Business
A local LGBTQ+ nightclub was denied COVID-19 aid. Its owner is fighting back
On a Saturday night at North Hollywood’s Club Cobra, a drag queen dressed as Miley Cyrus lip-synced to “Zombie” by the Cranberries, with Halloween decor and disco balls dangling from the ceiling. Muscular go-go dancers grooved in a cloud of rainbow fog while patrons vibed to hits by Selena and Bad Bunny.
It wasn’t easy for the popular Latin LGBTQ+ nightclub to rebuild to this level of live entertainment after nearly going out of business because of the COVID-19 pandemic.
The public health crisis shut the operation down for 18 months and left its owners hundreds of thousands of dollars in debt. Making matters worse, the U.S. Small Business Administration has repeatedly denied Club Cobra’s application for COVID-19 relief money, alleging that the establishment offered services of a “prurient sexual nature.”
For Marty Sokol, 56, owner of Club Cobra, the lack of government assistance has been frustrating and surprising.
“We’re the good guys in this town,” Sokol said by phone. “We’re the place you have your birthday party at. We’re the place you bring your tía to. … It’s beyond insulting.” (Tía is Spanish for aunt.)
Sokol is one of multiple business owners who say they were unjustly denied money from the Shuttered Venue Operators Grant program, launched by the federal government in 2021 to provide financial support of up to $10 million to arts and entertainment venues and promoters decimated by the pandemic.
Some have taken legal action against the SBA. And though the courts have sided at various points with the business owners, Sokol and others are still fighting for financial aid.
“We really feel wronged,” Sokol said. “If it wasn’t for our community, there’d be no way we would have survived.”
The issue isn’t limited to nightclubs. The Times also spoke with a North Carolina-based movie theater chain and a Tennessee concert promoter that have struggled to secure grants. Prominent cases — including a dispute between the SBA and exhibition basketball team the Harlem Globetrotters over $10 million in grant money — have drawn attention to the problems. (The court dismissed the Globetrotters’ complaint against the SBA last October.)
The SBA has also drawn scrutiny for awarding more than $200 million in SVOGs to companies with rich and famous owners — such as Post Malone, Chris Brown and Lil Wayne — while withholding assistance for others, according to a report by Business Insider.
“The overarching complaint has been there is a lack of transparency in the SBA’s decision-making process,” said James Sammataro, a Miami-based partner at law firm Pryor Cashman who has represented entertainment businesses in other SVOG cases.
“What [critics have] essentially said is it’s too subjective. … It’s applied unevenly, and the SBA has — intentionally or otherwise — created a hierarchy of who is more entitled to receive the grant money.”
The SBA declined to comment, saying it “does not provide comment on pending litigation.”
The SVOG controversy serves as a reminder of the lingering consequences of COVID-19 years after the pandemic first wreaked havoc on the economy and judicial system. Just as entertainment businesses were disrupted by the global health crisis, so too were the courts, Sammataro said, compounding the typical tedium.
“There’s no expedition that’s applied to these types of cases, even though you’re literally dealing with companies [whose] very lifeline may be on the line,” Sammataro said.
Marty Sokol at Club Cobra in North Hollywood.
(Michael Blackshire / Los Angeles Times)
Club Cobra has been serving drinks, DJ sets and live performances to the local LGBTQ+ community for more than a decade. Its sister establishment, Club Chico in Montebello, is coming up on its 25th anniversary.
During the COVID-19 shutdowns, Sokol and his team kept their business alive by streaming a socially distanced drag and go-go show on the subscription platform OnlyFans. Proceeds weren’t enough to dig Club Cobra out of debt, so Sokol applied for a $486,762 grant in April 2021.
When the SBA rejected Club Cobra’s application, Sokol appealed.
After some prodding, Sokol received an SBA email on Nov. 3, 2021 explaining that Sokol’s application was denied “at least in part” because Club Cobra “presented live performances of a prurient sexual nature” or derives meaningful revenue “through sale of products or services, or the presentation of any depictions or displays, of a prurient sexual nature.” In official materials regarding the SVOG program, the SBA outlines prurience as grounds for disqualification.
