Trial Needed to Sort Out Botched Lady Gaga Deal

(CN) - A Russian television station must go to trial to recover the money it paid to have Lady Gaga perform at a music awards show in Moscow, a federal judge ruled.

TV Service Zao, which owns an MTV-like music television channel in Russia, runs the MUZ-TV Music Awards Show every year and has previously featured stars like Jennifer Lopez and Katy Perry.

In August 2011, the president of the music label World Media Alliance told Zao that he could arrange to book Gaga. A self-proclaimed talent agent, Ryan Burke, then told World Media he could secure Gaga through his relationship with the singer's manager, Troy Carter.

William Morris is Lady Gaga's exclusive booking agent. Neither Burke, his companies, nor World Media had ever worked with Lady Gaga before.

Burke is the president of Vision Entertainment Worldwide, and he is a "senior booking agent" for NWE Talent Agency and Management Inc.

Both Florida entities hold themselves out as full-service talent agencies, but neither are licensed in the sunshine state, and their listed addresses are bogus.

World Media signed a binder agreement to have NWE act on its behalf, paying a $150,000 deposit for the services of Lady Gaga.

The agreement also stated the money should be fully refundable if the artist does not accept the offer or "negotiations do not end in fully executed contract."

Zao was not a party to and had no obligations under the NWE agreement. It entered into a separate deal with World Media and paid a $300,000 deposit for World Media to begin negotiations with representatives of Lady Gaga.

The contract stipulated that World Media would not offer Gaga more than $1.5 million, plus expenses, to perform at the MUZ Awards on June 1, 2012, in Moscow.

On behalf of Zao, World Media paid NWE a deposit of $1.35 million on Dec. 27, 2011, to secure Lady Gaga's performance.

NWE sent World Media a revised artist engagement agreement a couple of weeks later, proposing that Lady Gaga would appear for a performance on Oct. 9, 2012, for $3.5 million.

Neither Gaga nor any of her representatives had signed the agreement. Zao and its representatives also never agreed to sign the proposal for the October performance.

World Media told Burke in an email: "all deal is impossible and unacceptable." A Zao agent then emailed Burke for the immediate return of $1.65 million, which included the two deposits paid to NWE.

Zao sued Burke and his two companies, NWE and Vision Entertainment Worldwide, on Jan. 27, 2012, in the Southern District of Florida.

A federal judge froze NWE's bank account on Feb. 1, with just $1.05 million remaining of Zao's funds.

In his counterclaim, Burke said Zao signed a deal with World Media that said "Engagement date(s) subject to change according to ARTIST availability."

Burke and his entities said Lady Gaga had a scheduling conflict on the June 1 date, and that they performed under the contract by securing Lady Gaga for Oct. 9.

They say ZAO breached the agreement by directly contacting Lady Gaga and her representatives directly.

Zao countered that it could not have breached the contract because the documents were agreements or "mere proposals." It also noted that it had signed an agreement with World Media, not NWE, and thus could not be held to NWE's separate deal with World Media.

U.S. District Judge John O'Sullivan granted Zao summary judgment on the contract counterclaim, but he refused last week to release the funds held in escrow.

"Zao will need to prove its claims at trial before it is entitled to an order releasing the funds held in escrow pursuant to the Order Granting Joint Motion to Freeze Funds in Escrow Account," O'Sullivan wrote.

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