Concerts all over the country that were scheduled for this year are continuing to find new homes in next year’s calendar, as restrictions remain in place to help stem the spread of COVID-19.
The Brown County Music Center is working on this as well. At the May 26 meeting of the venue’s management group, BCMC Executive Director Christian Webb said that Live Nation was still not booking any new shows or acts for 2020. That’s the company that books national acts for the BCMC.
The biggest challenge in rescheduling is figuring out how to convert 2020 shows to a new date or multiple dates — especially when those shows were sold out, as patrons won’t be able to be as close together as they were before COVID.
Live Nation is looking at options to make that happen, including cancelling shows and then reselling those tickets for a socially-distanced show. “They’re not saying that is going to happen, but they are looking at all of these different options and that is the one that scares me,” Webb said.
“Does Martina (McBride) play two or three shows in each town now? Is it every other row that gets invited on Tuesday or Wednesday? It’s the converting of those shows is what is keeping everyone up right now.”
After July 4, Gov. Eric Holcomb’s Back On Track Indiana plan will allow for almost all activities and businesses to resume with social distancing as long as virus cases do not peak again before then. Under this plan, large venues may open with adherence to social gathering guidelines by June 14.
When it’s deemed to safe to open the BCMC’s doors again, the venue will look into having smaller events to bring around 500 people in — compared to the usual 2,000.
“What we’ve seen over the last week or so with other states that are reopening is people will come out. People will buy a beer for tribute acts. People are wanting to get out. They are getting a little stir crazy. So (we’re) looking at those smaller types of acts,” Webb said.
He also mentioned having smaller concerts outside the building, but management group member Jim Schultz reminded the board that they had promised the community that no music would be heard outside of the venue when it was first proposed.
Management group Co-President Kevin Ault said that if it would be safe enough to do a small show outside, then it would make sense to try doing shows inside using social distancing measures.
“Would somebody pay $5 to come and see a group of bands, like we did with soft openings? … We socially distance them all inside and see how this will even work,” he said.
“I don’t think we’re saying we’re going to do something tomorrow, but it would be nice if we could do something between August and September. Then, by then, we’ll know where we’re headed.”
The building also could be rented for holiday parties later in the year. Webb said he was approached by a Columbus company that wanted to contract to have its Christmas party there.
Finding funding
The uncertainty a pandemic brings for live entertainment and the crowds that come with it is causing the venue to re-evaluate the budget forecast for 2020.
At the May 26 management group meeting, board member Mike Lafferty reported that the venue’s cash on hand was $470,000, including around $82,000 in Payroll Protection Program funding and $39,000 owed to the venue from concessionaire DLS Events LLC for concessions sold in February and March. The $39,000 will be paid in three installments.
The music venue also received a $150,000 loan from Brown County’s motor vehicle highway fund. That money will be used to pay interest-only mortgage payments on the building for April, May, June and July, said county commissioner and management group member Diana Biddle on May 26.
At that meeting, Biddle said there is also a possibility that the county’s loan to the venue could be covered by CARES Act funding. It was recently announced that the county is eligible to receive nearly $500,000 in funding to cover unexpected expenses related to the pandemic. She said she would talk with the county’s attorney about that possibility.
“I don’t think we have anywhere near the half-million dollars they have set aside for Brown County, so if that’s the case, I don’t think getting that reimbursement is going to be difficult. It’s all in how you package it and explain it.”
At the April 28 meeting of the venue’s building corporation, members voted unanimously to approve a reimbursement agreement with the county that includes the venue paying the county back by the end of this year. However, Biddle said that if the venue is unable to pay the money back by the end of the year, the county would be able to extend the loan.
The commissioners unanimously approved the reimbursement agreement on May 6.
At that meeting, Biddle said that the venue had yet to receive its share of the $1 admission tax that was charged on every ticket since the fall. It totals around $21,000 to $23,000. That money could also be used to pay the interest-only payments on the mortgage, Biddle said.
“That will keep us from having to dip too far into motor vehicle highway (funding),” she said.
Lafferty is a retired certified public accountant and a former chief financial officer of a company in Columbus. He also serves on the venue’s finance committee. He and Webb encouraged the management group last week to look at making a budget forecast if the music center is unable to bring in revenue this year.
“I think we need to come up with kind of a cash flow forecast, because once the money from the county runs out we’re in a bad way,” Lafferty said.
Controller Jeff Overby also applied for an Economic Disaster Loan through the Small Business Administration, and the venue immediately received a $10,000 grant for applying. But he has yet to hear back if the center will receive a loan and for how much.
The management group also has a $200,000 line of credit that hast not yet been drawn on, Lafferty said.
Innkeepers tax
The county’s innkeepers tax was pledged as a backup revenue source for the venue’s mortgage payment if the music center did not bring in enough money to cover the payment monthly, and innkeepers tax revenue has been declining as fewer people are staying overnight here during the pandemic.
The Brown County Convention and Visitors Commission manages the innkeepers tax. The innkeepers tax is also used to fund the Brown County Convention and Visitors Bureau budget. That’s the agency tasked with marketing Brown County to visitors.
At the April 30 CVC meeting, CVB Executive Director Jane Ellis presented an updated forecast on the innkeepers tax based on reduction in taxes coming in from hotels and cabins.
Ellis said she factored in 60 percent of the innkeepers tax coming from cabins, with a 40 percent decline since hotels were not open.
