Stage fright: Behind the death of live events and the uphill climb back

Erin Benjamin, President and CEO of the Canadian Live Music Association (Photograph by Rodolphe Beaulieu)

Erin Benjamin stuffs a blue parka into her luggage and tightly secures the green pom-pom that distinguishes it from the sea of standard-issue black suitcases waiting at the airport. She says goodbye to her son, Oliver, and daughter, Toby, and heads out the front door of her Ottawa home. A cold gust of wind greets her as she tugs at the zipper of her brown leather jacket. It’s 8 a.m. on March 12, 2020, a typically grey and snowy late-winter morning in the nation’s capital. In three days, the 49th annual Juno awards are taking place in Saskatoon, and Benjamin is headed west to celebrate the best and brightest in Canadian music.

A former touring singer-songwriter who transitioned to a career in national arts organizations like the Canadian Arts Presenting Association and National Arts Centre, Benjamin has been attending the awards show for the past 10 years, the last six as executive director and president and CEO of the Canadian Live Music Association (CLMA).

A highlight on Benjamin’s calendar, there is far more anxiety surrounding this trip than usual. Just a day earlier the World Health Organization declared COVID-19 a global pandemic, and the Trudeau government pledged $1 billion in relief efforts. The National Basketball Association (NBA)—which had at least one player, Rudy Gobert, test positive for the virus two days after a game against the Toronto Raptors—became the first North American large-scale event holder to suspended operations as the dangers of crowded indoor gatherings were becoming clearer.

Benjamin is only a few steps out the door when her phone rings.

“Don’t get on the plane,” says a friend who’s working at the Junos. For the first time in 32 years, the show is cancelled.

Benjamin’s mind conjures images of empty arenas, deserted festivals and vacant concert halls. She picks up her suitcase and heads back inside, unable to stop the tears flowing down her face. Her kids take one look at her, crying and, notably, not at the airport. “What’s wrong, mommy?” a concerned Toby asks. Benjamin struggles to find the right words. How to explain to a 12-year-old what may be on the horizon? How a ruthless virus is about to threaten the collapse of entire industries. How untold jobs were on the brink of extinction. How a crucial piece of our cultural fabric would be ripped to shreds. She breathed a heavy sigh and made her own declaration: “The world is about to change.”

Flaming Lips’ front man Wayne Coyne and his fans take social distancing to another level during a 2020 concert (photograph by Scott Booker/Warner Records/CNN)

News of the Juno’s cancellation went public within a couple of hours. By the end of the day, a host of other major live entertainment ventures had screeched to a halt. Live Nation, the world’s largest promoter, suspended all concert events. The National Hockey League followed the NBA’s lead and also suspended its season. Theatre districts across Canada closed, while landmark annual events like the Calgary Stampede, Stratford Festival, Just For Laughs, and just about any public gathering were brought to a halt.

Of the many targets of the pandemic, few were rocked harder than the live entertainment industry. For the sake of public health and safety nearly the entire range of the sector’s business operations was essentially halted.

Normally, the industry is a cultural and economic bedrock that contributes roughly $3 billion annually to the national GDP and employs some 72,000 people in Canada. Yet, for almost one calendar year, revenue streams have turned to mere droplets, as everything from 60,000-seat stadiums to 200-capacity theatres lay dormant. A report from concert trade publication Pollstar estimated that the live entertainment and event sector lost $30 billion globally in 2020. Despite adapting as best it could (online concerts, sporting “bubbles” and other innovations), the industry faces one of the longest roads back to so-called normalcy.

“I don’t think we’ve invented the words to describe what’s happening—‘decimated’ comes to mind,” says Benjamin. “We are on a precipice right now and poised to lose a huge chunk of our cultural infrastructure in this country.”

In her role as the head of the CLMA, Benjamin represents key stakeholders—the ecosystem that supports musicians by putting them on stage. Members include venues, festivals, theatres, talent agencies, ticketing companies, suppliers and more. In the immediate wake of the COVID-19 news, Benjamin set to work lobbying the government for support for artists and non-artists alike.

Along with representing the CLMA’s members, as co-chair of the Ontario Live Music Panel, she worked closely with provincial cabinet minister Lisa MacLeod and the Ministry of Heritage, Sport, Tourism and Culture Industries to ensure that members of the live entertainment community were being supported by broader relief safety nets. The federal government announced more than $1 billion in relief funds, including the Canada Emergency Response Benefit (CERB). Initially, the CERB excluded artists who earned any streaming royalties—an extremely minor revenue stream for most musicians. Benjamin and her group successfully lobbied for an exemption. Still, by May, 70 per cent of CLMA members surveyed said they were not eligible for pandemic-related government assistance.