The SBA took issue with images of Club Cobra dancers in “seemingly sexualized” poses and “revealing” outfits posted on the business’ social media platforms. It also disapproved of the virtual drag and go-go shows that Club Cobra streamed on OnlyFans, calling them “erotic dance shows.”
Club goers enjoy each other’s company at Club Cobra in North Hollywood.
(Michael Blackshire / Los Angeles Times)
Sokol sued, accusing the agency of arbitrarily and capriciously refusing Club Cobra grant money while awarding SVOGs to similar establishments around Los Angeles — such as LGBTQ+ nightclub Reload Entertainment on Cahuenga and Silver Lake’s Los Globos. The SBA argued that it had conducted an informal review of the other establishments and determined that an additional “prurience review” was not necessary.
Sokol demanded that the U.S. district court in D.C. force the SBA to reconsider his application. The court concluded that the SBA failed to provide a “reasoned analysis for why these apparently similarly situated competitors were treated differently.”
Sokol said it was painful to see other nightclubs receive emergency aid while Club Cobra was refused money he could use to cover renovations, outstanding rent payments and other obligations.
“Watching them rebuild with great ease, we didn’t begrudge them,” Sokol said. “We just wanted equal treatment.”
In December 2022, the SBA vetoed Sokol’s application again, this time providing analyses of five “alleged competitors” and why they qualified for grants. The SBA reasoned that, for the most part, those establishments did not regularly post suggestive images or present live performances of a prurient nature.
Sokol filed another motion for summary judgment in May 2024. The court has yet to respond.
Audry Cobra performs during a drag show at Club Cobra in North Hollywood.
(Michael Blackshire / Los Angeles Times)
Another business in contention with the SBA is Golden Ticket Cinemas, a North Carolina-based theater chain. .
Golden Ticket Cinemas President John Bloemeke had opened his fifth and sixth locations when COVID-19 ravaged the entertainment industry
Bloemeke was able to secure grants for most of his locations, but not for two based in DuBois, Pa., and Rapid City, S.D. After Bloemeke challenged the SBA’s move to shun those theaters, the government agency offered the business owner roughly $500,000 — down from the roughly $2.8 million he asked for.
Patrons dance together at Club Cobra in North Hollywood.
(Michael Blackshire / Los Angeles Times)
Bloemeke filed complaints accusing the SBA of shortchanging Golden Ticket Cinemas and then failing to disburse those funds.
The SBA countered that Golden Ticket Cinemas wasn’t eligible for the full SVOG amount requested because those locations had allegedly been operational for longer than Bloemeke reported.
The court agreed with the SBA’s position that it was not legally obligated to disburse the funds. However, it also concluded that the agency’s logic for awarding a significantly lower amount was flawed and ordered the SBA to reevaluate the application.
According to Bloemeke, the SBA has yet to heed the court’s ruling.
“It was very frustrating,” Bloemeke said. “I mean, we have a nine-plex that’s only operating five of the screens because we’re still trying to get our head a little bit above water with some of this stuff.”
A go-go dancer performs at Club Cobra in North Hollywood.
(Michael Blackshire / Los Angeles Times)
Meanwhile in Nashville, Justin Roddick is still trying to snag a grant for his company, Concert Investor, which produces tours for up-and-coming musicians. Over the past 12 years, Concert Investor has helped launch the careers of Twenty One Pilots, Little Big Town, Kelsea Ballerini and other artists.
When acts stopped touring during the pandemic, Roddick’s business suffered.
“A year after COVID, we found ourselves with no other option other than to completely restart,” Roddick said. “So when I heard about the grant, I was very excited.”
Roddick was soon disillusioned. His request for about $5 million was denied multiple times, with the SBA deciding that Concert Investor did not control enough aspects of its productions to “meet the definition of a performing arts organization operator.”
A club goer dances in the crowd at Club Cobra in North Hollywood.
(Michael Blackshire / Los Angeles Times)
. The Concert Investor team alleged that the SBA unfairly altered the definition and moved the goal posts after the fact.
Initially, the court ruled in favor of the SBA. But an appeals court reversed that ruling in May 2024.
According to Patrick Corcoran, a representative for the businesses, the SBA was given a deadline of Dec. 11 to deliver a new decision. Depending on how the agency responds, Roddick might have to wait for the next Ballerini or Twenty One Pilots to come along and revive his touring business.
