That the Sydney Theatre Company re-appointed Andrew Upton as its artistic director yesterday was not exactly surprising. Upton and his wife, Cate Blanchett, had been thought to be moving to the United States, but once they decided to stay in Australia it looks as though the board was only too happy to give Upton the nod. The playwright and director will now get a chance to put his own mark on the company, with Blanchett again focusing on performing.
Theatre is a small world and Australian critics are becoming thin on the ground, so there has been little comment so far about Upton’s merits as an artistic director. But I suspect the decision had more to do with the business side of the equation. Upton and Blanchett have been highly successful managers, maintaining healthy cashflows in a time of falling attendances.
STC’s business plan is one of the better examples of the merger between art and commerce in an industry that often pays barely more than lip service to the latter. Entitled “STCABC”, the plan stresses three main themes of art, business and community, “emphasising our organisational commitment to artistic vibrancy, financial sustainability and community engagement”.
The company’s financial performance under Blanchett and Upton has not really been about making money; indeed, the company only broke even last year on revenues of $28.6 million. But the power couple’s sponsorship performance has been stellar.
STC brings in more sponsorship and donation income — $4.1 million last year alone — than it gets from the government in grant funding. That’s a boast few other arts organisations in the country could honestly make. With government subsidies constituting just over $3 million in a budget of $28 million, STC has one of the leanest ratios of public funding to revenue of any major arts company in Australia. It has also has $10 million in cold hard cash in the bank, giving it a buffer against hard times and a war chest for future campaigns.
A lot of that sponsorship coin has been driven by Blanchett, whose brand and recognition factor is by far the most bankable in Australian culture. So when Blanchett first indicated she wanted to step down from being the director, chairman David Gonski and the board must have been worried. Audi, the current principle sponsor secured under Blanchett, is reportedly paring back its funding from next year. It remains to be seen whether the amazing philanthropic record of recent years can be sustained.
In the announcement yesterday, Gonski stressed that Upton was appointed “after an extensive national and international search for a new artistic director, which identified a number of outstanding candidates”. That looks like boilerplate to me. It’s not as though there aren’t plenty of people qualified and willing to run it. But securing Upton locks in STC’s most valuable asset for another three years: Blanchett herself.
Famous people open sponsorship doors in a way that mere mortals can’t. Keeping Blanchett associated with the company will be worth millions to STC’s bottom line, particularly compared to the cost should she walk away. It’s not just her star power on the stage. In fact, it’s probably more about her star power in corporate boardrooms.
Upton’s tenure will not be without challenges. The company’s attendances have actually declined in recent years, a point picked up on by The Australian’s Matt Westwood in his interview with Upton today. Performing arts companies in general face particular pressures in keeping ticket prices affordable, while production, marketing and staffing costs inexorably rise.
Like any company working predominantly in a single medium, STC is beholden to bigger social trends in the way people consume culture. The falling attendances mirror a broader trend across the theatre sector, which has seen static or declining attendances over the past decade. For instance, according to the Australia Council’s Securing the Future report, main stage capital city attendances for theatre were actually lower in 2009 (the last year we have data for) than they were in 2002.
No one really knows why theatre attendances are falling across the industry, but exploding competition from other sources of entertainment is surely a factor. The performing arts are also coming to terms with the fact that the many centimetres of free publicity they used to enjoy from newspaper arts pages have vanished, never to return.
In cultural industries such as newspapers and recorded music, declining audiences led eventually to sudden crises, as confidence in the business strategies of key firms evaporated (see Fairfax and EMI). Theatre companies are sheltered from the full force of market competition to some degree by their non-profit structure and diversified streams of funding, but that doesn’t mean they are immune. Eventually, a tipping point is reached.
Upton appears to be mindful of this, telling Westwood this morning that he wants to produce more classics, which are generally reliable money spinners for performing arts companies. “I feel that our audience love them, and it’s territory that’s a sweet spot for this company,” he said.
With Blanchett retained and money in the bank, the short-to-medium-term future for the STC is surely rosy. The company has peerless connections in the top tier of Sydney’s corporate sector, and the Barangaroo development will add a new suburb worth of local residents to the company’s immediate vicinity.
In the longer term, though, STC will eventually have to make its way in an increasingly competitive marketplace without its star performer and key sponsorship attraction. The only way to do that will be to grow audiences.