Live Music Is Back. America’s Indie Venues Are No Better Off
Gary Witt has waited and waited and waited. A Milwaukee venue owner and live music veteran, Witt weathered 14 months of a total shutdown of his business; he’s down 40 percent of his full-time staff, 97 percent of his revenue from the last year, and nearly all of his life savings. Patience is just about all Witt has left — but even that is running out.
The global concert industry is roaring back to life, with major festivals like Bonnaroo and Lollapalooza rushing out summer lineups and artists like the Black Crowes, The Weeknd and Bad Bunny announcing dates for their tours. Yet any concert venue that’s not owned by a large promoter like AEG or Live Nation is still waiting — and has been for five months — for long-promised business-saving grants out of the U.S. government. While the Small Business Association (SBA) announced grant funding for venues in December, the rollout has been sluggish. Now, perversely, venues have to go even more into debt if they want to keep up with their larger competitors who do have enough money to throw open those doors.
“Part of you wants to get excited,” Witt, who’s owned Milwaukee’s Pabst Theater Group for nearly 20 years, tells Rolling Stone. “But without the grants, we now have to go even deeper into debt to stay competitive in a very competitive business. We need to book shows, we need to pay deposits, we need to hire our people back and get back to work. My partner and I were good managers of our cash flow throughout this, but that just means that now we’re completely broke.”
Today (May 21st) marks exactly five months since Congress passed the Covid-19 relief bill that included funding for the milestone Shuttered Venue Operators Grant (SVOG), but the $16 billion dedicated for concert spaces hasn’t gone out. The SBA’s application for the grant didn’t open until April 8th, and technological issues delayed the opening until toward the end of April, and the SBA hasn’t given an exact date for when venues should expect a response.
Several venue owners who spoke with Rolling Stone say they’ve had little communication with the SBA and that their applications remain under review.
“How do you do capital planning and plan for your future when the people who are actually going to be providing you the revenue have had their lips sewn shut like a bad horror movie?” Witt says. “This is like a Saw movie. Pretty soon each of us is going to cut our arm off to be able to find out what the SBA is saying.”
In a statement to Rolling Stone, the SBA said it expects to give out grants to venues who’d lost the most revenue next week. Whether that will happen isn’t clear; Billboard reported on May 10th that officials expected to begin disbursing grants this week, which didn’t happen. “The SBA is committed to quickly and efficiently delivering this pandemic relief to help our theatres, music venues, and more get the help they need,” the group said in its statement. “While there continues to be some fine-tuning of technical components of the program, we expect SVOG Priority 1 (90% revenue loss) awards to tentatively begin next week, kicking off a 14-day priority period. We will then move on to begin processing Priority 2 awards.”
“This is like a Saw movie. Pretty soon each of us is going to cut our arm off to find out what the SBA is saying” — Gary Witt, owner of Milwaukee’s Pabst Theater Group
The 3000-member National Independent Venue Association (NIVA), which was instrumental in getting the venue grants into legislation, tells Rolling Stone in a statement that it is concerned for the future of all music venues.
“NIVA members applied for SVOG as soon as the portal reopened, but as of today, nearly a month later, we’re not aware of any applications that have been processed and no emergency relief has been distributed. Independent venues and promoters are totally hamstrung until this money goes out because they can’t pay rent, rehire and retrain staff, or secure bands because they don’t have the money for deposits. This is putting the independent venue industry at risk for 2021, as well — all while the $16 billion Congress in bipartisan fashion earmarked to save our stages sits and waits.”
For more than a year now, independent venues have had their every glimmer of hope dashed or postponed. And after venues were told about SVOG funding, many of them started hoping for that money to help them rehire staff, make crucial renovations for health and safety purposes, and start booking shows again. It hasn’t materialized.
Stephen Sternschein, managing partner of the Heard Presents in Austin, says waiting for SVOG cash has left venues in the same state of limbo as they’ve faced since the pandemic first began. “We went from being extremely stressed about whether or not we were ever going to ever be able to reopen because of the financial burdens to now feeling like we have a pathway,” Sternschein says. “But it’s been a full-time job staying on top of all of the changes that are happening with the program along with when we will actually get help. Now shows are coming back and we can’t move yet. It’s like sitting at a red light and watching cars zoom right by us.”
