A20 EZ RE THE WASHINGTON POST.MONDAY, MAY 23 , 2022
cial Institutions, lists a corporate
address that is the same as Live
Nation’s Beverly Hills headquar-
ters, and was signed by Live Na-
tion Worldwide Inc., a Delaware
subsidiary of Live Nation Enter-
tainment. Live Nation Worldwide
is described as a “member” of
Frank Productions Concerts in
the filing, which also states that
the company’s management is
vested in its members.
“The day-to-day operations
and management of FPC remains
the responsibility of our local
management team,” Plant said.
“The filing of annual reports is an
administrative function that Live
Nation has taken on as part of its
joint venture with Frank Produc-
tions, LLC.”
Plant said the SVOG funds en-
abled the company to quickly hire
back employees it had temporari-
ly laid off during the pandemic,
and overall get “back to full
strength and beyond very quick-
ly.” The company’s pared-back
spending and the grant helped
ensure that FPC did not have to
borrow money from Live Nation,
he said.
“We have mechanisms with
Live Nation to lend us money that
we did not access during covid,”
Plant said in a phone interview.
“The intent of the (SVOG) pro-
gram was to keep people em-
ployed and keep businesses oper-
ating and it did that. There was a
pretty complicated and thorough
set of rules and guidelines pro-
mulgated about the program; we
read through them carefully and
we are eligible at the FPC level to
receive the funds.”
Gellman Management LLC, an
artist-management firm with of-
fices in California and Nashville,
received about $407,000 in SVOG
funds. Gellman Management LLC
was listed as a subsidiary in Live
Nation’s 2022 SEC filings, and
corporate documents filed in Cali-
fornia in August 2020 name Live
Nation CEO Michael Rapino as a
“member or manager.” A past Live
Nation annual report stated that
the company acquired a 50 per-
cent stake in Gellman Manage-
ment in October 2010.
In a statement to The Post,
Gellman Management said its
grant helped the company retain
staff members.
“None of these funds were allo-
cated for personal gain of man-
agement, nor [for] Live Nation,”
the statement said. “We did every-
thing by the book and followed all
of the guidelines outlined by the
SVOG, and it is unfair and incor-
rect to insinuate otherwise.”
In July 2021, nearly $8.5 mil-
lion went to a pair of St. Louis
venues — Delmar Hall and The
Pageant — in which Live Nation
holds a 50 percent stake and is the
largest single stakeholder, ac-
cording to SBA data and informa-
tion provided by the venues’ co-
managing member, Patrick
Hagin. Hagin said he and his
business partner each own a
25 percent stake in the businesses.
The venues, which sit next to
each other on the city’s famed
Delmar Loop, are a staple of the
St. Louis live music scene. Be-
cause they are 50 percent — but
not 51 percent — owned by Live
Nation, Hagin said, the venues
qualified for the grants.
“We are following the rules
here,” Hagin said in an interview.
“We are very conscious of what
the rules were.”
In addition to the federal aid,
The Pageant LLC did receive a
loan from Live Nation to help it
survive the pandemic, Hagin said,
though he and his business part-
ner also contributed a “propor-
tionate” amount. He declined to
specify how much.
In its 2022 SEC filings, Live
Nation lists Delmar Hall LLC as
one of its subsidiaries. But Hagin
said Live Nation plays no role in
running either Delmar Hall or
The Pageant, and neither venue is
a Live Nation subsidiary, adding
that he did not know why Delmar
Hall LLC was described as a sub-
sidiary in the SEC filing. He said
he would contact Live Nation to
alert them to what he believes is a
mistake.
Hagin said the SBA grants had
made an enormous difference for
the venues, enabling them to re-
tain the vast majority of staff
members and keep up with rent
and utilities.
“It would have been really, real-
ly ugly without it,” he said.advocated for support to be avail-
able to all live music workers no
matter where they work,” the
company’s statement said. “Ulti-
mately Live Nation wasn’t eligible
and that’s ok, we still supported
the bill for the good of the indus-
try.”
But while Congress wrote the
broad rules of the program, its
implementation and exact re-
quirements were left to the SBA.
