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Historic $15 billion rescue of struggling arts and entertainment industry nears reality

The shuttered 9:30 Club on V Street NW in Washington could get federal relief soon. (John McDonnell/The Washington Post)

This story has been updated.

Tucked into Congress’s immense, end-of-year relief package is an item that must be regarded as just this side of a miracle: $15 billion to help save the entertainment industry — the largest public rescue of the arts in U.S. history.

If the stimulus legislation passed by the House and Senate on Monday is signed into law by President Trump, that chunk of change will help shore up the finances of hundreds, if not thousands, of music clubs, performance spaces and other venues devastated by the pandemic shutdown. The hope among leaders of the country’s creative economy — employing 5.1 million arts workers — is that a victorious “Save Our Stages” effort bodes well for additional rescue programs.

The appropriation is by no means an all-encompassing salvation; the estimated losses for the live music industry alone in 2020 are $33 billion, said Audrey Fix Schaefer, a spokeswoman for the National Independent Venue Association (NIVA), which spearheaded the “Save Our Stages” legislative campaign.

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The bill that NIVA prompted and was introduced in June by Sens. Amy Klobuchar (D-Minn.) and John Cornyn (R-Tex.) was conceived to provide grants to the mostly for-profit nightclubs and concert spaces that host local and touring bands — to cover payroll, rent, utilities and other operating expenses. Months of negotiations led to more key sponsors, including Senate Minority Leader Charles E. Schumer (D-N.Y.), and additional beneficiaries, among them Broadway, regional theaters, movie houses, museums and zoos. The omnibus legislation also authorizes the creation of two new Smithsonian museums focused on American Latinos and women.

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According to Klobuchar, the bill was intended chiefly to help smaller operations. “It’s small towns that may have one venue. It’s a huge deal to lose that,” she said in an interview. “So many times people think of entertainment and music as sort of a boutique industry. In fact, it’s one of our biggest exports and one of the most important goodwill exports that our country has.” Cornyn added in a statement that he was proud to take a leading role to ensure that those who run such venues “have the resources to overcome lost revenue and mounting bills.”

How far the $15 billion would stretch, though, remains unclear. Under the terms of the legislation, the Small Business Administration would have its Office of Disaster Assistance disburse the grants. During the first 14 days, first crack at the money would go to those who can demonstrate losses of 90 percent of their gross revenue because of the covid-19 shutdown; over the following 14 days in the eligibility period, organizations that show 70 percent losses would be able to apply.

Over the past month, lobbyists have sought assurances that some money would remain for nonprofit institutions after the initial 28 days. The sticking point is that many nonprofit arts groups have continued to get private donations during the pandemic, in magnitudes that put their revenue losses below 70 percent. As a result, the new legislation sets aside $3 billion to be held in reserve after the first 28 days of grants to help meet the needs of these nonprofits and others. In addition to live-event operators, the bill would offer aid to movie theater operators and “talent representatives.”

Individual grants would be for amounts of up to 45 percent of the operation’s 2019 gross revenue, and capped at $10 million. In addition, Congress has stipulated that $2 billion of the fund go to venues employing fewer than 50 people.

That the government is acknowledging the suffering of the arts and entertainment sector seems remarkable, given a long-standing resistance to providing the sorts of aid it has given to such industries as banking, farming and automotive. Over the past four years, the Trump administration has proposed eliminating virtually all federal arts funding by wiping out the budgets of the two grant-making arms — the National Endowment for the Arts and National Endowment for the Humanities. Each year, Congress has restored their relatively minor annual spending plans, about $160 million each.

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“This feels like a historic moment, certainly for music venues, not to mention nonprofit organizations,” said Maria Goyanes, artistic director of Washington’s Woolly Mammoth Theatre and one of a number of leading arts executives who have sought a comprehensive government rescue.

Part of the rationale for extending the aid to regional theaters, said Nataki Garrett, artistic director of Oregon Shakespeare Festival in Ashland, Ore., is that they are often an engine for other local businesses, such as restaurants and bars. “Some places like OSF, we are primary economic drivers for our area,” she said. “Congress is making sure that the ‘Save Our Stages’ act is an act that covers us all.”

NIVA’s Schaefer said the plight for clubs and other live music establishments has been especially dire, because unlike restaurants and retail stores, their income has fallen to zero. “There’s no amount of magical math that makes shutting down for all the right reasons help you to pay your rent,” she said, adding that hundreds of venues have already shut down permanently.

Some concerns remain, however, about how equitably the money would be distributed. Risa Shoup, interim executive director of off-Broadway’s Alliance of Resident Theaters/New York, pointed out that many smaller arts groups, lacking staff and resources, may not even have the tools to wade through the application forms.

“Whatever this bill does to effectively reimburse costs certainly that will be a help,” Shoup said. “But the theaters and theater companies that are at greatest risk during the shutdown are ones who have traditionally faced the greatest obstacles.”