Entertainment venues still waiting for a lifeline as tech glitches snarl Covid relief applications

At The Independent in San Francisco, it’s been a long, dark year in the most literal sense. The music and comedy shows that filled the venue’s stage and boosted the local economy have been halted since early March 2020. Save for a few merchandise sales, its overall revenue is down nearly 100%.

“It’s been a devastating year for The Independent and our industry. We were the first to close and will be the last to reopen,” said Allen Scott, managing owner of The Independent.

“All of these small clubs that really are the backbone of the live touring industry are not built to be losing money for three, six — let alone 12 or 18 — months,” Scott said.

Owners like Scott were eager to file their applications for the Small Business Administration’s Shuttered Venue Operators Grant program, a $16 billion fund aimed at floating the industry until in-person entertainment can resume. Music clubs, theaters, promoters and more can access grants of as much as $10 million, based on gross revenue from 2019, as a part of the program, which was ushered in during the second Covid relief package.

But the SBA’s portal faced technical challenges on launch day, and the applications process is currently suspended.

The portal was set to open at noon on Thursday. But when it closed at 4:15 p.m., no applications were submitted. On Friday, it remained closed throughout the day while the agency worked to resolve the technical issues. Late Friday, the SBA said the portal would remain shut through the weekend.

“When a reopening date is determined, we’ll provide updates in advance so that applicants have time to prepare,” the agency said in a tweet late Friday.

When the portal opens, the funds will be distributed on a first-come, first-served basis, the agency said.

“This decision was not made lightly as we understand the need to get relief quickly to this hard-hit industry,” SBA spokesperson Andrea Roebker said in a statement Thursday, adding the agency was working to get it back up and running as soon as possible.

Earlier Friday, the SBA said, it was working with its vendors to fix the tech issues, which had been identified.

For now, the wait continues. Industry advocates and owners, thankful for the lifeline, were frustrated at the glitches and the delay in getting aid out the door. The challenges were reminiscent of issues faced during the early days of the Paycheck Protection Program’s launch last year. That program saw delays in getting applications processed.

“We’re grateful to the SBA, for their hard work in getting this program created… There’s a lot of confusion and anxiety surrounding this process but we’re still hopeful. The application cannot come soon enough,” Scott said. “Our livelihood depends on this.”

The National Independent Venue Association was formed during the pandemic to advocate for aid. It now represents some 3,000 local venues and promoters across the country.

NIVA estimates hundreds of venues have closed their doors for good due to the pandemic. And more are threatened, given the shutdown could extend into the summer and fall. Helping struggling venues now will be key to rebuilding the economy once things reopen, the group said.

“We are part of the backbone of our local economies, because for every dollar spent at a small music venue on a ticket, $12 of economic activity is realized for area businesses,” said Audrey Fix Schafer, a NIVA board member.

“If they want their communities to come back, once it’s safe to reopen fully, they’re going to need this economic magnet of independent venues like ours,” she said. The group projects these venues generate a direct annual economic impact of nearly $10 billion for local communities.

For many venues, opening at partial capacity isn’t “economically feasible,” due to the high overhead costs, the group has said. It also expects national tour routing won’t be at full steam until artists can tour fully at reopened locations.

While owners and operators wait for aid, they’re hopeful music and theater lovers will be ready to return in person later this year, and the program will have enough funds to cover those in need.

Casey Lowdermilk, assistant general manager of the Bill Graham Civic Auditorium in downtown San Francisco, said the venue has gone from 450 employees and 80 concerts a year to zero across the board.

“Hopefully, that money is enough and gets to all the venues that need it in a timely fashion,” Lowdermilk said. “And hopefully, by June or July, we’ll have a real trajectory of when we can return to full capacity events that are indoor venues.”

 The Independent’s Scott is confident demand will be there, once it’s safe to open.

 “We’re ready to get back to it,” he said. “People have been cooped up. We’ve had some early indicators in the industry, some festivals that have gone on sale, and some tours have gone on sale that have all blown out. … I’m really optimistic about the demand out there. And we can’t wait to open our doors.”

—CNBC’s Whitney Ksiazek contributed to this report.