Ruin of club culture because of corona: mass insolvency looms

Clubs are indispensable players in nightlife. Whether they will survive the Corona pandemic is questionable. Finally, politicians are taking the emergency seriously.

DJ Bonnie Ford spins at Berlin club "Rummels Bucht," part of the UnitedWeStream initiative Photo: Britta Pedersen/dpa

Since they closed on March 14 due to the Covid 19 pandemic, clubs in this country have lost all revenue. Raves no longer take place. Not only is the club landscape lying fallow, the Corona crisis is also throwing a spanner in the works of the festival summer. According to the German association for music venues, LiveKomm, at least 550 festivals are affected. How long the already dicey situation will last, no one can answer with certainty. The clubs will probably be the very last to be allowed to reopen, such is the risk of transmission.

Provided: Club culture survives the crisis at all. Because it was already at risk before the pandemic: A lack of legal protection and the ongoing gentrification of urban areas have always posed an existential threat to urban nightlife. In building law, clubs such as brothels and gambling halls are classified as places of entertainment, which makes building permits and the search for new establishments much more difficult.

The issue has been on the political agenda for some time: motions by the Left Party and the Green Party in the Bundestag aimed, among other things, at recognizing clubs as cultural venues similar to operas and theaters. But so far, the federal government has not provided any concrete measures on how to protect club culture.

Half a million collected

In the capital alone, the Clubcommission, an association representing the interests of Berlin’s club scene, classifies 24 clubs as endangered – 14 of them acutely so. Covid-19 has now accelerated this displacement dynamic. Gradually, the first clubs with a beer garden concept or drive-in raves are reopening. The crowdfunding campaign "United We Stream," initiated by Clubcommission and Reclaim Club Culture, has so far raised over half a million euros. But all this can’t even come close to compensating for the huge loss of revenue.

Motions from the Left and Green parties in the Bundestag want to recognize clubs as cultural venues similar to operas and theaters

The federal government has decided on a number of measures to save the club landscape and festival culture from imminent ruin: emergency aid of 9,000 euros for businesses with up to five employees and 15,000 euros for businesses with up to ten employees, as well as liquidity loans, have been made available. CDU Minister of State for Culture Monika Grutters wants to allow event organizers to issue vouchers for cancelled events instead of refunding the money. In addition, rents can be deferred during the crisis until June 2022.

However, these measures are far from sufficient, criticizes Caren Lay, a member of the Bundestag for the Left Party, in her paper "Corona emergency aid for club and festival culture," which is available to the taz. In it, she writes: "Due to the low reserves and small returns on sales of one percent for many clubs, the debts built up during the crisis cannot be recouped in the future. That’s why loans are not enough, because they only postpone the industry’s insolvency, piling up until after the crisis." In addition, about 40 percent of the clubs would not meet the requirements for such loans, for example, because they are non-commercial, non-profit collective enterprises without profit interests. Vouchers wouldn’t do much for the industry, either, since tickets are rarely pre-sold.

Instead, Lay calls for an emergency aid program for clubs and festivals to ensure their survival: This includes a waiver of rent debts and lowering of rents, protection against dismissal during the crisis that does not allow for ordinary layoffs, a conversion of loans that have already been granted into grants, an increase in short-time benefits for self-employed artists to 90 percent, and an emergency aid fund for the scene. "It has to compensate for the lost business and allow for planning of future programming," Lay explains. Because many clubs fell through the cracks of public Corona aid.

In an interview with the taz, Bavarian Green Party member of parliament Erhard Grundl also calls for an emergency fund for the industry. "The clubs will be affected by the effects of the pandemic for a long time, which is why a separate club and festival rescue fund, which absolutely must be set up for a longer period of time, is elementarily important." To secure club culture and the diverse festival landscape, the emergency aid provided by the federal government so far is no good, Grundl continued. "Loans or rent deferrals in particular shift the problems into the future at best."

Grants for fixed costs urgently sought

Pamela Schobeb, operator of the Berlin club Gretchen and chairwoman of the club commission, sees the situation similarly: "We urgently need subsidies to cover our fixed costs so that we don’t lose our venues." Since March 7, the doors of Gretchen have also been closed. The club had indeed received 15,000 euros in emergency aid: "But these are enough for two and a half months’ rent in our case, and the money has now been used up. Now we are deferring everything and are just piling up a huge mountain of debt."

The club in Kreuzberg can’t pay back loans because there’s simply not enough money left over from ongoing operations: "We work economically, but not profit-maximizing," explains Schobeb. As a solution, vouchers don’t help the Gretchen either: "Only the big promoters who get advance payouts benefit from this. We smaller ones don’t get the money from advance sales paid out until after the concerts are over anyway."

For Schobeb, therefore, it’s all about the big picture: the government must act quickly now or risk losing an important part of culture. Schobeb vehemently disagrees with the accusation that club culture is merely part of the commercial catering industry and thus fails to qualify for funding. "We curate our music programs just as artistic directors curate theater or opera schedules. We book artists from Germany and abroad, help local bands and create a new program for each event. We give new developments a chance and provide stages for young talent."

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Caren Lay is also aware of the seriousness of the situation. Her conclusion: "If clubs are allowed to reopen at some point, they must still be there." Mass insolvency must be prevented, otherwise the cities will lose important open spaces, a significant branch of the economy, but above all a renowned and internationally known part of culture.

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