AEG Live chairman Jay Marciano was anxious at the Feb. 12 Grammy Awards -- not because he had a horse in the race for album of the year, but because he, along with top AEG brass gathered in the company's Staples Center suite, was getting his first glimpse of Beyoncé, less than two weeks after the singer revealed she was pregnant with twins. The news caught the executives off guard, and as parent company of Goldenvoice, which promotes and produces April's two-weekend Coachella festival, they had a vested interest in Beyoncé's performing abilities: She had been announced as headliner just a month earlier.
Scant information had come from Beyoncé's camp since the bump made its Instagram debut on Feb. 1, so Marciano keenly watched the gravity-defying performance of "Love Drought" and "Sandcastles," the singer's chair stunt offering a glimmer of hope that a festival appearance still might be possible.
By that point, Goldenvoice had blocked off a week for rehearsals on the main stage at the festival site for Beyoncé and her dancers. But would she be able to play two physically challenging 90-minute-plus sets in the desert on back-to-back weekends while carrying twins, possibly in the third trimester of pregnancy?
AEG didn't want to seem pushy, sources at the company tell Billboard, but it really did need a definitive commitment on headlining the April 15 and 22 shows. It got its answer two days later, when officials learned that Beyoncé had canceled her 90-room hotel block near the festival site in Indio, Calif. (Coachella has been held on the Empire Polo Grounds since 1999), and the confirming call came not long after.
On Feb. 24, the singer's reps contacted Goldenvoice to officially inform them that Beyoncé was following her doctor's advice and postponing her performance, offering to headline the 2018 edition instead. Filling her slot is Lady Gaga, who will kick off her Joanne World Tour four months early at Coachella, ending five days of rampant speculation -- Daft Punk! Adele! Katy Perry! -- over who would take Queen Bey's place in the desert.
It was important to AEG that Beyoncé be replaced by a female singer, sources tell Billboard, and after some consideration and inquiries about both Adele and Gaga, Coachella founder Paul Tollett rang up Creative Artists Agency and booked Gaga for the top slot.
Part of the reason for the choice was history. While Coachella regularly features female acts, Gaga will be the first woman to headline the festival in a decade, and only the second ever. (Björk topped the bill in 2002 and 2007.) That's an important factor for the kind of cultural event the festival has become, spanning two three-day weekends with five stages and dozens of public art installations. It's also one of the highest-grossing annual events in North America: According to Billboard Boxscore, Coachella grossed $94 million in 2016, with an average daily attendance of 99,000. That's up $10 million from 2015, when organizers reported a similar attendance, and up 20 percent from 2014, when Goldenvoice reported an average attendance of 96,500 and a $78 million gross.
As far as the financials for the asks are concerned, headliners typically can receive in the range of $3 million-$4 million, and while Coachella is such a hot ticket that the financial risk associated with a Beyoncé cancellation was relatively low, it remains unclear whether Goldenvoice insured itself against such an eventuality. But even if it had, it's highly unlikely it would be able to collect on the policy, since the concert promoter wouldn't have suffered a loss, especially since Beyoncé has already rescheduled her appearance. "Based on the information I've seen, there's probably not going to be a claim," says Peter Tempkins, managing director of entertainment at Hub International, a full-service insurance brokerage.
Although he didn't insure Beyoncé or Coachella and is not privy to the type of policies they carry, Tempkins says it's not unusual for artists to insure their own appearances; artists typically pay 1.6 percent to 2.5 percent of their guarantee to protect their touring income against contingencies. But insuring against a pregnancy is highly unusual.
In other money matters, generally an advance is issued to an artist two months out from show date, but in this case, a postponement would likely defer that payment to the next calendar year, again minimizing risk to the promoter.
What is the cultural currency of a Beyoncé cancellation for the 2017 edition? Tickets on the secondary market dropped by 12 percent in the hours after she announced a rain check, but since Gaga was officially named they've bounced back slightly, ticking up 2 percent on the secondary market, according to event ticket search engine TicketIQ.
"Beyoncé really wanted to do the show -- she was all in until the moment her doctor said no," says one source familiar with the matter. "But it all worked out, and Paul is very happy with Lady Gaga. He is the festival's sole creator and artistic vision. He can't be sold an artist -- he makes the decision based on what is right for Coachella."
This article originally appeared in the March 11 issue of Billboard.