COVID related bankruptcies in the production space

Jeff Babcock

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Jan 11, 2011
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Just wondering how everyone is doing surviving the brutal impacts of COVID restrictions on production companies.

I am aware of several companies going belly up recently, including one of the largest ones in Toronto, who had hundreds of staff. The ones who are surviving seem to have in some cases pivoted to a lot of video work and install work. A number of events well into 2021's busy season are already getting cancelled, so this could mean 2 busy seasons in a row of really poor income and I am worried by what this could mean for the industry.

Those of you out there, how are you doing?

Best wishes to all of you impacted by this.
Jeff
 
Since enough of the public will not or cannot "get it" that their behavior is responsible for transmission (or they don't care, for whatever reasons), I predict we'll be dealing with this for another 2 years (earliest, because there will be vaccine resistance, distribution time, etc). I expect 50% of production shops to close, bankrupting owners who've spent decades building their companies. The vast swath will come from the middle - firms like Clair will survive in some way, and small shops where the owner doesn't depend on the production biz as sole income - are likely to make it. In between? It's gonna be bad.

Those who've "pivoted" (I HATE that fucking term) successfully into installation will find their work drying up, eventually. Once the back log of work is done the need for so many install firms will diminish. It will have delayed, but not prevented, the inevitable for some.

The elections in the USA do not help. An already hyper-political environment which put biology and epidemiology into the center of political partisanship, where the result is the general public, regardless of their political views, becomes the loser in the pissing contest.

So how am I doing? Living on what's left of my benefits while eying a 2021 that is far less certain than I'd previously hoped. My benefits run out right before Christmas. My health insurance will be unaffordable next year. I'm looking at my personal inventory of "stuff I'm unlikely to use again" for initial liquidations. The result is a Paul Kersey rage every time I see people deliberately flaunting their non-compliance with mask and occupancy orders. I've watched sports bars fill up to unhealthy numbers, I've noted events like weddings and family reunions turning into clusters of coronavirus infections. When it's not enraging, it's heartbreaking to know that people are willingly sacrificing the health of others for some misguided sense of self-worth or entitlement. My county went from under 10% positive rate to almost 18% in 3 weeks. Very rural counties are getting hammered - one has 100% infection in a nursing home while over 50% of their staff is positive, too. The novel coronavirus didn't care that their county only has 4000 people it in, they left themselves open to infection spread.

In late June I was hopeful, but after armed "militias" disrupted the Michigan legislature, I knew that it was over. Regardless of what one thinks politically, no governor is going to risk armed battle with white citizens - at the very least the optics favor the insurrection; "big bad Gov activates the National Guard". At the worst you deliver bodies in bags, and that's usually a bad thing at election time. And it's all over masks, limiting unnecessary gathering of persons from different households, and enhanced hygiene. If folks would wear masks, stay respectfully distanced, and not go out for hours on end, they could more safely go out. But because of the binary nature of human behavior, any relaxing of restrictions results in immediate reversion to "party like it's 2019." Apparently I'd forgotten that 'the college experience' was centered on lots of alcohol and screaming, too, and that high school sports is a religion that requires sacrificing public health as a condition of orthodoxy.

The pandemic is likely to cause my premature (and consequently unaffordable) retirement before I'm eligible for Medicare. So find the Crayons® labeled "Bitter" and "Angry". Color me.
 
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It was promising until today, there has been a rise in activity lately due to government stimulation programs and relatively low sickness levels. Oslo has had a rise in cases for the last week that's been pretty bad along with other large cities in Norway, today the local authorities called a stop to everything in several cities.
No liquor sales in pubs/bars etc., no public gatherings, lot's of school closed, no concerts or other shows allowed, no cinemas, no private gatherings of ANY kind with more than 10 people, max 20 people in churches and similar, mandatory face masks in shops where you can't maintain a 2m distance. Shops and similar places that's open are required to hire security so the customers keep a 2m distance. Mandatory home office for all employee and businesses have to document that they have offered all employees this opportunity unless it's strictly necessary to have them come into office for work. Venues have already started to announce temporarily closures. I'm expecting that the few shows I have booked for the upcoming weeks will be cancelled.

