The show goes on and it must evolve

The show goes on and it must evolve

Stuart Griffiths rescued Birmingham Hippodrome from near-bankruptcy and turned it into a successful £30m a year theatre. Steve Dyson finds out how over lunch

When Stuart Griffiths arrived at the Birmingham Hippodrome in September 2002, the 103-year-old theatre was on the brink of disaster. After a two-year closure for a major £35m rebuild, the venue had been open for less than 12 months. And while many experts had spent months carefully scheduling this project, not everything had gone to plan.

“The anticipated ‘honeymoon’ period didn’t quite come to pass,” explains Stuart, “and when I arrived the theatre was technically insolvent. The regularity of programming is everything for your audience, as you promote and sell one show after another. But after such a hiatus, it was almost like opening a new theatre, because people just got out of the habit of going to the Hippodrome.

“Also, the redeveloped building was half as big again in volume, which means it was half as much again to run. And we had slightly fewer seats in the main auditorium. Most of our revenue was what we retained from ticket sales, and so the business model wasn’t really working.

“On top of this, we faced quite a capital shortfall because we’d just spent £35m and the funding raised hadn’t quite covered that. We needed new income streams, we had to get the audience back, and we had to find a model that worked.” Stuart’s first steps were financial: the Hippodrome had prized its freedom since becoming a trust in 1979, never needing public sector support for ongoing revenues. It couldn’t, therefore, simply go back to Birmingham City Council or the Arts Council and demand more money. But as a much-loved institution, doors were quickly opened to meetings that discussed how the support of the city could be mobilised, while retaining the theatre’s independence.

He says: “We found ways for them [the city council] to help us get back on our feet, and they were great. Essentially, it was capital help – including a renegotiation of loans – and we said: ‘If you can help us like this we won’t come back to you again.’ It took us four or five years to get over, but since then we’ve been true to our word.”

With insolvency averted, the next task was to secure new trading income. The theatre started by taking hospitality and catering back in-house, retaining more of the bottom line from its audience spend, and also developed conferences and meetings.

“We tried to focus on adding value to your visit – yes, you come to see a great show, but you can also have a good time in a shiny new restaurant, or a business can use a private room for pre or post-show events. This created more income and was saying: ‘Come early, stay late,’ building the Hippodrome experience into something more than just 10 minutes at the bar for a drink before the performance.”

With capital finance and ways to create more revenue on track, the next thing the Hippodrome had to do was attract the audience – which meant working closely with theatre producers.

“We don’t create shows ourselves,” explains Stuart, aged 51, himself married to a theatre producer, with two teenage daughters. “So we had to re-establish ourselves in the market, regaining the confidence of the Sir Cameron Mackintosh’s of this world and saying: ‘We’re back in business and we can sustain one of your long-running shows’.

“For us, the most important thing is numbers. We know if we keep our audience at 500,000 or more a year – 75% to 80% capacity – the business model pretty well works. Birmingham’s a big market, with 4.5 million people in our catchment area. If we put the right thing on, in the right place, at the right time, for the right length of run, the model works.”

This hard work saw the 1,850-seat Hippodrome return to good health after three or four years, with annual turnover doubling from £12m when Stuart arrived to an average of £25m today. It reached around £30m in 2013-14, although he terms this a “special year” which included the long-running Lion King, one of the most popular shows ever. And although the theatre is nowhere near the UK’s biggest, it’s become the busiest, with audiences topping 625,000 last year.

This has resulted in an annual ‘surplus’ of between £500,000 and £1.5m in recent years. It’s essentially profit, but as a charity the ‘surplus’ is reinvested into the theatre’s operations, which include 115 full-time staff and up to another 200 seasonal jobs.

It’s not all been plain sailing: Stuart’s come to realise that it’s really only musical theatre, panto, ballet, dance and opera that are Hippodrome winners, with plain drama rarely working. Proof of that were takings from The Life and Adventures of Nicholas Nickleby in 2007, a “great play” but one that “just didn’t sit well” in the theatre’s spacious auditorium.

“There’s always the show that won’t work and you don’t always get it right,” says Stuart. “For the main stage we now have a clear focus on what we are and what we’re after, and we tend not to stray too far from that. The Hippodrome works when it’s full.

