Music venues turn to K Street with industry under threat

Club and concert venue owners are seeking help from K Street as the coronavirus threatens to decimate their industry.

Social distancing guidelines at the state and federal level mean music venues are at the back of the line in terms of reopening once the pandemic subsides, putting the businesses in a precarious situation.

The venues deal in large crowds, often pay massive rents in city settings and have become iconic staples of their communities.

But they had no voice in Washington until two weeks ago when several owners formed the National Independent Venue Association (NIVA), which now has 1,100 members and is funded by ticketing companies Lytes and See Tickets.

Shortly after, the group hired lobbying powerhouse Akin Gump to push for government aid in the next coronavirus relief package.

Their main ask from Congress: modifying the popular Paycheck Protection Program (PPP) to accommodate businesses that are completely closed so that 75 percent of the forgivable loan doesn’t have to go toward payroll.

The group also requested tax relief, unemployment insurance, mortgage and rent forbearance, a business recovery fund, existing debt deferral, and safe reopening guidelines.

Many venues are refunding ticket sales for performances that have been postponed or canceled because of the pandemic, eroding their bottom line.

“That barely scratches the surface of what venues are losing. When someone can’t come through the door, that means they don’t buy a drink, they don’t buy a tee shirt or a meal,” said Audrey Fix Schaefer, communications director for NIVA.

Those venues represented by NIVA include Headliners Music Hall in Louisville, Ky., the Bowery Ballroom and City Parks Foundation’s SummerStage in New York City, and the 9:30 Club and The Anthem in Washington, D.C.

Brian Pomper, partner at Akin Gump, said that if “the government doesn’t help during this existential crisis, most venues will likely fold. But if these mom and pop businesses get assistance, they’ll return as the economic engine of their communities.”

Almost 90 percent of venues say they’re likely to go under if they have to remain shuttered for six months without federal assistance, according to NIVA. And a study by Pollstar estimated that the concert industry would lose almost $9 billion if venues stay closed through the end of the year.

While those timelines go far beyond when most U.S. states say they plan to reopen, most customers don’t appear to be in any rush to fill seats at sports or entertainment venues.

Fifty-five percent of respondents in a recent poll said movie theaters, concert venues and stadiums should wait for a coronavirus vaccine before reopening. Public health officials have said a vaccine is 12-18 months away, at best.

“These iconic places, everybody knows what they are. They have enormous grassroots support because they’ve got people who go to these venues all the time — very vocal and devoted patrons,” Pomper said.

Akin Gump’s lobbying team for NIVA includes Clete Willems, former deputy assistant to President Trump, and Arshi Siddiqui, former senior policy adviser and counsel to Speaker Nancy Pelosi (D-Calif.).

Some lawmakers are already signaling support.

Rep. Kevin Hern (R-Okla.) praised Cain’s Ballroom in Tulsa, Okla., a NIVA member.

“For venues like this, a prolonged hiatus from live shows and events could prove fatal,” he said. “If Cain’s were to close permanently because of this shutdown, it would be more than just a blow to the music industry; the morale of our city would take a devastating hit at a time when we need hope more than ever.”

Hern added that reopening Cain’s would be seen as the definitive sign that the coronavirus is in the rearview mirror.

Some of NIVA’s members have received PPP loans, but many say it’s not suited to their business operations.

Cleve Mash, owner of Palm Beach nightclub The Pawn Shop, was approved for a $106,000 loan but only 25 percent of that can go toward his $37,000-a-month rent.

“We need to be able to be open at 100 percent or at the very minimum, 75 percent of our occupancy load. To get there, we need someone to support our rent,” Mash said. “Our business is built around social gathering not social distancing.”

The PPP, administered by the Small Business Administration, received an injection of $310 billion and began accepting new applications Monday after the initial $349 billion was gobbled up in less than two weeks.

Will Eastman, the owner of D.C.’s U Street Music Hall, was also approved for a PPP loan. He said it should allow him to pay 25 employees for 2½ months. For revenue, he’s been selling tee shirts to celebrate the 10-year anniversary of the venue, an effort that has brought in $25,000 since closing.

“I’m going to put employees back to work as soon as I can and we’re going to work selling as many tee shirts as we can and building our live streaming platform for our venue,” Eastman said.

Eastman closed the venue voluntarily on March 11 and he isn’t confident he can fully reopen before the loan amount runs out.

“All these independent venues … they give artists chances. Your Prince, your Bruce Springsteen, they wouldn’t be where they are without the First Avenue, the Stone Pony,” Eastman said, referencing clubs where the musicians got their early starts.

Rep. Frank Pallone Jr. (D-N.J.), who represents Stone Pony’s district in New Jersey, called the venue and others a treasured icon.

“The Stone Pony and dozens of music venues in Central Jersey cemented New Jersey’s pivotal role as the birthplace of some of rock music’s most treasured icons. These venues were born to run the shows of the next generation of Springsteens and Bon Jovis, and they must continue to fulfill their legacy in my district and across the country,” he told The Hill.