US venues file lawsuits over rejected Covid relief
More than 60 lawsuits have been filed over the Shuttered Venue Operators Grants (SVOG), the $16 billion aid launched by the US federal government to help live venues survive the pandemic.
A year after the US Small Business Administration (SBA) rolled out the Covid-19 relief programme, the agency is facing dozens of pending lawsuits from companies who say they were unfairly denied millions in relief, according to Billboard.
According to the aggrieved venues, SBA has refused their requests without good reason or a proper explanation, putting particular companies at a huge disadvantage over rivals who have received aid. Attorneys involved in the cases claim that rates of refusal under SVOG “significantly exceed typical government grant programmes.”
Concert Investor LLC, a Tennessee firm that has produced shows for the likes of Twenty One pilots, Little Big Town, O.A.R., is among the companies that have filed lawsuits.
Citing a 94% drop in revenue during the pandemic, the company sought nearly $5 million in aid under SVOG. However, the SBA decided the company didn’t meet the criteria to be a concert producer, saying the company “at best” merely “serves the needs” of artists by providing lighting and sound tech.
At least 33 lawsuits were still pending in federal court as of last week, according to a court filing by the SBA
In a motion filed in court Monday (2 May), Concert Investor’s attorneys asked a federal judge to grant the company a final judgment in its case, arguing the SBA had “ignored” ample evidence about its eligibility and had unfairly awarded grants to direct competitors who provide the exact same services.
“This disparate treatment has placed Concert Investor at a severe and worsening competitive disadvantage relative to other concert producers that can use their SVOG awards to restore and grow their businesses while Concert Investor is deprived of the federal assistance for which it too qualifies,” the company wrote. SBA will soon file its own brief, and the judge will rule on the case in the months ahead.
Some of the lawsuits, however, maybe in the process of getting resolved. Last week, the SBA said it would reconsider refusing $497,000 in aid to Superfan Live Inc., which offers VIP experiences at concerts from artists like Bon Jovi, Genesis, and Journey. The agency asked a federal judge for extra time so that it could “thoroughly examine the allegations in the complaint prior to issuing a new decision”.
At least 33 lawsuits were still pending in federal court as of last week, according to a court filing by the SBA.
Since it debuted in April 2021, the SVOG has handed out just over $11 billion to more than 13,000 businesses in a first wave; a second round of supplemental grants awarded an additional $3.4 billion to more than 9,000 businesses.
The SVOG, also known as the Save Our Stages Act, is part of a $1.9 billion American Rescue Package which was signed into law by President Joe Biden in March 2021.
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US venues frustrated after SBA grant portal breaks
The US Small Business Administration (SBA) was forced to close the portal for Shuttered Venue Operating Grants (SVOG) before a single application was received.
Four hours after opening the application process for the highly-anticipated $16.3 billion financial aid, the SBA was forced to close the portal due to insurmountable technical difficulties.
The operators of struggling concert halls in the US, who have waited over a year for targeted financial aid, took to social media to express their frustration at the delay.
Eamon Harkin from New York City-based venue Nowadays tweeted: “It’s been 15 hrs since we’ve had an update. An entire industry is on standby and their responsibilities to their businesses and families are being impacted. Please provide an update on when the process will open again ASAP.”
Prior to the portal opening, the US government watchdog, the Office of Inspector General (OIG), issued a statement questioning the agency’s ability to handle the massive grant program.
“OIG believes that SBA does not have the staff necessary to provide effective oversight over the SVOG program,” the report said. “At this time, SBA has not formalised a plan for staffing this office relative to the volume of applications expected. The agency has also not defined the organisational structure for administering the program.”
The National Independent Talent Organisation (NITO) are more forgiving of the SBA’s technical difficulties but have made a number of recommendations for a smoother, more equitable application process.
“There is a huge pressure to reopen the portal now – political, economic and social”
The first is to create a seven-day business window for rejected submissions to allow applicants the opportunity to correct errors or supplement their application with additional documents.
The second recommendation is that the SBA opens the application process with a 14-day priority window intended for the hardest hit small businesses that suffered a 90% or greater revenue loss.
“While we were all extremely disappointed at the difficulties suffered by all of the folks under the SVOG umbrella, we look forward to a solid and productive reopening once these issues are resolved,” says Frank Riley, NITO President/ High Road Touring.
“There is a huge pressure to reopen the portal now – political, economic and social – but to risk a repeat of what happened 8 April would only compound all of our problems. We need to give the SBA, and the implementation of this very new, and innovative program of assistance to all of the organisations that could benefit from the SVOG, the time to rectify these issues, and then hope for as smooth and productive a roll out as soon as possible.”
The SBA said the decision to close the portal was “not made lightly as we understand the need to ensure critical assistance gets to you as swiftly as possible”.
At the time of writing, the portal remains closed while fix tech issues are fixed. The administration has promised to give advanced warning of reopening so that all eligible applicants will have a fair chance to apply.
The Shuttered Venue Operators Grant, also known as the Save Our Stages Act, is part of a a $1.9 billion American Rescue Package which was signed into law by President Joe Biden on 11 March.
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