Deal to keep fest in Chicago limits competition

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

Though Mayor Lori Lightfoot took the stage during this year’s fest to announce to cheering fans that the flagship music would remain in Chicago, her office and the Park District had not shared all the specifics of the agreement with C3 Presents, which puts on the Lollapalooza, nor confirmed whether a contract had been signed.

In its response to a Tribune Freedom of Information request, the district said Monday the contract “is currently in draft status” and provided a three-page “agreement term summary” signed by Parks CEO Rosa Escareño and C3 manager Charlie Walker on July 30, the second-to-last day of the 2022 festival.

Among the most significant changes from the previous contract, as the Tribune reported last month, is that the new agreement will allow 60,000 more attendees over the four-day festival. The new cap will be 115,000 daily festival-goers, up from 100,000 in the previous pact.

The new agreement also appears to further limit competing music festivals from taking place in Grant Park for the next decade.

“CPD and C3 shall collaborate as necessary to avoid similar activity (multi-day music festivals) as characterized by type of entertainment, number of days and number of stages in Grant Park. In no case shall CPD, without the written consent of C3, permit a music festival in Grant Park to allow more than 20,000 daily attendees or to run more than two days,” the agreement reads. That appears to mean another C3-run festival, the two-day Sueños Music Festival, would be allowed to go forward.

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

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Another unresolved “item of emphasis” for the long form contract includes a service rate agreement. It is unclear whether that is a reference to assurances festival organizers wanted that the city would not raise its amusement tax over the next term of the agreement.

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

The agreement makes major changes to how the Park District will collect its share of festival revenues. Under the 2012 contract, the city took a percentage of net admission revenue, rising from 11% in 2012 to 15% by 2021. In addition, the city received a 5% cut of sponsorship revenue in excess of $3.25 million and food and beverage revenue in excess of $3 million. Under that formula, C3 paid the Park District $7.8 million for last year’s festival.

The new agreement stipulates that C3 will pay the Park District a share of the 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 brackets:

• 5% of the first $30 million in total festival revenue
• 10% of total festival revenue above $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

Those brackets would escalate 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 because of the COVID-19 pandemic — the city will receive $750,000.

The Park District has argued it does not need approval from its board for the contract to go forward. The board next meets on Wednesday.

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