With the passage of a $900 billion economic stimulus package, live entertainment venues, theaters, and cultural institutions are set to receive billions in federal aid after a year of drastically reduced revenues. Yet eligibility for the funding is contingent on a set of detailed criteria, ranging from how the institution is staffed to whether the seats can be packed away at the end of a performance.
As part of the targeted relief in the $900 billion stimulus bill passed by Congress last week and approved by President Donald Trump on Sunday evening, $15 billion in grants will be available to live venues, performing arts organizations, museums, movie theaters, and talent representatives.
The amount of each grant is determined based on 45 percent of the recipient’s gross earned revenue in 2019. The grants are capped at $10 million.
The approval marks a victory for the Save Our Stages campaign, which was launched with the goal of attaining $10 billion in grants. The National Independent Venue Association, which backed the proposal, argued that live venues have been among the first to close and the last to reopen during the COVID-19 pandemic, and have had few opportunities for alternate revenue streams.
NIVA applauded the passage of the bill and promised to provide assistance to anyone seeking a grant. It is also administering the NIVA Emergency Relief Fund to assist venues at the greatest risk of closing permanently before the grants are issued.
Any institutions seeking a grant through this program should make sure they qualify under the following guidelines:
General qualifications
The grant program is open to entities that were operational on Feb. 29, have experienced a revenue loss of at least 25 percent, and have reopened or intend to do so. Talent representatives must be currently representing artists in order to qualify.
Recipients cannot be majority-owned or controlled by an entity that is an issuer of securities listed on a national securities exchange. They must also receive no more than 10 percent of their gross revenue through federal funding, although an exception is made for disaster relief monies.
The grant program is aimed at smaller operators. The owner or controller must not have more than two of any of the following qualities:
- Own operations in more than one country
- Own operations in more than 10 states
- Have more than 500 employees
Venues cannot receive a grant if they have also received funds through the Paycheck Protection Program on or after the date the legislation passed. When an entity is state-owned, grants can only be applied to the qualifying venue or museum, not to any other state or political subdivisions. In addition, businesses presenting “live performances of a prurient sexual nature” are ineligible.
Sector qualifications
The grants are directed at venues where performances, movie screenings, or other arts and cultural activities are the “principal business activity.” To that end, the legislation outlines a variety of specific criteria an applicant must meet in order to be eligible for funding.
Live venues and performing arts organizations
These venues must have defined spaces for performances and an audience, along with mixing equipment, a public address system, and a lighting rig. At least one paid staffer must carry out at least two of the following functions:
- Booking
- Sound engineering
- Promotion
- Stage management
- Security
- Box office
Venues operated by nonprofits must have events that are produced or managed primarily by paid staffers rather than volunteers, and events must be promoted. Artists must be paid a fair wage instead of playing for tips, although this rule does not apply to fundraisers.
Live venues, performing arts organizations, and event promoters are defined as businesses where the principal activity is showcasing performing artists. Eligibility is further specified as meeting the following requirements:
- Audiences pay a ticket price or cover charge
- Performers are paid based on a percentage of ticket sales or other formal agreement
- At least 70 percent of revenue is generated through ticket sales, production fees, nonprofit educational initiatives, and sales of concessions and merchandise
- Tickets are made available an average of at least 60 days before an event
Movie theaters
Movie theaters qualify by having at least one auditorium with a screen and audience seating, along with a projection booth or space with at least one film projector. The theater must also charge paid admission and market its showtimes.
Museums
Museums must have indoor exhibitions that are subject to COVID-19 restrictions. In addition, qualifying museums must have at least one auditorium, performance space, or lecture hall with fixed seating and regular performances.
Talent representatives
Talent representatives are defined as professionals who represent or manage artists or entertainers for no less than 70 percent of their work. Performers must be booked primarily at live events or festivals, and be paid through a percentage of ticket sales or other formal agreement.
Approval and administration
The grants are administered through the Associated Administrator for the Office of Disaster Assistance. Applicants must make a good faith certification of economic need.
First priority will be given to entities whose revenues between April 1 and Dec. 31 are less than 10 percent what they were during the same period in 2019. Second priority is given to those with revenues under 30 percent compared to the previous year.
Any funds received through the CARES Act count as revenue. The administrator may also use alternative methods to calculate losses for seasonal employers who would be adversely affected by the exclusion of the first quarter of the year.
No more than 80 percent of the grants will go to priority recipients. A total of $2 billion is set aside for entities employing 50 or fewer full-time employees.
Funds can be used to cover payroll, rent, mortgage, utilities, debt payments, worker protections, payments to individual contractors up to $100,000 per person, maintenance, administration, and taxes. Funds must be spent within 18 months of receipt, after which any remaining money must be returned.
Grants can also be used to cover the costs of producing a performance, although this cannot be the primary expenditure. They cannot be used to purchase real estate, make payments on loans originated after Feb. 15, for investing or re-lending, to make political contributions, or for any other purpose deemed unfit by the administrator.
Supplemental grants of half the initial amount are allowed if a recipient’s revenues for the most recent quarter as of April 1, 2021, are still 30 percent or less of the comparable 2019 quarter due to the pandemic. While the initial grants cover the period from March 1 to Dec. 31, the supplemental grant period extends through June 30, 2022.
Recipients must retain four years of employee records and three years of other relevant documentation as part of the oversight process. All recipients are subject to audit.
