2020 Decimated the Concert Industry—And It Can’t Rebuild Without Government Help

Update, Dec. 21: The Save Our Stages Act has been included in the COVID-19 stimulus package. Read more.

Original post:

Ask anyone who misses the catharsis of a good, sweaty dance party or mosh pit—so much magic can happen within the four walls of a concert hall.

In the 1960s, San Francisco’s Fillmore was where the Grateful Dead and Sly and the Family Stone honed their psychedelic sound. In the late ’80s and early ’90s, MC Hammer brought Oakland party rap to the world with a music video filmed at Sweet Jimmie’s, and Green Day made a name for themselves at Berkeley’s all-ages punk spot 924 Gilman. More recently, Slim’s in San Francisco was the springboard for platinum-selling rapper G-Eazy’s first headlining tour.

Over the decades, the Bay Area’s music venues have been where people go to forge connections, build communities and experience new forms of creativity. Additionally, venues have had an outsized impact on the local economy by drawing music fans to neighborhoods where they spend money on pre-show drinks, late-night tacos, transportation and hotels. According to the most recent study from the San Francisco Controller’s Office, nightlife generated $6 billion for the local economy in 2015 and created 60,000 jobs.

Fast forward to the coronavirus pandemic, and most of those jobs are gone. Music venues sit empty, accruing debt and on the brink of permanent closure, as they await government assistance.

Despite their importance to culture and the economy alike, venues have been all but forgotten in the United States’ woefully inadequate COVID-19 recovery plan. On the federal level, the Save Our Stages Act, which would provide substantial grant funding to independent venues, has remained stuck in limbo as the Republican-controlled Senate continues to delay a second stimulus package, leaving millions of Americans hungry and facing eviction.

At the state level, the COVID-19 crisis has plunged California into a deficit; the state has had to tap into its rainy day fund to avoid major cuts to essentials like K–12 education, and state lawmakers say relief for live music is unlikely without more federal funds. And on the city level, San Francisco, Oakland and Berkeley have given various pandemic-relief grants to artists, arts nonprofits and small businesses. But most of these grants have been doled out in one-time payments of $25,000 or less, which hasn’t come close to covering music venues’ costs. The San Francisco Venue Coalition estimates that the average monthly overhead of a typical San Francisco club is $18,000–$35,000.

A vaccine on the horizon offers a glimmer of hope that the concert business may resume in the second half of 2021. Until then, “We’ve got rent to pay, we’ve got mortgages to pay,” says David Mayeri, the CEO of Berkeley’s nonprofit UC Theatre and an organizer with the National Independent Venue Association (NIVA), a nationwide coalition that sprang up in response to the pandemic. NIVA has over 100 members in Northern California. “The financial burden is just enormous, and a lot of clubs are going out of business,” he says.

Indeed, The Stud, San Francisco’s oldest LGBTQ+ venue, shuttered in May. And Oakland has lost eclectic concert hall Starline Social Club, punk dive Stork Club, Afro-futurist warehouse venue Spirithaus and The Uptown Nightclub.

“We’re anchor tenants to neighborhoods, economic drivers and employers,” says Casey Lowdermilk, the assistant general manager of Bill Graham Civic Auditorium and an organizer with the San Francisco Venue Coalition and NIVA. “Losing venues will have devastating impacts for our community—not only economically, but culturally.”

A Lifeline for Venues?

Even if the intrinsic value of art doesn’t move politicians to act, the live music industry’s financial impact has been a persuasive tool for organizers. By coming together across the United States, the venue owners of NIVA have flexed their collective economic muscle. “We are now seen as a very viable, organized group,” says Mayeri.

“Both sides, Democrats and Republicans, believe that saving arts and culture across the country, saving our stages, is important in the fabric of communities,” he continues, referencing a Chicago study that found that every dollar spent on live entertainment generates $12 for the local economy.

Thanks to NIVA’s awareness campaign in Congress, Mayeri is optimistic that the Save Our Stages Act now has support on both sides of the aisle, and it is included in the Senate’s bipartisan relief bill. But Senate Republicans and Democrats have continued to clash over and further delay the stimulus package, with the legislative session soon coming to an end.