The projections also assumed there will not be a second wave of the virus in the fall, like some scientists and health officials have predicted.
At that meeting, CVC President Kevin Ault reported there was $47,000 in the innkeepers tax account.
According to Ellis’ projections, there would be about $152,000 left at the end of this year that could go to the music center. It would also mean the CVB would have to run on a budget of $466,250. In previous years, the CVB had a budget of $712,500.
In total, Ellis projected in April that innkeepers tax would bring in $627,781 at the end of this year. Last year, $846,748 was brought in through the innkeepers tax.
The projections for this year also allow for the CVB to have $500 a month to use on social media marketing. “With that, the CVB can make it to the end of the year. It will be tight, obviously. There are other places we can cut. We haven’t talked about reducing hours in the Visitors Center and what that could look like,” Ellis said in April.
She emphasized that the CVB would use grassroots advertising to promote Brown County on a reduced budget, and that her full-time staff members know they may have to work the Visitors Center if part-time staff can not be brought back on board.
“It’s not going to be an easy road by any means. We know that. I do feel that Brown County is going to bounce back. We’re already having a hard time keeping people away,” Ellis said.
‘Conserve our cash’
Before the pandemic hit early in March, the music center had seven shows scheduled for the month. Only one show actually happened.
If those shows had gone as planned, the venue would have been over budget in profits, Overby said.
According to a report by Blue and Company LLC, the music center lost $331,914 its first year. The report covered January to December 2019, but the venue opened in August 2019, with ticket sales happening in April 2019, so it was not a full year of operation. The mortgage loan is not included in the review, since that falls under the county and the building corporation.
In a follow-up interview with Lafferty and Overby last month, Lafferty said the loss was probably closer to $120,000 or $140,000, since some of the costs were one-time fees associated with opening the venue, like legal work.
“I felt like that was pretty good. I came in as a skeptic and that exceeded my expectations. At that point in time, I began to believe in this place,” Lafferty about of the loss.
“The ticket sales, not only did we have good ticket sales in the fall as we started shows with Vince Gill, but the ticket sales for this year were incredible. All of a sudden, my skeptical nature kind of went, ‘Wow. This thing is really going to work.’”
Then came the pandemic.
The report shows that the venue had $1.2 million in ticket sales. Lafferty said that number is now closer to $1.3 million and that is a “big liability” for the venue if those shows do not happen.
“That’s not your money until the stage lights go up and people start clapping,” he said.
According to Overby’s forecast for 2020, which he presented early in March before the venue had to shut its doors, the venue was on track to bring in $3,899,501 in ticket sales for a total of $4,762,662 in revenue.
“If the world would allow it, this could support itself quite well, make the mortgage payments and possibly have a little left over,” Lafferty said.
Before the end of last year, Lafferty said the management group was able to make $115,000 worth of mortgage payments.
As of Dec. 31 last year, the management group had $895,000 in cash on hand. But that now stands at around $380,000.
Lafferty said cash on hand was drawn down in part due to replacing the venue’s sound system at a price tag of around $267,000. The venue also received around $52,000 for the speakers they had, which was used to help cover the cost of the new sound system.
The venue had contracted with an acoustic engineer to put in the first system, but it ended up not being what they needed, Lafferty said.
“We got Matt (Kincer, BCMC technical director) on board. He started catching a lot of the heat from some of the tours: ‘This stuff is junk. It isn’t working.’ Then, some of it was found to be defective,” Lafferty said.
Now, Lafferty said the goal is keep the cash until the BCMC’s doors can open again.
If that’s not until next year, Lafferty said additional funding may be needed from the local government, other organizations or a private investor to help get the venue going again.
“You either have to cover that $1 million or you put on a show. You don’t put on a show for free. You have to pay your people. You have to pay the band,” he said.
“We need to conserve our cash. We’re really to the point where I don’t see how we could take any more money out of the cash we have to, say, make a mortgage payment or interest payment, because we’re going to have to have some starting money when we start up.”
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A re-opening plan for the Brown County Music Center is in the works.
It includes installing Plexiglas at all sale counters; ordering portable hand sanitizer stations; getting personal protective equipment for workers; and ordering signs explaining social distancing guidelines.
Ticketmaster also talked with staff about installing contact-less technology in the building, like portable scanners to read people’s phones or tickets without having to having to interact with a person, and contact-less payment options. No price tag for those options is available yet.
The venue currently has a little over $1 million in ticket sales for shows that have not yet happened. It doesn’t actually get that money unless the shows go on.
If shows are canceled, the venue will have to refund the ticket money. However, every show except for ABBA and the sold-out Willie Nelson show now have new dates.
“From a numbers standpoint, Willie is a big deal because we have $130,000 in ticket sales for him. If we had to refund that, it will be a hit,” said finance committee member Mike Lafferty.
At the April 28 meeting of the venue’s management group, members agreed to not participate in Ticketmaster’s refund window last month, which allowed any person who bought a ticket through Ticketmaster this year to get a refund the month of May.
Under the venue’s policy, a refund will be available 30 days before a rescheduled show date in case a person cannot make the new date.
“For the most part, I think our patrons are pleased that, one, we have a plan, and, two, there is an option to get a refund. There is disappointment they can’t have it right now, but for the most part they are pleased there is at least plan in place to get that should they decide they would like one,” said Audience Services Manager Andrea Swift-Hanlon.
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