Royal Albert Hall: We’re broke
mainThe hall issued an emergency appeal this morning:
The Hall requires urgent public support to generate more than £20m to weather the COVID-19 storm and fulfil purpose of promoting arts and sciences for future generations
Despite Government references to the Royal Albert Hall as a “crown jewel” that must be saved, it cannot apply for any emergency grants within the £1.57bn arts and heritage sector rescue package
The usually self-sufficient charity has already forgone £18m in income in six months since COVID-19 forced its closure
To coincide with the Royal Albert Hall giving evidence to the DCMS Select Committee on the viability of performance venues to open adhering to social distancing rules, the Hall is launching a plea for public donations to help ensure its survival.
When the COVID-19 pandemic forced the Hall to close its doors on 17 March 2020, the Hall lost 96% of its income overnight. In the six months since then, it has forgone £18m in income, had to refund over £6.5m of ticket sales, exhausted its reserves and cancelled all but the most critical building projects.
Despite recent fanfare regarding the Government’s £1.57bn rescue package for the arts sector, the Hall is not eligible for an emergency grant, but has instead been advised to apply for a loan, which, if successful, it will receive in December, nine months after its ability to generate income was abruptly cut off.
Craig Hassall, CEO of the Royal Albert Hall commented: “Six months on from enforced closure, and circa £18m down in lost income, we are not eligible for any of the Government’s emergency grants. This leaves us in an extremely perilous position, with no way of replacing our lost income, apart from a government loan which may or may not materialise.
“We raised concerns months ago about the potential for independent, unfunded organisations such as the Royal Albert Hall to miss out on government support, and especially having been held up by Government as a ‘crown jewel’ that must be saved. With millions of pounds of essential building work called to a halt owing to COVID we had hoped to be eligible for a capital grant but have been informed that, as we are not a portfolio of nationally spread sites, we are not eligible for this scheme.
“We are fortunate to have supportive members and private donors who have given generously, but unfortunately, the ‘Rescue Package’ fanfare has given many potential donors the false sense that we are being sufficiently supported elsewhere. The Royal Albert Hall now faces a bleak future unless it can secure not only a repayable Government loan, but also urgent donations to plug our current £20m shortfall.”
And yet at the same time as the RAH has to wait until December to find out whether it can borrow £20M, the government admits that its rushed and badly implemented Furlough scheme has probably been defrauded by up to £3.5bn, which is,er, not surprising. The Arts have been shafted so badly that it looks deliberate.
If you are claiming the UK Govt has knowingly taken deliberate action to bring the arts to its knees over the past months for motives other than trying to stem the pandemic then produce your evidence. Incompetence, though possible and a factor, doesn’t count.
Hard no-deal BREXIT + pandemic – incompetence + arts = £0
One really should not have expected such utter vulnerability so early on in a situation like this considering the extremely high standards these snotty “highly educated professionals” used as barriers to their world. Well, former world at this point.
Financial incompetence at most of these halls and opera houses has historically and sadly been all too common. Hence the constant need for donor or government intervention.
It’s amazing as a business owner myself that they haven’t had the most basic cash reserves, savings, investment structure, lines of credit or business interruption insurance, etc mechanisms well in place to make them self-sufficient by now.
Emotionally going on and on about how different or extraordinary the pandemic is won’t solve anything as venues and agencies quickly go dark; not to mention the artists completely left out in the cold with no resources.
As these institutions continue to rapidly fail, I hope hedge funds snap them up for salvage, trim all of the fat, put new management in and get them running again soon. Otherwise we’re going to have a lot of hopelessly large abandoned buildings subject to vandals and typical neglect.
Angus, I can only assume from this that you’ve never even attempted to look at the finances of running an arts organisation.
Let’s deal with the insurance point first of all: all big venues *do* have insurance. Most of which, on this occasion, have found that their insurers refuse to pay out (thanks, largely, to the government’s intransigence in refusing to insist that venues closed).
As regards the finances themselves – the two chief sources of income (which between them make up 90%+) are usually government grant, plus hire fees. This can be topped up with commercial sponsorship. If you can’t hire out your venue, your sponsors won’t contribute either.
As to ‘why don’t these places have reserves and investments’ – well, if they had a surplus of any size at the end of the year, they wouldn’t be getting a grant. The surplus most large places manage, such as it is, means that in the strongest cases they may be able to build up six months’ reserves.
There really is very little to cut – staff are invariably paid poor wages, repairs aren’t done until they are absolutely necessary. The only option is to increase hire fees enormously – but bearing in mind the likely hirers are arts organisations even more strapped for cash than the venues themselves, that’s not going to get you very far. And to state the obvious, even taking that kind of drastic action isn’t going to help if you can’t hire out your venue in any case.
