Save Our Stages: Stimulus Funds For The Performing Arts Industry

Businesses in the arts have earned their stimulus with a solid case for why they are the United States single most affected industry. With enormous operational costs, no ability to ‘pivot’ to a different model, and a structure that requires long-term planning, the pandemic has brought everything besides their bills to a complete halt.

Fortunately, Congress gave the performing arts industry a gift for the 2020 Holidays when it passed a $900 billion stimulus bill that allocated $15 billion to the arts and the industries that support them. Those reading this with a personal investment in the industry are probably already asking: Great, does that mean I can apply for stimulus relief? I hope the answer is yes, so read on to look at the specific requirements and restrictions.

Fortunately, I’ve done the digging through the actual 5000+ page bill, so you don’t have to. In this article, I outline who is entitled to what regarding stimulus funds for the arts.

Stimulus Funds For Businesses In The Arts

Is There a Stimulus Program for Businesses in the Arts?

Yes. Believe it or not, the U.S. Congress allocated a hefty amount of money for the arts and those industries that make it possible to enjoy live performances and culture. In December 2020, the Consolidated Appropriations Act of 2021 was signed into law by President Trump. Included in the massive piece of legislation is Section 324: Grants For Shuttered Venue Operators. This section is more familiarly known as the Save Our Stages Act (SAS Act).

How Did the Arts Get a Stimulus Package?

Soon after the coronavirus’s reality sunk in, nation-wide, grassroots organizations coalesced and called themselves, respectively, the National Independent Venue Association (NIVA) and the National Independent Talent Organization (NITO). Both immediately organized themselves into formidable structures. With the strength of thousands of indie venues and the workers that make those venues function, the two organizations put effective pressure on their representatives to provide stimulus funds for businesses in the arts.  In October, the effective lobbying paid off, quite literally, when Congress allocated $10 billion worth of stimulus to the arts as part of the HEROES Act.

Just wait; it gets better. As a broader stimulus package was being discussed in early December, NIVA and NITO kept pressing and managed to get a 50% increase in the stimulus funds for the arts. Congress included the SAS Act in the larger stimulus bill and allocated a whopping $15 billion for businesses involved in the arts.

What types of businesses qualify for stimulus funds?

The types of businesses that qualify for these stimulus funds are those involved with live or cultural performances. More businesses are crucial to the production of live or cultural performances than you might have known.  Naturally, there is quite a range between Madison Square Garden and your local coffee shop that holds an open mic, so make sure to read the next two subheadings to know specifically what kind of businesses qualify. Roughly, here’s who should be getting excited:

  • Venues
  • Promoters
  • Movie Theaters
  • Museums
  • Talent Representatives (agents)

If you’re already thinking of ways you could ‘upgrade’ your business to become a performing arts venue, it’s not advisable to hold your breath on this point. While the law is generous regarding what it gives, it is very specific with who gets it. There are many criteria that must have been in place at the beginning of the U.S. Coronavirus pandemic.


What Are The Requirements to Qualify?

The specific conditions are broken down by type of business. It isn’t a ‘one size fits all’ criteria, but there are a few conditions that all applicants will have to meet regardless of what type of business they are.

  • All conditions laid out in subsequent subheadings require that the businesses could have met them on February 29th, 2020
  • Experienced a decline of over 25% percent in a 2020 quarter compared to the same quarter from 2019
  • Intend to re-open when possible
  • Nonprofit venues have salaried employees and not volunteers

As someone who was involved in the arts, I can attest to the fact that Congress did a good and thorough job making sure that the businesses in need are the ones that will get it. I was favorably impressed as I read through the bill.

Stimulus Requirements for Performance Venues

For venues that host music, comedy, and theater performances, there are several requirements.

  • There is a stage or a defined performance area
  • The business operates a mixer, PA system, and lighting rig as part of its performances
  • They have at least one person to do one or more of the jobs listed below
    • Sound
    • Booking
    • Promoting
    • Stage Management
    • Security
    • Box Office
  • There is a fee to see performances, either in the form of a ticket or a cover charge
  • Shows are promoted
  • Performers are paid, either as employees or independent contractors.