Majority ownership is relatively
straightforward to determine, but
corporate experts said determin-
ing “control” of a company can
require more nuance and case-by-
case analysis. In this case, the SBA
defined “control” as “both the
strategic policy setting exercised
by boards of directors or similar
organizational governance bodies
and the day-to-day management
and administration of business
operations as overseen by princi-
pals,” according to an agency doc-
ument on the program. In other
words, a firm could be the largest
single shareholder of a subsidiary
but not technically “control” it.
The SEC’s definition of “subsid-
iary” is “an affiliate controlled by
such person directly, or indirectly
through one or more intermediar-
ies.”
Keith Higgins, a retired part-
ner at the law firm Ropes & Gray
and a former director of corpora-
tion finance at the SEC, said the
definitions reflect “simply two
separate sets of regulations ad-
ministered by two different agen-
cies.”
“Even though the language in
the two regulations appears to get
at the same concepts, it is not
inconceivable that an entity the
SEC considers a subsidiary for its
purposes is not ‘controlled’ for
SBA purposes,” Higgins said.
In 2018, Live Nation purchased
what it described at the time as a
majority interest in Frank Pro-
ductions, a concert venue pro-
moter based in Madison, Wis.
Frank Productions’ operating
company, Frank Productions Con-
certs LLC, received $10 million
from the SBA grant program in
July, the maximum amount possi-
ble. Both Frank Productions and
Frank Productions Concerts are
listed as Live Nation subsidiaries
in the SEC filings.
Joel Plant, chief executive of
Frank Productions, said in
emailed statements to The Post
that Live Nation only has a minor-
ity stake in Frank Productions
Concerts, the entity that received
the SBA grant.
“It is accurate to say that both
Frank Productions and Frank Pro-
ductions Concerts are subsidiar-
ies of Live Nation, and it is impor-
tant to note that under the SVOG
program, simply being a subsid-
iary of a publicly-traded entity
does not make an entity ineligi-
ble,” Plant said.
Frank Production Concerts’
2021 annual report, filed with the
Wisconsin Department of Finan-Congress was especially dis-
pleased that aid meant for small
businesses via the Paycheck Pro-
tection Program, launched in
spring 2020, had in some instanc-
es made its way to large public
companies. The news that major
hotel and restaurant chains had
helped drain the program’s funds
sparked a backlash and calls for
more oversight.
“They got burned by PPP on
both sides of the aisle. They were
very focused on that,” said one
person with knowledge of the
congressional negotiations who
spoke on the condition of ano-
nymity because they weren’t au-
thorized to discuss the delibera-
tions.
Still, 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 subsid-
iaries, large and small — to access
the money, one of the sources
said. The firm specifically op-
posed language barring aid to
publicly traded companies, ac-
cording to a congressional aide,
who spoke on the condition of
anonymity to describe private
conversations.
The amount that Live Nation
spent on lobbying the federal gov-
ernment on a variety of issues,
including the grants, more than
doubled in 2020 from the prior
year to more than $1 million, and
increased again in 2021, accord-
ing to a tally by OpenSecrets, a
nonprofit group that tracks the
influence of money in politics.
Ultimately, the measure ap-
proved 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 ef-
fort was meant to protect jobs.
“As the largest employer in the
live music industry of course wedriving 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 ven-
ue 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 with the trade
publication Pollstar 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 ven-
ues, because they have such a vast
empire with the ticketing and
things,” she said.
In making their case for the
funding, advocates emphasized
the intense financial pressure
that small businesses faced, in-
cluding 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 ven-
dors.
“The thousands of independ-
ent venues that came together to
form NIVA could not have sur-
vived the pandemic shutdowns
had it not been for the emergency
relief provided by the Save Our
Stages Act,” Rev. Moose, NIVA’s
executive director and co-found-
er, said in a statement to The Post.
“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 pan-
demic relief already had been ap-
proved by Congress. That created
an opportunity to apply lessons
learned when designing the new
funding. One lesson in particular
stood out: Taxpayer funds should
not be used to bail out the share-
holders of public companies,
which unlike mom-and-pop busi-
nesses can access capital markets
to raise money.being followed and vice versa,
that businesses are not penalized
for having non-controlling, silent
investors or completely typical
legal and tax structures.”
