Members of the Broadway community are awaiting further guidance on Save Our Stages legislation after the passage of the landmark relief bill last month.
Save Our Stages was signed into law on Dec. 27, 2020, as part of the $900 billion coronavirus relief package. The provision provides $15 billion in grants to live venue operators, producers, promoters and talent representatives to cover expenses such as payroll costs, rent, mortgage payments and utilities. Each recipient can receive up to $10 million.
However, while the passed legislation provides a framework for the distribution of grants, members of the Broadway industry are waiting for more clarification from the Small Business Administration on eligibility requirements.
“Since the focus of the grant has grown to include so many categories, there’s not a great amount of detail specific to theatrical productions,” Robert Fried, a partner at accounting firm Withum, Smith and Brown, said of the legislative text.
What is clear thus far is that grants are restricted to productions that were “fully operational” as of Feb. 29, 2020 and can compare revenue earned in one quarter of 2020 to the same quarter in 2019 — the metric used to calculate grant amounts. This means that within the Broadway industry, grants would only be available to productions that were running in 2019, Fried said. The production must also intend to reopen.
Further, productions that are majority owned or controlled by a larger entertainment company — defined as having more than 500 employees and owning or operating venues in more than one country and more than 10 states — are ineligible to receive grants. On Broadway, that excludes entities such as Disney Theatrical or other corporate-owned productions.
Theatrical producers are named in the text, but it remains unclear as to whether most would qualify for grants due to the way in which they’re defined, Fried said. Per the text, at least 70% of a theatrical producer’s earned revenue must be generated through ticket sales, production fees or production reimbursements to receive the grant. This does not neatly fit into a typical producer’s financial model of generating revenue from a share of the profits.
The Small Business Administration has been tasked with allocating grants and clarifying these rules as needed. The office has not yet opened grant applications and is currently working to put a system in place through its Office of Disaster Assistance, an SBA spokesperson wrote in an email to Broadway News.
“SBA is working expeditiously to identify changes to program rules, forms, and processes as laid out in the legislative text, and to appropriately update guidance and systems for the emergency relief programs that SBA will administer. SBA is also committed to ensuring that the relief programs are launched as quickly as possible to deliver critical economic aid to America’s small businesses, live venue operators and promoters, independent theaters and cultural institutions,” the statement reads.
Another question for Broadway productions is whether insurance payments received in 2020 will be counted as gross revenue, Fried said, which could potentially impact when they are eligible to apply for assistance.
According to the text of the legislation, individuals and institutions who can prove a loss of more than 90% of their gross revenue due to the pandemic will be the first group eligible to apply, followed 14 days later by those who have lost 70% of their gross revenue.
After that, the application process opens up to any relevant business or individual that had a loss of at least 25% in gross revenue related to the pandemic.
After April 1, 2021, there is a possibility of receiving a supplemental grant equal to 50% of the first grant amount, if revenues for the most recent quarter are not more than 30% of the corresponding quarter in 2019.
