Second scheme to purchase music venues launches

A second scheme to purchase music venues in order to secure their long-term futures has launched – this time, in the UK.

Music Venue Trust (MVT), the UK charity that represents hundreds of grassroots music venues, today (23 May) announced an ambitious initiative to buy the freehold of grassroots music venue (GMV) properties.

A similar enterprise was launched in the US in 2020 by former WME music execs Marc Geiger and John Fogelman. Under the banner SaveLive, the pair amassed a multi-million-dollar war chest to “bailout” struggling US music venues.

MVT, on the other hand, has launched a Charitable Community Benefit Society (CCBS) named Music Venue Properties (MVP) in order to buy venues in the UK.

Unlike a charity, a CCBS can raise money through community shares purchased by, say, music fans and ethical investors. Anyone who buys a share will help raise funds to allow MVP to buy freeholds, whilst also receiving a 3% APR return on their investment.

Mark Dayvd, CEO of Music Venue Trust says, “This is the most ambitious initiative Music Venue Trust has ever undertaken. The long-term security and prosperity of grassroots music venues depends almost entirely on one thing – ownership. Too many have been at the mercy of some commercial landlords whose motivations revolve primarily around profit. We have lost over a third of our venues in the last 20 years and with over 90% having only 18 months left on their tenancies we are at the cliff edge and could see the decimation of our sector if we don’t do something radical about it.

“The Music Venue Properties scheme will allow ethical investors and music fans to invest in the future of live music while receiving a healthy return on their money. Our #SaveOurVenues campaign launched during the pandemic raised over £4.1m with more than 80,000 people contributing. We already have the crowd – we just need to ask them to invest from 23 May and are confident they will.”

“The long-term security and prosperity of grassroots music venues depends almost entirely on one thing – ownership”

MVP has identified nine venues for a pilot project that will allow the scheme to establish proof of concept; six venues in England; one in Scotland; two in Wales.

With an initial target of £3.5 million to purchase these venues, the first of these Community Share Offers will launch later this month on (23 May). MVP hopes to purchase these venues before the end of 2022.

Further venue freeholds will be identified and secured as and when they become available, and MVP will continue to raise funds through selling community shares and borrowing against the freeholds purchased. All rental income subsequently received from the purchase of venues will be reinvested towards the expansion of the portfolio.

MVP says that on completion of purchase, it will offer the majority of current operators an immediate rent reduction and help contribute to building repairs and insurance, while also “guaranteeing long term security and market resistant rents”.

According to MVT, the issue of ownership underpins almost every other challenge that GMVs have faced during the last twenty years including gentrification, noise complaints, under-investment, poor economic models, and an inability to plan for the future.

Over 35% of GMVs have closed in the last 20 years and 93% of them are tenants with the typical operator only having 18 months left on their tenancy. Since the start of the Covid crisis, the sector has acquired over £90m of new debt, yet 67% of Culture Recovery Fund grant aid was paid directly to landlords.

Elsewhere, Geiger and Fogelman’s SaveLive recently announced its first round of venue partners, as well as a $135m round of investment.

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