Live Nation is a dominant force
in the entertainment industry,
with operations in North Ameri-
ca, Europe, Asia and the Middle
East. Music industry experts said
that after nearly two decades of
acquiring smaller companies and
regional chains, the company has
deepened its geographic reach
and now reaps profits along each
step of the entertainment busi-
ness — from artist management
to venues to sponsorships to tick-
eting.
A 2010 merger with Ticketmas-
ter and the company’s dominance
ever since has drawn intense criti-
cism from some antitrust experts
and members of Congress, and in
2019 the Justice Department al-
leged that Live Nation had violat-
ed the terms of the merger settle-
ment. 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 Justice Department’s allega-
tions.
“The live entertainment indus-
try 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 such as the
Fillmore in San Francisco and the
House of Blues chain, popular
festivals such as 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 Shuttered Venue Opera-
tors Grant program was passed by
Congress in late 2020 and offered
relief awards of up to $10 million
to performance venues, mu-
seums, producers and talent man-
agers. The money was approved
at a time when much of the con-
cert industry across the United
States was shut down because of
restrictions meant to prevent the
spread of the coronavirus. Con-
gress 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 Inde-
pendent Venue Association
(NIVA), an alliance formed in re-
sponse to the pandemic, was aThe grants do not appear to have
violated the law or any rules set by
the SBA.
Nevertheless, the revelation
demonstrates how a large compa-
ny with stakes in hundreds of
smaller businesses could, while
following the rules, reap a benefit
that some legislators didn’t want.
And it shows that how agencies
implement a law can be just as
important as the way it is written
by Congress.
“When we wrote this, we specif-
ically 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 legisla-
tion. “I did not want Live Nation
getting a nickel.”
Live Nation as a parent compa-
ny did not directly receive any
money from the program, but the
government relief to its subsidiar-
ies still protected its investments
and improved its long-term out-
look, however slightly. The earn-
ings 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 members and recover more
quickly from the disruption, their
executives said in interviews and
emailed statements.
In one case, one of the compa-
nies that received funds from the
SBA borrowed money from Live
Nation and its other owners in the
first months after the coronavirus
hit, showing how the parent com-
pany played an active role in its
survival. In another case, one of
the subsidiaries that received tax-
payer funds did not need to tap an
available credit line from Live
Nation, showing how the grant
could have shielded the parent
company from having to finance
the entity’s survival.
Several companies listed as
Live Nation subsidiaries in Febru-
ary SEC filings received funds
from the grant program, accord-
ing to SBA data. They include
Wisconsin company Frank Pro-
ductions Concerts LLC, which re-
ceived $10 million; artist manage-
ment firm Gellman Management
LLC, which received nearly
$407,000; and Missouri firm Del-
mar Hall LLC, which received
$1.75 million. Corporate docu-
ments filed in Wisconsin and Cali-
fornia 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 hun-
dreds 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 Del-
mar Hall LLC, is 50 percent
owned by Live Nation, said Pat-
rick Hagin, who co-owns both
businesses. He added that Delmar
Hall was erroneously listed as a
Live Nation subsidiary.
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-to-day op-
erations, 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 entire-
ly 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 moni-
toring 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 ro-
bust grant monitoring process,
SBA reviews and investigates, as
necessary, to ensure the law is
LIVE NATION FROM A
Live Nation subsidiaries got aid meant for small businesses
GARY MILLER/FILMMAGIC
Live Nation’s business includes storied concert venues, p opular festivals like Lollapalooza — held last year in Chicago, above — and talent
management firms that oversee hundreds of artists.TOM WILLIAMS/CQ ROLL CALL/GETTY IMAGES
Rep. Peter Welch (D-Vt.) co-sponsored the relief bill for the music
industry. “I did not want Live Nation getting a nickel,” he said.S0114 6X2.Washington Post newsletters deliver more of what you’re looking for.
Discover and subscribe for free at washingtonpost.com/newslettersA ts & entertai ment
?