Sean Lynch, owner of the Pub Station in Billings, Montana, and a co-chair of NIVA’s reopening task force, had to lay off much of his 37-person staff last year and currently has a crew of seven. Lynch, his wife and the few employees he’s kept on have taken on new responsibilities like handling graphic design, marketing, advertising and social media. He can’t properly reopen the Pub Station without more hands, but he can’t hire staff until he’s sure he has the funds to pay them.
“We finally have more shows coming up and we’re just not sure how we can balance this,” he says. “We can’t pay everybody after the show, and we need this money just to build up our team. We’re ready to hire 20 people on the spot. It’s going to be difficult to even find those people just because of how low unemployment in Montana is to start with, but beyond that, we can’t bring 20 people on and train them if we can’t get them paid, and we can’t run this business without a crew.”
After a year of mounting bills, Lynch doesn’t have much room for more debt, making the SVOG his last option.
“We’re not independently wealthy, my wife and I built this venue from the ground up,” Lynch says. “It’s me, her and the bank. We can’t ask for more money, that’s not our structure. If I showed a bank proof that we’ve got the SVOG on the way and just need money for the next month or two, that’s one thing. But when you say ‘my revenue’s down 95% and we’ve got some shows coming up in six months,’ the likelihood of getting that line of credit is very low.”
Sternschein’s Heard Presents, which operates the Austin venues Empire Control Room & Garage and the Parish also needs money to rehire a staff of 150 people from the current skeleton crew of 10. But the biggest struggle, Sternschein says, is making sizable repairs to his venues’ plumbing and HVAC systems after a year of inactivity.
With no cash, Sternschein would either have to open the venue with clogged toilets or keep the venue closed for months longer to get the fixes after hopefully getting the SVOG cash soon. Until he gets financial clarity, he’s stuck. As he waits for potential government funding to help push business forward, Heard’s reopening target continues to push further back. For now, he’s unsure if he can reopen before 2022.
“I can’t even make a decision on our renovations because I can’t hire the architects and engineers to deliver plans and a timeline that we can use to decide, so this decision is being made for me by the federal government right now.”
Beyond the most immediately pressing issues, as re-openings continue to speed up, some venues fear that losing out on grant funding could put them further behind better financed venues in the coming months. While more strapped venues can’t give performers the rates they may have given before the pandemic, the more fortunate can get more leverage.
As a Montana venue, Lynch’s Pub Station is a tertiary market that relies on larger touring markets for its volume of shows. Deals change from act to act, but overall Lynch says, he can offer around 75 percent of what he would before the pandemic. While he’s booking gigs, Lynch is beginning to see other markets take more of his potential business.
In the larger Milwaukee and Austin markets, Witt and Sternschein worry about more powerful corporate concert companies taking an even larger portion of their business as independent venues remain more vulnerable.
“The business that we’d otherwise be able to do is going somewhere else. There are two classes of venue citizens. There’s the independents and the folks owned or controlled by multinational, global publicly traded corporations,” Sternschein says. “I’m seeing a race that the bigger folks are winning the same way they always do, by having more money to throw at things quicker. I don’t have any hate in my heart for them. They’re operating their businesses as best they can to be successful, and this is what was going to happen anyway. But part of the SVOG’s purpose was to mitigate some of the loss and the impact of that, and the longer we wait, the less impact the grants can have on stabilizing things for us.”
As Witt says: “Even before the pandemic, it was the case but yes, we’ve been impacted. We didn’t lose everything so that we could stand back and watch large companies like Live Nation get bigger.”
Marko Shafer and Max Mamikunian, owners of the Hotel Cafe in Los Angeles, only decided to take on the hefty debt needed to survive the pandemic after the Save Our Stages legislation had begun to pick up steam and they felt hopeful enough to commit. Despite the unease of the broader indie venue landscape as funding remains in limbo, the Hotel Cafe remains cautiously optimistic. “No one was sure SVOG was even going to pass. For over a year, no one had any idea what would happen,” Shafer told Rolling Stone at the beginning of May. “The feeling became ‘holy shit, there’s a light at the end of the tunnel.'”
Hotel Cafe, like the rest of the independent venue business, hasn’t had its grant application accepted yet, but the venue announced on Tuesday it would reopen in July — though its plans are heavily dependent on the grant funding actually coming through.
“We haven’t considered [not getting funding] only because that’s so fucking dark,” Shafer says. “There is no alternative. If we don’t get the SVOG, we close.”