The Year In Clubs: Record Revenues For Some, Struggles For Others

It’s easy to look at Pollstar’s Worldwide Top 200 Clubs grosses chart and see that for the top performers, the post-pandemic concert firehose was most definitely “on” in 2023. But it wasn’t that way for all of them – particularly those that struggled most to survive during the 2020-21 COVID shutdown and have yet to fully recover.

At the top of the chart, the 5,009-capacity MGM Music Hall at Fenway Park in Boston replaced perennial chart-topper House of Blues Boston (now Citizen’s House of Blues) as the highest-grossing club venue, selling 449,641 tickets for a gross of $27,699,329 during the reporting period that ran from Nov. 17, 2022 to Nov. 15, 2023.

And there is The Sylvee in Madison, Wisconsin, which ended the year at No. 13 after finishing at No. 12 in ‘22, despite vastly improving its box office receipts.

In 2023, The Sylvee took in $6,001,914 in grosses and 128,321 tickets sold compared with 2022’s gross of $5,386,016 and 125,385 tickets, or roughly a 10% increase.

On the other end of the spectrum are clubs like Happy Dog in Cleveland, which by day is a restaurant specializing in hot dogs, customizable with 50 toppings, but also presents live events including concerts for a capacity of about 250 by night.

Rising costs, and ticket prices, coupled with and in a way resulting in, declining ticket sales are faced not only by Happy Dog but similar small and mostly independent venues.
Its owner, Sean Watterson, would like to see more support from local governments.

As a NIVA precinct captain in Ohio, he led the Save Our Stages initiative in that state to lobby for emergency relief during the pandemic, but he notes the distribution of support funds that kept so many independent small venues afloat has long ended; however, some states have enacted their own support programs that continue. But it’s not enough.

One solution, he believes, is for organizations like NIVA and D-Tour, which advocate for small independent operators, to continue lobbying efforts to keep their business front of mind for legislators and other decision-makers.

Other clubs have battled rising rental and lease costs or, in the case of Exit/In, Nashville’s venerated rock club that was taken over by a hotel development company in December 2022, lost their spaces to gentrification.

In a very real sense, the only safe club is the one whose owners also own the real estate.
The Sylvee is owned and operated by FPC Live in partnership with Live Nation, and FPC Live President Scott Leslie is quick to credit his team and attention to the artist and fan experience they offer for its success.

“We have a team that is absolutely obsessed with making the artist experience amazing and the patron experience amazing,” Leslie says. “And it makes booking really
easy when artists want to play there and the shows perform well because fans want to
go to see shows. We’ve tried to impart on our team to never get complacent and always be trying to figure out something else that we can be doing for artists on the road, and something else that we can be doing for our patrons to get them in quicker to shorten lines. When you create that cocktail of an amazing artist experience and amazing patron experience, that makes the booking of shows and the marketing of shows a little bit easier – which is probably why we had that success.”

He does acknowledge the possibility that with so much competition for discretionary dollars, clubs have to step up their games in order to not only thrive, but to just keep pace.
“We see this experience economy that’s happening,” Leslie says. “Are you giving the artists and patrons the standard experience or something more? Are your bathrooms frightening, or are they clean? I think those are relevant questions that all venues of all sizes need to be asking at this point, because it’s all part of the experience.

“[As a patron,] maybe you’re going out for an evening, you’re meeting for drinks before or after, you’re going out for dinner with your significant other beforehand. Very few of these things happen in a vacuum where you go to the venue and then go home. You make an evening out of it. … Clubs are creating the same sort of experience, like it used to be with trendy restaurants. It all boils down to the experience.”

But the club market is a complicated one; even moreso during complicated times and an unprecedented post-pandemic landscape that continues to be marked by global inflation, staffing shortages and continued health concerns that have not completely dissipated.

Societal changes, regulatory hurdles, and even competition for wallet contents from stadium megatours make it harder for smaller venues to compete.

There may be a well-documented glut of concerts on the road, but many smaller club venues could be staring at ruin rather than the riches reaped by their newer, larger-market, and often better-funded cousins.

The rising tide is not necessarily raising all boats, says Watterson, who gave up a job as an attorney for the Securities and Exchange Commission specializing in counter-terrorism and anti-money laundering to open Happy Dog, which just celebrated its 15th anniversary in August.

It presents about 220 events a year, according to Watterson, 175 of which are live music and a majority of those are with touring acts. The remainder are mostly local artists.

“You look in 2022, and our loss is 13%. And top line revenue is down from 2019 versus 2022,” Watterson tells Pollstar. “When you dig through the numbers, you see our shows used to be like $5 to $8 shows. And that’s gone up. Now our average shows are $10 to $12 shows.”

Watterson notes that, like many smaller clubs, Happy Dog operates on a 100% door deal for live events.

The artist gets the ticket revenue, and the venue gets the bar income, pays the taxes and sends money to the performing rights organizations. Watterson doesn’t begrudge the artists taking that revenue.

“But because we’re doing door deals, none of that money is coming to us,” he explains. “And actually our costs go up further because in Cleveland we have an admissions tax. We send money to Nashville for the PROs. We’ve gone from a small profit to a sizable loss. And that’s not unique.

“That revenue that’s coming from tickets has gone up and we’re not seeing it as being passed through to the artists in our case. [Rising ticket prices] means a decrease in the number of people coming. And the change in habits in terms of the amount of alcohol you’re selling is noticeable. The costs have gone up. Your labor has gone up. All of your costs of goods have gone up, and your demand is spotty,” Watterson says.

Competition with more entertainment options, or when a massive stadium tour comes to the market, is a common struggle regardless of club size.

“It might be difficult to counterprogram against a stadium show on any given week or weekend,” Leslie says. “But you also have an opportunity to get 45,000-50,000 concertgoers into the idea of going to see music [at your club]. If you’re able to give them a great experience, you can re-engage with that fan with the right show as a downstream opportunity.”

It would be easy, and cynical, to say that’s just how markets work. The problem with economic Darwinism is it doesn’t take into account the role these smaller clubs play in the live music ecosystem. They are where talent is developed and serve as community centers and revenue generators for local businesses.

“We’re of value to the community. We have people playing on our stage and that’s their creative outlet,” Watterson emphasizes. “In this community, they’re playing for family and friends and they’re bringing our communities together. And the harder it is for spaces to maintain this, to exist – these spaces that in the pre-COVID days were a little better than break-even – you’re losing a lot more than just a place for the next superstar to start their career. You’re losing community.”