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By Chris Cooke | Published on Thursday 16 May 2019
Organisers of the Woodstock 50 festival yesterday welcomed a ruling
in the New York courts confirming that the event’s financial backer had
no right to unilaterally cancel the event. This means “Woodstock 50 is
on!”, said organisers declared. Though the court declined to force that
now ex-backer to return $18 million to the event’s bank account.
The 50th anniversary celebration of the original Woodstock, due
to take place in August, was thrown into doubt last month when its
primary financial backer – Amplifi Live, a division of marketing group
the Dentsu Aegis Network – announced that the event had been cancelled.
The Woodstock company itself then quickly denied there had been any
cancellation and insisted that the show would go on.
The dispute between Woodstock and Dentsu went legal last week,
putting the spotlight on the contract between the two entities in the
New York courts this week. Most attention fell onto what that contract
said about cancelling the event and the management of the bank account
that had been set up to pay festival costs.
The agreement did set out quite clearly what Dentsu could do if
it thought the Woodstock company was ever in breach of its contract.
Basically, the marketing firm could either cancel the deal and walk away
from the project, or take control of the festival and more directly
manage the booking of acts and delivery of the event.
Dentsu alleges that Woodstock was very much in breach of its
contract by the middle of last month. Among its gripes are Woodstock’s
failure to consult the firm over talent bookings and a significant, if
necessary, slashing of capacity, as well as failures to decrease the
approved budget after missing a talent booking deadline and to gain
approval for certain expenses.
On the basis of those alleged breaches, Dentsu decided to take
control of the event. It then used that control to cancel the whole
thing, because “the significant cost overruns, revenue shortfalls and
lack of financing facing the festival [are] all insurmountable obstacles
that cannot be cured”. But, argued Woodstock, while the contract may
have provided for Dentsu to take control of the event, that didn’t mean
it could cancel the show.
That’s because – although by taking control of the event Dentsu
changed its working relationship with the Woodstock company – the two
entities’ agreement was still in place. And that agreement clearly
states that “any decision to cancel the festival shall be jointly made
in writing by the parties”.
This is why the judge hearing the case ruled yesterday that
Dentsu and its subsidiaries “are enjoined and restrained … from
cancelling the festival or communicating to the media and/or festival
stakeholders – including state and county officials, venue operators,
local vendors, community representatives, insurers, producers, and
talent agencies, and performers – that the festival has been cancelled”.
However, not everything went the way of the Woodstock company.
Under the original deal Dentsu committed a budget of just over $49
million to stage the festival and set up a standalone bank account via
which to pay the festival’s costs. There was just under $18 million in
that account at the point the marketing group bailed on the project.
At that time Dentsu took that cash out of the festival account.
The legal filing Woodstock made last week also requested that that
money be returned. But the judge said yesterday that he was denying the
“request, pending a full evidentiary hearing, for a mandatory injunction
directing [Dentsu] to return the $17.8 million to the festival bank
account and provide [Woodstock] access to the funds in the festival bank
This was based on what the aforementioned contract said about
funding and banking, and in particular the fact it put the financial
backer very much in control of the festival bank account, to which the
Woodstock team had just “read-only access”. In its various legal
arguments this week – the judge added – the Woodstock company had
fallen “woefully short of making the heightened showing necessary to
warrant a mandatory injunction ordering [the return of] $17.8 million to
the festival bank account”.
So, a mixed ruling that allows both sides to claim a victory of
sorts. But a ruling that definitely allows Woodstock 50 to go ahead,
providing its organisers can find a new financial backer to fill the big
fat budget hole.
One of those organisers, Gregory Peck, yesterday insisted that –
now it had been confirmed Dentsu had no right to cancel his event –
“Woodstock 50 is on! We can’t wait to bring this important event to the
public this summer. We have one of the greatest line-ups of talent of
any music festival, and we are grateful to all of the talent for their
loyalty and support”.
Meanwhile Michael Lang, the most prominent person on the
Woodstock side of the dispute, added: “We have always relied on the
truth and have never lost faith that the festival would take place. I
would like to thank all of the talent and their representatives for
their patience and support. Woodstock 50 will be an amazing and
inspiring festival experience”.
For its part, Dentsu said it felt “vindicated” by the judge’s
ruling on bank account access. “The court did not rule that [our]
assumption of control over the festival was improper or alter that
status in any way”, a spokesperson then added. “While we understand that
pursuant to the court’s ruling [we] cannot cancel the festival without
Woodstock 50’s agreement, at this time we do not intend to further
invest in the festival due to the issues noted by the court, as well as
the compressed timeframe, and multiple health and safety concerns”.
We now await to see whether Woodstock 50 does indeed go ahead
in August. Either way, it seems likely further legal action will follow.
Woodstock may well sue Dentsu over the reputation damage its
cancellation announcement caused, while the marketing group may yet go
legal over the alleged breaches of content. So, as always, good news for