Entertainment contracts must answer a fundamental question: when the unexpected happens, and an event cannot proceed as planned, who bears the resulting loss? Entertainment events are inherently time-sensitive. They are tied to a specific date, venue, and performer, and when any of these elements fail, the event itself may fail. In such circumstances, the contract must clearly allocate risk in advance. Risk allocation is not about eliminating risk; it is about deliberately assigning responsibility to the party best placed to anticipate, manage, insure against, or absorb it.

This question has become increasingly important as the Nigerian entertainment industry continues to expand. Afrobeats has evolved into a global phenomenon, and with that growth has come larger budgets, international talent schedules, corporate sponsorships, digital ticketing platforms, and greater commercial exposure. A single concert may now involve millions of naira in commitments and multiple stakeholders with significant interests at stake. Yet despite the increased complexity and financial risk, many entertainment contracts remain inadequately drafted, offering little guidance on how losses should be allocated when things go wrong. This makes effective contractual risk allocation not merely desirable, but essential.

Evolution Of Risks In The African Entertainment Sector

In 2023, a heavily promoted Burna Boy concert in Johannesburg organised for the South African market by Ternary Media Group (TMG) with Nigerian principals collapsed amid a fraud dispute between the business partners, with one partner accused of diverting ticket proceeds and fleeing the jurisdiction. Refunds were issued, reputations suffered damage, and the artist’s appearance was called into question through no fault of his own. The episode illustrates a clear case of counterparty and financial risk. Where funds pass through a promoter, the contract must clearly provide for what happens in the event of default, misapplication of funds, or disappearance of the promoter. A properly structured agreement would ring-fence ticket revenues, typically through an escrow or trust arrangement, and make the artist’s obligation to perform conditional upon receipt of cleared funds. In practice, however, many contracts fail to do so. Nigerian entertainment is replete with the no-show and its cousin, the disputed cancellation. Promoters publicly accuse artists of collecting deposits and failing to perform; artists have encountered promoters failing to meet payment or logistical obligations. The recurring legal failure appears the same: the contract does not clearly allocate the risk of non-appearance, what portion of the fee is refundable, what counts as a permissible excuse, what notice is required, and who bears the sunk cost of a venue hired and a crowd gathered for an act that never takes the stage. Non-appearance is the single most foreseeable risk in live entertainment, and the one most often left to argument after the fact.

The COVID-19 lockdowns of 2020 wiped out a full season of Nigerian concerts, festivals, and outdoor events overnight. Across board, Security alerts and government directives have cancelled or relocated major outdoor events. Currency volatility and the foreign-exchange dislocation that followed the 2023 reforms repriced every contract with a foreign artist or a dollar-denominated fee, and each of these constitutes a force majeure-type risk.

However, as presently drafted, the force majeure provision affords protection only in respect of events expressly contemplated by the contract, and Nigerian law does not provide a general remedy for unforeseen events that fall outside the scope of the clause, as was held in Globe Spinning Mills (Nig.) Plc v Reliance Textile Industries Ltd (2017) LPELR-41433(CA).

Key Risk Allocation Clauses In Entertainment Contracts

Risk allocation is achieved by legal risk planning, ensuring proper distribution between parties across the contract. The following are the load-bearing elements for an entertainment agreement, and the questions each must answer.

1. Force Majeure

This famous clause, which shines during the Covid period, is that which excuses non-performance when a named, uncontrollable event prevents it. Force majeure is a creature of contract, and it must be specifically named in the contract. There are several types: epidemic and pandemic, government or regulatory directive, security closure, civil unrest, and failure of power or essential infrastructure, because a clause that lists only “acts of God” will not capture them. See Attorney-General of Cross River State v Attorney-General of the Federation (2012) LPELR-SC.250/2009. It must say what follows: suspension, rescheduling, or termination, and crucially, what happens to the money already paid?

2. Cancellation, Postponement, And Refund

Distinct from force majeure, this governs the ordinary cancellation by either party, for any reason. It should set a sliding scale: what is refundable and what is retained depending on how close to the event the cancellation occurs, who carries the sunk costs (venue, marketing, production already incurred), and the mechanics and timeline of refunds to ticket-holders. This is the clause that the disappearing-promoter and no-show scenarios turn on.

3.  Non-Appearance And Key-Person

Where the value of the event depends on a specific person, the contract must address that person’s unavailability through illness, injury, travel failure, or death separately and explicitly: the consequences for the fee, the availability of a substitute, and the insurance that sits behind it.

4. Indemnity

This is a promise by one party to bear specified losses suffered by another. Properly used, indemnities channel risk to the party responsible for it; the security contractor indemnifies for crowd-control failures, the production company for on-set injury, and the artist for claims arising from their own conduct. The drafting must be precise about what is indemnified, up to what limit, and whether it is supported by insurance, because an indemnity from a party with no assets is worth only the paper it is written on.