Federal relief is crucial to save venues, but Mayeri also believes California can do more. Even before the pandemic, independent music venues already operated on razor-thin profit margins because of high real estate costs. “The state of California should have a $50- to $100-million fund to support music venues and performing arts theaters,” Mayeri proposes. As of the 2019 fiscal year, California ranks 26th compared to other U.S. states in per capita spending on the arts.

“We have to rebuild—we’ve been decimated,” says longtime artist manager Michelle Campbell, whose clients, like rapper Mahawam, have built up their fan bases by touring independent venues. “We need funding for that, [even] if you have to entice corporations, give them tax write-offs and have them donate to cultural endowment funds. … There needs be something on all levels—city, state and federal—to rebuild the cultural landscape, because it’s going to be different. Especially when you have these long-term bars and venues that have closed permanently, like Starline, which was our cultural hub. How do we get something like that back? You have to be intentional.”

On the city level, the city of Berkeley, where the UC Theatre is located, had one of the swiftest pandemic responses of any Bay Area municipalities when it comes to the arts. In April, the city began distributing $4.5 million in relief funding among arts nonprofits, small businesses and vulnerable tenants. San Francisco and Oakland have led their own relief effort that have included grants and loans for small businesses, arts nonprofits and individual artists. Additionally, San Francisco has waived payroll taxes and other government expenses for bars and clubs, and created the JAM Permit, which made it easier to book live music in outdoor dining areas and other city-designated Shared Spaces before the region went into its current lockdown.

But as the San Francisco Venue Coalition argues, these efforts, while appreciated, have been insufficient to address the specific needs of music venues. Payroll taxes, for instance, are only a small fraction of a venue’s expenditures, and the JAM Permit is geared towards a restaurant booking a jazz trio or DJ, not a promoter putting on an outdoor concert. The SFVC wants direct financial support instead.

Lowdermilk and the SFVC have given the San Francisco Entertainment Commission a detailed policy proposal that asks for $48 million in funding for independent venues. This would allow the city to cover the operating costs of around 50 venues for 16–18 months of closure with the funds it receives from the federal government’s second stimulus package.

“That will be a one-time payment, and hopefully by next summer we’ll reopen, and hopefully venues will have survived,” Lowdermilk says. “I think there are a lot of opportunities for our city government to help us, and we want to be there to be able to have that economic activity on the return, to help our city recover.”

Without Federal Help, California’s Options are Limited

The SFVC’s proposal is currently being considered by the Entertainment Commission, but it would require the approval of Mayor London Breed, whose office told KQED in a statement that without federal funding, the city is stretched beyond its capacity to maintain even its basic services. Acknowledging the hardships small businesses face, a spokesperson for the mayor wrote that the city’s CARES Act funding from the first stimulus package has been spent on the immediate needs of the pandemic, such as testing, quarantine housing, contact tracing, food security and personal protective equipment.

“Without additional financial support from the federal government, cities all across the country, like San Francisco, will need to make budget cuts and hard trade-offs,” the mayor’s office wrote, adding that even basic services, such as the Municipal Transportation Agency, are facing potential layoffs and budget cuts. “San Francisco needs additional federal support in the weeks and months ahead so that we can continue our COVID-19 response [and] support businesses—including entertainment and nightlife venues—and stabilize city services like Muni.”

San Francisco Supervisor Matt Haney, who represents the nightlife-heavy Tenderloin and South of Market neighborhoods, says that his office is exploring other funding opportunities for venues, even if federal relief doesn’t come in the near future.

“We have an emergency reserve. It’s possible we could pull some money from that,” he says. “I think this is incredibly urgent, and if there’s any flexibility with spending, this should be something that is prioritized—even as a lifeline for the next three months to get us to a point where, hopefully, we have more robust support from federal government.”

Federal government help is also crucial in order for California to step in on a state level, says State Senator Scott Wiener. “Only Congress has the ability to deficit spend, only the federal government has the ability to print money. We need a significant new PPP program to support these businesses,” he says.

Wiener says Governor Gavin Newsom has expressed an urgency to help small businesses in the next budget cycle in January. Indeed, Newsom recently announced a new, $500 million program that will distribute grants of up to $25,000 to small businesses. But given venues’ huge monthly costs—and the fact that financial analysts predict that California could be operating at a deficit through 2024—federal funds will still be needed to make a major difference for music venues.

