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News of the Signature Bank collapse on Sunday sent alarm bells throughout the Broadway industry, and general managers, producers and accountants worked to ensure the show was able to pay its weekly paycheck.
Broadway’s general manager said, “Broadway owes another letter of thanks to the federal government. If the federal government hadn’t stepped in and taken control, today would have been a nightmare.” hollywood reporter on monday.
(The first letter of thanks went to Senator Chuck Schumer and other members of Congress who helped pass the Shattered Venue Operator Grant bill, which provides up to $10 million for Broadway productions.)
State regulators seized Signature, a New York-based bank, on Sunday night following the collapse of Silicon Valley Bank on Friday. The failure of Silicon Valley Bank spooked Signature Bank customers, leading to Friday’s deposit run. new york times report. Signature Bank, one of the few banks to accept crypto deposits, was also still reeling from its massive exposure to the crypto sector after its collapse last year.
It’s also one of the two major banks working with Broadway productions, so its closure sent alarm bells to the industry.
As of December 31, 2022, the bank had total assets of approximately $110.36 billion and total deposits of approximately $88.59 billion, making it the third-largest bank failure in history.
Over the weekend, as members of Broadway shows saw news that their signature bank had failed and were concerned about how it would affect their ability to not only pay their weekly cast and crew salaries, but other operating expenses. Panic occurred. in hundreds of thousands of dollars. Broadway vendors were also checking with productions to see if they could meet their payment obligations.
Fears subsided somewhat throughout Monday as banks continued to operate for the most part and Broadway productions were able to make wire transfers. Greater reassurance came from the fact that they promised that all depositors of The Federal Deposit Insurance Corporation has moved all deposits and almost all assets to the newly named Signature Bridge Bank operated by the agency.
However, payroll firm Checks and Balances, which partners with many Broadway shows, said it would not issue direct deposits through Signature due to temporary “potential delays in remittances and availability of funds.” We had chosen to issue a hard check. Because, according to a memo sent to the client, the regulator will take over operations.
Despite the reassurance, many Broadway productions plan to hand over at least part of their business to another bank, given the uncertainty about the signing bank and whether it will eventually be acquired. was doing.
“Things are going well, but I would say people are still very cautious with their money,” said Robert Freed, a partner at accounting firm Witham, who heads the firm’s theater and entertainment division. Told. “It’s not a crazy dash because as some say it’s actually the safest place to have your money now since the government guaranteed 100% of your deposits That’s why.”
Many Broadway productions moved or considered moving their day-to-day bank accounts to City National Bank. City National Bank is another main bank working with Broadway productions and a subsidiary of The Royal Bank of Canada. in the US banking industry. (City National Bank is a powerhouse in the non-Broadway entertainment industry and has close ties to Hollywood film and television producers.)
While large banks are looking at long-term investments, City National’s Broadway connection is something many in the industry consider very important given the needs of their specialty.
“Right now, the only bank we can work with is City National because other banks don’t understand our industry and don’t have the ability to face us head-on,” said another general manager. said. THR.