Financially Vulnerable, Independent Music Venues Worry Of Having To Sell

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A crowd on the floor of Tipitina’s, dancing to the Bruce Daigrepont Cajun Band on Aug. 19, 2007.

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«The existence of independent venues is vital to the continued growth of multi-genre musical diversity. Local underground music scenes flourish in the independent venues,» says Stormy Shepherd of Leave Home Booking, who is also a co-founder of NITO, the non-profit National Independent Talent Organization, which represents independent agents and managers. «These artists and their fans found their first home in the independent venues, who are seemingly more willing to take risks when it comes to booking young, boundary-pushing artists. They are also the first to take calls from independent agents who represent many of these artists, forming a very integral symbiotic relationship in the realm of live touring.» That ecosystem, Shepherd says, is at the core of keeping the music industry both thriving and diverse.

«A lot of these mom-and-pop clubs have been declining buyout offers for decades,» says BJ Barham, of the band American Aquarium. «Now, when all of their resources have been exhausted and next month’s overhead is creeping up on them, these clubs will have two choices. Close down or sell out – go into business with the bigger promoters. These larger promoters and VC firms are operating with unlimited resources and are the kind of folks that can afford to wait out the storm. They will chalk up the lost revenue and continued overhead as a mere business expense and continue moving forward. Without a doubt, we will see some of our favorite clubs turned into rock-and-roll Applebees’ on the other side of this thing. A big-box shell of its former self, using a storied history to line the walls and sell more overpriced souvenir T-shirts.»

This trend is not new – venues like Asbury Lanes have been criticized for accepting buyouts and morphing into more cartoonish or polished versions of their former selves. But even if those promoters do retain some of the original venue’s character, it can put a monopolistic strain on the market. «Once the larger promoters have bought out the competition, bands like us have two options,» says Barham. «Play the best room in town, no matter the ownership, or don’t play the market at all. It really ties our hands as artists.»

«I’m not necessarily here to further demonize the big conglomerates, as they have their purpose and we certainly have a good rapport with some of them,» says Patterson Hood of The DBTs. «However, there was already a delicate balance in place between the big companies and the indies, especially in the size rooms [1000-2500 capacity] we tended to play . The indies fill a role that profit margins and corporate needs would prohibit.»

It also puts corporate promoters in prime positions, once live music begins again en masse, to use their leverage to increase ticket prices. Sen. Klobuchar was a major backer of the Department of Justice’s Live Nation investigation and a vocal critic of the company’s merger with Ticketmaster. «Americans purchase millions of tickets each year and shouldn’t be forced to pay sky-high prices because of unchecked consolidation in a broken ticketing industry,» she tweeted in 2019. «I’ve called for accountability and I’m glad it’s happening.»

It’s been a rough few months for Live Nation, financially and from a public relations perspective – a memo obtained by Rolling Stone detailed changes to artist guarantees and other booking processes that were highly criticized for being unfair, and the company posted a loss of $431.9 million in the second quarter of 2020. But they also recently secured some changes to their debt covenants, which will provide, as CEO Michael Rapino stated in a recent press release, «financial flexibility» through the pandemic.

Live Nation CEO Michael Rapino, left, and Irving Azoff, then-CEO of Ticketmaster, photographed on Feb. 24, 2009. The pair were testifying during a congressional hearing on the merger between Live Nation and Ticketmaster.

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«Like most necessary things, once they are too large they almost immediately outgrow their use to a community and only function towards a bottom line,» says Ben Swank, co-owner of Third Man Records, alongside Jack White. Since opening in Nashville, Third Man has worked hard to create a symbiosis with the city beyond simple retail or live music, and Swank even met his wife, musician Jemina Pearl, at local club The End. Their venue, The Blue Room, hosted Billie Eilish late last year.

«Once you serve the dollar instead of the people, you are useless,» he says. «This is just a newly evolved form of disaster capitalism. Independent venues wouldn’t sell out to a national conglomerate before? Well how about after six months of hardship? They are taking advantage of a s****y situation in order to grow their wealth, and it is in no way about the love of music, or musicians, or the people who support them. It’s cynical and it’s honestly heartbreaking to consider a world where the local music community isn’t in a position to serve itself.»

There’s also concern that acquisition could lead to closure. «What worries me about big companies buying out smaller venues is that they will shutter them,» says Kendell Marvel. «If a company has two live venues in town that compete against each other, it will be a problem. Look what the Walmart did to mom-and-pop businesses. Without indie clubs, guys like me probably wouldn’t exist.»

Not everyone sees the threat of buyout as a total negative. Beyond federal aid, some speculate that the key to getting out of this perilous state might just be innovation – or intervention beyond the hand of government. «The independent venues have incredible character and personalities, as they’ve been nurtured by creative entrepreneurs and professionals,» says John Petrocelli, CEO of live-streaming company Bulldog DM. «Hopefully they will be able to maintain their independence, but the data suggests that 90% of them will not survive without some kind of relief. Corporate ownership or investing can change the spirit of the entity but there is also the possibility for backers to allow entrepreneurs to continue to flourish while maintaining their brand.»

Jason Miller, who was until recently a senior vice president at Live Nation, hopes for a more unconventional kind of investor. «My heart goes out to independent venues,» he says. «If someone has big pockets, they have to come in and save these clubs. It could be Jeff Bezos, Spotify.»

The idea of an Amazon-themed «independent» music venue might be more than most artists could stomach, but it doesn’t stop some from mulling the possibilities of who could step up to the plate in absence of federal aid, and not in an outright purchase, but as an investment in the future of music.

«I think that it would be in the best interests of corporate entities like Spotify or Amazon — who rely on the well-being and health of artists for their streaming platforms to even exist — to step in and help foot the bill in keeping smaller independent venues alive,» says Jessica Dobson of Deep Sea Diver. «Major corporations have the revenue to be able to step in and provide a leg up for these venues — and could be in their own interest — as it could present a new narrative about their role in keeping the arts alive and healthy.»

Whether or not that outcome is anything within the realm of possibility is yet to be seen, but Tipitina’s Mercurio does see one silver lining to the crisis: «I feel like all of the venues have become closer together throughout all of this,» he says. «We are usually in a more competitive situation, but now more than ever, we are in the same boat.»

The same boat of wanting to hang on to their independence and ability to sail through the pandemic without having to close for good or give up ownership. The difference? That federal aid.

«It cannot wait any longer,» says Audrey Fix Schaefer, director of communications for NIVA. «We need them to act now.» She encourages anyone concerned to go to SaveOurStages.com to let their elected officials know they want them to support the Save Our Stages Act, to buy gift cards from favorite venues and to decline to take a refund on cancelled shows if they’re financially able.

«Independent venues are where every band gets its start,» says Mercurio. «These are the spaces that foster the rock stars of the future.»