This summer’s rise in coronavirus cases only reinforced what many in the industry already knew — “back to normal” isn’t going to happen this year.
The pain is going to be longer than expected, as major tentpoles are further delayed at the box office, Broadway won’t reopen until next year, and live music concerts are all but canceled for the foreseeable future.
This week, negotiations are starting in earnest on Capitol Hill over the next big COVID-19 relief package — and there is a long list of needs for sectors of the entertainment industry, from an extension of unemployment benefits for the workforce, to longer-term loans for movie theaters and live music venues, to liquidity for local broadcast stations.
Stephanie Freed, a lighting director, and Grant McDonald, a video director, both of New York, set up a website this summer, with instructions on how to press members of Congress to extend the unemployment benefits.
One of their main talking points is that they, along with many others in the industry, are “are mostly middle class workers who are typically ineligible for regular unemployment benefits because we qualify as self-employed freelancers. The rent, inexplicably, remains due. Bills need to be paid. Even those of us that are eligible for regular benefits cannot survive on the base unemployment rate in our state.”
“We have received a barrage of personal stories that are just overwhelming, but it just seems that politicians aren’t hearing these stories that are out there,” Freed said in an interview.
Here’s a summary of what sectors of the industry are looking for in the next package, which may be the last best shot at COVID-19 relief in advance of the election.
Business loans: Law firms, post-production houses, talent agencies and independent producers benefited from the Payment Protection Program, the massive small business loan effort to provide a bridge to firms up to 500 employees in hopes that they will retain their workforces.
But the loans had drawbacks: they covered a period of eight weeks, and they expired at the end of June.
Now movie theaters and live music venues, among other businesses, want a revised program that would expand the levels of relief.
They are backing the RESTART Act, which would extend the time frame where businesses can qualify for having their PPP loans forgiven, from those eight weeks to 16 weeks.
The legislation also includes a new loan program to cover up to six months of payroll, benefits and fixed operating expenses. A portion of the loan would be forgiven based on the revenue losses the businesses incurred in 2020, with the rest repaid over seven years and with no payments due in the first year. (Details here)
The size of the businesses covered would be expanded — up to 5,000 full time equivalent employees — and the loans would be capped at either 45% of a firm’s 2019 gross receipts or $12 million, whatever is smaller. Such things are rent, payroll, utilities and employee benefits will be eligible for forgiveness of loans, but no publicly traded companies could be eligible to have their loans forgiven.
Whether the RESTART Act is incorporated in the next relief package is uncertain, as sides are said to be so far apart on key details. But supporters of RESTART emphasize its bipartisan backing. It’s being spearheaded in the Senate by Sen. Michael Bennet (D-CO) and Sen. Todd Young (R-IN), and Treasury Secretary Steven Mnuchin has expressed support.
The National Association of Theatre Owners, meanwhile, launched a campaign for the bill with the message, Save Your Cinema, warning that without relief, many venues are at risk of closing for good.
Enhanced unemployment benefits: When Congress passed its $2 trillion coronavirus relief package in March, it included two provisions that have proven to be hugely important to the entertainment industry’s rank and file: $600-per-week of enhanced unemployment benefits, and expanded eligibility to freelancers, independent contractors and gig workers, who otherwise have been shut out of traditional state unemployment benefits.
Now the question is, will it continue? The coronavirus unemployment relief is set to expire at the end of this week.
Broadway’s unions as well as the Broadway League representing theater owners and producers have made the unemployment benefits and health insurance a top priority, along with other industry guilds and associations. In the case of McDonald and Freed, they have been trying to build grassroots support and working with the group Unemployed Action.
“We are not advocating for some extravagant lifestyle, we are advocating to survive,” says McDonald. He and Freed said that even the enhanced COVID-19 benefits don’t replace their wages, and they have moved to Virginia as they rent out their New York apartment to a medical professional treating COVID-19 patients.
In May, the House passed a $3 trillion relief package, the HEROES Act, that includes an extension of the COVID-19 benefits through Jan. 31, 2021. But some Republicans have balked an extension at the $600-per-week level, arguing that it is a disincentive for workers to return to their jobs if they are making more on unemployment than they were on payrolls.
Just how many people fall into that category isn’t entirely known, but Freed challenges just how widespread that situation is for those in the industry.
“Most of the people we know do want to get back to work. The people we talk to do like their jobs. But the entertainment industry doesn’t exist right now,” she says, referring to the production slowdown, closures and cancellations that have been so widespread across showbiz.
Others employees fall through the cracks. This week, Rep. Adam Schiff (D-CA) and Rep. Judy Chu (D-CA) introduced legislation to close a loophole that left workers who make two types of income — regular W-2 employees and independent contractors — from getting the full COVID-19 benefits. Those mixed-income workers especially affected those in the music business and other sectors of the industry, as a number go back and forth from full-time employment and freelance.
There has been some talk that Senate Republicans will seek a short-term extension of the benefits as sides negotiate a more comprehensive relief package. But on Tuesday, President Donald Trump also signaled that while the benefit provided a lifeline, Republicans are talking about a benefit that is 70% of the amount.
“The amount would be the same, but doing it in a little bit smaller initial amounts so that people are going to want to go back to work, as opposed to making so much money that they really don’t have to,” Trump told reporters.
He said that he was against the original decision for the enhanced benefits, but “it still worked out well because it gave people a lifeline, a real lifeline.”
Local media: Broadcast stations and newspapers want to ensure that they are eligible for small business loans, as a number of local media outlets are ineligible for relief because they are part of larger conglomerates.
The HEROES Act legislation did include a provision to make local news outlets eligible for small-business loans even if they are part of much larger entities. The loans would be limited to each individual location, and recipients would be limited to those outlets that bring in less than $41.5 million in revenue annually. Although House Republicans generally shunned the HEROES Act and Senate Majority Leader Mitch McConnell (R-KY) said it was dead on arrival as it moved to the upper chamber, the provision to boost local media has bipartisan support.
Groups like the National Association of Broadcasters and the News Media Alliance also have been advocating for the federal government to spend more of its advertising dollars on local media as a way to boost a dramatic drop in revenue.
Last week, state broadcasting groups also urged Congress to include provisions to further direct dollars to local stations and newspapers. In addition to federal dollars, the broadcasters asked lawmakers to “include provisions that would prioritize and incentivize stimulus recipients to spend a portion of those funds on promotion through advertising on local media.”
Insurance: A group of production companies, completion bond guarantors, distributors and sales agents recently formed a coalition to push for government support for independent production.
High on the list is pandemic insurance, in which the government would provide a backstop, and Rep. Carolyn Maloney (D-NY) already has introduced a bill that would provide a relief to productions that can’t start without the COVID-19 risk protection.
It’s unclear how quickly that legislation will advance. The coalition, which includes such companies as A24, Amblin Partners, and Village Roadshow, wants such things as liability protection and government assistance to support situations where a project is interrupted by the pandemic. They also want grants and low interest loans to help restore liquidity to companies impacted as production all but halted last quarter in areas like Los Angeles.
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