'We're talking about life or death': Milwaukee music venues look to allies, and Washington, to survive the pandemic
Gary Witt never experienced anything like it.
The CEO of the Pabst Theater Group saw 128 spring shows his team spent months booking for their four Milwaukee venues — the Pabst Theater, the Riverside Theater, Turner Hall Ballroom and the Back Room at Colectivo Coffee — suddenly canceled or postponed in a single day. And it was only the beginning.
That staggering amount of cancellations was for one venue operator, and only covered calendars through May 15.
As the coronavirus crisis continues, the Pabst Theater Group continues to cancel and move dozens of shows — with no definitive end in sight.
"For our industry, we're talking about life or death," Witt said. "We have had to return hundreds of thousands of dollars for tickets to people. ... We're losing hundreds of thousands of dollars for every month that we're not operating."
To ensure the Pabst Theater Group and other independent venues survive, Witt is behind an ambitious, unprecedented effort that's lobbying Washington for support.
He's a founding member of the National Independent Venue Association, a new organization representing more than 1,600 venues and promoters in the United States, including 62 in Wisconsin, ranging from smaller Milwaukee venues like Shank Hall, the Cactus Club, the Miramar Theatre and the Cooperage, to larger independent venues like the Sharon Lynne Wilson Center for the Arts in Brookfield and The Rave.
"We couldn't afford to survive without a unified voice," Witt said. "The complete and sudden shut down of every venue has dealt a devastating blow. Revenues have halted, but overhead hasn't. ... If we want to have a future, we have to find a way through this, and this is the one time we're asking for assistance to do that."
Rallying behind NIVA is one of several steps local venues have taken to tackle the greatest challenge the live music industry has ever faced.
In April, the Pabst Theater Group sued its insurance provider, Cincinnati Insurance, for being denied business interruption claims. Witt declined to discuss the lawsuit.
The group also orchestrated an employee relief fund, raising more than $71,000 to support about 250 part-time employees like ushers, bartenders, stage hands and photographers. Struggling venues the Miramar Theatre, Cactus Club, X-Ray Arcade and the Jazz Estate have launched their own GoFundMe campaigns to help out-of-work employees and cover urgent expenses.
In March, the Wisconsin Center District — a government body that operates the Wisconsin Center, the UW-Milwaukee Panther Arena and the Miller High Life Theatre, and owns Fiserv Forum, which is operated by the Milwaukee Bucks — cut salaries for full-time employees by 20%. It laid off 34 full-time employees, about half of its full-time workforce, with the hope of rehiring employees weeks ahead of reopening their buildings, said WCD CEO Marty Brooks.
The district had expected $21 million in net income for all of 2020. With the pandemic, it's projecting just $50,000, Steve Marsh, the district's senior vice president and chief financial officer, told the Journal Sentinel.
Brooks said the district is moving to restructure $100 million in debt, accumulated from reconstruction of the convention center and the theater, with a goal of reducing payments by half over the next two to three years.
"As a quasi-government agency, the relief packages on the federal and state level, we're not able to tap into any of them," Brooks said.
Local privately owned venue operators like the Pabst Theater Group and Shank Hall received their Paycheck Protection Plan loans. But it's not enough to compensate for the staggering shortfall.
A blockbuster year goes bust
The live music industry was poised to have yet another record-breaking year before the pandemic crushed those prospects.
Last year, box office grosses for the top 100 tours in the world reached $5.5 billion — up 72.1% from a decade prior, according to concert trade publication Pollstar. 2019 was so rosy, Pollstar described market conditions as "perfect" — and gross revenue for the top 100 tours for the first quarter of 2020 were even 10% higher.
But if concert venues remain dark for the rest of the year, the industry would lose up to $8.9 billion, Pollstar projects. Live Nation, the world's largest live entertainment company, doesn't expect full-scale touring to return until summer 2021, CEO Michael Rapino told investors this month.
With streaming still not compensating for the cratered music sales business, touring is the primary source of revenue for most artists, Witt said.
"The Eagles, REM, Elton John, Mumford & Sons, you name it — every one of those bands started playing small independent venues in America and grew their careers from there," Witt said. "I fear if you subtract venues from the American landscape, where will the next Springsteen be?"
That's one of NIVA's big selling points to Congress. Another is the economic ripple effect. Small venues' direct economic impact in their communities amounts to nearly $10 billion, according to NIVA, with an estimated $12 billion spent on related economic activities, like dinner and drinks, for every dollar spent on a concert ticket at a smaller venue.
"We are income generators for our cities," Witt said. "We bring revenue to area restaurants, bars, hotels, retail shops, car rentals. Our contribution to the tax base far exceeds our ticket sales."
NIVA made that case in an April 22 letter sent to congressional leaders of both parties. Among the many suggestions for independent venues and promoters: increasing the PPP loan cap; offering tax credits for refunded tickets; and allowing rent and mortgage payments to be abated until venues and promoters can operate at full capacity.
The letter was a first step in NIVA's "#SaveOurStages" campaign. Funded by ticket marketplaces See Tickets and Lyte, the group has hired the powerful lobbying firm of Akin Gump Strauss Hauer & Feld to make its case on Capitol Hill ahead of the next stimulus plan.
