Arkansas Online

Live Nation subsidiaries benefit from relief funds

YEGANEH TORBATI AND TONY ROMM

In the early months of the pandemic, as lawmakers toiled on an aid package for shuttered concert halls and other performance venues, a major company lobbied to be included in the relief.

Live Nation Entertainment — the corporate parent of Ticketmaster and a dominant force in the enter- tainment industry — urged Democrats and Republicans in Congress to let it be directly eligible for the $15 billion emergency relief program, according to five people familiar with the matter.

Congress wrote the law to exclude large companies like Live Nation, as well as firms they own or control.

But the parameters set by Congress and the Small Business Administration, which disbursed the funds, allowed several companies in which Live Nation has significant investments to receive grants. Nearly $19 million

went to firms listed as subsidiaries on Live Nation’s 2022 securities filings or in

which Live Nation has a substantial, though not majority, ownership stake, according to a Washington Post review of Securities and Exchange

Commission filings, state corporate documents and SBA data, as well as interviews with executives at companies that received grants. The grants do not appear to have violated the law or any rules set by the SBA.

“when we wrote this, we specifically didn’t want these publicly traded companies — Live Nation foremost among them — to get their hands on this money,” said Rep. Peter welch, D-Vt., a key co-sponsor of the relief legislation. “I did not want Live Nation getting a nickel.”

Live Nation as a parent company did not directly receive any money from the program, but the government relief to its subsidiaries still protected its investments and improved its long-term outlook, however slightly. The earnings of its subsidiaries provide Live Nation with crucial cash flow and enable it to service its debt, it said in securities filings. The aid enabled the companies to pay staff and recover more quickly from the disruption, their executives said in interviews and emailed statements.

Several companies listed as Live Nation subsidiaries in february SEC filings received funds from the grant program, according to SBA data. They include wisconsin company frank Productions Concerts LLC, which received $10 million; artist management firm Gellman Management LLC, which received nearly $407,000; and Missouri firm Delmar Hall LLC, which received $1.75 million. Corporate documents filed in wisconsin and California list Live Nation executives or subsidiaries having roles at frank Productions Concerts and Gellman Management. frank Productions Concerts, Gellman Management and Delmar Hall are all included on a list of hundreds of subsidiaries filed as part of Live Nation’s annual report covering 2021.

A fourth company, The Pageant LLC, received $6.7 million from the program. It, along with Delmar Hall LLC, is 50% owned by Live Nation, said Patrick Hagin, the managing partner of both businesses. He added that Delmar Hall was erroneously listed as a Live Nation subsidiary.

‘HUMAN THING TO DO’

Live Nation said in a statement that it does not have majority ownership or a controlling stake in any of the entities that received funds.

“Therefore we don’t have the ability to tell these partners that they can’t get access to these funds, especially considering the SBA reviewed and approved their applications before any funds were given out,” the company’s statement said. “These entities control their own day-today operations, and the folks running these small businesses used every resource legally available to them to support their employees through this crisis, which was not only their right but also an entirely understandable and human thing to do.”

In a written statement, an SBA official defended the awards as proper, and said that Live Nation does not “directly own” any entity that received grants through the program.

“SBA is also aware of and monitoring all applicants and awardees in which Live Nation entertainment Inc. has disclosed to the SEC in its annual filings as being ‘subsidiaries,’” the SBA statement said. “Through a robust grant monitoring process, SBA reviews and investigates, as necessary, to ensure the law is being followed and vice versa, that businesses are not penalized for having non-controlling, silent investors or completely typical legal and tax structures.”

A 2010 merger with Ticketmaster and the company’s dominance ever since has drawn criticism from some antitrust experts and members of Congress, and in 2019 the Justice Department alleged that Live Nation had violated the terms of the merger. In an agreement reached between the company and the federal government in 2019, Live Nation’s antitrust consent decree was modified and extended through 2025.

“even before the merger with Ticketmaster, it was indeed an amalgamation of many different local promoters and even local venues that were brought under the same umbrella,” said Brandon Ross, an analyst at LightShed Partners.

Live Nation continues to deny the DOJ’s allegations.

“The live entertainment industry has never been more vibrant and competitive, which is evident from the many companies that continue entering the market,” the company said in a statement.

Live Nation’s business includes storied concert venues like the fillmore in San francisco and the House of Blues chain, popular festivals like Lollapalooza and talent management firms overseeing hundreds of artists. In its most recent public filings, the company said it has more than 10,000 full-time employees. It brought in $6.3 billion in revenue in 2021.

The grant program, known as the Shuttered Venue Operators Grants, was passed by Congress in late 2020 and offered relief awards of up to $10 million to performance venues, museums, producers and talent managers. The money was approved at a time when much of the concert industry across the United States was shut down because of restrictions meant to prevent the spread of the coronavirus. Congress later added more funds to the program, for a total of more than $16 billion.

Lawmakers unveiled the plan, then known as “Save Our Stages,” in mid-2020. The National Independent Venue Association, an alliance formed in response to the pandemic, was a driving force behind the measure and urged lawmakers to support it.

“This was about, yes, Nashville and New York. But it was just as much about the fargo Theatre or a small, small country music venue in Texas,” a key supporter of the measure, Sen. Amy Klobuchar, D-Minn., said in a speech on the Senate floor in December 2020.

In an interview published that month, Klobuchar was blunt in saying that lawmakers did not think Live Nation should qualify for the funds.

“It’s true it [the legislation] doesn’t include Live Nation venues, because they have such a vast empire with the ticketing and things,” she was quoted as saying.

LOBBYING EFFORT

In making their case for the funding, advocates emphasized the intense financial pressure that small businesses faced, including the risk that owners who had made personal guarantees would lose their homes and life savings in trying to meet their obligations to employees and vendors.

“The thousands of independent venues that came together to form [the association] could not have survived the pandemic shutdowns had it not been for the emergency relief provided by the Save Our Stages Act,” said the Rev. Moose, the association’s executive director and co-founder. “Our members are small business people that don’t have access to wall Street financial instruments to survive a historic crisis not of their making.”

By the time the measure passed, trillions of dollars in pandemic relief already had been approved by Congress.

Live Nation initially sought to shape the bill so it could qualify for the funds, according to five people with knowledge of the discussions. Live Nation ramped up its lobbying in the fall of 2020, seeking to make it easier for the company — and its many subsidiaries, large and small — to access the money, one of the sources said. They specifically opposed language barring aid to publicly traded companies, a congressional aide said.

The amount that Live Nation spent on lobbying the federal government across a range of issues including the grants more than doubled in 2020 compared to the prior year to over $1 million, and increased again in 2021, according to a tally by OpenSecrets, a nonprofit group that tracks the influence of money in politics.

Ultimately, the measure approved by Congress excluded, among others, public companies — or venues or firms “majority owned or controlled” by such companies — from receiving any of the aid.

In its statement to The Post, Live Nation said its lobbying effort was meant to protect jobs.

“As the largest employer in the live music industry, of course we advocated for support to be available to all live music workers no matter where they work,” the company’s statement said. “Ultimately Live Nation wasn’t eligible and that’s OK. we still supported the bill for the good of the industry.”

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