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Monday, May 23, 2022

Canyon Club Survives to Promote Future Gigs

Had Lance Sterling known how complicated the last year would be trying to save his sub-2,000 seat concert venues during the pandemic, he said he likely would have closed his doors instead.

But now, having taken out loans, sold assets and spent months trying to preserve jobs and pivot his business at Sterling Venue Ventures, which runs the Canyon clubs, he hopes to return to operating as a stronger company.  “We all had the same mantra: if we get through this, we’ll be healthier and a better company. And from history, I’ve learned that, you know, businessmen figure out a way to get through stuff,” Sterling, owner of the Agoura Hills company, said. “I mean, I don’t know how we did it, but I know that everything came just in time.”Sterling Venue Ventures includes a chain of small and mid-size performance and restaurant venues that includes the original Canyon Agoura Hills, additional Canyon locations in Santa Clarita and Montclair, Libby Bowl in Ojai, Burbank’s Starlight Bowl, the Saban Theatre in Beverly Hills as well as performing arts and cultural centers in Oxnard and Redondo Beach.

When the pandemic struck and businesses were forced to close, music and performance venues like Sterling’s had limited options for modified operations and, as a result, he resorted to selling equipment and his liquor license to try to keep afloat while waiting to reopen.

“If we had any concept that we were going to be shut down for 15, 16 months, then I probably would have given up, to tell you the truth,” Sterling said. “Because, I think for the year and a half that we’ve been impacted, our accounts have lost revenues of $27.7 million. And it’s funny, when I talk about those numbers, they seem so wildly large. I didn’t realize that we did that much money to begin with.” Payroll controlPrior to the pandemic, Sterling’s venues employed more than 400 ushers, waitresses and support staff to serve guests. The clubs often featured rock, jazz, country and comedy acts favored by the over-30 crowds in the area. They included Pat Benatar, B.B. King, Willie Nelson, the Kinks’ Ray Davies and Heart. Since March of last year, without being able to book performances by crowd-drawing entertainers, Sterling focused on private rentals and hosting small, outdoor gatherings as a way to sustain business. He reduced his staff and started making modifications to his point-of-sale technology to ensure the venues could run with fewer employees in the future.

“We actually went down to 15 employees because we realized, after the first PPP, that I actually was punishing everybody who I kept on. If I just let them go, they’d be making $1,000 a week. And because they stayed, they were making $500 to $600 a week,” Sterling said. “So I felt bad because my most loyal employees are the ones that I kept on and then if they’d gone on unemployment, they would have made more money. So after the first PPP, probably in September, we decided just to release everybody so that they could collect the unemployment.” Sterling Venue Ventures received two Paycheck Protection Program loans to cover payroll expenses, totaling $1.3 million over both disbursements. Sterling also applied for and received $7 million from a Shuttered Venue Operators Grant. Under that program, businesses could apply for grants equal to 45 percent of their gross earned revenue for 2019, up to $10 million. Most awards have gone to Tier 1 businesses, which suffered losses of revenue of 90 percent or more between April and December 2020.

“When we reported lost revenues, we lost 97 percent of our revenue over the year,” Sterling said.

But, while revenue plummeted during the closures, he said, his regular guests came out of the woodwork to see how they could help. “The funny thing is, the other 2 percent of the revenue was from people calling us and just donating to us. They just were people that come all the time and wanted to do anything they could to help. Those people have a special place for me now, because, you know, they can come to any concert they want for free.”Wider economic impactWhile customers rallied to support Sterling’s locations, the closures and capacity restrictions have had a continued impact on not just his business, but other small music venues and the businesses located around the venues.

“Performance venues tend to support the economies around them as well, including but not limited to things like restaurants and bars and parking garages,” Thor Steingraber, executive director of the Soraya theater on the campus of California State University – Northridge, said.Steingraber has served as director at major venues from Lincoln Center to theaters in Europe and Asia and, during the pandemic organized groups of venue operators to discuss the impacts of the coronavirus on arts and entertainment locations. The closures of restaurants and bars nearby music venues feed off of each other and create cumulative impacts, he said, which have been particularly difficult to navigate.

“It becomes a self-fulfilling prophecy because, say I want to meet friends for a performance, but I can’t also meet them for a drink or dinner,” Steingraber said. “Maybe we’re going to think of a different way to spend our evening together, right? All these things are very interdependent.”Despite the continued impacts of the coronavirus, including the resurgence of the mask mandate late last month, Sterling is confident business will improve. He has called back all of the staff who used to work for him — 25 percent have returned to their jobs and Sterling aims to hire another 100 people to make it through the end of the year. He has changed his point-of-sale system to functionally eliminate the other 200 service jobs and has streamlined ordering technology to limit face-to-face contact with guests in the future.

“I’m very proud of everybody that I’m working around, because they know what we were going through. And, you know, it made us slower, more empathetic,” Sterling said.

Overall, he sees the health of the company trending positively, though the work is much more demanding. “The 100 people that work here, they all make substantially more money. Everybody here is full-time. And there’s no fat, there’s literally no fat in the company. Because I don’t think anybody who didn’t want to work here could even survive a night.”

Katherine Tangalakis-Lippert
Katherine Tangalakis-Lippert
Katherine Tangalakis-Lippert is a Los Angeles-based reporter covering retail, hospitality and philanthropy for the San Fernando Valley Business Journal. In addition to her current beat, she is particularly interested in criminal justice topics, health and science stories and investigative journalism. She received her AA in Humanities from Moorpark College in 2016, her BA in Communication from Cal Lutheran University in 2019 and followed it up with a MA in Specialized Journalism from USC in the summer of 2020. Through her work, Katherine aspires to help strengthen the fragile trust between members of the media and the public.

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