How to invest in hiring more people and losing more money--send in the clowns

Spectator, The, Jul 11, 1998 by Fildes, Christopher

I wonder how Rupert Murdoch would get along in the opera business. The great man descends on London and summons his project manager: `Well, Pagliaccio, how's the move to Wapping going?' `Oh, splendidly, chairman. We're already looking ahead to the opening ceremony. I thought something simple, like Bollinger.... `Expensive, though.' `Not really - oh, you mean the building, chairman? I suppose it is. Nice, though. It'll improve the neighbourhood.' 'A pity the neighbours objected.' `Honestly, chairman, I don't want to be elitist, but some people . . . Anyway, we can be proud of our efforts in raising all that money.' `So when it's all done, we'll have increased our capacity?' `Not significantly, chairman.' `Then we'll be able to operate with fewer people?' `No, no, chairman. The numbers will go up. We've been talking to the unions about it, but you know how these negotiations are, a matter of give and . . . now what was the other thing?' `All right, Pagliaccio, tell me what the business plan says.' `Well, we're drafting one, chairman.' `But you must know what the profit and loss account is going to look like?' `Oh, yes, chairman. It will look worse.' `What, worse than it was before this project started?' `Quite a lot worse, chairman. We were hoping you could see your way to guaranteeing `And the balance sheet?' `There seems to be a hole in it.' `Very interesting, Pagliaccio. Tell me, why have we made this colossal investment?' `We owe it to ourselves, chairman. There are some qualities that money simply cannot measure. I'm sure you agree with me.' `I'm not sure, Pagliaccio, but I do think you're wasted on opera. Have you ever thought of publishing the Times?'

Sadler's Who?

ALTERNATIVELY, Mr Murdoch could send for Sir Richard Eyre. That is what Chris Smith did at the Ministry of Culture. Sir Richard does not quite tell us why Covent Garden will get through a fortune and end up employing more people and losing more money, but he takes us on a guided tour of what he calls the London lyric theatre estate: Covent Garden, the Coliseum, which houses English National Opera, and Sadler's Wells. Sadler's who? Quite. I am not sure how many of Covent Garden's City friends could find their way there. (Clue: it is beyond the Barbican, if they can find that.) Its subsidy is only 2 per cent of Covent Garden's or 3 per cent of ENO's. What Sadler's Wells has done, all the same, is to build a new theatre and put its finances in order.

In the black

THE NEW Sadler's Wells opens in October with the Ballet Rambert, and I hope this will keep Giannandrea Poesio happy. (Later on, Covent Garden's homeless opera company will come and stage The Bartered Bride, which will be more in my line.) Mr Smith and the Arts Council should be happy already, because this will be the first such project supported by the National Lottery to be up and running. There is no hole in the balance sheet at Sadler's Wells, and the profit and loss account (its humble subsidy included) has moved into the black and is planned to stay there. Mr Smith might usefully go on to ask how Sadler's Wells has done it. There are clues here and there in Sir Richard's report. He praises its flexible working arrangements and thinks that its board is the right size and shape. If so, some of the credit should go to Ian Hay Davison, who came in as chairman three years ago and cleared the old board out. He and Ian Albery, the chief executive, have seen the building project through, and one of their first decisions was that a business whose shareholders' funds were in deficit and whose principal asset would soon be a hole in the ground could not go on meeting its payroll. They laid off four-fifths of the staff. Nobody likes to do that, but how Covent Garden must regret missing the chance.

La Dogana Straniera

THERE is an opera waiting to be written, called The Quaint Old Spanish Custom. In Fleet Street as it was, the print unions used such irrational customs to rule and rob the roost, until Mr Murdoch moved to Wapping and outwitted them. As The House, Covent Garden's televised self-portrait, served to show, the lyric stage's practices make Spain look rational and Fleet Street look well-managed. Turned out of its house, Covent Garden still chose to hang on to most of its cost base, to its armourers and wigmakers and full supporting cast, and to its protected jobs and union rules and quaint old lyric customs. The show has been on tour, busking for everyone's living and (not surprisingly) losing more money. Sadler's Wells has no company to send on tour. Its place in the scheme of things is to be a receiving house and provide a stage and a staging post for other theatres' companies (coming shortly: the Frankfurt Ballet). Its cost base is low and it can buy or hire services, and barter for Covent Garden's Bride, as and when it wants to. This is what management jargon calls outsourcing. It can do much for flexibility and more for costs and it is a proven cure for quaint old Spanish customs.

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