Production costs double in a decade as theatres brace for deficit – report

Cost increases

Production costs have doubled in the past decade, driven by the price of labour, energy, insurance and building maintenance, the report goes on.  

Ninety-one percent of organisations expect total costs to rise in 2025-26, with staffing once again the biggest concern. 

Ninety-two percent anticipate increases in staffing costs, with 45% expecting increases to be significant. 

Beyond staffing, 88% expect supply costs to increase, 77% foresee higher energy costs and 82% anticipate rising maintenance expenditure, the latter being particularly acute for older and listed venues.

The figures are similar to SOLT and UK Theatre’s 2025 report, which also laid bare the impact of cost rises on individual shows. 

"Even a star-led play may only recoup its initial investment – and begin to turn a profit – in its final weeks," the report said last year. 

Deficits 

A "marked deterioration" in the sector’s financial confidence is a key theme to emerge from the report. 

More than half of subsidised theatre organisations and 36% of theatre organisations overall are expecting to record an operating deficit this year, with only 36% expecting their turnover to increase – down from 60% the previous year. 

The figures align with warnings in last year’s report that a third of theatres would run at a deficit this financial year.

The latest report also suggests the outlook in terms of operating costs is getting worse year-on-year. In the 2025 survey, 48% of theatre organisations expected a surplus in 2025–26, with only 5% anticipating a substantial deficit. One year later, only 40% anticipate a surplus, with 13% now expecting a substantial deficit. 

"The sector has repeatedly underestimated the depth and duration of cost pressure," the report reads. 

"Each successive deficit year erodes reserves further, leaving organisations less resilient to external shocks and less able to take the creative and commercial risks on which future growth depends." 

Later, the report stresses that squeezed financials would often take a toll on new work and outreach work most of all. 

"When margins erode year after year, the first things cut are often the ones that matter most over time: new commissions, development programmes, regional touring and early-career opportunities," it reads.
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Box office and attendance 

Attendance to the theatre in general remained healthy, according to the report. 

More than 37 million people attended the theatre in the UK in 2025 – the same as last year – and 17.64 million theatregoers went to the West End – a record for London’s Theatreland, and three million more than Broadway. 

Revenue from West End shows was also record-breaking, according to SOLT and UK Theatre, which placed it at £1.084bn in 2025, up 4.1% from the year before. 

However the report also describes the West End’s financial performance as "uneven" across the year, noting a particularly "fragile" period in the middle of the year.  

"A buoyant first quarter, with double-digit revenue growth and attendances up 8.5%, gave way to a more fragile middle period," it reads. 

"The final quarter softened further, with attendances slightly down year-on-year as households constrained discretionary spending."

Last year, West End producers suffered a "shock" drop in audiences and box-office takings. Sonia Friedman told The Stage: "May is often difficult, but May for most of us was further down than we have ever known it, in terms of audiences and revenue." 

The report also revealed that high attendance figures were partly driven by a higher number of overall performances. While West End attendances hit a record high, average occupancy fell slightly to 84%. 

"Growth came from additional performances and disciplined pricing rather than stronger real-terms income or fuller houses," it reflected.   

Protest and boycott 

The report also addresses the minefield of corporate sponsorship, flagging that access and education initiatives are affected by ethical protests. 

Boycotts have created a "chilling effect" among corporate sponsors, it declares, with support for cultural organisations, once seen as positive for a corporation’s reputation, now sometimes seen as risky. 

"When that income falls away, the impact reaches beyond artistic programmes to access, education and community engagement programmes," the report reads. 

Philanthropic giving in general remains fragile, according to SOLT and UK Theatre. Growth has stalled and competition for the money has intensified, with even large, high-profile organisations struggling to secure multi-year commitments. 
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Other findings 

London is by far the most frequent destination for tours, with 74% of producers taking shows there, followed by North West England at 74% and South East England at 66%. 

Meanwhile ticket prices have fallen in real terms, the report claims, and producers intend to keep it that way, with 63% planning to freeze or reduce their lowest-priced tickets.

Good news

SOLT and UK Theatre also encourage the sector to be optimistic, citing positive changes, including hiked rates of Theatre Tax Relief.

The report calls culture secretary Lisa Nandy’s £270m funding in early 2025, which included £85m for urgent capital works, "the most significant investment in cultural buildings in a generations", and also welcomed the Curriculum Review, which scrapped the EBacc, as a potential game changers. 

Margaret Hodge’s review of Arts Council England is also referenced as a positive intervention. The report suggests that implementing some of its recommendations, including "less bureaucracy", would make a difference. 
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What now? 

The report calls for a number of policy interventions, including relief from higher business rates, which SOLT and UK Theatre labelled "a disproportionate burden, particularly in high-value urban locations". 

Also among its demands are enhanced Theatre Tax Reliefs to cover touring – something Hodge’s review also called for. 

"The question for 2026 is not whether theatre can survive," Essex and Walker reflected. "It will. The question is at what scale, in which places and with how much capacity to invest in the future."