5.  Limitation And Exclusion Of Liability

The key consideration here would be what the cap on exposure is. The two questions are how high the cap sits (often pegged to the contract value or the fee) and what sits outside it; death and personal injury caused by negligence, and fraud, should never be excluded, and a Nigerian court will not enforce an attempt to do so.

6.  Insurance

This is the layer that pays for the consequences when risk materialises despite everything else. Because it is so often misunderstood, it will be examined in greater detail below.

Insurance And Risk Mitigation

Whilst Insurance is not a substitute for the clauses above, it is what catches the loss when those clauses have allocated a risk to a party who then cannot, or will not, bear it from its own pocket. Where an indemnity says who is responsible, insurance is the financial reservoir that makes the indemnity real. The two must be drafted together.

The insurance options relevant to Nigerian entertainment sector and increasingly available through local insurers and brokers, often with foreign reinsurance include; event-cancellation cover (loss of revenue and committed costs where a covered cause prevents the event); non-appearance and personal-accident cover (protecting the promoter where a key artist cannot perform); public-liability and spectator-liability cover (third-party injury and property damage, the crowd-safety reservoir); and equipment, property and production cover for shoots and installations.

Key Questions For Insuring Parties

The single most-neglected question in Nigerian entertainment contracts is who bears the responsibility for insuring, and on what terms. The clause must be explicit on each of the following, because each shifts consequences in real time:

A.  Which Party Insures: Allocate the cover to the party best placed to obtain and control it, typically the organiser or production company for event-cancellation and public-liability cover, and the artist (or their loan-out company) for their own non-appearance and personal cover. The mistake to avoid is assuming the other side has it; in practice, neither does unless the contract compels it.

B.  What Is Covered, And What Is Excluded: A policy is defined as much by its exclusions as its cover. The post-pandemic market has made the communicable-disease exclusion near-universal, so pandemic risk is, in practice, no longer insurable on standard terms, meaning a contract that leaves pandemic risk to “the insurer” leaves it, in truth, with nobody. The insuring clause should require disclosure of material exclusions, not merely the existence of a policy.

C.  The Limit And The Excess: ACover that is too low, or carries an excess the insured party cannot meet, is not practical. The contract should specify a minimum sum insured proportionate to the real exposure (a public liability limit, for instance, that bears some relationship to the size of the crowd).

D.  Naming And Noting Interests: The party that benefits from the cover should be named as an insured or have its interest noted on the policy; otherwise, it has no direct claim against the insurer and must chase the policyholder, which is useless if that policyholder has become insolvent.

E.  Proof, And The Interface with Indemnity: The contract should require evidence of cover (a certificate, not a promise) before obligations crystallise, and should state how an insurance recovery interacts with the indemnity, whether the indemnifying party must pursue its insurer first, and whether proceeds are to be accounted for. Without this, the parties end up litigating the relationship between two protections that were meant to work together.

Insurance, when properly understood, is limited but valuable: it does not cover everything, the exclusions matter as much as the cover, and it is only as good as the limit, the named interests, and the solvency behind it

Conclusion

The Nigerian entertainment industry has evolved far more rapidly than the contracts designed to govern it. As the industry has grown, so too has the range of foreseeable risks, the magnitude of potential losses, and the number of stakeholders exposed to them. In this environment, risk allocation can no longer be treated as an afterthought. Contracting parties must proactively identify the risks inherent in their transactions, determine which party is best positioned to manage or absorb each risk, and clearly document those allocations before disputes arise. Ultimately, the strength of an entertainment contract lies not in its ability to prevent every adverse event, but in its capacity to provide certainty when one occurs.

References

• COVID-19 lockdown cancellations (2020) and the 2023 fuel-subsidy and foreign-exchange reforms; matters of public record, cited as illustrations of force-majeure-type and currency risk.
• Globe Spinning Mills (Nig.) Plc v Reliance Textile Industries Ltd; Court of Appeal, Lagos Division, Suit No. CA/L/732/2013 (force majeure is a creature of contract, operating only to the extent expressly provided by the parties).
• Attorney-General of Cross River State v Attorney-General of the Federation (2012) LPELR-SC.250/2009 (Supreme Court; the doctrine of frustration as the narrow common-law residual where there is no force majeure provision).
• Burna Boy Johannesburg concert cancellation (September 2023);  collapse of the event amid a fraud dispute between the promoting company’s principals; reported by Nehanda Radio and others (illustrative of counterparty and financial risk; cited as a sector episode, not as legal authority).