“It’s devastating to pay into the system and to believe it works a certain way … and then to have no action,” Roddick said. “It’s kind of unreal to me.”
Nike is cutting about 1,400 jobs in its operations division, mostly from its technology department, the company said Thursday.
In a note to employees, Venkatesh Alagirisamy, the chief operating officer of Nike, said that management was nearly done reorganizing the business for its turnaround plan, and that the goal was to operate with “more speed, simplicity and precision.”
“This is not a new direction,” Mr. Alagirisamy told employees. “It is the next phase of the work already underway.”
Nike, the world’s largest sportswear company, is trying to recover after missteps led to a prolonged sales slump, in which the brand leaned into lifestyle products and away from performance shoes and apparel. Elliott Hill, the chief executive, has worked to realign the company around sports and speed up product development to create more breakthrough innovations.
In March, Nike told investors that it expected sales to fall this year, with growth in North America offset by poor performance in Asia, where the brand is struggling to rejuvenate sales in China. Executives said at the time that more volatility brought on by the war in the Middle East and rising oil prices might continue to affect its business.
The reorganization has involved cuts across many parts of the organization, including at its headquarters in Beaverton, Ore. Nike slashed some corporate staff last year and eliminated nearly 800 jobs at distribution centers in January.
“You never want to have to go through any sort of layoffs, but to re-center the company, we’re doing some of that,” Mr. Hill said in an interview earlier this year.
Mr. Alagirisamy told employees that Nike was reshaping its technology team and centering employees at its headquarters and a tech center in Bengaluru, India. The layoffs will affect workers across North America, Europe and Asia.
The cuts will also affect staffing in Nike’s factories for Air, the company’s proprietary cushioning system. Employees who work on the supply chain for raw materials will also experience changes as staff is integrated into footwear and apparel teams.
Nike’s Converse brand, which has struggled for years to revive sales, will move some of its engineering resources closer to the factories they support, the company said.
Mr. Alagirisamy said the moves were necessary to optimize Nike’s supply chain, deploy technology faster and bolster relationships with suppliers.
A bill that would have required insurers to offer coverage to homeowners who take steps to reduce wildfire risk on their property died in the Legislature.
The Senate Insurance Committee on Monday voted down the measure, SB 1076, one of the most ambitious bills spurred by the devastating January 2025 wildfires.
The vote came despite fire victims and others rallying at the state Capitol in support of the measure, authored by state Sen. Sasha Renée Pérez (D-Pasadena), whose district includes the Eaton fire zone.
The Insurance Coverage for Fire-Safe Homes Act originally would have required insurers to offer and renew coverage for any home that meets wildfire-safety standards adopted by the insurance commissioner starting Jan. 1, 2028.
It also threatened insurers with a five-year ban from the sale of home or auto insurance if they did not comply, though it allowed for exceptions.
However, faced with strong opposition from the insurance industry, Pérez had agreed to amend the bill so it would have established community-wide pilot projects across the state to better understand the most effective way to limit property and insurance losses from wildfires.
Insurers would have had to offer four years of coverage to homeowners in successful pilot projects.
Denni Ritter, a vice president of the American Property Casualty Insurance Assn., told the committee that her trade group opposed the bill.
“While we appreciate the intent behind those conversations, those concepts do not remove our opposition, because they retain the same core flaw — substituting underwriting judgment and solvency safeguards with a statutory mandate to accept risk,” she said.
In voting against the bill Sen. Laura Richardson, (D-San Pedro), said: “Last I heard, in the United States, we don’t require any company to do anything. That’s the difference between capitalism and communism, frankly.”
The remarks against the measure prompted committee Chair Sen. Steve Padilla, (D-Chula Vista), to chastise committee members in opposition.
“I’m a little perturbed, and I’m a little disappointed, because you have someone who is trying to work with industry, who is trying to get facts and data,” he said.
Monday’s vote was the fourth time a bill that would have required insurers to offer coverage to so-called “fire hardened” homes failed in the Legislature since 2020, according to an analysis by insurance committee staff.
Fire hardening includes measures such as cutting back brush, installing fire resistant roofs and closing eaves to resist fire embers.
