Live Shows Are Back, But Delayed Federal Grants Are Draining Concert Pipeline

Sydney Sprauge, Rebel Lounge
Neil Schwartz

Sydney Sprauge performing at the Rebel Lounge in Phoenix Arizona on June 4.

"Everything's turning on so fast," says Stephen Chilton, owner of the Rebel Lounge. "But we have no revenue coming in now and it's hard to staff up enough to handle that volume."

Concerts are coming back with what looks to be a busy, competitive fall season. But the Small Business Association’s sluggish rollout of the $16 billion Shuttered Venue Operators Grant program that Congress approved in December is leaving independent venues and promoters ill-prepared for a robust return.

For the past 15 months, venues have been largely shuttered due to COVID-19 restrictions. The SVOG was created to save indie venues from permanent closure and level the playing field with corporate competitors Live Nation and AEG, which relied on borrowing during the pandemic -- except that the checks haven’t gone out yet and no one’s certain who’s getting one. As of June 21, only 677 venues and promoters had received SVOG funds from the SBA, about 13.5% of those that applied. And although many of these spaces can open up now, that only intensifies their need for funds so they can rehire employees, make deposits to book acts, hold shows and start bringing in money again.

“Everything’s turning on so fast,” says Stephen Chilton, owner of the Rebel Lounge, a 300-capacity club in Phoenix. “We all know that September, October and November are going to be crazy, but we have no revenue coming in now and it’s hard to staff up enough to handle that volume.”

Indie promoters face a tough decision on how to proceed while still awaiting SVOG funds as festival season approaches. Prime Social Group co-founder/president Adam Lynn canceled three out of six events for the multicity Breakaway Music Festival this year and rescheduled the others for later in 2021 due to uncertainty over the status of its SVOG application.

Others are even worse off, and he says that “many independents are not able to issue their fans refunds” because they already spent that money on artist deposits or production costs. Now those promoters are just hoping that SVOG funds come through in time -- or else they’ll need to cancel shows at the last minute and lose more money, as well as customer goodwill.

Because independent businesses don’t have the same access to cash as corporations like Live Nation and AEG, agent Wayne Forte with Entourage Talent says much of the independent touring sector is getting dangerously closed to running out of capital, while others have borrowed substantially.

“There’s been a huge learning curve for the SBA -- they went into this having no idea how our business works,” Forte tells Billboard. While the pace of the grant awards has picked up – the stakeholders have daily meetings with the SBA to receive updates on agency’s progress -- the delays have led to concerns about overleveraged promoters and agents defaulting on their obligations, potentially creating a liquidity crisis that would be hard to contain because of the terms of the loans many are receiving.

“Unfortunately, if there is a problem,” adds Forte, “we probably won’t know until it’s too late.”

This story will appear in the June 26, 2021, issue of Billboard.