Sydney Theatre Company has posted a total net operating loss for 2019 of $7.75 million. Writing in the company’s Annual Report, STC Chair Ian Narev, a former Chief Executive Officer of the Commonwealth Bank Group, warned of a risk to the future viability of the company. Referring to the impact of COVID-19 and the loss of at least six months revenue, Narev said: “our Board and our auditors agreed that under the ‘Subsequent Events’ part of our financial report, it was appropriate to note a material uncertainty as to the Company’s ability to continue as a going concern”.
Yael Stone and Noni Hazlehurst in Sydney Theatre Company’s The Beauty Queen of Leenane. Photograph © Brett Boardman
Like all arts organisations, STC has been severely affected by the shuttering of venues due to the coronavirus pandemic. However, it was already weathering financial pressures due to the closure of The Wharf for redevelopment. The venue, which temporarily ceased hosting performances in June 2018, is scheduled to reopen in February 2021. Last year was the first full calendar year that STC operated without being able to perform there.
In the 2018 Annual Report, Narev noted that STC will incur a net downgrade to its usual operating budget of $2.5 million for each year that The Wharf is closed. Because of the unavailability of Wharf 1 and 2, the STC’s 2019 season was smaller than the 2018 season, with 13 productions rather than the usual 15 or 16. Ticket sales were lower in 2019 than 2018. Performances in 2019 (including tours) totalled 645 compared to 724 in 2018. Total paid attendance in 2019 was $319,888 compared to $324,232 in 2018.
As Narev noted in the Annual Report, the average size of each production grew given that they were relying more heavily on larger venues such as the Roslyn Pack Theatre (880 seats) and the Drama Theatre at the Sydney Opera House (540 seats).
Sydney Theatre Company has reported increasing losses since 2015. The total net deficit of $7.75 million for 2019 was largely due to the disruption caused by the Wharf Renewal Project, along with depreciation and asset write-downs.
“The group consolidated result (including STC operating result and the building project) is a loss of $4.77 million,” said STC Executive Director Patrick McIntyre.
“The auditors have flagged under the heading Subsequent Events that there is now a material uncertainty about the company’s ability to continue as a going concern owing to the COVID-19 pandemic,” added McIntyre. “The closure of theatres from 16 March for the foreseeable future has caused a critical revenue downturn. If theatres remain closed until the end of the year we will lose $18 million of anticipated box office revenue, with further income downgrades in areas like catering, philanthropy and sponsorship.”
The company has cancelled six of its 2020 productions so far, but is hoping to be able to perform again from September, though there is no certainty about that at the moment, particularly given the current rise of coronavirus infections in Victoria and the concern that this could happen elsewhere in the country.