Broadway Sees Lifeline in $15 Billion Aid for U.S. Entertainment

(Bloomberg) -- Theater owners and producers whose venues have been shut during the Covid-19 pandemic were given a shot at survival after the U.S. Congress approved about $15 billion of grants to the arts and entertainment industry.

That happens to be roughly the same amount New York City alone has suffered in total economic losses since Broadway theaters were among the first businesses to shut in March. Surrounding restaurants and hotels lost billions of dollars as streets became almost deserted. The impact followed a record-breaking 2018-19 season with almost 15 million ticket buyers.

About 97,000 people work in the Broadway industry, a tourist draw and a staple of midtown Manhattan for more than a century. Thousands more are employed by traveling shows that contributed $3.8 billion to other local economies, and were attended by 18.5 million in about 200 U.S. cities last year, according to the Broadway League, a national organization of theater owners and show producers.

“We are grateful for this bipartisan agreement which will provide immediate relief across our industry and a lifeline to the future,” said Charlotte St. Martin, the league’s president, who said she expects theaters to be among the last businesses to reopen. “We look forward to the lights of Broadway returning and shining brighter than ever before.” ​

The pandemic precipitated the worst crisis in Broadway’s history, St. Martin said in September, as she prodded Congress to act.

The bipartisan provision, dubbed SOS for “Save Our Stages,” was written by U.S. Senators Amy Klobuchar, a Minnesota Democrat, and John Cornyn, a Texas Republican. It provides grants that could reimburse venues for 45% of their losses, or $10 million, whichever is less. It covers theaters, music clubs and non-profit museums.

The bill also set aside money for movie theaters. The money may be used for expenses such as payroll and benefits, rent and mortgage, utilities, insurance, personal protective equipment and other business expenses.

At Cleveland’s Playhouse Square Foundation, a consortium of performing arts venues that attracts about 1 million visits a year, CEO and President Gina Vernaci said the bill’s passage would help her organization survive after incurring a $7 million operating deficit.

“This will help not only New York’s Broadway, but drive performing-arts centers all across the country,” Vernaci said. “Getting the theaters back up and running will help support surrounding restaurants, office buildings, hotels, parking lots that depend on us.”

Live music stopped across the U.S. in March and hasn’t resumed, save for occasional socially distanced shows. The industry missed out on $9.7 billion on box office sales, according to Pollstar, a trade publication. The larger economic hit from lost sponsorships, ticketing, concessions and merchandise may be closer to $30 billion.

“This is the lifeline our industry so desperately needs to emerge from a devastating year,” said Dayna Frank, owner and CEO of First Avenue Productions and board president of the National Independent Venue Association, which organized performing artists, theater workers and owners across the country. It warned that 90% of such venues would close without government intervention. Billboard published a list in September of music venues closed during the pandemic, including New York’s Copacabana and the Douglas Corner Cafe in Nashville.

The grassroots lobbying campaign involved more than 2.1 million people who sent Congress emails and more than 1,200 artists who raised money and awareness. The group singled out Foo Fighters, Miley Cyrus and The Roots, among others.

Live Nation, the world’s largest concert promoter, said shows won’t return until at least the middle of 2021. Live music thrives on packing hundreds or thousands of people close together, a risky activity for spreading the virus.

Many venues staged fundraisers in the short term, but that will only hold them for so long, said Rob Mercurio, co-owner of Tipitina’s in New Orleans. Survival will depend on when live music resumes, he said.

Venues could open “and people might still not feel comfortable,” predicted music producer Swizz Beatz earlier this year.

For Steven Severin, co-owner of Neumos, an independent music venue in Seattle that’s hosted acts from The Shins to Adele, the grants represented the end of months of lobbying to get help for clubs in Washington state and beyond.

As a precinct captain for NIVA, he was advising businesses like his to hang on this year because help was coming. But as gridlock took hold in Congress, he started to doubt whether any assistance would materialize.

“You go nine months without income, you get into a lot of debt,” he said. “It got pretty sketchy and dark.”

On Monday, though, after the bill text was released and passage seemed assured, he was overtaken by emotion.

“I’m choked up as hell,” Severin said. “This is crazy. Oh, my god. This has been a full-time job for nine months.”

©2020 Bloomberg L.P.