More than one third of grassroots music venues in the UK are operating at a loss, according to a recent study by a charitable organization.

More than one third of grassroots music venues in the UK are operating at a loss, according to a recent study by a charitable organization.

More than 33% of music venues in the United Kingdom are not profitable, as stated in the yearly report of the non-profit organization Music Venues Trust (MVT).

Out of the 835 venues, 38% of them, mostly small and completely independent, experienced a financial loss. The main reason for this was the cost of rent, which put a lot of pressure on these venues. On average, the cost of rent increased by 37.5% compared to the previous year for those who rented their premises.

In 2022, there were 960 small music venues, but 125 of them closed last year. About half of those permanently shut down, while the other half stopped hosting live music. A well-known venue, Moles in Bath, had previously featured popular artists like Radiohead and Ed Sheeran on their journey to fame. The closure of Moles was attributed to the rising cost of living in recent years. Co-owner Tom Maddicott explained that the increased expenses for supplies, utilities, and rent, along with the financial struggles of their customers, led to the venue’s closure.

The financial challenges for small-scale venues are particularly difficult in rural areas, where venues in towns with populations under 200,000 are experiencing an average loss of 2.5%. While the overall revenue for grassroots venues has increased by 15%, operating costs have also risen by a similar amount, resulting in an average profit margin of only 0.5% for these venues that are considered vital to the UK music industry.

Grassroots venues are classed by the MVT as those that have music as their “raison d’être”, that “take risks” with their cultural programme and “programme artists that deserve audiences, with no expectation of direct financial reward” – differing from more purely profit-driven music venues that host mostly already-established acts. Some 28,223 people are employed across grassroots venues, a drop from 30,720 in 2022.

Mark Davyd, the CEO of the charity, urged UK political parties to make promises to support the sector during their election campaigns. He also called on larger venue groups and concert promoters to contribute to the “research and development” that is done on their behalf – specifically, the hosting and nurturing of emerging artists who eventually become successful in selling tickets. Davyd stated that it is time to put an end to excuses and demand action from those who have the ability to prevent the destruction of the sector.

In a report released in June 2023, PricewaterhouseCoopers forecasted a 7.4% annual growth for the entire live music industry in the UK until 2027. They also projected that the UK live music market would reach £1.63bn in 2023, an increase from £1.54bn in 2019.

In 2022, UK Music discovered that the industry was positively impacted by 14.4 million music tourists. These tourists were defined as individuals who traveled at least three times the average commute for their region. Out of this number, 1.1 million were from other countries and collectively, they spent a total of £6.6 billion. This expenditure included travel, accommodation, and other expenses aside from ticket purchases and venue fees.

A potential solution to bolster the industry involves implementing a fee on all UK gig tickets, with the proceeds going towards supporting local venues. Enter Shikari, a popular rock band, is advocating for this approach and has pledged to donate £1 from each ticket sold on their upcoming arena tour to be distributed among smaller venues through MVT.

In November 2023, Conservative MP and previous culture secretary John Whittingdale responded to questions about sector support plans by stating that there are currently no intentions to implement a ticket levy. He mentioned that discussions led by the industry are taking place to explore ways to provide more support for grassroots music venues through larger events and venues. Whittingdale also noted the government’s direct support of the Emergency Grassroots Music Venues Fund during the pandemic, as well as the recent announcement of an additional £5m allocated to Arts Council England for a Supporting Grassroots Music fund.

In addition to providing financial support to venues in need, MVT has also expanded into a venue ownership strategy. The Music Venue Properties project utilizes community and crowdfunded investments to purchase the freehold of buildings, ensuring the sustainability of these venues in the long term. The first venue acquired through this initiative was The Snug in Atherton, in October 2023. So far, community shares have raised £1 million for the overall scheme, with an additional £500,000 from Arts Council England, loans totaling £650,000 from the Arts and Culture Impact Fund, and donations from music industry companies.