Supply companies: ‘We’re planning for the worst and hoping for the best’
As theatres stand dark the situation has become a “ticking time bomb” for suppliers, who are facing mounting costs from landlords, leasing companies and the taxman. Theo Bosanquet speaks to some of the industry’s leading suppliers about the long-term impacts of lockdown
All areas of the theatre industry have been hit hard by the coronavirus lockdown, but supply companies in particular have found themselves in a difficult predicament. With the productions and events they equip with lighting and sound kit, sets, props and costumes now shut down, they have lost almost all of their business. But the bills they pay, whether in rent or loan repayments, have continued to stack up.
Chris Headlam, managing director of Orbital Sound in south London, describes the situation as a “ticking time bomb”. The major problem, as he describes it, is that much of the cutting-edge equipment on loan to theatres and live events – which is still in situ in many cases – has been bought on hire-purchase agreements. When producers pay to rent it, suppliers can make a profit margin, but with venues currently dark, their ability to pay off those loans is in jeopardy.
“If you switch off one end of the supply chain, but the other end carries on, that’s where you end up with a very dangerous situation,” Headlam says. He predicts that without help, many companies in the sector “will be out of business by the summer”.
On Friday, suppliers called on the government for support, publishing a 10-point plan in an open letter. The letter was written, in collaboration with industry colleagues, by Bryan Raven, managing director of White Light, one of the industry’s leading lighting suppliers. He agrees that the current environment is “extremely challenging”. While he is confident the company can weather the storm, he is nevertheless braced for a drastic reduction in demand.
“We expect the company to reduce in size by 20% to 30% [after lockdown],” he says. “It’s not about saving money in the short term, but about recognising that the markets we supply, including theatre, broadcast and corporate events, are sadly going to take a hit.”
‘We expect the company to reduce in size by 20% to 30% after lockdown. The markets we supply are going to take a hit’ – Managing director of White Light Bryan Raven
Of those markets, broadcast is recovering most quickly as TV companies scramble to fill empty schedules over the summer. White Light has even constructed a temporary TV studio in its warehouse to meet demand. But the outlook for theatre is far more uncertain. Raven feels that if shows can start reopening in some form in the autumn, in time for the Christmas seasons, the financial blow will be much easier to cushion.
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But he fears the ramifications of a longer closure. “If we have to wait until next year, I’m not sure what state the industry will be in. We’re planning for the worst, hoping for the best.”
Raven points out that, as with Orbital, White Light’s costs – ordinarily it has 260 staff and a £40 million turnover – are still ongoing. “The challenge is that nobody is giving us any waivers – our landlords, leasing companies, the taxman – no one is giving us grants. Our clients still have our kit, but they’re not paying for it currently. So, it’s going to leave a big dent in the financial fortunes of the supply industries.”
As is the case for many sectors, the furlough scheme has been crucial in keeping companies in the supply industry afloat. Angels, one of the country’s leading costume suppliers, has furloughed its entire team of 150, besides management, who are meeting daily via Zoom to navigate the company through the crisis. “All of our current work – both hire and manufacture – has stopped,” says production director Jonathan Lipman. “It has left us in a very difficult situation in terms of what happens next.”
’All of our current work – both hire and manufacture – has stopped’ – Production director of Angels Jonathan Lipman
Like Raven, he is confident his company will bounce back, as long as the furlough scheme extends to cover the entire period that theatres are closed. And he is concerned that many of the freelance costume-makers Angels relies on are in a precarious position. “There is a danger of an entire section of the industry falling through the net,” he says, clearly nervous that even when the work does come back there will be a shortage of skilled personnel to do it.
But he is buoyed by conversations he has had with some of Angels’ clients, which include West End big hitters Hamilton and Wicked. “We have had dialogue with a few production companies that are optimistic they can start up again as soon as government guidelines allow, which is encouraging.”
Like many in the theatre industry, suppliers are concerned about government support falling away too quickly after lockdown, making it difficult for the industry to recover in the long term. And despite reorganising their workshops and warehouses to accommodate social distancing, there are no easy solutions for handling what is likely to be a difficult transition period. As Lipman puts it: “There is not going to be a light-switch moment when everything starts up again.”
Headlam feels the crisis has highlighted some longer-term issues, not least the reliance on expensive equipment. He claims that with designers and technicians increasingly demanding the “latest toys”, costs have spiralled. “The whole industry has got into a problem because the person dictating the size of the cheque is not the person writing it. That’s an insane way to operate.”
But he says the lockdown has forced a rethink, while driving the company to use all of its creativity to find a way through. “All those years working against the clock to open the doors and let the first audience in have taught us enormous resilience and inventiveness. Orbital’s software teams are busier than ever developing new products for the future. Our project managers have become builders, knocking down walls and modernising the warehouse. Everyone is learning new skills.”
Even if live events do return in some form by the autumn, there are still big unknowns regarding how many people will be happy to attend them. As Lipman acknowledges: “Nothing will really return to normal until audiences feel safe.” When we spoke, his biggest concern was whether the government will continue the furlough scheme – a few days after the interview, chancellor Rishi Sunak announced the extension of the scheme until October – and freelance support until the point that venues have fully reopened. He has approached BECTU to initiate a discussion about lobbying the government on behalf of costume-makers.
On the tech side, even greater help may be needed. Headlam estimates there is as much as £1.8 billion in borrowed finance across the industry. And he says many producers are in the dark regarding the true financial situation of their suppliers, mistakenly assuming they own the kit outright. “Supply companies have ongoing leasing and hire-purchase commitments on the equipment that is currently in the theatres. Just because the prime minister rightly tells people not to go to the theatre, that does not mean those obligations don’t carry on.”
He even raises the grim prospect of equipment being repossessed from theatres if companies are forcibly dissolved. But he emphasises that solutions can be found if all links of the supply chain pull together. “We truly hope that when our industry reopens, we will all remember how to multitask, how to muck in, how to support others when under pressure. Theatre is best when created by a team – let’s hope our industry remembers that and is better for it in the long term.”
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