West End boys
The king of theatreland, Andrew Lloyd Webber, seems on the verge of abdicating. Is he feeling restle
Andrew Lloyd Webber never does things by halves, more like convulsions. Having lain low for a while completing his latest musical, The Woman in White, and overseeing the spectacular interior refurbishment of his high Victorian Gothic pride and joy, the Palace Theatre, rumours abound that he is on the verge of throwing everything up in the air once more.
Exactly five years ago, Lloyd Webber's Really Useful Group (RUG) bought control of the Stoll Moss theatres - one-third of the major West End houses, including the Theatre Royal, Drury Lane, and the London Palladium - for £87.5m. The deal, made in a fifty-fifty partnership with a City venture-capital firm, NatWest Equity Partners, placed Lloyd Webber at the top of the West End tree, just above his arch-rival Cameron Mackintosh.
Now the king might be abdicating to concentrate on his composing, his art collection and his family. Still only 56, Lloyd Webber is known for being restless - and indeed might change his mind about everything after lunch tomorrow. But for the moment, his old friend Patrick McKenna, a former chief executive of the RUG and currently head of Ingenious Media, a boutique advisory business, is mulling over a potential buyout offer that could value his entertainment empire at more than £500m.
Why is this happening now, and what does it mean for the future of London theatre? There are two bids on the table. The wholesale deal involves a leading American corporation, and most observers and insiders believe this to be Clear Channel Worldwide, whose New York-based subsidiary, Clear Channel Entertainment, currently owns or operates 44 amphitheatres in the US and 28 large venues in Europe. The second bid is focused on four of the smaller RUG theatres - the Lyric, Apollo, Duchess and Garrick - which Lloyd Webber's subsidiary producing company, Really Useful Theatres (RUT), is keen to offload. The RUT claims to make an operating profit on the theatres, but losses last year amounted to £8m. (Overall, the RUG's pre-tax profits fell from just over £4m to just under £3.4m in the 12 months to July 2003, on sales down from £31.8m to £30m.)
A suggestion that the Apollo and Lyric - the neighbouring showpiece Victorian theatres on Shaftesbury Avenue - might be "knocked through" to make one big venue has been quietly ditched, and the RUT's chief executive, Andre Ptaszynski, has conceded that running the smaller "drama" theatres has been a problem. So who will want them? Comedy suggestion of the week is that the rapper Sean "P Diddy" Combs would snap up one or two. More serious interest would surely come.
Interest will certainly come from the Broadway independent producer Max Weitzenhoffer, who already owns the Vaudeville, and probably from the Ambassadors Theatre Group, the second-largest theatre group in the West End, whose managing director, Howard Panter, is currently acting as landlord to the homeless (in London) Royal Shakespeare Company at the Albery Theatre.
Having withdrawn from the Barbican, the RSC is still squandering taxpayers' money on West End rentals, so perhaps the government should intervene to help it secure a permanent home in partnership with the Ambassadors Theatre Group. If the government is prepared to assist in the refurbishment of such theatres, following the Theatres Trust report of 2003, which calculated a cost of £250m to maintain the West End infrastructure, why should it not preserve them for the nation in a more practical sense, too, by collaborating in the ideas and principles of ownership?
Once the RUG has sold these four houses - and any sale will have to be approved by Bridgepoint Capital (the private equity group that took over NatWest Equity Partners) - it can lie down and be seduced by the big players. Indeed, there is a strong possibility that the whole convulsion was kick-started by Bridgepoint, which has discovered that theatre ownership is not the pot of gold it might have once appeared; in short, it wants out, and that means Really Useful Theatres must deliver a sale.
This situation has probably convinced Lloyd Webber to hire back McKenna to "strategise" his life, as he did ten years ago, when McKenna suggested the buy-back of the company from the disastrous public flotation at a cost of £77m, a price that was eased within a year in a remarkable deal with Polygram, the Dutch record group, which paid £80m for a 30 per cent stake in the company.
It is likely that Bridgepoint presented Lloyd Webber with three options: he could sell Drury Lane, his prime venue, to Cameron Mackintosh (no way!); he could write Bridgepoint a very large cheque to make up the debt (too embarrassing); or he could unravel the Really Useful Theatres operation to get them off his back altogether.
The four-theatre deal is the result of that last option, the obvious decision. And it also chimes with Lloyd Webber's perennial dilemma of wanting to be a serious artist while calling all the shots. For Mackintosh, by investing £30m in theatre refurbishment and rebuilding, has stolen quite a lot of Lloyd Webber's thunder over recent years. Mackintosh owns seven West End theatres, and he doesn't have to deal with anyone else.
Currently, Mackintosh has two hit shows in two brilliantly refurbished venues - Mary Poppins (co-produced with Disney) at the Prince Edward and Mamma Mia! at the Prince of Wales, a theatre that is now a treat in itself - and his plans for Shaftesbury Avenue, which include a new Stephen Sondheim theatre built above the Queen's Theatre, have attracted more good publicity than the equally admirable work of the RUG.
It is scarcely credible that Lloyd Webber will allow his intellectual property to go up for sale - I cannot imagine that he would not want to be involved in the future, and possibly definitive, versions of his past work - and some insiders think that the notion is just part of a ploy by McKenna to improve the bidding. But if his catalogue really does hit the market, an RUG sell-out will include not just the remaining theatres, but also production and publishing rights to Joseph and the Amazing Technicolor Dreamcoat, Jesus Christ Superstar, Evita, The Phantom of the Opera and Sunset Boulevard, as well as lesser-known but still commercially potent musicals such as Whistle Down the Wind and Aspects of Love.
We can probably discount Mackintosh as a possible purchaser, but Clear Channel is an obvious contender, along with the Ambassadors Theatre Group, and even such oddball outsiders as Quintain Estates, part of the international consortium redeveloping the Millennium Dome. I can imagine Clear Channel taking over the Lloyd Webber empire partly because its chief European executive, David Ian, a vastly experienced showbiz big-hitter, is such a tried and trusted friend of Lloyd Webber. He is producing the first ever UK tour of Lloyd Webber's Starlight Express (which opened in Bristol on 26 January) and planning a big West End revival with the RUG of The Sound of Music, not to mention a reggae musical based on the Bob Marley back catalogue.
Ian talks the Lloyd Webber talk and he might, very soon, be walking the walk . . . and big companies want to conquer the world. Clear Channel Worldwide, based in San Antonio, Texas, claims to be a global leader in the "out-of-home advertising and entertainment industries, with radio and television stations, outdoor advertisement displays and live entertainment productions and venues throughout the US and in 63 countries around the world". I just hope we don't lose sight of the artist and his talent - and I mean ALW - in all this mess.
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