With the holiday season looming, we’re only a few weeks away from that time of year when It’s A Wonderful Life starts playing on TV around the clock. And while there are certain parts that immediately come to mind —it’s not Christmas in my house until George Bailey yells “My mouth’s bleedin’, Bert!” and starts joyfully sprinting through the snow — this year, with much of the country still grappling with the financial fallout of the COVID-19 pandemic, it’s the film’s bank run scene that feels particularly relevant.
“Can’t you understand what’s happening here? Don’t you see what’s happening?” Jimmy Stewart as Bailey asks the throngs of people gathered in his building-and-loan, urging them not to sell their shares to the town’s wealthy villain, Mr. Potter, for 50 cents on the dollar. “Potter isn’t selling, Potter’s buying! And why? Because we’re panicky and he’s not, that’s why. He’s picking up some bargains.”
It was hard not to think of that scene a couple weeks ago when Marc Geiger, former music chief of the WME talent agency and co-creator of Lollapalooza, announced SaveLive, his new plan to bail out small, independent music venues that are struggling financially due to the pandemic. The program involves Geiger and his investors buying at least a 51% ownership stake in each participating venue; so far, he’s raised $75 million in capital with which to buy them.
On the one hand, with no government relief in sight and a return to live music still likely at least a year away, someone has to step in and do whatever it takes to keep independent clubs alive. “One of my favorite things in the world is to go to a club, be treated well and see an incredible band,” Geiger told the New York Times. “So I thought, ‘OK, I’m going to raise a bunch of money and I’m going to backstop all these clubs. I’m going to be a bailout solution for them, and I’m going to call the company SaveLive.’”
On the surface, it’s a noble endeavor, but many question Geiger’s intentions. “Can Music Venues Stay Independent If This Guy Buys Them All?” a recent Vice headline asked. Live Nation CEO Michael Rapino reportedly trashed the venture during a Q&A session at the end of his company’s third quarter earnings report, likening it to a “fire sale.”
“When it get to the venues in general, the thesis out there with Marc Geiger and some others is that is that these independent venues are so distressed that they’re going to throw someone the keys at a very cheap price, and you can roll up some of these cheaply and have some scale,” he said. “Well, the thesis is basically broken. At the first point, any great live club is not throwing anybody the keys cheaply; there’s a lot of capital out there. So if you own the Troubadour in Los Angeles, a legendary business, and you’re having a tough year, you’re not selling to Marc Geiger at a one- or two-time multiple. Your access to capital, to PPE loans — there are a lot of ways you can weather the storm, so we don’t think there’s a fire sale.”
Geiger insisted to the Times that he would not seek to flip assets and would treat the deals as true partnerships, but some independent venue owners remain skeptical. “Certainly seems like the plan could work in terms of buying venues at low prices while they are all financially distraught,” Scott Hammontree of The Intersection in Grand Rapids, Michigan, tells InsideHook. “It seems much like AEG and Live Nation buying 51% of businesses as they have been doing for years now. I can’t speak for other venue owners, but as you can imagine, we value our independence and like running our businesses in the way we see fit in our markets. Indie venues like myself are trying to hang on as long as possible, as we, like Marc, see a booming future once the pandemic has relented. However, I think many venues will be approaching a point that taking additional debt on doesn’t make sense for them and they may have no choice but to sell a majority stake to avoid closing for good.”
Lynette Wiley, co-owner of the Jalopy Theatre in Brooklyn, New York, says there are aspects of Geiger’s plan that make sense, but she too bristles at the idea of the exec taking a 51% ownership stake in venues.
“Something that I have thought about for years and have always wanted to establish was touring routes with like-minded venues,” she explains. “It takes time, and it takes effort. To be able to have a good touring route helps the artists, and it also saves money on the venue side, because they can create one ad campaign. They can just change the date. There’s so many ways to chip off at costs. So I love that part of the idea. That sounds great.”