“We have to balance our budget so we have far more constraints, but I don’t think the state has done enough to financially support small businesses, and particularly those that simply cannot reopen,” Wiener continues. “I know that will be a focus as we go back and go into the budget process.”

California’s commercial eviction moratorium helps, but it also leaves music venues on the hook for back-rent after March 2021. It’s highly improbable that they’ll resume business by then. (The State Legislature killed a bill sponsored by Wiener that would have extended eviction protections through the end of the pandemic—it was strongly opposed by the real estate industry.)

Once a music venue gets evicted or breaks its lease, it may be gone forever. That’s because of a lack of adequate rental properties, argues Allen Scott, a co-owner of The Independent and The New Parish and the head of concerts and festivals at Another Planet Entertainment. “If you’re the owner of a restaurant, you lay off all your employees, you break your lease, you cancel your insurance—you literally get rid of every expense that you have. Your hope is that when you can open back up again, you can negotiate a new lease … and you can move forward,” Scott says. “A music venue cannot do that because there are not that many spaces we can go into—otherwise it would be a lot easier of a business.”

Other Options While the Federal Stimulus Stalls?

Even as city and state governments await federal funding, some entertainment industry leaders say there’s more that can be done locally to support live music.

One criticism has come from arts presenters who feel that the performing arts have been unfairly left out of California’s reopening efforts. Before the current upswing of COVID-19 cases that landed most of California in the purple tier, indicating unmitigated spread, San Francisco moved to allow indoor dining at 25% capacity of up to 100 people; outdoor religious services with up to 200 people were also allowed. But there was no official pathway for outdoor, masked and socially distanced performing arts events—even though the city didn’t stop thousands of people from partying on Ocean Beach during Burning Man weekend.

The lack of consistency frustrated venue owners and arts presenters, who believe that they have the tools and expertise to throw safe gatherings—and badly need the income. “We have hundreds of people who work for us who we’d like to give some employment to, some artists we’d like to give employment to … and more than anything else, create an environment that would be safer than what is currently happening,” Fred Barnes, general manager of The Chapel and co-founder of the Independent Venue Alliance, said at an August Entertainment Commission hearing.

Even after releasing the JAM Permit for music in outdoor dining and other public areas, the city attempted to shut down a 49-person-capacity outdoor performance from the San Francisco International Arts Festival (SFIAF). In an email to KQED, a spokesperson from the City Attorney’s office called it a potential “super spreader event.” In October, the SFIAF filed a lawsuit against the city of San Francisco and state of California, claiming that the performing arts should be the same way as religious services and political activity in California and San Francisco’s reopening efforts because they, too, are protected by the first amendment.

“We just want parity with those types of activities,” says SFIAF director Andrew Wood. The governor’s office sided with SFIAF in court and issued an interim directive to allow outdoor performances with 100 attendees or fewer pending local health officials’ approval. But the city of San Francisco is still in a legal battle with SFIAF, and the festival is using its virtual holiday party to raise money for legal fees.

Social gatherings of any kind are off while California remains in the purple tier. But Wood says he wants the court to recognize the arts as a first amendment-protected activity so that they can be included in future reopening plans when virus rates go down and other activities like outdoor dining resume.

Shannon Amitin from the Queer Nightlife Fund agrees. The nonprofit organization has been giving out micro-grants to bartenders, sound techs, performers and DJs from LGBTQ+ bars and clubs since the pandemic started. Amitin says that in addition to improving the unemployment system, which has subjected some furloughed workers to months-long wait times for relief, the city can help independent promoters and artists by providing guidelines for outdoor, socially distanced events that aren’t tethered to outdoor dining. “We really need to take a harm reduction approach to events,” says Amitin. “Folks are still going to gather, so let’s give them the tools and the ability to do it safely.”

For the San Francisco Venue Coalition’s part, Lowdermilk says that it only makes financial sense for its venues to operate at 100% capacity. “We don’t want to push this. We want our patrons and staff to be healthy,” he says. “And we’re only interested in reopening at full capacity. Any sort of limited-capacity situation doesn’t make sense for us—the numbers don’t work out for venues. … It’s a very low-margin industry as it is, and we need to fill our rooms to be profitable.”

That won’t happen until the vaccine is widely available—which means that venues will continue to bleed money, and go out of business, until the federal stimulus arrives.