Theater Relief Program

Finally, Relief for the Arts!

January 22, 2021 Posted by Kristen Anderson in COVID-19, Non-profits, Nonprofits, Pandemic, The Arts

A new relief program will provide grants to arts organizations that have suffered financially due to the COVID-19 pandemic. The Shuttered Venue Operators Grant (SVOG) program was established by the stimulus bill signed into law on December 27, 2020. The bill included several forms of additional coronavirus relief available to nonprofits, including grants to theaters, museums and other performing arts producers and venues.

The SVOG program includes $15 billion in grants exclusively for such organizations that lost revenue due to the pandemic. Eligible applicants may be able to receive grants of up to $10 million.

Who is eligible to receive a grant?

For the purposes of the SVOG, eligible entities include:

  • Live venue operators and promoters;
  • Theatrical producers;
  • Live performing arts organization operators;
  • Museum operators, zoos and aquariums;
  • Motion picture theater operators; and
  • Talent representatives.

Subsidiaries of eligible entities may also apply for a SVOG if they meet the eligibility requirements. To be eligible, an entity must have been in operation as of February 29, 2020 and must have not received a PPP loan on or after December 27, 2020.

How much are the SVOG awards?

An eligible entity that was in operation on January 1, 2019 may receive a grant equal to 45% of its 2019 gross earned revenue. For an entity that began operations after January 1, 2019, it may receive a grant equal to its average monthly gross revenue for each full month it was operating during 2019, multiplied by 6.

How will grants be awarded?

The Small Business Administration’s Office of Disaster Assistance (“SBA”) will administer the SVOG program. The SBA is not yet accepting applications for grants, however, once it does, it will process applications in the following order:

  • First Priority – Entities that have suffered a 90% or greater revenue loss between April 2020 through December 2020 due to the pandemic (“Revenue Loss”).
  • Second Priority – Entities that have suffered a 70% or greater Revenue Loss.
  • Third Priority – Entities that have suffered a 25% or greater Revenue Loss.

What may SVOG funds be used for?

SVOG recipients may use funds for:

  • Payroll costs;
  • Rent and utility payments;
  • Scheduled mortgage or debt payments, not including prepayments of principal, on debts incurred in the ordinary course of business prior to February 15, 2020;
  • Worker protection expenditures, including PPE;
  • Payments to independent contractors;
  • Administrative costs, including fees and licensing expenses;
  • State and local taxes and fees;
  • Insurance payments;
  • Advertising, production transportation and capital expenditures related to producing a theatrical or live performing arts production; and
  • Other ordinary and necessary business expenses, including facility maintenance costs.

SVOG recipients may not use funds to:

  • Buy real estate;
  • Make payments on loans originated after February 15, 2020;
  • Make investments or loans; or
  • Make contributions or other payments to, or on behalf of, political parties, political committees, or candidates for election.

SVOG recipients must keep records demonstrating their eligibility for three years and must keep employment records for four years. The SBA has not yet released the application; however, it has stated that it will provide additional guidance when the application is available.

Please let us know if you have any questions about the SVOG or another coronavirus relief program available to nonprofits.

Updated January 28, 2021

NOTE: The information contained herein is not intended to be legal advice and the reader should know that no Attorney-Client relationship or privilege is formed by the posting or reading of this article which is also not intended to solicit business.

Casey Summar, Partner, The Law Firm for Non-Profits,1812 W Burbank Blvd, #7445, Burbank, CA 91506

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