In short: it's bad. I know a lot of companies and venues don't have too much left in their bank accounts, unless we get some compensation from the government it's going to get nasty.
 
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Aww, Tim and Helge, thanks for sharing your stories. It is indeed brutal and I am glad to not be in the USA as the way that this whole thing turned into a political mess where some people are ignoring medical advice, listening to conspiracy theories, going to the streets to protest against masks (which I have a hard time understanding) has had a major negative impact. Tim, the whole Medicare situation for you sucks, maybe you should move to Canada. ;)

Of course it is not just the sound companies. I was very sad when my favorite coffee shop went bankrupt recently because of this, and I'm sure everyone at this point can give countless similar examples.

I really hope that governments and municipalities around the world are taking the impacts to some of these hard hit industries seriously and make efforts to help before things get way worse. What I've been seeing so far in many countries just isn't enough.

I don't have a lot of faith that some members of society will suddenly start thinking about others above themselves, so we will likely be stuck with this for a long time still.

Sorry for the dismal, depressing thread..... hoping that those of you who are most affected find a way to get through this. Stay safe.
 
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Jeff, you're right that it goes beyond the live entertainment industry - hospitality and tourism have been hit hard, too. The difference is that those can rebound fairly fast (too fast, as we've seen in some locales) compared to the machine that is regional and national show production.

I fully expect politicians to lack the will, and the public to lack the will, to do what is needed: a new 'stay at home' period with real enforcement, and graduated re-opening with enforced occupancy limits for all gatherings regardless of type, nature, or purpose. Failing that, enforceable mask orders and alcohol curfews (notice that intoxicated people spew more 'stuff' in the air than sober people).

Because I expect none of those things to happen, we'll have 2 more years. The Covid Honey Badger® (sorry, groundhogs have a strict union) has made the prediction.
 
I fully expect politicians to lack the will,
In Sweden some politicians from the opposition hav accused the government of wanting riskgroups(elderly above 70) to get infected. And the very same person has been going to parties and running a fake Uber (as a prank!?!?)Shows how much responsibility she is willing to take, Her explanation was that it was too boring otherwise????
 
In Sweden some politicians from the opposition hav accused the government of wanting riskgroups(elderly above 70) to get infected. And the very same person has been going to parties and running a fake Uber (as a prank!?!?)Shows how much responsibility she is willing to take, Her explanation was that it was too boring otherwise????

Sweden's experiment with "herd immunity" turned out not so well, it appears, while accomplishing the real goal of not shutting down a big portion of the leisure economy. From a perspective of "ruthless economics," I understand that the old, feeble and infirm are seen as a consumer of net resources, not direct and immediate contributors to resources. Having a pandemic conveniently remove that population frees up more capital for productive use.

Seems rather crass, eh? But there is no shortage of economists who espouse these ideas. They get some help from politicians, too. I recall that around 30 or more years ago, a state governor was quoted as saying, in effect, that older people had an obligation to die and get out of the way of younger persons. I can't place the state or his name but I recall the little scandal that erupted after it hit the news.
 
Jeff, you're right that it goes beyond the live entertainment industry - hospitality and tourism have been hit hard, too. The difference is that those can rebound fairly fast (too fast, as we've seen in some locales) compared to the machine that is regional and national show production.

I fully expect politicians to lack the will, and the public to lack the will, to do what is needed: a new 'stay at home' period with real enforcement, and graduated re-opening with enforced occupancy limits for all gatherings regardless of type, nature, or purpose. Failing that, enforceable mask orders and alcohol curfews (notice that intoxicated people spew more 'stuff' in the air than sober people).

Because I expect none of those things to happen, we'll have 2 more years. The Covid Honey Badger® (sorry, groundhogs have a strict union) has made the prediction.
And replying to my own post....

The Covid Honey Badger® has seen the Pfizer and Moderna vaccine reportage and is impressed with the initial results. CHB also sees a greatly complacent population and a significant portion of that population that is not yet willing to receive vaccination. CHB saw a partial shadow and now predicts we'll have another 18 months before we can rewind to 2019.
 