Pérez’s legislation was thought to have a better chance of passage because it followed the most catastrophic wildfires in U.S. history, which damaged or destroyed more than 18,000 structures and killed 31 people.
The bill was co-sponsored by the Los Angeles advocacy group Consumer Watchdog and Every Fire Survivor’s Network, a community group founded in Altadena after the fires formerly called the Eaton Fire Survivors Network.
But it also had broad support from groups such as the California Apartment Association, the California Nurses Association and California Environmental Voters.
Leading up to the fires, many insurers, citing heightened fire risk, had dropped policyholders in fire-prone neighorhoods. That forced them onto the California FAIR Plan, the state’s insurer of last resort, which offers limited but costly policies.
A Times analysis found that that in the Palisades and Eaton fire zones, the FAIR Plan’s rolls from 2020 to 2024 nearly doubled from 14,272 to 28,440. Mandating coverage has been seen as a way of reducing FAIR Plan enrollment.
“I’m disappointed this bill died in committee. Fire survivors deserved better,” Pérez said in a statement .
Also failing Monday in the committee was SB 982, a bill authored by Sen. Scott Wiener, (D-San Francisco). It would have authorized California’s attorney general to sue fossil fuel companies to recover losses from climate-induced disasters. It was opposed by the oil and gas industry.
Passing the committee were two other Pérez bills. SB 877 requires insurers to provide more transparency in the claims process. SB 878 imposes a penalty on insurers who don’t make claims payments on time.
Another bill, SB 1301, authored by insurance commissioner candidate Sen. Ben Allen, (D-Pacific Palisades), also passed. It protects policyholders from unexplained and abrupt policy non-renewals.
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Politicians in Washington and the reporters who cover them have an often adversarial relationship.
But on the last Saturday in April, they gather for an irreverent celebration of press freedom and the First Amendment at the Washington Hilton Hotel: The White House Correspondents’ Association dinner.
Hosted by the association, an organization that helps ensure access for media outlets covering the presidency, the dinner attracts Hollywood stars; politicians from both parties; and representatives of more than 100 networks, newspapers, magazines and wire services.
While The Times will have two reporters in the ballroom covering the event, the company no longer buys seats at the party, said Richard W. Stevenson, the Washington bureau chief. The decision goes back almost two decades; the last dinner The Times attended as an organization was in 2007.
“We made a judgment back then that the event had become too celebrity-focused and was undercutting our need to demonstrate to readers that we always seek to maintain a proper distance from the people we cover, many of whom attend as guests,” he said.
It’s a decision, he added, that “we have stuck by through both Republican and Democratic administrations, although we support the work of the White House Correspondents’ Association.”
Susan Wessling, The Times’s Standards editor, said the policy is a product of the organization’s desire to maintain editorial independence.
“We don’t want to leave readers with any questions about our independence and credibility by seeming to be overly friendly with people whose words and actions we need to report on,” she said.
The celebrity mentalist Oz Pearlman is headlining the evening, in lieu of the usual comedy set by the likes of Stephen Colbert and Hasan Minhaj, but all eyes will be on President Trump, who will make his first appearance at the dinner as president.
Mr. Trump has boycotted the event since 2011, when he was the butt of punchlines delivered by President Barack Obama and the talk show host Seth Meyers mocking his hair, his reality TV show and his preoccupation with the “birther” movement.
Last month, though, Mr. Trump, who has a contentious relationship with the media, announced his intention to attend this year’s dinner, where he will speak to a room full of the same reporters he often derides as “enemies of the people.”
Times reporters will be there to document the highs, the lows and the reactions in the room. A reporter for the Styles desk has also been assigned to cover the robust roster of after-parties around Washington.
Some off-duty reporters from The Times will also be present at this late-night circuit, though everyone remains cognizant of their roles, said Patrick Healy, The Times’s assistant managing editor for Standards and Trust.
“If they’re reporting, there’s a notebook or recorder out as usual,” he said. “If they’re not, they’re pros who know they’re always identifiable as Times journalists.”
For most of The Times’s reporters and editors, though, the evening will be experienced from home.
“The rest of us will be able to follow the coverage,” Mr. Stevenson said, “without having to don our tuxes or gowns.”
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