NIVA members and major bands like Foo Fighters and Wisconsin's Bon Iver have spread the word about the campaign. More than 330,000 letters have been sent to members of Congress from citizens in support of NIVA, the association's spokeswoman, Audrey Shaefer, told ABC News. A letter supporting NIVA was also sent this month to Speaker of the House Nancy Pelosi and House Minority Leader Mike McCarthy signed by 93 Congressional representatives.
"We can provide a vital lifeline for the industry that will help to sustain the iconic venues that are central to the social, cultural, and economic fabric of so many of our communities," the letter reads. "This industry is not going to make it without our help."
U.S. Rep. Ron Kind, the Wisconsin Democrat from La Crosse, is discussing relief options for venues with congressional leaders and fellow members of the Ways and Means Committee, including the possibility of ticket refunds being eligible for disaster loss. Another stimulus bill is expected to be passed by July.
That's when Peter Jest, local concert promoter and Shank Hall owner, and the Wisconsin Center District's Brooks hope to begin hosting events. Along with the Pabst Theater Group, they're continuing to not just move shows, but to book shows at their venues for fall through next year.
"A lot of the bigger stuff is moving to 2021," Jest said. "Most of the arena acts are pretty wealthy and can afford to take time off. But there are other bands that travel in vans or trailers that make their living at small clubs and theaters, and it will be hard for them to take off until 2021."
With so many differing variables across states, in terms of the severity of COVID-19 cases and different governors' and mayors' approaches to reopening their economies, it could be difficult, if not impossible, for national acts to route tours. For Milwaukee to secure bookings, Chicago, as a Midwest hub, will likely need to be able to accommodate shows, Jest said.
"Obviously we need to put safety and the health of everybody above everything else," said Doug Johnson, the Wisconsin Center District's Vice President of Entertainment and Sports. "It's a little too early to know when we can start the car back up again, and when we do, that car needs a tuning.
"I think it will be a gradual thing."
No quick fix
After the Wisconsin Supreme Court struck down Gov. Tony Evers' stay-at-home order May 13, live music began returning to small bars across the state — although not in Milwaukee and Madison, where restrictions on gatherings are sill in effect.
The most notable indoor concert since nationwide shutdowns began was May 18, when Travis McCready, frontman for blues rock act Bishop Gunn, headlined a solo acoustic gig in Fort Smith, Ark. Capacity for the venue Temple Live was cut to 20% — from 1,110 to 229 — with groups no larger than six spaced out at reserved seats around the venue and required to have their temperatures taken at the door and wear face masks. Under those conditions — which included capacity restrictions in the bathrooms, one-way traffic flows and hand sanitizer stations — the venue lost money on the gig, Temple Live's president Lane Beaty told The New York Times.
Gigs like that may be few and far between, but drive-in concerts may become a trend, following such events in Denmark and Germany. Country superstar Keith Urban did a surprise drive-in concert for hospital workers outside Nashville in May, and such events have been announced in Florida, Arizona and Texas. Live Nation's Rapino told investors the company were looking into drive-in events, but none has been announced in Wisconsin so far.
According to a poll from Nielsen Music and MRC Data in March, 29% of respondents said they would go to a concert less than a month after the pandemic ends. Another 30% would go to a concert within one to two months. Only 2% said they would never go to a concert again.
But 21% of respondents said they wouldn't go to a concert for at least five months after the pandemic ends. And a new Nielsen and MRC poll this month showed what kind of precautions fans demand: 61% of respondents want hand sanitizers throughout the venue, 51% said they want events to be held outside; and half of respondents want reduced capacities at shows.
Given the potentially shaky market conditions, Jest said guaranteed artist rates for concerts he's scheduling are going down, and there's less back and forth in negotiations.
"Everyone is working well together," he said. "No one knows for sure who will come back."
Johnson said he recently renegotiated over a postponed show to guarantee more money for the venue for additional cleaning costs.
Among the things the Wisconsin Center District is exploring for when events return: additional methods of cleaning, thermal scanning capabilities, alternative seating maps to allow for more social distancing, and how many face masks they should buy, for employees and possibly guests.
"There will be a very strong core group of procedures and protocols done throughout the nation," Johnson said, which he predicts will be implemented by Live Nation and the live entertainment industry's second largest player, AEG.
Brooks and Witt said venue operators are already discussing what those procedures might be locally. Brooks emphasized that changes will be robustly communicated online and through social media and that it will be "an ongoing learning experience, where the public will tell us and other venues what makes them feel comfortable and not comfortable."
"We all like to socialize, we enjoy entertainment, we enjoy music, we enjoy being with other people," Brooks said. "After all the different horrific events that have happened in the world the past 10 or 15 years, people will support a festival or go to a concert."
"I am confident that the entertainment industry will rebound, but it will not be a quick fix," he said. "It may take a year and a half or two years to get back to where we were in the fourth quarter of last year."
Given the crowds concerts rely on, and with the country still behind with the amount of coronavirus testing suggested to ease restrictions as we wait for a vaccine or herd immunity, it could take awhile before music venues and promoters can even start rebuilding the industry.
"We were the first ones to close," Witt said. "And we'll likely be the last ones to be opened up."
Contact Piet at (414) 223-5162 or email@example.com. Follow him on Twitter at @pietlevy or Facebook at facebook.com/PietLevyMJS.
Piet also talks concerts, local music and more on "TAP'd In" with Jordan Lee. Hear it at 8 a.m. Thursdays on WYMS-FM (88.9), or wherever you get your podcasts.