Why NITO is calling on Congress to save the music industry

Frank Riley, Founder of High Road Touring joins Yahoo Finance's On The Move panel to break down the importance of saving the live music industry as well as discuss how the COVID has impacted artists and public venues.

Video Transcript

JULIE HYMAN: Amongst the many industries that have been hit by coronavirus, live music is certainly on the list. We've seen a suspension of concerts, some attempts at drive-in concerts. For example, we talked with Tommy Mottola earlier in the week who said that the industry really has to get creative. But there is also an increasing number of people in the music industry who say they need help from the federal government.

Frank Riley is one of them. He is the founder of High Road Touring, which does booking for acts like the Alabama Shakes, Nathaniel Ratliffe, Joan Baez, Phoebe Bridgers, and many, many more. Frank, thank you for joining us.

And you are also working with a new group called the National Independent Talent Organization to try to get some help from Congress. Talk to me, first of all, about what kind of support you are asking for, what kind of legislation, and what it will be aimed at doing.

FRANK RILEY: What we're asking for and what we actually need is basic income or subsidies to survive through this period. Most of our members, 90%, 95%, 99% of our members have zero income since mid-March. We were all benefited by the rapid implementation of the PPP program earlier this year-- April, May, June. But that ran out fairly quickly. And for High Road, it ran out by mid-June.

We're now looking at a long term loss of income through at least the end of the year. And the numbers and the increasing viral activity seem to indicate that this may last through mid of next year. Under those circumstances, many of the independent music companies will not survive. We won't make it through to the next level-- that includes agencies, promoters, independent venues, and, of course, the artists themselves.

So what we're looking for right now is money to carry us through the end of the year. And in some part, that seems to be well focused on the restart program and the restart bill.

ADAM SHAPIRO: Frank, I'm curious-- would the natural way to do this be through the NEA? Or even-- I mean, back in the Depression, there was a program-- it was the Federal Arts Program-- it was for visual arts. But isn't-- we already have the mechanism in place to help, is it really just a matter of funding, say, the NEA?

FRANK RILEY: The NEA is a separate, and on some level politicized, organization that wouldn't reflect or wouldn't include the independent commercial businesses, the independent agencies, and the independent venues, per se. We're viable and profitable and successful businesses, by and large, and the NEA is a funded government program, as far as I know, that runs on a separate, and not necessarily parallel, course to what we do also.

I don't believe that that's the way to go forward. I don't believe that money would be directed into places of need within our organization. We certainly have common ground, that's for sure. And what would benefit the NEA would benefit us too.

JARED BLIKRE: Jared Blikre here. I wanted to ask you with your insider look in the industry, if there's some kind of paradigm shift going on brought on by all the changes that are going on necessarily by the COVID response-- for instance, maybe cutting out some of the middlemen, if you will. I've seen certain smaller bands that dropped to a kind of direct to consumer approach where they're just putting on shows live, they're managing their own merch through some kind of e-commerce platform. And is this-- are the changes that we're seeing now going to be more structural and more permanent? And what are they?

FRANK RILEY: There will be structural changes. You know, some of the repercussions of this catastrophe will affect the larger corporations even more than the smaller ones, because they're laden with debt. You know, what happens in the process of development of artists from which the independent community generally-- new artists and new ideas and new music generally comes through the independent community. In order to have a further reach than local draw or local access that young bands might have and might be able to do on their own, they need the help and assistance of professionals. They need to be guided into the proper venues, the right avenues, the right support systems, management, promoters.

There's a whole interdependent pathway that needs to be navigated more successfully than generally is-- that generally it's capable of-- generally, young bands are capable of. There's a well-established system of growth and development of new artists, and it's primarily supported during the early phases by the independent music community. From there, you know, to reach the highest levels of success, you generally have to be aligned with a major label or have other assets behind you. But a lot of people can develop viable and very successful touring careers simply through the independent music community.

JULIE HYMAN: Frank, lastly, I just quickly wanted to ask you about what's happening at High Road. Have you had to lay people off? How are you guys weathering this time when there, presumably, is not a lot, if any, revenue coming in.

FRANK RILEY: Our revenues stop-- 99% of our revenue stopped on March 15. I struggled through the end of June and kept my entire company intact through some combination of the PPP funds and then cash reserves in the High Road accounts. At the end of June, I had to lay off 10 full-time employees. And I had to push away three or four contractual workers as well.

We have a skeleton crew now. We've got 11 or 12 people across our three offices. And we're relying on our cash reserves. But no company-- or no company that I know of-- can rely solely on cash reserves for 12 or 18 months or whatever this period may be.

So we're-- you know, we're in dire straits. We're going to struggle through this in some form or fashion. But you know, obviously, High Road and other independent agencies, along with the independent venues, will not fully survive through this period. We're a cautious and careful company, but other younger, you know, less experienced or less supported companies will not survive through this. It will have a direct effect on the artist community going forward.

JULIE HYMAN: I, for one, cannot wait until live music comes back. And we wish you all the best and all the luck. Frank Riley of High Road Touring, thank you so much for joining us. Appreciate it.

FRANK RILEY: Thanks, Julie. Thanks, everybody there. Thanks for the opportunity. Best to all of us.