Theatre company the Utrecht Games, city company of the Netherlands' fourth largest city, is on the brink of bankruptcy. It was recently revealed that the company led by artistic and business director Jos Thie has a deficit of €2.1 million. Correspondence that has since surfaced shows that it was already clear in May this year that problems were getting out of hand. That was a month after the Utrecht subsidy advisory committee issued its laudatory opinion, and a few weeks before the Council for Culture issued its very thrifty advice.
Economical
That frugality was partly because the council was already aware of the poor management at the city company at the time. There was a €600,000 deficit in May, caused by disappointing attendance figures at the opera Orfeo in the pond of Soestdijk Palace.
When asked, a spokesperson stated:
"We only got hold of the annual accounts in May, and that was after all the substantive advice had actually been completed. It was too late to review the decision-making, nor did we look at the figures in any detail. For us, that quick look only confirmed our statement that we had little confidence in the business plans."
Only in the course of the summer did it become clear, that the Utrecht company's deficits had increased much further. The decision to make up for the loss-making 2011 production by a new performance series this year proved disastrous. Not only because the weather was disappointing, but also because ticket sales to companies fell far short of expectations. In the company's letter dedicated to it in August, the business breaker Thie wrote as follows:
Financial problems arose with the opera Orfeo ed Euridice in 2011, due to a miscalculation during the production of the show. Despite the fact that this production was received jubilantly by press and audience, and despite the fact, that more than 40,000 tickets were sold, exceeding the production budget closed 2011 with a deficit of about €0.65m. Prompted by the great success of the opera on the pond of Soestdijk Palace, the management set up an independent market study to investigate the possibility of whether there was still enough potential audience to do a commercially successful revival in 2012 in order to reduce the deficit. Market research and additional audience research indicated that there was ample audience potential for a commercially successful reprise.
7000 fewer cards
Based on this data, the supervisory board gave permission to re-stage the opera to still serve a very large audience (around 60,000 ) and, in addition, make up for the deficit incurred. This was reported in our 2011 financial statements. Unfortunately, things turned out differently. The buying behaviour of the public in times of crisis is not easy to predict. Completely contrary to the results of the market research, ticket sales in 2012 went differently than in 2011. In the first season, the most expensive tickets were sold first, and all business packages were sold. In 2012, we sold the most expensive seats last and only 15 % of the business packages were sold. In the end, around 7,000 fewer tickets were also sold. This meant lower revenue of 7,000 x 68.50 = €480,000 due to lower ticket sales and €680,000 due to lower average revenue per visitor.
The situation surrounding the deficits of Jos Thie's city company remained 'under the cap' until after the premiere of 'Much ado about nothing' in August. All parties involved thought it unwise to burst the bubble just before the premiere party. It was also feared that the negative publicity surrounding the show would have a bad impact on ticket sales. Now that ticket sales are disappointing after all, and the deficits could well end up much higher, publicity has been sought, especially now that the rescue plan, as far as the local and regional authorities are concerned, seems to be complete.
Rescue plan
Behind the scenes, Frits Lintmeijer, alderman for culture, worked diligently on a rescue plan. It finally came: the company is reorganising, saving 550,000 euros a year. the province, which had actually stopped subsidising the arts, will contribute a one-off sum of 200,000 euros, the municipality will pay 250,000 euros and lend 800,000 euros to the company interest-free. The Utrecht Games' own theatre, the Paardenkathedraal, will be sold for 500,000 euros to the K.F.Hein Cultuurfonds, which will thus also take over the remaining mortgage of 100,000 euros.
In Utrecht, anger has now reached a boiling point. The art world, already hard hit by provincial and state budget cuts, is reacting off the record furious. The anger is directed not only at Jos Thie and his entrepreneurial skills, but also at the councillor, who suddenly manages to arrange 2.2 million for "a company that wilfully makes a mess of things".
FC Utrecht
Others, however, express their admiration for the alderman, who miraculously managed to limit the damage in the end. After all, he got the province to contribute after all, and he persuaded the K.F. Hein Fonds to "go into real estate" with the purchase of De Utrechtse Spelen's own theatre. This construction is similar to the bailout the Utrecht city council initiated for FC Utrecht a few years ago: at that time, the stadium was bought from the bankrupt club for 25 million.
Of great concern to the Utrecht art world is the €250,000 cash paid by the alderman. There are fears that this money comes from the culture budget, and thus at the expense of other Utrecht artists and institutions. This would also prevent Utrecht from supporting groups that now receive money from the municipality but no longer from the national Performing Arts Fund. People are effectively refusing to bleed for the mismanagement of a single creator.
Dark clouds
Whether the money will indeed be taken from the budget for other creators remains to be seen. The fact is, however, that the alderman may fear a much bigger problem: after the reorganisation, will Jos Thie's company still be the same company that the Culture Council and the local advisory board agreed to, and - even more exciting - will the Ministry of OCW think so too? After all, what happens if Jos Thie, the business creative director, is thrown out of the city with pitch and feathers by his colleagues? Chances are that Utrecht would then lose its place in the basic infrastructure.
Then much more than 250,000 euros will be lost.
The documents:
Confidential Memo dated 21 August:
Click to access 2012WMC55-BIJLAGE-Vertrouwelijk-Memo-Commissie-WMC-De-Utrechtse-Spelen-21082012.pdf
State letter The Utrecht Games
Click to access 2012WMC55-statenbrief-De-Utrechtse-Spelen.pdf
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Memo GS from deputy Pennarts-Pouw Recovery plan The Utrecht Games
Press release ORFEO The Utrecht Games recovery plan
Click to access 2012WMC55-bijlage-2-persbericht-ORFEO-De-Utrechtse-Spelen-herstelplan.pdf
Letter recovery plan The Utrecht Games 31082012
Click to access 2012WMC55-bijlage-C-brief-herstelplan-De-Utrechtse-Spelen-31082012-3.pdf
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