- Performing arts venues have been some of the hardest-hit industries during COVID-19, often shuttered since the start of the pandemic with limited opportunities for revenue
- Despite challenges, investors may believe it is a good opportunity to purchase independent theaters due to long-term appeal once the pandemic has passed
- Latest COVID-19 relief proposal includes relief targeted at independent live venues, first proposed under the “Save Our Stages” initiative
Acquisitions of small performing arts venues may ramp up in the near future despite the sector’s vulnerability during the COVID-19 pandemic. Investors suggest that small market and regional theaters will continue to hold appeal once the pandemic passes, making them good long-term purchases.
The theater industry has been particularly hard-hit by COVID-19. They were typically forced to shut down at the start of the pandemic, cutting off their main source of revenue while still having to cover regular costs such as property taxes and utilities. Movie theaters have also been severely constricted, with lackluster domestic box office returns from new films. Across the nation, several theaters and performing arts spaces have closed permanently.
Any investors who acquire a theater will probably need to wait to see a return on their investment. Even as movie theaters reopen, moviegoers have been reluctant to take in a film and potentially risk infection. Audiences may not be willing to return in large numbers until after a COVID-19 vaccination is available.
As negotiations over a new round of COVID-19 relief proceed, the updated HEROES Act proposed by House Democrats incorporates $10 billion in aid for independent performance venues, a proposal originally floated as the Save Our Stages Act. In Connecticut, the state has advanced to Phase 3 of its reopening plan and allowed performing arts venues to reopen at half capacity.
