A “groundbreaking” scheme that gives concertgoers the chance to own a share of their favorite grassroots music venues has acquired its first property in the United Kingdom, delivering a much-needed boost to a struggling sector that’s still yet to fully recover from the pandemic.
The 100-capacity The Snug, located in the town of Atherton, just a few miles outside Manchester, is the first grassroots venue to be purchased as part of the “Own Our Venues” initiative by U.K. charity Music Venue Trust (MVT).
The scheme was launched last May and offers music fans the chance to become investors in small U.K. grassroots venues by purchasing community shares that are then used to buy out commercial landlords, effectively transferring ownership to the trust and local patrons.
To date, more than 1,250 investors have backed the pilot project, raising around £1.5 million ($1.8 million), with Ed Sheeran among its high-profile supporters. Funding has also come from Arts Council England and Arts & Culture Finance, who both contributed an additional £500,000 ($606,000) to the member-owned Music Venue Properties fund.
Share options begin at £200 ($250), although investors under the age of 25 can buy single shares at a discounted rate of £100 ($125). In return, investors receive 3% annual interest, generated through rent returns and more efficient running of the businesses, say organizers. To prevent big companies or corporations from becoming majority owners, shares are non-transferable and cannot be sold or traded with other investors.
Venue properties bought by the Music Venue Properties fund, such as The Snug, are leased back to the current operators at a reduced below-market rate, with venue managers also receiving financial support around maintenance, insurance and repairs.
The Snug’s managing director Rachael Flaszczak said the purchase of the seven-year-old venue “serves as a light of hope that the preservation of grassroots music venues can be done when people pull together to make things happen.”
Music Venue Trust CEO Mark Dayvd tells Billboard the acquisition represents “an amazing step forward” for a grassroots live industry that’s “currently in the middle of a crisis.”
According to the trust, 127 grassroots venues have closed or stopped putting on live music concerts in the United Kingdom in the past 12 months, representing around 16% of its members and depriving new acts of vital spaces to develop their craft in front of live audiences.
In the last 20 years, more than 500 grassroots music venues have shuttered in the United Kingdom, reports the trust, with notable closures including London’s The Marquee, Astoria, 12 Bar Club and Madame Jojos. Contributing factors include rising rents and costs, long-term lack of investment and the gentrification of surrounding areas leading to noise complaints and restrictive licensing conditions.
The pandemic and accompanying shutdown of the live music industry saw the United Kingdom’s grassroots music scene acquire £90 million ($110 million) of new debt, says Dayvd. Underpinning the fragility of the sector, 93% of small-capacity music spaces in the United Kingdom are run by tenants, with most having less than 18 months left on their tenancy agreements, according to MVT’s research.
To try and stop further closures, the trust has identified a further eight venues in U.K. towns and cities that it plans to purchase under what it calls a “world first” public ownership model and is in advanced talks with the landlords of two of those properties, says Dayvd. The trust’s long-term goal is to have a nationwide network of publicly owned properties whose status as music venues is protected for the long-term future.
“Many of the most pressing challenges faced by the sector are solvable by this issue of ownership,” says Dayvd, who wants to grow the number of fund investors to boost its buying power. He’s also keen to see the “Own Our Properties” scheme roll out to other countries where grassroots venue operators are under similar financial pressures.
“We have to accept that grassroots venues, wherever they are in the world, are doing the job of research and development — giving the stage to a young artist who’s written their first song or playing for the first time in front an audience,” says Dayvd. “It’s what pushes the industry forward, and we need to protect that pipeline.”
