Dark times for theatre unless government acts fastJames Dodd 22nd June 2020
• Two thirds of performance venues have lost over 70% of revenues, our survey shows
• Government help covers less than 30% of those losses, 87% of venue leaders say
It is clear that the UK is about to suffer a severe recession. But some industries will be hit much harder than others. We have conducted a survey of CEO’s and leaders of theatres and performing arts businesses, and the results are shocking.
We will come on to these later: but what is often forgotten is just how important the theatre sector is to the overall UK economy. 14% of all the world’s theatre tourism comes to the UK – it drives more tourism to the UK than sport; it is hugely important to the service sector; and it is the lifeblood of the creative sector which last year accounted for a greater share of the economy than agriculture. Research by Oxford Economics suggests that the arts industries will lose £74bn this year, with the potential loss of 400,000 jobs.
Performance venues provide jobs to local residents and help sustain local economies. Yet the C-19 pandemic has left many at risk of closure. Recently three major venues across the UK made significant announcements; Fiona Allan, CEO of The Birmingham Hippodrome announced they were beginning redundancy consultations; Deborah Shaw, CEO of the Marlowe Theatre Canterbury reported they have lost 98% of their revenues; and Craig Hassall of The Royal Albert Hall suggested the venue would be unable to operate under impractical social distancing after lockdown has lifted, and could face closure.
Without further support, the sector faces devastation. The results of our survey are quite staggering. Already, one fifth of our respondents think they may never open again. 67% of all businesses have lost more than 70% of their revenues for the year. When asked how much of their losses have been covered by the government or loans, 87% replied “less than 30%.” David Guilding, Arts Manager for Warwick District Council, informed us his business had made losses of “£500,000 so far – however we deal with sales in advance (tickets). If those shows are cancelled and we have to refund…” Clearly this situation isn’t sustainable.
77% had furloughed over three-quarters of their staff. Whilst 85% said they had made less that 50% of their team redundant, many were unsure how much longer this would be the case, particularly as the government has begun winding down the scheme.
As Craig Hassall attested, the situation is being compounded further thanks to the continued uncertainty regarding social distancing procedures. Unlike most other businesses, venues have the added consideration of their programme. Almost two thirds of those surveyed have had over 71% of this year’s performances cancelled. Many are tentatively rescheduling for either later this year or next, with no real idea of when or how they will be able to reopen. Some are even having to make further diary changes on a day-by-day basis, because there is simply no way yet of knowing when or how they will be able to open. A mere 21% of those we surveyed hoped to open this coming September – the earliest date anyone gave – but reported the government’s lack of clarity meant this was far from definitive. 69% stated they didn’t expect to open until sometime in 2021.
The preservation of theatre, cultural and entertainment businesses is a crucial part of the future revival of our economy. These businesses don’t just entertain, they educate, support and strengthen communities and the mental health and wellbeing of individuals. They are places where people can learn about different cultures and ideas, and gain business, social and life skills; or they can simply provide an escape from the harsh realities of life. It is a terrible irony that, just when the world is watching more entertainment content than ever, the businesses that provide the future of this content are threatened. The government must step in and either extend the furlough scheme beyond October for specific industries like the arts, or they must deliver an alternative solution.
A number of leaders suggested a possible phased re-opening, allowing them to open their F&B areas and lower capacity performance spaces, then their larger spaces. Some highlighted the need for ideas and instruction on alternative ways their business could function. Others discussed the need for loans which would enable them to continue with or carry out essential restoration work whilst they are forced to be dark. But above all, almost everyone we surveyed stressed the need for clarity, guidelines and a solution from government, fast. Because time is running out.
Martin Tripp Associates is a London-based executive search consultancy. While we are best-known for our work across the media, information, technology, communications and entertainment sectors, we have also worked with some of the world’s biggest brands on challenging senior positions. Feel free to contact us to discuss any of the issues raised in this blog.