Crunch time: the nation’s funded theatres on their struggle to survive

There have been high-profile casualties – Nuffield Southampton Theatres entered administration in early May and the Royal Lyceum went into “hibernation” a fortnight later, where it will stay until Spring 2021 – but most of England’s national portfolio organisations and their fellow state-subsidised theatres in Wales, Scotland and Northern Ireland managed to weather the initial impact of the coronavirus lockdown.

They took the hit, mitigating it as best they could by furloughing staff, reducing their overheads, and asking ticket-holders to consider leaving their money with the theatre as a donation rather than requesting a refund. Some have taken advantage of Arts Council England, Arts Council Wales, Creative Scotland and the Arts Council of Northern Ireland’s emergency funds, but some have not. “We discussed it,” says Peter Rowe, artistic director of Ipswich’s New Wolsey Theatre, “but it was clear that the money was needed more elsewhere.”

The UK’s subsidised theatres essentially entered standby mode, and that is how they remain, operating with skeleton staff and closed buildings as they wait out the storm and slowly eat into their reserves. Some – those that receive a high percentage of their income from subsidy, and those that had a profitable 2019 thanks to hit shows or West End transfers – can survive like this until next spring. Many – those with a higher percentage of earned annual income and those with limited reserves – cannot last that long.

‘The danger is that we are allowed to reopen, and proceed on that basis, but then have to shut down again’ – Tamara Harvey, Theatr Clwyd

The situation is changing daily, though, and those theatres that survived the first financial trauma of coronavirus are nervously eyeing two further bumps on the road ahead. The first, and probably most severe, is the tailing off of the Coronavirus Job Retention Scheme in October. The wage bill of employees returning from furlough – as much as 85% of the workforce in some cases – will prove insurmountable for organisations that are still unable to open their doors and start earning money. Mass redundancies will be inevitable, insolvency a distinct possibility.

No panto, no Pinter?

The second storm gathering on the horizon is the prospect of a winter without pantomime. For most regional subsidised theatres, the Christmas show is the most popular and best-selling show of the year, the income from which helps to finance the rest of the organisation’s activities. The old adage remains true: you put on the panto to pay for the Pinter. No panto, no Pinter – or anything else, for that matter.

“Our pantomime is the one show every year that actually makes a profit,” says Rowe. “Last year, it made about £350,000. We need that big injection of funds. If we don’t do it this financial year, we will be looking at some significant redundancies.”

He continues: “We are war-gaming various scenarios, and our rule of thumb internally is that we will reopen with the pantomime – whenever that is. If we can do it in February, we’ll do it in February, partly because of its earning potential, but also because of its value to our audience and to the town. It is about the economics obviously, but it is also about what the Christmas show represents within the community.”

‘Just because there is a pandemic underway, it doesn’t mean our civic duty fades’ – Adam Penford, Nottingham Playhouse

Even if it can be achieved on a logistical level, there are financial implications. It is a complex equation, factoring in the possible size of the audience, the length of the run, the cost of the tickets, the size of the cast, the production budget, and more. As Penford explains: “We know that we can make it work practically, but whether or not it adds up is another question entirely.”

And even if theatres can reopen, and a financially viable and hygienic way of staging a show is found, there is another worry: that the paying public will be reticent to return, that artistic directors build it and no one will come. The possibilities of a second wave and a second lockdown, or an illness in the company, also have to be taken into account.

“The real danger is that we are allowed to reopen, and we proceed on that basis, and invest everything to get a show to the point of opening to the public, but then have to shut down again,” says Harvey. “I wish it were as straightforward as either doing it or not, but it is muddier than that.”

Taking responsibility

For subsidised theatres across England, Scotland, Wales and Northern Ireland, there are many questions and few answers. When can we reopen? How can we reopen? Will the audiences come back? Will we have to close again? How will we afford to maintain our staff without government support? How will we continue as a business without putting on a Christmas show?

But amid all this uncertainty, these institutions have not lost sight of their responsibilities, to their audiences, their community, other parts of the industry, and other parts of the economy.

ACE’s relaxing of funding conditions and advancing of current grants has allowed NPOs to pay freelance practitioners already contracted to work with them, and more than 50 organisations have combined to sponsor a freelance task force designed to maintain relationships across the sector and to campaign for an extension to the government’s Self-Employed Income Support Scheme.

It is not just other theatre workers that rely on subsidised theatres for their livelihoods, though. They also play a vital role in the local economies of towns and cities across the country.

“Theatr Clwyd is a major source of income for so many people,” says Harvey. “Take our ice cream supplier, for example, a local Welsh company. It’s a small, simple thing, but we were able to get all our ice creams back to them in time for them to sell from their farm throughout lockdown and survive.”

