability for certain losses (say, the loss of profits if an event doesn’t go ahead as planned) is also crucial, as these amounts can run extremely high if claims are made.”
Our commercial team have expertise in commercial contracts, for more information, contact the team here.