Benjamin also helped to lead the Coalition of Hardest Hit Businesses (CHHB), a newly formed organization made up of 100 partners including the CLMA, Hotel Association of Canada, as well as tourism boards from every major region across the country. The coalition went to work devising proposals and other long-term changes to help its stakeholders keep their heads above water and safeguard these industries against future disasters.

When it comes to the pandemic’s impact on the Canadian music scene, “hard-hit” is an understatement. With the rare exception of artists who own 100 per cent of their music—an exclusive group that includes the likes of rapper Jay-Z and metal rock mavens Metallica— the stage is where a musician’s dollars are earned. It’s a notable change from traditional revenue models. No longer are record sales the avenue to financial success. Today, digital streaming has changed things even more, with miniscule returns for artists.

For the vast majority of musicians in Canada, “well north of 75 per cent of their income comes from touring,” says Shane Matthewson, a CPA and JUNO-award winning drummer. Matthewson, 37, spent years as a touring musician with the band KEN Mode before turning his attention to his Winnipeg-based accounting and management firm, MKM Management Services, in 2016. As the main point of contact for his client roster of bands (mainly “road dogs,” as he calls them), Matthewson spent much of the first three months of the pandemic refreshing the government’s COVID-19 response page and searching for answers to the dozens of emails he received from clients each day, seeing which funds and grants he could help secure to make up for the sudden loss of income. “It was a nightmare keeping up with all of the changes.”

Perhaps the most troubling sign for the industry has been the permanent closure of several venues. As a 2020 City Lab report explains, “the more music venues there are, the more jobs become available, and the more a city’s economy is able to grow.”

Unable to pay rent and squeezed out by hefty property taxes, at least 13 venues in Toronto alone were permanently shuttered during the first nine months of the pandemic, including The Mod Club and Kensington Market’s The Boat, both of which helped launch the careers of many Canadian artists. According to a November 2020 joint study from the CLMA and City of Toronto titled Re:Venue, each closed venue represents losses of approximately $575,000 in annual GDP contributions, and $148,000 in provincial and federal taxes. Under normal circumstances, those venues would host roughly 5,000 musicians per year and provide nearly 200 jobs—from ticketing companies to graphic designers, bartenders, insurance companies, sound and lighting engineers, security personnel and more, all toppled by the pandemic’s domino effect. In total, 554,000 fewer tourists attended music events in Toronto in 2020, sapping Ontario’s economy of an estimated $369 million in Gross Provincial Product. Toronto’s municipal government implemented $1.7 million in tax relief efforts. Yet of the 177 venues surveyed in the study, 96 per cent said they were at risk of business failure.

Neon Dreams’ Frank Cadillac performs—virtually—at the 2020 Junos (Photograph by CBC Music

On June 29, three and a half months after explaining to her children that the world would change, Benjamin and her family curled up on the couch to watch the Juno awards, which had regrouped to broadcast a live show online. Digitally-broadcast events and performances, drive-in concerts and other inventive solutions helped fill the void to keep some revenue flowing, satisfy artists’ need to perform and give fans at least a taste of how things used to be (veteran rock band The Flaming Lips even hosted a concert where everybody—audience and band members—was encased in individual bubbles).

Still, just 30 per cent of Canadians surveyed on behalf of non-profit MusicCanada said they have watched a live show on a digital platform during the pandemic. The efforts to keep the arts alive, virtually, are applauded, but nobody in the industry is ready to make these changes permanent. “I haven’t met an artist yet who is satisfied with the experience they’re having now versus what it was before [the pandemic],” Benjamin says.

Perhaps the most successful and elaborate pivot came from the world of professional sports, where fan attendance—ticket sales and other game-day revenue—accounts for roughly 40 per cent of team revenues; the NBA had already lost an estimated US$695 million from the 258 games it was forced to cancel last March in the wake of the pandemic.   

In June, the league announced it would play out the remainder of the season sequestered at Disney World resort in Orlando, Fla., with no fans at the games. “Bubble basketball” provided a model for how leagues—at least those with deep pockets—could safely adapt and continue to provide a product. All told, the league spent a reported total of $180 million to operate its bubble, which included constructing multiple courts on the property and purchasing thousands of rapid COVID-19 test kits. By playing the games inside the bubble, the NBA was able to prevent additional losses of US$1.5 billion in television revenue, it’s biggest source of income. The National Hockey League also established its own “bubbles”—one in Toronto and the other in Edmonton, and saw similar success in being able to provide a product to fans. Neither the NBA nor NHL registered positive COVID-19 tests inside the bubble.

Leagues like Major League Baseball and the National Football League, however, played in their usual venues, with either no fans or a limited number of fans in attendance—and experienced a number of COVID-19 outbreaks. Others, like the Canadian Football League and Canadian Hockey League, were forced to suspend operations altogether. 