Just to underline my point, look at an orchestra like the LSO (which, by and large, is financially sound – at least by the standards of arts organisations). If they sell out concerts at the Barbican, they lose upwards of £40,000 every time. that can only be solved in two ways: 1) put up prices enormously, so pushing their top price from £55 to around £120; or 2) rely on government grant (I’ve ignored sponsorship here; yes, they get that too but it’s minimal in the overall budgetary picture). You will, I assume, be aware of the criticism that publicly funded arts organisations get for being expensive to attend, so the likely result of (1) is that the government will criticise them for trying to make ends meet.
On top of all this, many organisations will apply to charities for grants. But guess what: the markets are slumping bigtime at the moment so those potential sources of funding aren’t making such large grants either.
Now. Perhaps you could tell me why any private equity investor would want to invest in something that nobody has *ever* managed to make money from (other than in the most basic commercial way, in which the idea of developing anything is for the birds) in circumstances of absolute uncertainty, government capriciousness and public criticism? Or why, since these issues are hardly new (if admittedly exaggerated at this point), nobody has ever tried to do so?
For the record, I don’t work in the arts (I am a tax lawyer and a very active amateur musician) – but professionally I’ve had reason to look very closely at the books of any number of cultural organisations. Not one of them has any fat to trim – and the same is true across most of continental Europe, where you will have noticed that the arts are doing better almost entirely because various governments (especially in Germany, as usual) have understood the need to give that sector a lifeline.
So, they’re still broke along with the whole industry plummeting downhill with hard closings.
Well, the hedge fund idea is the most realistic at this point. Perhaps other major investors or conglomerates should snap up these debt-burdened buildings and get their name on them as others do. The tired old way of running things has clearly resulted in today’s failures besides the clear lack of financial and legal preparation.
Time to move on since full reopenings are too far off for anyone to depend on and schedule around.
Maybe a foreigner will step in and buy a hall or two by the time bankruptcy swallows these places up.
These types of arts organizations are desperate for cash, not more useless analysis.
You’re quite right that these organisations are desperate for cash. My point is, though, that in the current climate, there is absolutely no chance of making a profit on such a venture.
That being the case, there is no reason for a hedge fund, or PE investor, to put in their money. It’s like expecting water to run uphill. It doesn’t matter which way you slice it: if a buyer wants to make a profit, it either charges hirers more (a lot more, which means govt funders for arts groups end up picking up the tab), or it charges the same and asks for… govt to pick up the extra.
In that position, any sane government would cut out the middle man and just bail out the venue. I am not for one moment claiming that the current shower of thieves, liars and racists is by any definition a ‘sane government’…
RAH needs to realize they are NOT a priority when so many individuals remain desperately in need as they are unable to go to work.
They need to check their White Privilege and stop distracting funds from those more deserving.
You do know that people work at the RAH don’t you? And many related jobs depend on it? Including the builders who’d be doing the repairs. The economy is a mass of interconnected aspects. There’s nothing ‘privileged’ about being an employer and a venue for people to *be* employed.
That’s like saying the businesses being looted and burned are somehow “important” because they serve the community.
NO!!!!!!!!!!!!!!!!!
Businesses and careers DON’T MATTER! They’re disgusting symbols of capitalism.
BLACK LIVES MATTER and they should storm RAH, take what they want in the name of reparations and burn it down that symbol of WHITE PRIVILEGE just as is done in the states!!!! Places like that perpetuate systemic racism!
Ummmm…
I wonder whether this might be why they’ve not been able to admit an audience for the Proms?
No, that would be missing the obvious
Forget it. Money is needed for more important things, like helping people buy a home. Having said, the governments have been printing free money since Covid turned up so maybe they can fund it. Dishonest bastards.
The people who want to buy homes need jobs and those jobs might just be at the RAH. It is an employer, directly and indirectly.
My understanding is that the RAH has a ground rent of 50p per year paid to the crown. It is the regular home for plenty of big ticket events which hopefully will resume when COVID is being curbed. It should be possible for a commercial package to be negotiated.
Invite VPO with ASM and John Williams to raise funds.
I don’t think you understand what the problem is.
Sadly the VPO would need to self-quarantine on arrival for 14 days before they could play.
If worse comes to worst, which is pretty much the most optimistic expectation ever since Brexit, the RAH can be re-purposed as the Boris Johnson Cenotaph, operating on the same mode as the PM himself: empty even when filled.
I have a cunning plan to save the Royal Albert Hall…
All that’s required is for Norman Lebrecht to pen an outraged article for The Telegraph, stating that the EU Withdrawal Treaty’s terms and conditions prohibiting state aid mean that the UK Government is forbidden by international law from granting any moneys to the Royal Albert Hall.
Then, Boris Johnson will immediately bleat that Britain is a sovereign kingdom that can unilaterally breach its international treaty obligations, and he will save the RAH with an immediate “Rule Britannia” Grant of £20millions.
Simple, n’est-ce pas?