The Grand Theatre in Groningen is dying. Yesterday, the city council of the northern university city decided that no more money should be poured into the theatre, which is in acute cash trouble. Bills from suppliers and independent artists have not been paid for several months, and financial reserves are more than depleted. We have reports of artists owing more than €18,000 from the theatre. With the municipality unwilling to make up those shortfalls, they may be able to whistle for their money.
The near-failure of the small Groningen theatre is not entirely unexpected. In early 2013, the government stopped subsidising the theatre. As a result, over 800,000 euros in revenue fell away from the annual budget. Even then, it became clear that the then interim director Ben Hurkmans, who had previously served on the subsidy advisory committee that determined the 2013-2016 subsidies for the city of Groningen, could not manage the operation. In order to keep the theatre running, he had to appeal to the friction costs, or the budget that was meant to be used for redundancy procedures: after all, there would have to be substantial cuts in staff and programming after austerity.
Hurkmans' successor Paul Smelt took office in 2013, when there were only 168 thousand euros in reserve. Investments were made in a new grandstand and an extra foyer, which again resulted in deficits, and did not bring the desired extra income. By mid-2014, therefore, the money appeared to have run out. We quote the annual report:
2013: The 2012 operating account ends with a negative result of €83,285 on an annual turnover of €2,393,983. The operating result is mainly caused by friction costs and an investment in the grandstand to make Grand Theatre more future-proof. The result is partly charged to the earmarked fund OCW and partly to Equity, which thus amounts to € 168,175 as of January 2013. More details on the finances can be found in the financial statements for 2012.
2014: The operating account for 2013 ends with a negative result of €78,357 on an annual turnover of €1,656,044 The operating result is mainly caused by the costs of renovating the premises. In addition, there was temporarily no close monitoring of efficiency in running cultural hirings, the regional project and the following programme activities: Dance Week/Groupe Entorse, Jan Fabre and the Veenfabriek, which made them more costly than expected. A new control mechanism per activity has been established for 2014, which will allow us to keep a closer eye on expenses in the future. The result of the operating account is charged to Shareholders' equity, bringing it to €89,818 as of January 2014.
In January, Smelt announced his departure. When asked, he is willing to comment on the situation that has arisen: 'There are too many people in Groningen who hope that the Grand Theatre will be like it used to be.' He would not name names, but points to 'politicians, councillors, advisers and journalists'. So the city assumed too easily that the storm of the government's draconian arts cuts would blow over and the theatre could resume its role as a production house as before after a while.
After Smelt's departure, Renee Waale was appointed as interim. So in the first few weeks, she found herself faced with a whole pile of unpaid bills from artists, lighting technicians and other suppliers: 'There are immediate debts and we therefore asked the city council to grant a bridging loan, which would at least allow us to pay the bills pending reorganisation. Now that has been refused, the Supervisory Board is considering the situation.'
Just how serious the situation is becomes clear when Waale reports that the theatre's fixed expenses structurally exceed what it receives in subsidy. In the coming days, it will become clear how - and if - the Grand Theatre will pay the bills. How that plays out is still uncertain. 'The Grand Theatre is not "Too big to fail",' Waale said.
Clarification: this is going to happen in many more places.
The situation now emerging in Groningen seems akin to the closures of theatres in Gorinchem and Vlaardingen. There, the city council also refused to assist a theatre that could not get the programming right. But there it was mainly the problem that local governments like to invest in buildings, and not coming up with a cover plan for its operation. The big difference with Groningen, of course, is that until 1 January 2013, the Grand Theatre was just getting money from the government, and suddenly that money stopped flowing. That happened to many dozens of institutions in the cultural sector. Like the Grand, those have drawn on their reserves to survive in recent years. Like the Grand, many institutions have driven on the hope that it would all be reversed.
In February stated the General Court of Auditors that the effects of the cultural cuts by Rutte 1 could not yet be mapped out, so a debate on the new cultural policy could not yet be held. The coming year will reveal whether many more institutions will go the way of the Grand. We expect a few more.
English (UK) 
Nederlands 
Français 