When the NBA and NHL started their new seasons, they too returned to empty arenas in the hopes that the spread of the virus is mitigated as the 2021 campaign wears on and ticket-buying fans can return to the stands in a partial-capacity setting. To limit travel—particularly across the U.S. border—this NHL season features a new division made up entirely of Canadian teams, and teams in warm-climate locations explored playing games outside as a means to allow fans back in the stands. Meanwhile, the Toronto Raptors, the NBA’s lone team outside of the U.S., have been temporarily relocated to Tampa Bay, Fla.

After becoming a basketball fan following the Raptors’ 2019 championship run, Neha Kohli followed the NBA’s bubble experiment closely. A comedian, actress and CPA from Toronto, Kohli at first struggled to grasp the severity of the pandemic. “For a long time a lot of people were in denial in the performing community,” she says. “We were thinking ‘Oh, it’ll be two weeks then we’ll be back.’” Before the pandemic, Kohli produced her own reoccurring show, She’s All That, performed in sketch troupes, and attended acting auditions as many as five days per week. She also founded her accounting company, NK Consulting, where she gears up mainly during tax season and winds down during the other months to focus on her acting career. In the wake of the pandemic, she’s put more time toward the consulting business.   

“The great thing about being a CPA is the fact that, even during a pandemic, I was able to earn money, pay the mortgage and other living costs,” she says. “It’s such a stable thing in my life that’s allowed me to take so many risks.”

With comedy clubs closed and auditions few and far between, Kohli has taken the opportunity to focus on scriptwriting. She also taught accounting courses at Centennial College, York University and for CPA Ontario’s CPA PEP program—all virtually, of course.

As they adjust to a new reality, some artists sought new roles within the industry. Stratford actors are turning to film and TV; Comedians like Kohli are scripting original content to pitch to producers or apply for grant funding. But, as she warns, for the vast majority “the harsh reality of the situation is that it’s going to be very hard to get out of the pandemic while still being creative, without having to permanently switch careers.”

That is the inherent fear among those who ply their trade in live entertainment. In places like the music industry, there could be what Benjamin calls a “mass exodus” on the horizon.

Yet, plans are already well underway to ensure that large-scale concerts and festivals could return in 2021. Live Nation and Ticketmaster partnered with tech companies Blink Identity and CLEAR Health Pass—which make high-speed facial recognition technology. Ticketmaster is planning to implement new ticketing functions that will be able to detect whether concertgoers have tested negative for COVID-19 or, eventually, have been vaccinated.

“OK, so U2 can go back on tour,” Matthewson says, “But what about the little guys? A lot of clients are figuring out what they are going to do going forward. Some are saying ‘I’m going to become a real estate agent.’ This will kill a lot of bands.”

“This is not Drake we’re worried about,” echoes Benjamin. “These are our neighbours, our friends and family. It’s people’s livelihoods.” 

In Canada, a reported $384 billion—19 per cent of the country’s total economic output— has been spent in COVID-19 relief efforts. The country is eyeing a stark period of economic recovery, which makes the sudden collapse of the live entertainment industry that much more dire. It will be much harder to turn around the economy with an entire sector on life support.

Benjamin says she’s grateful for the government’s help to this point but warns much more will be needed in order to keep her industry alive. The Coalition of Hardest Hit Business has drafted several recommendations that have been presented to the government.

First, it’s asking for an increased wage subsidy for those in the sector. Second, it is seeking more support for fixed costs such as equipment and venue overhead expenses that, unlike their revenue, haven’t dropped. Third, they are seeking further liquidity to help prevent businesses from plunging further into debt—an inevitability so long as the till remains near empty.

Key to survival, Benjamin insists, is a continuation of sector-specific relief. The live music industry, for example, received $23 million through the emergency sector relief program deployed by Canadian Heritage. By September, CLMA members began seeing those funds, which ranged from $5,000 to $150,000, depending on the scale of the business and losses. It’s a positive start, Benjamin says. But more is needed. “For now, it’s about mitigating Grand Canyon-sized gaps between concept and reality.”

The many stakeholders in the live entertainment realm are, like the rest of us, at the mercy of the coronavirus and the success of nationwide vaccine programs already underway—the government has said all Canadians should have access to the vaccine by September. In the meantime, there are signs for hope. Music festivals staged in December 2020 in Taiwan and Australia—where COVID-19 has been tamed—offer a potential glimpse into our near future. Warmer weather could welcome more outdoor event options as well.

Benjamin is hopeful that the advocacy of groups like CLMA and CHHB will help save the industry, and that the government will respond to their needs. “This industry will be back,” she says. “But our main concern is that the loss of infrastructure will be so significant that we may not be able to hit the ground running and contribute in a meaningful way in terms of rebuild and recovery,” she adds. “That’s what we’re trying to protect against most of all.”

COVID-19 RECOVERY

Learn what Canada’s top financial minds think about how our shattered economy will rebound post-COVID, find out how to determine the value of a company during a pandemic and look for these telltale signs that your business is at risk of closure.