“One of the things I noticed straight away was the sheer size of our circle – seating 1,000. That’s a lot of people in the same place, whereas most theatres have three or four levels, which means they’re less connected. The right show makes the feel of the place, the great atmosphere.”

Stuart nods furiously when I tell him this is what I experienced at the Hippodrome in 2009 with the rock extravaganza We Will Rock You, by Queen and Ben Elton. This was one of his great memories too, and it’s these “shows of scale”, he says, that really work. “We’re selling the main experience, and the feeling that’s created among [nearly] 2,000 people sharing that experience.” And so despite a few hiccups, Stuart’s developed a real understanding of what shows sell, and that the Hippodrome just isn’t the “intimate space” needed for smaller dramas.

Staurt Grifiths2

But despite getting into a “comfortable” position with his audience and revenues, he then faced a difficult conversation with the theatre trust’s chair, John Crabtree. “I have a fantastic relationship with John,” Stuart says, “and he’s always given me the freedom and support that was needed. But at one stage he sat me down and said: ‘What’s next?’ To start with I said: ‘Well, we’ve done it, we’re here and it’s working.’ And John said: ‘Well, yes, and that’s fine if you’re now leaving us to go somewhere else, and if someone else is planning the future. But perhaps the challenge for you is what happens next? What we do with it now the theatre’s in this position?’”

What Crabtree was reminding Stuart was that cashflow – so crucial for most theatres – was no longer a short-term stress for the Hippodrome, and that this should enable strategic, long-term thinking.

“These were such wise words and good advice,” recalls Stuart. “How could we take advantage of a business working so well? We were able to say: ‘What kind of organisation are we? What more we can do? And how can we extend that success?”

This led to an increased programme of learning, education and outreach under the name Hippodrome Plus, attracting new funds for projects like working with special needs groups, and taking art and dance outside the building to outdoor festivals and street theatre – often for free.

Hippodrome Plus funding has come from the likes of PwC, Pinsents, IMI, Lloyds, Wragge & Co and Brewin Dolphin, corporate sector brands that have existing relationships with the theatre but want something “new and creative”.

“We say: ‘Talk to us about what you’re interested in. Is it young people? Different parts of the city? Different age groups?’ the great thing about Hippodrome Plus is that we can always do more because there’s no limit to the number of schools or the number of young people we can include across the city. The corporate world doesn’t spend on hospitality the way it used to. Companies find these closer relationships valuable, and often staff join in.”

Stuart also has a growing number of roles across the city. He’s chair of the Southside Business Improvement District (BID), which has 300 members and is pushing to improve things locally that “work for everybody” so that businesses no longer feel “just on our own”.

The BID works with others across the city – such as Colmore and Broad Street BIDs – and between them they represent three quarters of businesses in Birmingham’s centre. “That’s pretty representative,” says Stuart, “and it means the city [council] tends to want to talk to us about things like transport and public realm, and we have a voice on those decisions. Having a clear, more direct say on how the city develops, on behalf of businesses on the ground who are trying to survive and thrive, is a really good thing.”

This, he suggests, could even mean Southside “becoming the Covent Garden of Birmingham”, although he admits the BID needs to help develop China Town, sort out traffic chaos, increase business activity, and “offer more people more life” before this becomes a reality.

Meanwhile, from this November, Stuart becomes vice-president of the Greater Birmingham Chamber of Commerce, ahead of serving as president in two years’ time. And it’s in this Chamber role that he hopes to challenge traditional commercial structures, encouraging businesses to grasp the value of creative arts. The West Midlands, he points out, has more graduates in this sector that anywhere else in the UK, and it’s time businesses realised and benefited from this.

“I want the Hippodrome, which is not grant-funded and has major revenues, to be seen as a serious business, not just the ‘nice-to-have’ cream on top. And that’s absolutely the case for every other arts organisation I know in 2014: they’re efficient, serious businesses because the days of hand-outs and grant-funding are gone. I want the business community and cultural community to come together, developing a better kind of engagement.”

His thinking is still forming, but Stuart envisages a “culture fund” where investors can support a whole collection of shows over three-to-five year periods, with tax advantages and financial returns. He says: “Public funding is not what it used to be, and we’ve got to find new ways of doing things to provide a benefit: that could be social, it could be CSR, and it could be financial returns as well.”