There are further specifications seemingly aimed at coffee shops that host open-mics and the arts from time to time.

Stimulus Requirements for Movie Theaters

  • At least one auditorium with a screen and fixed seating
  • At least one projection booth
  • There is an admission fee to see movies
  • Showtimes for movies are advertised

For movie theaters, it is very straightforward in terms of the requirements.

I’m hoping that my own local theater, the ShowRoom Cinema in Asbury Park and Bradley Beach, will rise from the ashes and somehow find a way to reopen.

Stimulus Requirements for Museums

Surprised that museums are included here? I was, but it’s fortunate they are. The requirements for museums are limited but include:

  • Business is primarily a museum
  • No for-profit museums
  • Has suffered a decline in revenue due to occupancy restrictions
  • Has at least one space for presentations/performances with fixed seating

Stimulus Requirements for Management and Promotion Agencies

There are minimal requirements in this category. The only hard rule is that at least 70% of the business’ revenue comes from talent management.

Are There Any Restrictions?

There are thorough but fair restrictions. Following the distribution of PPP grants and loans, the public was reasonably upset when they saw financially well-positioned corporations and organizations receiving money supposedly made available to help small-business owners. Congress has seen to it that this won’t happen, at least in regards to the SAS Act.

What are the restrictions?

The business can’t have more than 500 employees, or:

  • Demonstrate more than 10% of revenue from federal funding
  • Receive a PPP loan past December 27, 2020
  • Operate in more than ten states
  • Operate in more than one country
  • Issue securities traded on any exchanges
  • Present performances of a “prurient sexual nature”
  • Use the funds for
    • Investing or re-lending
    • Loans taken after February 15, 2020
    • Political contributions
  • Taken out FEMA or Disabled-Veteran loans
    • Sections 36 or 37 of section 7(a) of the Small Business Act (15 U.S.C. 636(a))
  • Be owned by a company that meets any of the specifications on this bulleted list.

     

How Much Money Will I Get?

This is the million-dollar question, or rather, the ten-million-dollar question, so let’s get to it. Roughly speaking, the businesses detailed below can receive up to 45% of the gross revenues for the corresponding 2019 quarters. That, or $10 million, whichever is less.

What exactly does that mean? If a business in the arts can demonstrate a 20% or greater quarterly loss compared to the same quarter in the 2019 fiscal year, they are entitled to apply for stimulus.

That being said, if a business performed an economic miracle and managed to keep their revenue levels within a 25% year-after-year decrease, they can not apply. Also, they can not use stimulus funds to exceed their gross revenue from the year prior. Refer to the table below for clarification.

BusinessGross Revenue Q2 2019Gross Revenue Q2 2020Q2 2020 Stimulus Eligibility
Bob’s Beats$1,000,000$100,000$450,000
Mary’s Comedy Shop$1,000,000$500,000$450,000
Jenelle’s Talent Factory$1,000,000$751,000$0
Jerome Theater Company$1,000,000$749,000$251,000

The stimulus funds received are for losses incurred between March and December of 2020. After that, businesses will have an option to apply for a second grant for losses incurred up to the end of June 2021. Businesses can apply for the second grant if their most recent quarterly gross revenues do not exceed 30% of the corresponding 2019 quarter.  This second grant will be capped at 50% of the first grant received. Using the table as our reference, and assuming that in 2021, Jerome Theater Company earned less than $300,000 each quarter, they can receive up to $125,500 in the second grant.

What Can I Use My Stimulus Money For?

The stimulus money is to be used for business operations! Payroll, taxes, debts incurred before Feb 15, 2020, utilities, repairs, independent contractors, etc. The restrictions on what business owners are allowed to do with these stimulus funds are relatively reasonable. In short, if it seems like a necessary expense for the operation of that business, it’s okay.

Summary of the Stimulus Programs Available for Business in the Arts

This stimulus program is an economic lifeline for businesses in the arts that have seen revenue decline or disappear since the beginning of the pandemic. By no means will it offset 100% of losses, but it will help many businesses involved in the arts stay afloat until they can continue operations at some point in the future; Hopefully, this day comes soon. Besides being a huge aspect of the American economy, having a relationship with the arts is arguably the best aspect of calling the United States your home.