The latest in our series of topics comparing different parts of the UK arts sector business models looks at the ‘big 10’ theatres in comparison with other large Regularly Funded Organisations. The dataset is laid out below.
A brief comparison of the 2009 & 2010 data for the ‘big 10’ theatres and ACE RFO’s
A number of things merit further exploration.
- Of the ACE RFO sample of organisations with more than £5m annual turnover the great majority have public venues (23/28 in 2009 and 8/9 in 2010). Can we therefore say that if you want to run a large organisation in the arts you really need to be running a large venue if you are to achieve the economies of scale that go with this?
- ACE grants make up a smaller proportion of total income for the Big 10 vs. both the ACE RFO sample and the larger ACE RFO’s (in this case >£5m turnover) though the difference is less marked in 2010 not least because of the income drop suffered by the Big 10 looks to have been more substantial than that suffered by other ACE RFO groups.
- Interestingly the Big 10 see less income from Trusts & Foundations (0.1% in 2009, 9.1% in 2010) and from Local Authorities (12.1% in 2009, 6.8% in 2010) than the wider ACE RFO sample. This could be simply that the sums involved represent a smaller proportion of total income for these large venues vs. the smaller turnover in the ACE RFO sample. We would need to take a more detailed look to be sure.
- On the whole the level of grant funding for the Big 10 is roughly on a par with that seen in the larger ACE RFO’s and based on these two years of data is hovering around the 47-52% of total income mark. This is a good 10% lower than the wider ACE RFO sample we’re comparing them to above.
- Indeed the Big 10 are pretty close to the model talked about by many ACE staff of 1/3 ACE grants, 1/3 other grants, 1/3 earned income. Of all the groups we’ve analysed they are the closest fit so far.
- As you might expect the Big 10 achieve a higher proportion of their income from ticket sales (31.0% in 2009 and 34.8% in 2010) than the average ACE RFO (24.4% in 2009 and 31.9% in 2010) though they are much closer to the percentage of income from tickets achieved by the larger (ie >£5m turnover) organisations (25.3% in 2009 and 32.1% in 2010).
- We were surprised to see that the income from the auxillary uses of the venue (shop & retail, café & catering, space hire) is relatively low for the Big 10 vs. the ACE RFO sample and even vs. the larger organisations sample. We don’t have an explanation for this … perhaps it is because these spaces are not open all day but are limited to evening opening? Perhaps their café’s are not as well marketed as those in the Cross Artform Venues …. Merely speculation on our part. We’d be interested in comments from these organisations and those who work with them.
- The net result in terms of income achieved from the venue vs. income achieved from non-venue based sources (from donations & sponsorship to contracts , commissions, research and IP) is that whilst venue based income is generally strong (37.7% in 2009 and 40.1% in 2010) vs. the ACE RFO sample (28.5% in 2009 vs. 27.2% in 2010) the non-venue based income is relatively weak (6.6% in 2009, 6.6$% in 2010) vs. the same ACE RFO sample (17.5% in 2009, 14.9% in 2010). In order to reach a conclusion as to whether this profile is normal for the performing arts we would need to look at a wider sample of venues and dig into more detail on the sources of non-venue based income and the extent to which these income streams have been developed. A best guess at this stage is that attention has been focused on tickets and venue based income as this is likely to be worth more to them and is a core skill whereas the work on intangible asset based income is not yet worth enough, requires adoption of various digital technologies and other changes of format and these are not yet areas of comfort for the SMT. This would tally with the conclusions of the evaluation of the Ambition programme conducted in 2010. Again, very much up for debate!!
- It would be interesting to compare the big 10 theatres to the Combined Artform Venues (CAV) as the CAV members show an even lower level of grant funding as a proportion of total income and whilst ticket income is fairly similar in these two data sets the significant difference is in the auxillary income from the space, in particular café income for CAV organisations.
Notes on the data:
- All the data presented above is the average or mean for the sample group. We could also look at minimum, maximum or the best 25% but we’ll leave that for another day!
- As the ‘big 10’ network is fairly small we are looking at a smaller data set for this group than we usually look at when benchmarking. A degree of caution should therefore be applied when reading the data and the interpretation.
- As we add in more of the large venues to the overall ACE RFO sample set we are seeing the ACE RFO results change, only by fairly small amounts on the whole … one or two percentage points but it does mean that the mean is starting to become skewed in favour of the large venue model.
- The contents of each column cannot be added up vertically to reach 100%. For a detailed explanation of this see http://www.mycakefinancialmanagement.co.uk/blog/?p=3076
- The data above is not from matched samples so any analysis cannot be conclusive at this stage but the data can be used to raise questions for further research.
- The data has not been gathered to be representative of either of the RFO portfolios i.e. no attention has been paid to the covering of all sectors in proportion with their inclusion in the RFO portfolio. It is also possible that there is an element of regional bias as we have not set up the sample group to ensure that such bias is avoided.
- The data above is not the full data set. There is considerably more detail in the income from intangible assets than is shown above. There is also data on both direct and indirect costs. For an overview of all the lines of data see http://www.primenumbers.co.uk/benchmark/forms/artsbm.htm for an example
Previous posts and topics in the Culture Benchmark series: