finance

Theatre finances: angelic intervention needed


A masked, socially-isolated figure in an abandoned theatre is drawing crowds in Seoul. The themes are uncomfortably up-to-date, even if the show — The Phantom of the Opera — is evergreen. The musical goes on eight times a week in South Korea thanks to protective gear, temperature checks and health tracking apps. That is rare good news for a beleaguered industry.

In many global cities, the arts are in crisis. Pandemic-induced closures have few precedents. Even after the September 2001 terrorists attack, Broadway receipts recovered after a few weeks. This time, the theatre industry fears it will be last to reopen. That is reasonable given the dangers of tightly-packed indoor mass gatherings and older audiences. London theatres sell more than a quarter of their tickets to the 64-74 age group, the Arts Council says.

There will be exceptions. In London, an immersive Great Gatsby will open in October. The masked and gloved audience will move around at a safe distance. In more conventional shows, keeping patrons 2m apart from strangers would mean losing some three-quarters of ticket sales. That would make shows, particularly lavish ones, unviable. Musicals usually need to sell 55 per cent of tickets to cover running costs.

Theatres no longer rely so heavily on subsidies

London’s Royal Opera House has even less headroom. Break-even requires 95 per cent occupancy. Box office accounts for a third of income. But much of the rest — catering, retail, memberships, some philanthropy — is also linked to performances. Closing the Covent Garden venue has lost the ROH £3 in every £5 of income. It has reduced costs, furloughed staff, and will this month stream some pay-per-view performances. Even so, reserves, £5m going into the crisis, will not last beyond the autumn.

It is not alone. 70 per cent of UK venues expect to run out of cash by the end of the year. Some already have. The industry is relying on the government to step in. Some £300m is needed every three months to save the sector during lockdown, it says. Its outsized role in attracting tourism bolsters its case.

The UK arts scene has shown resilience before. When grants were cut after the financial crisis, theatres increased fundraising as well as ticket sales. Once they reopen, they will work hard to trade their way back to financial health, probably by putting on safe bankable productions. But the pandemic’s economic fallout will leave backers, so-called “angels”, and audiences strapped for cash. Some venues are going to be plunged into the same darkness as the Phantom’s lair.

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