In a revelation that has raised eyebrows, music industry heavyweights, including Post Malone, Chris Brown, LeAnn Rimes, and Nickelback, are reported to have received millions of dollars from the taxpayer-funded Shuttered Venue Operators Grant, aimed at aiding struggling musicians and venues during the height of the Covid-19 pandemic.
Administered by the Small Business Administration (SBA) in 2021, the program aimed to resuscitate live entertainment businesses that were severely impacted by lockdowns and restrictions. The Shuttered Venue Operators Grant extended financial support of $14.5 billion to a range of entities, encompassing movie theaters, performing arts venues, talent agencies, and artists alike.
Distinguished from the Paycheck Protection Program, which entailed loans, this initiative provided eligible applicants the opportunity to secure up to $10 million in non-repayable funds, intended to offset revenue losses incurred due to the pandemic-induced disruptions.
An investigation conducted by Insider has exposed how limited liability companies affiliated with renowned artists took advantage of this grant. Singers Post Malone and Chris Brown, reputed for their substantial wealth, reportedly received the maximum payout of $10 million each. Rapper Lil Wayne secured $8.9 million, while singers LeAnn Rimes and Nickelback each received $2 million.
While the specific allocation of these funds remains ambiguous, there is no indication that these disbursements to high-profile artists transgressed any legal boundaries. The aid, conceivably, could have been directed towards various purposes, including compensating lighting and sound technicians, costume designers, drivers, security personnel, and other essential contributors to the live entertainment ecosystem, all of whom experienced a dearth of opportunities as tours and concerts were canceled.
However, the lack of a stringent mandate necessitating corporations and limited liability companies to prioritize the welfare of these workers has sparked debate. Grant recipients were legally permitted to divert funds towards existing mortgage payments, taxes, payroll, and even self-compensation.
Particularly notable from the investigation was the revelation that a Los Angeles asset-management firm, NKSFB, reportedly facilitated grants for an extensive roster of 97 artists, venues, and managers, amounting to a staggering $260 million in payouts. Among the beneficiaries were prominent names such as Post Malone, Korn, and Steve Aoki.
Responding to the exposé, an SBA spokesperson highlighted the efficacy of the Shuttered Venue Program in salvaging numerous entertainment venues and operators throughout the Covid-19 pandemic. The spokesperson noted that a significant portion of the grant was channeled towards businesses with fewer than five full-time employees, representing the most vulnerable segment of the industry.
As the extent of fraudulent claims in pandemic-era aid remains under scrutiny, an SBA report unveiled earlier this year underscored the potential mismanagement of $200 billion from Covid-19 relief programs. This sum equates to approximately 17 percent of the $1.2 trillion disbursed by the SBA. Despite these concerns, the SBA has dismissed widespread fraud within the Shuttered Venue Program, estimating that fraudulent grants constitute less than 1 percent of the total disbursed.
Written by
Derek Chan – Editor
