Los Angeles Music Scene: Save Our Stage Starting April 8th

A couple weeks back, I wrote that it was taking time to get the Save Our Stages money out to the music venues. The gears of Washington DC run slow. The New York Times (March 19) reports that applications will finally be accepted starting April 8th. Of course, when will money actually get to the venues? Well, who knows how long that process will take, but here's what the newspaper reported:

Applicants are eligible for grants of up to $10 million from the Shuttered Venue Operators Grant fund, which Congress created in the economic relief bill passed in December. Applications will be taken in phases, starting with a two-week period exclusively for businesses that lost at least 90 percent of their revenue after the pandemic took hold last year. 

Groups that lobbied for the relief money are desperate for it to start flowing, but also nervous about how long it will last. With an estimated 30,000 or more businesses eligible for the grants, those in the industry fear the available funding will quickly be consumed.

First question is: will any Los Angeles venues get to apply for funding in the initial two-week period? We know that Los Angeles venues stayed open for 10 weeks in 2020. If you assume straight line revenue, that indicates that 19% of their revenue would have been recognized. Of course, summer likely brings in more revenue than the early part of the year so I'm sure that 19% is over-stated. It might be borderline to hit that 90% or greater revenue hit.

Second question is: as mentioned in the quote, is there enough money to go around? I also wonder about in my previous blog post:

My current belief is that Los Angeles music venues will open up between September and early 2021. If I am correct, music venues in Los Angeles will have been shut down at least 18 months before being able to operate. How do they even survive that long even with Save Our Stages funding?

The New York Times articles puts some doubt in that. The article mentions that there is $16 billion available to be spread across 30,000 venues. That would be $533,000 per venue, if spread evenly. That seems like a lot of money, but we know based on this Los Angeles Times (Sep 1) article that the Bootleg Theater needed in the six figures to survive through the end of 2020. How much into the six figures? Well, we know that the much smaller Silverlake Lounge is attempting to raise $150,000 (unfortunately, they're not anywhere close to that amount). I think 5 or 6 Silverlake Lounge's could fit inside the Bootleg Theater. The Bootleg Theater needs may be in the low seven figures by the time Los Angeles music venues open up. That might not be an issue as up to $10 million can be provided, but it just indicates how quickly this money can be used up.

Side note: maybe my September date for music venues was too pessimistic. Supposedly, vaccines will be available for everyone starting in May. It isn't like everyone can get a shot in the arm starting May 1st, but maybe we can think positively and venues can open up in July or August. I'll stick to my September forecast for now. 

I guess what I am saying is that it is safe to assume that venues will max out their requests and that there might be some significant short-falls in funding. It looks like Los Angeles music venues have already come to that conclusion, as well. Pollstar (Mar 12): recently reported:

Legislators are taking notice. In February, Assemblywoman Laura Friedman, who represents Burbank, Glendale and Los Angeles neighborhoods including Los Feliz and Silver Lake, wrote along with a handful of her peers to legislative leadership to urge relief for the sector.

. . . “We saw the success of federal-level [advocacy], and it’s easily translatable at local and state governments,” [Another Planet Entertainment’s Casey Lowdermilk]  says. “Regardless of what party you’re in, the economics of venues speak loudly. For every one dollar spent at a venue, $12 is generated in the local economy. Regardless of what side of the aisle you’re on, you get that and you understand the value to your community.”

What might state-level relief look like in California? Approaches have varied from state to state in scope and size, but points to Indiana, which assessed the SOS Act’s Shuttered Venue Operator Grants – providing up to 45% of a venue’s 2019 revenue – and pledged to add an additional 20% in relief.

As another side note: Another Planet Entertainment owns a lot of venues in the San Francisco area.

We'll have to see how it all plays out and what finally happens to many of our venues. Key questions to be answered in the next couple months:

1. How much money will our Los Angeles venues get from the $16 billion Save Our Stages funding?

2. What will the timing look like in terms of venues opening up? The longer they stay closed, the more funding they need. We do know that a lot of the major theme parks in Southern California are opening up at limited capacity starting late April / early May. This isn't exactly comparable as venues are indoors, but at least we're seeing large gatherings get approved. 

3. Will California or Los Angeles provide additional funding? There are no doubt a lot of requests for funding out there. If music venues get put to the back of the line as the thinking is that Washington DC just passed the Save Our Stages, but additional help is actually needed, California or Los Angeles might have already allocated funding to other areas and might have nothing left to give.