Heard about this recently on an episode of This American Life talking about the Fine Print in life. One of the stories was about the story behind Van Halen’s contract rider specifying there should be M&Ms backstage, but the brown M&Ms needed to be removed, and failure to do so resulted in full payment of the contract and no need to perform. Over the years I had heard about this and indeed thought it was an example of the crazy excess of rock musicians living in their own world. On the show they had They Might Be Giants explain the real reason behind the crazy restriction on brown M&Ms and it turns out to be sensible and actually pretty smart.
The reality was that Van Halen was bringing into their shows 2 or 3 times the amount of equipment and trucks that a venue was used to, meaning that their floor might not support the weight, the lights, the electricity etc. There was real danger if the venue didn’t read the contract rider specifying all the minute details of how much weight everything must support and how much power was needed. How did you know if the venue was paying attention to the fine print and not be putting the band and crew in danger? Easy check the bowl of M&Ms, which if they could get that right meant they found that strange request buried in the contract and probably followed up on the rest as well.
Snopes the debunking website also has a good explanation of this and has some quotes from David Lee Roth’s biography that explained this as well, including a story of trashing the dressing room when he found the brown ones.