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Seems like some of the retailers are getting hit now. PSSL seems to have closed doors although from the start it appeared to be a temporary thing and from checking the site today it looks like they may be back. News today claims Guitar Center has filed for bankruptcy.
Not sure how folks are going to be able to cover overhead with no income.
 
News today claims Guitar Center has filed for bankruptcy.
Not sure how folks are going to be able to cover overhead with no income.
It is worth noting that Guitar Center's financial woes are not a recent phenomenon (see https://www.ericgarland.co/2015/02/03/end-guitar-center/ for example), and that the instrument side of the industry seems to be doing OK (e.g. https://guitar.com/news/fender-sales-record-2020/ ) even as the live event market has cratered. So I might not read too much into the announcement of Guitar Center's bankruptcy.
 
Another regional sound co here in my province has gone bankrupt, and their gear is all gone to auction now. Even with the first people starting to receive vaccines today (yay), I expect The Covid Honey Badger's predictions are probably not all that far off when it comes to seeing large events like festivals etc resume.
 
And replying to my own post....

The Covid Honey Badger® has seen the Pfizer and Moderna vaccine reportage and is impressed with the initial results. CHB also sees a greatly complacent population and a significant portion of that population that is not yet willing to receive vaccination. CHB saw a partial shadow and now predicts we'll have another 18 months before we can rewind to 2019.
One major difference that the vaccines provide that is enormously different from say the 1918 flu is a definable end to the pandemic that can be predicted with some degree of certainty. In the past the end of an epidemic was almost always only assessable in hindsight. This scenario affords some options for planning.
 
One major difference that the vaccines provide that is enormously different from say the 1918 flu is a definable end to the pandemic that can be predicted with some degree of certainty. In the past the end of an epidemic was almost always only assessable in hindsight. This scenario affords some options for planning.
And in the past, successful practices and treatments showed up at the end of the pandemics, not in the middle. As you point out the availability of vaccines will make this one the same - except it will be vaccinations and treatments than can bring predictable ending, rather than more deaths.

As for the rest - anyone need an employee with 40 years of audio experience, with 20+ years in management?

Didn't think so.
 
Hi All,
Looking back at this thread, here we are much as Tim seems to have predicted.
Just wondering how some of you came out of the pandemic from a business perspective? Things finally re-opened here in terms of ending event capacity limits etc so it looks like festival season is actually going to happen this year after 2 years of nothing. A bunch of businesses did not make it through unfortunately.
I hope everyone is doing ok and those of you who are gigging or providing production have a successful season of recovery.
 
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Hi All,
Looking back at this thread, here we are much as Tim seems to have predicted.
Just wondering how some of you came out of the pandemic from a business perspective? Things finally re-opened here in terms of ending event capacity limits etc so it looks like festival season is actually going to happen this year after 2 years of nothing. A bunch of businesses did not make it through unfortunately.
I hope everyone is doing ok and those of you who are gigging or providing production have a successful season of recovery.
I predicted an installation lull that did not happen. Otherwise the recent history has shown the predictions fairly close.

As a labor representative, I can say that some of our CBA employers lost 50%-70% of their stage crew / related work force. Anyone over the age of 55 that didn't come back right away is not coming back, at least not with any regularity. New workers are oh so green and while they're trying really hard, their lack of experience is evident.

The problem is... the public, promoters, and many artists expect to put on shows as usual in terms of technical staffing and local crew. Uh, pulling riggers out of a hat just ruins the hat and annoys the rigger. Finding the extra 20 carps because the act's show carries it's own stage ain't easy. Wardrobe, hair & makeup crew are even more difficult to fill than 2019. The crafts of live entertainment took a huge personnel hit as a result of the pandemic.
 
IDK how it is in other parts of the world, but rates are up here by 20-30% due to lack of skilled labour. We ended our last round of restricitions on feb. 12. Promotors and producers hasn’t really gotten up to speed yet, some shows/events are happening, but a lot of them have been taking it slow to see how things pan out. Summer is looking good.

One of the more interesting developments is that Creative Technologes bought the nations largest sound/light/staging company and merged it with the largest video production company (they already owned that).