Then there is the work subsidised theatre does in the community: much of the outreach work of the performing arts industry is carried out by regional theatres, and it is particularly crucial at the moment. As Penford says: “Just because there is a pandemic underway, it doesn’t mean our civic duty fades.”

‘Unless there is a massive bailout, the business just doesn’t make sense any more’ – Tom Morris, Bristol Old Vic

Nottingham Playhouse, and theatres around the country, prioritised adapting those programmes for lockdown. “Some took a little longer to sort out,” says Penford. “Our weekly learning group for disabled adults didn’t really work on Zoom, for example, so we had to find another way to do it. But we are now at the point where every single participation activity we would normally be doing is available online. Many of the participants are shielding, so that strand of our activity is more important than ever.”

On top of all this, most subsidised theatres have continued to create theatre in one form or another, sometimes making it available online for free, sometimes using it as a way of raising much-needed funds to aid their survival.

Nottingham Playhouse, for example, has created Noah and the Peacock, a live-streamed, interactive Zoom play for children; co-produced a series of theatrical documentaries with Theatre Royal Stratford East. And it had a previous production – The Madness of George III – uploaded on to YouTube as part of the National Theatre at Home programme. Penford acknowledges that Nottingham Playhouse is lucky – not all subsidised theatres have a professionally captured NT Live performance available to stream online – but also emphasises the positivity the project engendered.

“It was amazing at the time when it first went out,” he says. “To be able to revisit that in these circumstances was fantastic. I’ve had messages from our furloughed staff and from the freelance cast and creative team saying that it gave them a bit of hope and a bit of emotional relief to see it again.”

Making the case for investment

With the end of the furlough scheme approaching, though, and the doubt over whether or not Christmas shows can go ahead, the stark reality is that subsidised theatres will not be able to survive, let alone continue creating, without significant financial intervention. As Morris says: “The fact is that unless there is a massive bailout, the business just doesn’t make sense any more.”

Morris, along with his fellow artistic directors in Ipswich, Nottingham, Mold and elsewhere, is desperately trying to make the case for this investment. He favours a three-step strategy – a programme of funding that will secure jobs, support theatres while they remain closed, then give them a leg-up when they can reopen.

“Firstly, we need to protect the workforce by extending the Job Retention Scheme and the Self-Employed Income Support Scheme,” he says. “Secondly, we need to construct a sensible, incentivising investment package for when we can reopen, perhaps based around a reform of Theatre Tax Relief. And thirdly, we need to plug the gap in between. That is where the hard thinking is going on.”

Morris mentions director Sam Mendes’ idea, outlined in a recent article he wrote for the Financial Times, of a “cultural investment participation scheme” in which the government acts as a “theatrical angel”, investing in theatres and receiving a share of their profits. He also echoes Mendes’ observation that the streaming services who benefit from the production line of the theatre industry do very little to sustain it.

“If I were running Netflix, I would absolutely be making a major investment in British theatre,” he says. “But then if I were running Netflix, it probably wouldn’t be half as successful as it is, because I’d have done that years ago.”

‘If we don’t do something now, we will be bankrupt by November – we can’t even afford the 20% contribution to the furlough scheme’ – Elizabeth Newman, Pitlochry Festival Theatre

For some subsidised theatres, though, the help is already too late, wherever it comes from and whatever shape it takes. Theatre Royal Plymouth recently announced that it was preparing to make redundancies after experiencing a 90% decline in its income, calling the situation “a regrettable but inevitable result of the ongoing crisis”.

Pitlochry Festival Theatre in Perthshire is particularly vulnerable. It has to earn 85% of its turnover every year, as public subsidy from Creative Scotland and Perth and Kinross Council contributes just 15%. That it earns the money largely during the summer months puts it in an especially precarious position, and artistic director Elizabeth Newman cannot wait for financial aid any longer – help she is sceptical will ever arrive.

“Boris Johnson isn’t suddenly going to see the light and start funding theatre like Germany does,” she says. “He’s just not going to do that. So if we don’t do something now, we will be bankrupt by November, because we can’t even afford the 20% contribution to the furlough scheme. We currently have a staff of 98, which we will have to reduce to 13 full-time members and four part-time. We are economically shot to pieces, but we can’t allow ourselves to go bankrupt because if we go bankrupt, we will never come back.”

She adds: “We have to shrink down to the critical roles that will allow us to keep offering artistic work, keep supporting the local public, and get back up and running again when the time comes. We have to shrink to grow again, because if we don’t – if we don’t find a way of weathering this storm – there won’t be anything on the other side.”