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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21 June: Delay would lead to 5,000 UK cancellations
Research published today (10 June) shows that even a four-week delay to the deadline for lifting the final restrictions on live events in the UK would cost the live music sector over £500 million and leave the summer festival season at risk of total collapse.
More than 5,000 shows by artists including Olly Murs, Tom Odell, Rag’n’Bone Man, Beverley Knight, McFly, Alexandra Burke and Rudimental would either need to cancel or postpone if the 21 June deadline was pushed back, incurring immediate costs across the live music supply chain and further damaging an industry already hanging in the balance, according to industry body LIVE (Live music Industry Venues and Entertainment).
The rumoured move, as IQ reported earlier this week, comes despite the fact that, by the government’s own evidence, large-scale events can happen safely with the right precautions in place.
Through LIVE, a federation of 13 associations representing more than 3,000 live music companies, the live sector is calling for government to publish the data from the first round of Events Research Programme (ERP) pilots, so “they are able to follow their own science” and allow live businesses to reopen with Covid-safe precautions. The ERP findings which have been released by government to the media show that with screening, improved ventilation and other mitigating factors, mass events are reportedly as safe as a trip to the supermarket.
“We implore the government to follow their own scientific data that proves live events are safe with the right mitigations”
Lucy Noble, chair of the National Arenas Association, says: “The pilot shows at the Brits and Liverpool were touted as the key to getting back to full-capacity live performance, which is why it’s extremely frustrating that the government refuses to publish the full report and allow the sector to open up through the carefully planned precautions which are currently waiting in the wings.
“We implore the government to follow their own scientific data that proves live events are safe with the right mitigations. Now is the time for them to protect the live events sector for generations to come.”
Any delay to the 21 June reopening date would have significant and immediate repercussions for grassroots music venues, with 248 venues facing an immediate threat of eviction if the government does not fully compensate their financial losses from delayed reopening, says Mark Davyd, CEO of Music Venue Trust.
“In the event of any delay to reopening, government action to restore confidence to the sector will need to be swift, decisive and comprehensive,” says Davyd. “Any decision to delay places the sector in the most perilous and uncertain situation since April 2020. All that has been done by government, the public, artist and communities to save our venues risks being undone.”
“We cannot keep waiting indefinitely without knowing when step four will take place”
The UK’s much-anticipated summer festival season would also see significant casualties, with 65% of all Association of Independent Festivals members saying they will be forced to cancel if faced with a five-week delay – and 21% already gone.
Jim King, CEO of European festivals for AEG Presents, comments: “A delay into July without a clear road map to get back to step four [full lockdown lifting] puts an impossible strain on all festivals, including AEG’s All Points East festival, along with our suppliers across the industry.
“We cannot keep waiting indefinitely without knowing when step four will take place, and this uncertainty will undoubtedly result, by default, in more cancellations. We are desperate for the UK festival season to begin again, but an undated reopening makes long term planning and investment unfeasible.”
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