Millionaire artists including Post Malone, Lil Wayne, Chris Brown, Nickelback, Steve Aoki and others received some $200 million in pandemic relief as part of the Small Business Administration’s “Save Our Stages grants, according to a new report in Insider.
The report notes that many of these artists own or may have owned businesses or corporations that could qualify for such grants — which were grants from the government, not loans. Yet the intent of the Shuttered Venue Operators Grants, which were the result of Congress’ “Save Our Stages” campaign that ultimately distributed some $16 billion in pandemic relief, was to assist independent venues.
The amounts received by the above artists and others, if accurate, are staggering: $10 million each for Post Malone and Chris Brown, $9.9 million for Steve Aoki, $8.9 million for Lil Wayne, $8.6 million for Smashing Pumpkins, and many more. Sources tell Variety that the maximum relief money many venue owners received was $100,000.
To be fair, as the article notes, vetting applicants for federal funding during the pandemic was no easy task, and there’s no question that SVOG and “Save Our Stages” did indeed save many struggling venues that otherwise would have closed. But $10 million for Chris Brown? $2 million for Nickelback, who are Canadian?
It is worth noting that the SBA initially struggled to distribute the $16 billion in grant money: While the act was passed into law by Congress in late December of 2020, it was nearly six months before venues received any of that money; the application website was inoperative for several weeks and the SBA ended up replacing the team in charge of SVOG distributions after coming under significant pressure from Congress.
While it is unclear which artists applied for grants themselves, it may have been done by a third party, as the article notes: “A single financial-management firm in Los Angeles successfully submitted grants on behalf of 97 artists, venues, and managers, amounting to more than a quarter of a billion dollars in grant payouts, Insider’s analysis found, including more than $200 million for big-name artists alone.”
While a rep for the SBA did not immediately have a comment when contacted by Variety on Friday, the article notes, “The Shuttered Venue program ‘helped save thousands of entertainment venues and operators across the country during the COVID-19 pandemic,’ an SBA spokesperson said in a statement. Nearly half the grant money went to businesses with fewer than five full-time employees, ‘the smallest of small businesses,’ the spokesperson added.”
The article notes that many of the artists ran businesses that fit those categories, like Aoki’s corporation, DJ Kid Millionaire Touring Inc., which reported four full-time employees on its application for a $71,000 Paycheck Protection Program loan.
The article also notes that two businesses partly owned by veteran talent manager Irving Azoff, whose firm’s clients include the Eagles, Lizzo, Harry Styles, and Gwen Stefani, together received $17.5 million from the program, although an attorney for Azoff said the companies complied with the program’s rules. Similarly, as reported by Variety last year, venues affiliated with Live Nation, the multi-billion-dollar corporation that was specifically stated to be excluded from “Save Our Stages,” received some $19 million in funding from the program, although a rep told Insider that the company has “no ability to control whether its subsidiaries access aid programs.”
However, scammers thrive when the government is giving out free money, and the SBA Inspector General reported in June that between 8% and a third of the loans given out in various programs during that period “may have” been fraudulent. Further, the SBA claimed last month that just 1% of the SVOG loans were estimated to be fraudulent.
The article concedes that “Industry sources contacted by Insider defended the Shuttered Venue program by pointing out that many artists typically contract with hundreds of sound and lighting technicians, costumers, drivers, security personnel, and other contractors when they put together a tour. All those contractors were out of work during the lockdowns, the sources said, and artists applying for grants could have used the money to help keep them afloat. But there was no requirement that they spend the money that way.”
Indeed, “There were few limits on how the money could be spent,” it continues. “The grants couldn’t be used directly for some things, like buying real estate or making political donations. But under SBA guidelines, the grants could be used to pay ‘owner compensation,’ an amount the agency capped at whatever the owner earned in 2019.”
Representatives for the Small Business Administration, several of the above artists, and Senators Chuck Schumer and Amy Klobuchar, who helped lead the “Save Our Stages” effort, did not immediately have comment when contacted on Friday.
Variety will have more on the situation as it develops.