“But,” she continues, “the whole point of independent venues is the independence. I would worry that while I don’t want to see the market decrease by half or more, which I think is likely given the length this [pandemic] has gone on, that wouldn’t be independent venues. I don’t know if the Loews Theater model works for venues. I think that fans are so loyal because there’s something special about the places that they see the music that makes them go there … We have so many fans that will come to [Jalopy] because they like how we curate. It doesn’t even depend on who’s playing. It’s the sense of who we are, what the place feels like, and what their experience is going to be when they’re there. So I’d love, if you’ve got a war chest like this, to help venues create touring routes. Give us infrastructure back so that we could work together in new ways. That would be a great use of that money. The 51% ownership is a little frightening.”
Maintaining the individuality of small venues is a big concern for Hammontree as well. “I don’t think that it’s in the best interest of indie venues or artists to have yet another large promoter owning a mass number of venues,” he says. “Maybe Marc’s group will encourage those venues they acquire to continue running their venues with the same independent spirit as they did before. Only time will tell.”
Of course, no two independent venues are the same, and while some owners like Hammontree and Wiley take issue with some aspects of Geiger’s plan, others may have no choice but to sell to him to stay alive. Perhaps that’s why the National Independent Venue Association (NIVA), which is lobbying Congress on behalf of the Save Our Stages Act to provide relief for struggling independent venues, won’t weigh in on the specifics of his venture.
“NIVA is pro independent venues and promoters, not anti anything,” NIVA executive director Rev. Moose wrote in an emailed statement to InsideHook. “Since we formed in April, our sole focus has been to get emergency financial relief for our members, with the much-needed Save Our Stages Act currently having 207 bipartisan cosponsors. Every one of our nearly 3,000 members makes their own decisions based on what’s best for their business, which was the case before the pandemic, now, and in the future. This is the very independence we’re fighting to preserve.”
The fact that relief of some sort is an absolute necessity to keep these venues alive is something all owners can agree on — regardless of where it comes from.
“[We need to have] funding streams available, whether they’re federal, city, state, or they’re private foundations thinking collectively about how to support the venues,” Wiley says. “I used to run a foundation. What I’m hearing from colleagues is that there’s a fear right now for people to grant organizations, because they don’t know who’s going to be left standing. So, how do you determine who you give funding to? Well, that kind of paralysis is just the opposite of what’s necessary. If there’s an organization that you think needs to survive, then help it survive right now. We’ve probably got a year left of this — not that we’ll be fully closed, but that we’ll be impacted in what we can do. That’s a long time. But with smart thinking and funding sources, hopefully most of us will pull through this.”
That’s what Geiger is banking on. “I believe the artist economy is going to be very big when it comes back,” he told the Times. “Artists will want to tour to get their cash moving again, and people are going to love going out more than ever.”
But how much longer will artists have to wait to hit the road? By the time independent venues are able to safely return to operating at full capacity, will it be too late?
“I don’t think that there’s any returning to normal until there’s a vaccine that has been distributed to enough of the population,” Wiley says. “So that timeline is as long as the science to get us where we need to go takes.”
The Jalopy Theatre operates as a non-profit, and Wiley points out that even non-profit independent venues like hers that may appear to be in a better position to weather the storm are facing major budget cuts as a result of COVID-19.
“One thing that’s going to be a real impact for nonprofits is the absolute decimation of city budgets and state budgets,” she explains. “So organizations that relied on city and state funding to keep their doors open and produce the art that they were, what I’ve been told by the city is ‘you might get a grant in 2021, but the impact of this is going to be seen 2022 through 2025.’ That money accounts for a small portion of our budget, but for some, it’s 25%, 30%. That is such a huge kick, and not something that they’re going to come back from easily at all.”
The sad truth is that all facets of the music industry need saving these days, and unless Congress steps in to provide some relief or fans open up their pockets via GoFundMe and Kickstarter fundraisers, rallying around their beloved institutions the way the town of Bedford Falls rallies around George Bailey in It’s A Wonderful Life‘s heartwarming climax, we’re likely staring down a not-so-distant future in which independent clubs are either no longer truly independent or no longer in business.
More Like This
This article was featured in the InsideHook newsletter. Sign up now.
