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Not a Level Playing FieldDateline: 8th February, 2004The West End is not competing with the subsidised sector on a level playing field, says Andrew Lloyd Webber (see our news story). So, he says, producers should get tax breaks, like those brought in for the film industry in 1997. He is to raise the matter in the House of Lords. But the two worlds, of theatre and film, are completely different. We have been subsidising theatre for decades, not just in London but across the country, but the British film industry was not subsidised. Because of the predominance of the Hollywood blockbuster, wioth its huge costs, British film producers were not able find the level of funding needed to make films that could compete, being restricted to low budget work or those films, such as Shakespeare in Love, which were, as it were, subcontracted by Hollywood producers (Miramax) to a British company. As a result, British film makers were heading off the the States and the industry was dying. In theatre, however, we have a totally different situation. We have a subsidised sector, which consists of major companies like the RSC and the National, and theatres such as the Royal Court, the West Yorkshire Playhouse and so on, and theate companies, such as, for example, Out of Joint, which are funded either by Arts Council England centrally or by one of its regional offices, the former Regional Arts Boards. When these companies make a profit, the money is ploughed back into productions and to support the future running of the company. These subsidised theatres and companies have a complex income stream, consisting of funding from ACE (wheresoever it comes), sponsorship from business (either for tax loss or PR purposes), local authority funding, and box office. Merchandising and advertising on tickets and in programmes add a little income, and many theatres add to this income from hiring the theatre for conferences and other corporate events. The commercial theatre sector, however, depends upon money from the producers themselves (companies set up with the aim of producing shows and to make money therefrom), from "angels" (people who wish to invest in theatre, often because of a love for theatre), from venture capitalists (who aim to make a quick and, preferable, very large profit), and the box office. Alongside this, of course, is a merchanding/advertising stream, similar to that of the subsidised sector. Profits in the commercial sector, however, are, notionally, for the benefit of the investors (equivalent to shareholders), although, as producer Marc Sinden told the BTG, angels are well advised to allow their investment to run over a number of productions over a period of time, thus mirroring the subsidised sector's reinvestment of profits. However, when a commercial show is a major success - for example, Phantom or Les Mis - the it can make millions for its writers and producers. There is, of course, some cross-over between the two sectors. Trevor Nunn made over a million from the transfer of his classic musicals from the South Bank to the West End, and new shows, which originated in the subsidised sector, can go on to be West End hits and make a lot of money for the organisations which originally produced them. Then there are co-productions, common enough between subsidised companies and between commercial producers - a good way, in fact, of spreading the financial risk. Increasingly common are co-productions between the two sectors: an excellent example is the joint ventures between producers Bill Kenwright and Thelma Holt and the RSC which have brought RSC productions to London after the company's withdrawal (under Adrian Noble) from their arrangement with the Barbican. So we already have a well-developed funding system for theatre, something which did not exist in the film industry when the tax breaks were introduced in 1997. So, should the government introduce tax breaks for West End theatre producers, as suggested by Lord Lloyd Webber? It all depends. If the money to fund these breaks is to come from the same pot as provides ACE with the money for its subsidies, then the answer has to be no. In that case what would happen would be that the same amount of money would be coming into the industry, where it would simply be moved around a bit and used less efficiently. By this I do not mean that the commercial sector is less efficient than the susbsidised, but that some profits would necessarily have to be given to investors, thus reducing the amount that would be available for new productions. If, on the other hand, we could be sure that giving tax breaks would not affect the (actual and potential) amount available to the subsidised sector, then by all means follow ALW's suggestion. But I cannot believe that any actual or potential government - New Labour or Tory - would be willing to increase taxation or cut other services to allow this to happen. Indeed, ALW's own party's tax mantra is cut, cut, cut! Articles Indices:
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