DJ Marshmello Leaves Palms Nightclub Gig Early Likely with Handsome Payout

Posted on: October 7, 2019, 03:43h. 

Last updated on: October 7, 2019, 11:29h.

Ed Silverstein @casinoorgedsilv Read More

Expertise: Legal, Tribal Gaming.

Christopher Comstock — known professionally as Marshmello — the now ex DJ at Kaos Nightclub at The Palms Las Vegas, may have had a lucrative payout provision in his contract. Or, at least, went through recent negotiations with Palms management, as his residency ended midway between his $60 million, two-year booking, entertainment attorneys said.

The Station Casinos property gave him top salary to lure customers to the upscale nightclub for,  among other reasons, liquor and food sales. Marshmello was a popular attraction, especially for those in their 20s and 30s. In that way, he is similar to singer Lady Gaga, who continues to perform at MGM Resorts Park Theater.

Unnamed sources recently told the Las Vegas Review-Journal that Marshmello will get in the millions of dollars — but not more than $30 million — in payments to cancel the rest of the engagement. The contract was believed to have been signed in April, and reportedly paid him approximately $600,000 a weekend.

He had worked earlier at Wynn Nightlife. That Las Vegas entertainment venue wanted him to remain, but Marshmello left for The Palms.

Even so, why would a venue pay him as much as $60 million for only two years? Sammataro, who has represented artists such as Enrique Iglesias and large studios such as Sony and Warner Brothers, explains that economics in Las Vegas differs “from a traditional analysis conducted by a venue/promoter in pricing a concert.”

Sammataro said the “venues generally hold capacities between 3,000 to 5,000 concert-goers. The successful hotels can nonetheless pay arena prices, i.e., capacities of 14,000-plus, because the concerts drive people to the hotel, as well as the hotel’s restaurants, bars and casinos.”

For The Palms, signing Marshmello to “an industry-shaking reported $60 million deal was presumably about more than attracting concert-goers and filling up the biggest party space in Vegas,” Sammataro explained. “It was the ultimate headline to punctuate its $690 million reinvention.”

Marshmello Key to Palms Rebrand

He said that Marshmello was part of The Palms “re-brand, and its promise to ‘redefine the daylife and nightlife experience in Las Vegas.’ Kaos’ goal was not to beat other clubs. It was to compete with festivals by having DJs and other artists play to indoor and outdoor crowds simultaneously, while filling its 39 cabanas, bars, and selling food and booze packages,” Sammataro added.

Marshmello’s deal also signaled that the market for resident DJ’s was “still robust,” Sammataro said.

At some point, there had to be a ceiling on the highest-paying residencies, as the price tags had been inching up steadily until Marshmello’s industry-rattling deal,” Sammataro explained. “We’ll see if this exit is an outlier, or if it will mark a downtrend in what is a cyclical business.”

On a related front, electronic dance music (EDM) artists, such as Calvin Harris, David Guetta, and previously Avicii, “hold particular appeal in that they do not require the expensive staging necessary for other acts,” Sammataro said. “From a production cost perspective, it’s one guy and a laptop. It also marked a departure from what had been a trend towards smaller, more intimate, and customized experiences, marked by the Jewel at Aria, Intrigue at Wynn, and Park MGM’s On the Record.”

Contract Specifics

As far as a contract for a DJ like Marshmello, “a smartly-drafted contract contains built-in outs,” Sammataro advises. “This should be a front-end negotiation, with out-clauses scheduled at designed intervals — i.e., every six months — and tethered to specific performance or revenue-based thresholds.

“The ability for a venue to secure this downside protection is dependent upon negotiation leverage. High-powered talent will insist upon true guarantees or a ‘no cut’ provision,” he added. Sammataro said that, “To the extent that there are not expressed contractual provisions allotting for a buy-out and specifying the precise economic terms of the buy-out, it all comes down to, what else, money.”

He suggests parties in the agreement need to find “the right strike point, at which it is more palatable for the venue to pay an exit penalty than to continue to honor the contract.”

Where the point lands depends on several factors, according to Sammataro. These include: Was the residency not working to the extent that it was harming the artist’s brand? What was the emotional toll of the relationship? Does the artist have other commercial opportunities? Can potential breaches be asserted against the artist, etc.?”

Kamal Moo, a Los Angeles entertainment attorney who has represented such artists as Janet Jackson, further told Casino.org, “I don’t see many agreements that give the artist the ability to just walk away from an engagement. That would basically defeat the purpose of having a contract.”

Moo, who is not connected to the Marshmello case, said, “If there was some kind of breach by one side, that could have triggered some sort of termination language. But, generally, unless there’s a force majeure event — for example, the theater burns down — it’s difficult to just walk away from a contract.”

Additionally, unless there’s some termination language in the agreement, then a termination will need to be negotiated, Moo said. “If the parties can reach an agreement regarding termination, the parties will also usually release each other from liability in exchange for something, normally some sort of payment.

“If termination negotiations are unsuccessful, then the parties can escalate things and go to arbitration — if that option is in the contract — or litigation to sort things out,” Moo advises. But generally, parties want to avoid that because “it can get expensive and messy,” Moo explained.