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Federal Grant Relief Earmarks Billions for Shuttered Venues

December 28, 2020

Throughout the COVID-19 pandemic, live entertainment and cultural institutions have been devastated by decreased economic activity.

To help provide targeted relief, Congress has earmarked $15 billion in grants for live venue operators, museums, cultural institutions, zoos, movie theaters, and other entities and individuals.

Similar to PPP loans, the grants provide relief to eligible recipients that meet certain criteria. The following information can assist you in determining if you may qualify for this grant program.

Who is Eligible?

The shuttered venue grant program is available to the following categories of entities and individuals:

  1. Live venue operators and promoters
  2. Theatrical producers
  3. Live performing arts organization operators
  4. Relevant museum operators
  5. Motion picture theatre operators
  6. Talent representatives

Be aware, however, that these categories have specific definitions and qualifications.

For example, “relevant museum” is defined as a nonprofit entity that falls within the definition of “museum” in the Museum and Library Services Act.

This definition allows for nonprofit aquariums, zoos, arboretums, botanical gardens, art museums, children’s museums, general museums, historic houses and sites, and nature centers, among others, to be eligible for participation.

“Live venue operator” is defined as an individual or entity that organizes, promotes, produces, manages, or hosts live concerts, comedy shows, theatrical productions or other events by performing artists. The definition requires that the venue receive revenue via cover charge or tickets; pay performers an amount that is based on a percentage of sales, a written guarantee, or “another mutually beneficial formal agreement”; and generate at least 70% of its revenue through cover charges, ticket sales, production fees, or food, beverage, and/or merchandise sales.

Alternatively, a live venue operator will fall within the definition if it makes tickets available for purchase at least 60 days before events and pays performers, as described above.

The bill provides detailed definitions for each category, and potential applicants should pay close attention to its language when assessing eligibility.

What Are the Requirements?

To qualify for a grant, an eligible entity or individual must satisfy general requirements and other requirements specific to the type of recipient.

Generally, an eligible recipient must demonstrate that it:

  1. Was fully operational on February 29, 2020;
  2. Had a 25% gross revenue decline in any 2020 quarter compared with the same quarter in 2019;
  3. Is open or intends to reopen as of the date the grant is received;
  4. Is not owned or controlled by an entity that is publicly traded or received more than 10% of its gross revenue from federal funding during 2019; and
  5. Has not received a PPP loan on or after December 27, 2020.

Similar to a PPP loan, eligible recipients must also submit a good-faith certification that the uncertainty of current economic conditions make the grant necessary to support ongoing operations.

The bill contains other general requirements, along with exceptions for certain entities, and provides specific requirements for each category of eligible entities.

For example, a relevant museum must serve as such museum as its principal business activity; have indoor exhibition spaces that have been subjected to pandemic-related occupancy restrictions; and have at least one auditorium, theatre, or performance/lecture hall with fixed audience seating and regular programming.

How Much Could My Grant Be?

Eligible entities may receive a maximum initial grant of 45% of gross revenue for the 2019 calendar year, with a cap at $10 million.

If an eligible entity began operations after January 1, 2019, the maximum initial grant available is the average monthly gross revenue for each full month of operation in 2019 multiplied by six.

A recipient may be eligible for a supplemental grant in the amount of 50% of its initial grant if, as of April 1, 2021, its gross revenue for the most recent calendar quarter is no greater than 30% of the gross revenue for the same quarter in 2019 due to the COVID-19 pandemic.

What Are the Allowed Uses for Grant Funds?

Initial grants may be used for allowable expenses incurred between March 1, 2020 and December 31, 2021, and supplemental grant funds may be used for allowable expenses incurred between March 1, 2020 and June 30, 2022.

Allowable expenses under the program include:

  1. Payroll costs;
  2. Payments on covered rent obligation(s);
  3. Covered utility payments;
  4. Scheduled payments of interest or principal on covered mortgage obligations, except for prepayment of principal;
  5. Covered worker protection expenditures;
  6. Payments to independent contractors;
  7. Maintenance expenses;
  8. Administrative costs and expenses;
  9. State and local taxes and fees;
  10. Operating leases in effect as of February 15, 2020;
  11. Insurance premiums; and
  12. Costs related to producing a theatrical or live performance, including advertising, transportation, and capital expenditures.

When Might I Receive My Grant?

Grants will be awarded based on priority for the first 28 days of the program.

In particular, grants awarded in the first 14 days will go to eligible entities that have faced a 90% or greater loss in gross revenue due to the COVID-19 pandemic.

Grants awarded in the 14-day period following the initial 14-day period will only be awarded to eligible entities that suffered a 70% or greater loss in gross revenue due to the COVID-19 pandemic.

After these two periods, grants will be awarded to all other eligible entities.