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Leading theatre companies in Melbourne and Sydney have posted improved financial results, showing the worst of their pandemic financial woes are behind them, but have warned their recovery could be undone by a further economic downturn.
Sydney Theatre Company (STC) has posted its first surplus in five years, a mere $44,000, after its bottom line was helped by $10 million in government support and $3.8 million in donations, and its revenues bolstered by a string of hit plays in its first full season since lockdown.
Heather Mitchell’s portrayal of Justice Ruth Bader Ginsburg in RBG helped STC to a small surplus in 2022.Credit: Prudence Upton
The financial results show STC benefited from a big uptick in box office earnings off the back of RBG, of Many, One, an encore season of the Picture of Dorian Gray, and The Tempest. Ticket revenue rose from $14.6 million to $26 million last year. Its 15 productions drew 315,982 paid attendees, a near return to pre-lockdown audiences.
The Melbourne Theatre Company reported a surplus of $3.4 million, comprising an underlying operational financial deficit of $2.3 million offset by one-off accounting recognition of $5.3 million in federal and state government pandemic relief grants, and an additional one-off revenue boost of $400,000. Operational deficits had also been recorded for the harsh lockdown years of 2020 and 2021.
Despite signs of recovery, STC’s executive director Anne Dunn remains worried about the prospects for economic volatility later this year at a time when government COVID support grants begin to wind back.
Economists have warned of a 50 per cent chance of recession this year and say the effect of higher interest rates will likely see consumer spending retract. The Reserve Bank is due to announce on Tuesday its next move on interest rates.
COVID had changed buyer behaviour, Dunn said, with audiences purchasing closer to performance nights. Amid rising production and freight costs, the challenge was to keep theatre tickets affordable.
“Clearly the amount of additional support in terms of government COVID relief has been vital in STC’s recovery and the challenges of working through decreased support this year and next are present and real and there will be continuing discussions about ongoing funding,” Dunn said.
“We’ve seen the window for buying tickets for performances narrow and with some shows, cut-through in the marketplace has been more challenging. People are mindful of what they are spending.”
MTC full-price tickets are regularly over $100, but it has been offering deeply discounted tickets for last-minute purchases and the under 30s, while STC is keeping most of its tickets to a consumer sweet spot of less than $100.
Tuuli Narkle and Virginia Gay in the Melbourne Theatre Company production of Cyrano. The play was staged in 2022 after it was cancelled on opening night in 2021 due to another lockdown.Credit: Jeff Busby
Sally Noonan, MTC executive director, and co-CEO, said pandemic relief funding, combined with generous donations from its audiences, had allowed the company to “weather three years of operating deficits and continue to employ actors, creatives, and industry professionals, deliver our annual season of plays, industry-leading artist development, education, and community access programs, and restore reserves to the modest levels held pre-pandemic”.
“However, we are still in a period of managed recovery,” she said. “Audiences have not yet returned to pre-pandemic levels and this is exacerbated by cost of living and inflation pressures.”
The financial results come as major theatre companies remain locked in negotiations with the peak body representing 400 Australian playwrights over pay and entitlements. Negotiating parties are due to meet next month, with theatre companies wanting to increase their share of box office receipts and take a stake in future screen adaptations of stage plays – and the writer’s guild strongly opposed.
Bell Shakespeare’s operating result was better than budgeted but nevertheless reported a deficit of $724,000. Audiences of 125,247 for the year fell short of the 141,626 who attended pre-pandemic in 2019.
While the world had largely righted itself, new waves of infection, and audience hesitancy contributed to a difficult operating environment, it reported.
“We have had a very strong start to the year with audiences but are keeping a watchful eye on the prevailing economic conditions,” said Gill Perkins, Bell’s executive director.
“Romeo and Juliet is in Melbourne this week, returning to Sydney next week, and our national touring production of Twelfth Night is about to open in Orange. It will be interesting to see how that production performs in the many and varied jurisdictions it plays in across Australia.”
Julieanne Campbell, executive director of Griffin Theatre, said her Sydney company would post an underlying operational deficit of $127,000 for 2022. Audiences were bouncing back in 2023 but production costs were rising and there was increased pressure to pay more attractive salaries because of a theatre skill shortage.
Rose Riley and Lucy Bell in Bell Shakespeare’s Romeo and Juliet at new venue The Neilson Nutshell.Credit: Brett Boardman
“Because smaller companies like Griffin run closer to the line, it doesn’t take much for additional expenditure to affect our bottom-line. There are strong pressures on the company’s limited resources, and it will still be a challenge to break even in 2023.”
Malthouse Theatre has yet to post its 2022 results. Belvoir St Theatre, in inner Sydney, ended 2022 with a modest surplus of $78,000, after a “mighty comeback year” in which for the first time in three years the company was able to present a full season.
It put its financial turnaround largely down to dedicated audience members who were willing to come back and fill its theatres, and to the state and federal governments who provided much-needed additional support.
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