OF all the areas you might expect a canny private equity firm to invest serious bucks, the theatre business – with its reputation for volatile actors and directors, no less volatile audiences, and millions poured into shows that can fold almost immediately – might not be top of the list.
However, London firm Exponent has reason to be cheerful over its £134m investment in Ambassador Theatre Group (ATG), which included the acquisition of the UK theatre business of the American entertainment group Live Nation, to create the country’s biggest theatre company.
A year on from the deal, ATG’s founder, chief executive and creative director Howard Panter says that audiences have risen five per cent and the combined company is on course for a £20m profit. “We’re operating better than our business plan at the time of the acquisition,” he says.
Panter, 62, founded ATG in 1992 with his wife Rosemary Squire, who is his joint chief executive. Together, the couple make arguably the most powerful partnership in UK theatre, presiding over 40 theatres nationwide and 400,000 seat sales a week, with a company worth “north of £160m”. Its current West End successes include The Lion King, Wicked and Legally Blonde, while Jez Butterworth’s play Jerusalem and a modern version of Moliere’s La Misanthrope, starring Keira Knightley and Damian Lewis, are among its recent critical and commercial triumphs.
Panter, a large, bald man with a thick orange beard and good-humoured air, is understandably bullish about the theatre industry’s health and profit-making potential, particularly in the capital.
“The two things that distinguish London’s economy are the City and theatre – they’re what’s seen to be world class and unique,” he says. “Theatre generates about nine times the money invested in it, and after heritage it’s the thing that brings the most tourists to London.”
We meet in the magnificent Art Deco environs of the Savoy Theatre, among London’s finest auditoriums and one of the theatres that account for over £100m of ATG’s worth – Panter describes owning them as “like having Cezannes that make a profit: they’re beautiful, unique, premium, and they earn money.”
The portfolio stretches from grand theatres of the West End and county towns to more modern regional venues, the newest of which is a £42m development in Buckinghamshire, the Aylesbury Waterside, built by the local council and operated by ATG.
It was in another area of the commuter belt, Woking, that Panter and Squire started the company with their first theatre, the Ambassador (now a cinema but still in the group), and he’s forthright about the blend of shows needed to appeal to the broadest audiences. While some may snipe about a profusion of easy-to-please, film-based musicals or unchallenging touring shows, Panter points out that the shows like Mama Mia, Dirty Dancing and Legally Blonde have tapped into a new female audience that’s increased the volume of theatregoing by almost 10 per cent.
“We’re like the BBC, in that we do Panorama and Eastenders, which means opera to pantomime,” he says. “I don’t mind which it is, as long as it’s the best of its kind.”
Running a theatrical business comes with its own set of unique issues – the principal among these being dealing with that delicate, capricious breed: actors. “It’s a very particular creature that becomes an actor,” says Panter, who trained in production at LAMDA theatre school but never wished to tread the boards himself. “You’re actually saying ‘I am my work’, asking people to look at you in a way that’s different from any other profession. From a management point of view, it creates a dynamic that’s very particular to theatre, which requires a degree of navigation.”
Having been steering those waters for four decades, Panter is confident about the quality of actors, writers and directors still coming through, whom ATG’s Whitehall theatre, Trafalgar Studios 2, is designed to incubate. He’s nevertheless worried about the lack of young producers able to create fledgling shows.
“The artistic talent is really strong, but the entrepreneurial talent is very hard to find. The risk you take early on is very great, and I’m not sure if I was starting out today how far we’d get.”
Panter would like to see tax incentives for “people who invest in theatre through producers”, though even with the government’s keenness on artistic philanthropy, that’s unlikely to materialise any time soon. Instead, audiences will have to continue relying on this super-producer’s own talents for some time to come.