Yikes: Survey predicts 90 percent of Austin live music venues to close by Halloween

A survey of Austin businesses impacted by the Covid-19 pandemic finds that 90 percent of the city’s live music venues are likely to permanently close by this fall.

That forecast was one of the conclusions of a June survey conducted by the University of Houston’s Hobby School of Public Affairs, with more than 1,000 business owners from all industries sharing their actions following closures and scaled reopening of businesses across the state in recent months.

The survey, which was commissioned by the Austin Chamber of Commerce in coordination with the Central Texas for Business Task Force, found that bars and live music venues in Austin are the most at risk for closure due to the pandemic.

Among other findings:

• 62 percent of music venues said they would survive four months or less of continued closure
• 19 percent of music venues were able to pay their full June rent, with 67 percent paying less than half of their rent balance
• 83 percent of music venues laid off their full-time employees
• 79 percent of music venues suspended payments to vendors, suppliers and landlords

The survey’s summary noted Halloween as the likely milestone by which a majority of Austin’s bars and live music venues will be closed for good.

Members of the task force and other involved parties received the data at an online session last Wednesday, with live music advocates hoping the findings will strengthen their push for economic aid specifically designated for live music venues that have an average monthly overhead of $40,000.

“Live music venues are far and away skyrocketing to the top of every category in terms of hardest hit, eminent closure, layoffs, trickle-down effects to the rest of the economy in the form of taxes and vendor contracts,” said Rebecca Reynolds, head of the Music Venue Alliance in Austin.

Tuesday marked the opening of the application process for small businesses, including music venues, to receive grants of up to $40,000 as part of the city’s economic aid funding from the federal Coronavirus Aid, Relief and Economic Security (CARES) Act. Last month City Council voted to approve $16.5 million total for the grant program.

“We’re trying to articulate that we don’t need the whole fund, but here’s what we need and here’s some places we can get the money from to keep venues on ice for three months,” Reynolds said. “We were very pleased to see the survey results reflect what we’ve been feeling out here in the community.”

The venue alliance has worked in recent years to have live music venues recognized separately from bars and nightclubs because of their business models that rely on mass gatherings and limited hours to operate successfully. The 54 designated venues throughout the city have been closed since mid-March and unable to reopen even when the state allowed bars to open at limited capacity.

Thus far three music venues in Red River Cultural District – Barracuda, Plush and Scratchouse – have joined Shady Grove and the original Threadgill’s as well-known live music locations that have announced their closure since the onset of the pandemic.

Reynolds said the city-level decisions on how to allocate the small business grants and the $1 million available from the separate Creative Space Assistance Program will determine what venues will be able to survive an additional two or three months of closure, and which will have to permanently go out of business.

“Council landed on the idea that the federal (Paycheck Protection Program) and (Small Business Administration) loans would be sufficient, but those covered March, April and May if they were lucky,” she said. “Now that we’re moving toward August that money is spent.”

Local music advocates are also involved with the National Independent Venue Association and its push to secure federal aid of at least $1 billion for more than 1,300 venues across the country.

Cody Cowan, executive director of the Red River Cultural District, said the city’s $40,000 grants for small businesses will likely not be enough for most venues to survive until late 2020 or next year when it is possible public health conditions would allow them to reopen.

“I feel like we’re playing Frogger and just leaping from one disaster relief pad to the next, hoping there will be another bigger pad coming from the federal government, though no one knows at this point,” he said.

“That’s really the only way that small businesses and especially independent music venues will have any chance of still being open by Halloween. I have hope for another round of (federal) aid just on a pragmatic basis, that if the federal government doesn’t provide relief then we’re going to see a tipping point economically that there’s no coming back from as a society.”

Stephen Sternschein, co-owner of the Parish and Empire music venues and a co-founder of NIVA, said he is encouraged by the UK’s recent move to provide nearly $2 billion to arts and music venues affected by the pandemic. That aid could send a signal to members of Congress to approve funding for U.S. venues ahead of the summer recess, a decision he said would likely be make or break for venues throughout the country.

As for his own venues, he said financial models completed at the start of the pandemic put September or early October as the cutoff for possible closure without reopening even at limited capacity.

With the state’s continued increase in Covid-19 infections showing no signs of tapering, he said the prospects are dire.

“Sitting around and talking about putting the effort into administering $40,000 grants to each of these businesses … we all know that what these folks need is like 10 times that. It’s insulting and doesn’t take into account the massive deferred expenses that are coming up for each person involved in a music venue. It’s not going to change the calculus for whether any of us close or not,” he said. “We didn’t expect to have a reopening too soon that would cause us to shut down again and move back three months. The problem just got much worse for everybody, because the fixed and deferred expenses have not changed but the amount of time we have to hang in there has doubled, maybe tripled.”