Agreement to keep festival in Chicago limits competition

The deal to keep Lollapalooza in Chicago for at least the next decade includes a complete overhaul of how festival producers will pay the Park District, tighter restrictions that keep competing music festivals out of Grant Park and no provision for investment in the land, with the exception of a $100,000 tennis court. courtyard renovation.

Although Mayor Lori Lightfoot took to the stage at this year’s festival to tell excited fans that the flagship music would remain in Chicago, her office and the Park District had not shared full details of the deal with C3 Presents. , which puts the Lollapalooza, nor confirmed if a contract had been signed.

In its response to a freedom of information request from Tribune, the district said Monday that the contract “is currently in draft form” and provided a three-page “summary of the terms of the agreement.” signed by Parks CEO Rosa Escareño and C3 Director Charlie Walker on July 30. the penultimate day of the 2022 festival.

One of the biggest changes from the previous contract, as the Tribune reported last month, is that the new deal will allow an additional 60,000 attendees to take part in the four-day festival. The new ceiling will be 115,000 daily festival-goers, compared to 100,000 in the previous pact.

The new deal also appears to further limit competing music festivals in Grant Park for the next decade.

“CPD and C3 will collaborate if necessary to avoid similar activity (multi-day music festivals) characterized by type of entertainment, number of days and number of stages at Grant Park. Under no circumstances will CPD, without the written consent of C3, allow any music festival in Grant Park to have more than 20,000 daily attendees or to run for more than two days,” the agreement states. This appears to mean that another C3-run festival, the two-day Sueños Music Festival, would be allowed to go ahead.

The previous agreement made no mention of the size or duration of the competing festivals. He banned the Park District from holding another multi-day, multi-stage music festival “that is identical or substantially similar” to Lollapalooza, without consultation with C3. City-sponsored events like Taste of Chicago, Jazz Fest and Gospel Fest were exempt. Future exempt city events will be updated in the “finalized contract”, as per the agreement.

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Another unresolved “significant item” for the detailed contract includes an agreement on service rates. It’s unclear whether this is a reference to assurances that festival organizers wanted the city not to raise its entertainment tax over the next term of the agreement.

Festival wear and tear on the ground has long been a frustration for parks advocates. The agreement summary makes no mention of C3 providing long-term infrastructure or drainage upgrades; the only improvement noted is the $100,000 renovation of the tennis courts where the festival vehicles are parked.

The agreement brings major changes to how the Park District will collect its share of the festival’s revenue. Under the 2012 contract, the city took a percentage of net admissions revenue, dropping from 11% in 2012 to 15% by 2021. In addition, the city received a 5% reduction in admissions revenue. sponsorship exceeding $3.25 million and food and beverage revenue. over $3 million. According to this formula, C3 donated $7.8 million to the Park District for last year’s festival.

The new agreement stipulates that C3 will pay the Park District a share of total festival revenue, including admissions, food and beverage, merchandise, third-party licensing, sponsorships and streaming. Whatever share C3 pays would be based on a series of installments:

  • 5% of the first $30 million in total festival revenue
  • 10% of total festival revenue over $30 million and up to $50 million
  • 20% above $50 million and up to $70 million
  • 15% above $70 million and up to $80 million
  • 10% above $80 million and up to $85 million
  • 5% above $85 million

These tranches would increase by $1 million per year. As with the last contract, C3 will guarantee payments of at least $2 million if the full four-day festival takes place or $1.5 million for three days. If the in-person festival is canceled — as was the case in 2020 due to the COVID-19 pandemic — the city will receive $750,000.

The Park District argued that it did not need its board’s approval for the contract to go ahead. The bureau then meets on Wednesday.

The next Lollapalooza is scheduled for August 3-6, 2023.

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