EEMA Examines The Impact Of Covid-19 On Entertainment Industry
The Events and Entertainment Management Association (EEMA) recently conducted a member survey with 170 companies that were affected by COVID-19. The report highlights the loss of business, the revenue impacted, employers affected and the funds required in the long run to attain stability. The findings of this report have been shared with “The Government of India” and “Ernst & Young” team. Recently EEMA had filed a petition appealing to the Government of India to intervene with measures to support the lives of the 60 million Indians the event industry employs – directly and indirectly.
Some of the key findings of the report:
1) Around 52.91% of companies resulted in 90% of their business being cancelled between March-July 2020
2) 63.1% companies i.e. around 107 companies suffered from a revenue loss of up to 1CR
3) Around 7 companies envisage a 50%-80% retrenchment of their current workforce and 35 between 25%-50%
4) The ideal working capital/loan expected to keep afloat for the next 6 months is around 2-5 CR for 39 companies and 1-2 CR for 118 companies
5) Around 97 companies will need to raise capital or debt from institutions or shareholders, VC funding etc.
EEMA requested the Government of India to consider the following steps to alleviate the present situation:
o Release with immediately effect, all tax refunds that are due including income tax and TDS
o Cover cost of salaries/ daily wages, etc., for those infected by COVID 19 and unable to return to work
o Collateral free line of credit to be used for employee’s salaries and statutory dues
o Moratorium of payback on loans, interest for a period of 9-12 months
INDUSTRY-WIDE RECONSTRUCTION MEASURES:
o Pay all dues to companies who have executed work orders for the Government of India, Public Sector and for State Governments
o Zero or minimal interest loans to be made available by the Department of MSME for the fiscal year 2020
o Government-initiated projects should replace the need of Bank guarantees with Corporate guarantees
o Loans to be provided for loss-making companies against future contractual work
o Instruct insurance companies to insure future events and activities against Covid-19 or similar medical/ biological disasters in addition to existing natural disasters
o To cover the cost of salaries/ daily wages of employees laid off for a period of 90 days minimum
o Reduction of GST on entertainment and cultural events to 12% and the arts and entertainment segment may be covered
The event and entertainment industry is going through challenging times since the outbreak of the coronavirus. The economic disruption has led businesses across various sectors to see a huge downfall in their growth. The worst affected are the event industry who are witnessing a major dip in their business due to the cancellation of events worldwide. Due to which, there has been a significant spike in the number of webinars, online discussions and live chats to keep the industry active. However, the daily wage workers and the small and medium scale agencies associated with the trade are facing the brunt and need immediate support, both from the events community and the government.
The 170 member survey represents over a 1,00,000 of companies that were affected by this pandemic and EEMA urges the government to consider some steps like the immediate payout of all income tax refunds, which have been due for a while, and the due payment from the central and state governments to event companies for work done or work-in-progress.
Sanjoy K Roy, President, EEMA said, “The COVID-19 pandemic will impact the entire business community, and our team is focused on ensuring the health and safety of our employees. Industries have already faced an interlocking set of financial challenges for which we filed a petition to the government of India. The sectors are getting into a financial crisis which might soon result into increasing unemployment ratios. We hope that the Government takes the required decision which can help the country to survive with the results of the pandemic.”