KEY POINTS TO CONSIDER WHEN CONTRACTING A WEST END THEATRE

General Comments

It is often difficult or impossible to book a West End theatre more than a few weeks in advance. This is because most theatres operate "open ended runs" - i.e. a production will continue to play so long as the weekly net box office receipts are sufficient to give a weekly profit. The normal arrangement is for the theatre owner and the producer to each have the right to give an agreed number of weeks notice (2 or more) to the other when the weekly net box office receipts fall below the contractual break figure for an agreed number of consecutive weeks (normally 2 weeks for plays).

Special circumstances can occur so that the theatre owner and producer will know well in advance that a production may close on a specific date - e.g. limited seasons; star's contract ends and producer will not recast; a stop date has been mutually agreed, etc.

Key Points to Negotiate

1.1 Weekly Rent

How much is the weekly rent? (Normally referred to as a fee because of VAT considerations)

•is it a fixed rent or on account of box office receipts

•is it guaranteed by the producer or is it a share of the box office receipts

•is it lower before recoupment of production costs and/or does it rise after recoupment

•is it payable during the fit-up and opening week(s) (if rent is payable is it the full contractual rent or a portion thereof)

•is it payable during the get-out.

NB Because of the recent shortage of productions looking for West End theatres there have been occasions when the rent (and even the Contra) have not been guaranteed by the producer and theatre owners have been prepared to take some of the risk by sharing the weekly box office receipts, either on a straight percentage basis or on some form or first, second, third.... call basis, or on guarantee.

1.2 Weekly Contra

What is the total weekly cost? (theatre owners on request should supply a sample)

•staff - how many

•are they available to producer full time (e.g. box office)

  • levels of pay
  • NI
  • pensions
  • any contractual guaranteed overtime

•Are there sufficient staff for production? Arrangements for engaging extra staff and at what rates

•Are all estimated costs on contra reasonable

•Are estimated costs best value for money

  • negotiable
  • fair.

1.3 Notice Clauses

•How many consecutive weeks below break figure (usually 2)

•Are opening week, Christmas week, Easter week included/excluded in the weeks below the break figure

•How many weeks notice to be given

•Any minimum run guarantee

•If limited season is it guaranteed or can notice still be given during season

•Is there any right for the owner to terminate regardless of levels of business (e.g. after 12 months).

1.4 PP Seats (if any)

•How many

•Who benefits

•Are there any allocated for Stage One Voluntary Levy.

1.5 Box Office

•Where is advance held? Is it secure, is it in Trust

•Who benefits from interest

•What charges (other than VAT) are being deducted from weekly receipts, e.g.

  • Credit card commission at cost or marked up by theatre – rate must be specified
  • Phone room and telephone booking charges (if any) – rates must be specified
  • Ticketing charges for computer hardware/software – per ticket – charged as comps?

•Arrangements, if any, with supplier of hardware tying producer to one of big ticket agents (e.g. First Call/Ticketmaster)

•Arrangements with main ticket agent (if any)

•Which phone numbers to be published in guides, classifieds and advertising

•Details of allocations to all agents

•Arrangement with all agents - e.g. commission deals, who hold advance monies, bonds, settlement dates etc.

•Phones switch out of hours - to whom - who pays

•Ticket prices, total house value, concessions, number of performances, time of performances

•Complimentary seats, charge for press night

•House seats, who controls, when released, charged at full value?

1.6 Cast/Re-casting

•Is contract dependent on named stars

•Arrangements if named star does not appear (e.g. illness)

•Arrangements for re-casting

  • Does theatre owner have approval of re-casting (not to be unreasonably withheld)

•Can contract be terminated if theatre owner does not agree re-casting

•Insurance for non-appearance of star(s) or cancellation for causes beyond producers’ control.

1.7 Deposits

•Theatre owners will usually expect a cash deposit or bank guarantee from the producer to ensure all liabilities under the contract are fulfilled.

•If cash deposits are paid, check who benefits from the interest – usually it is the producer.

•Size of deposit is negotiable and will depend on the weekly amounts of rent and contra payable, the reinstatement costs, the length of notice and the theatre owners’ perceived risk.

1.8 Miscellaneous

•Use of stage for rehearsals, maintenance of set, etc.

•Reinstatement, wear and tear, equipment in working order

•Dates preview, press night, charity perfs. etc.

•Right to inspect books or accounts, right to audit and at whose cost

•Insurance provisions

•Cancellation of performances - any compensation due to the theatre

•Non-presentation of production, what is producer's liability

•No interval - is there a penalty charge

•Complying with union agreements

•Indemnity from producer that s/he owns the rights of the play and prosecution for obscenity etc.

•Fire, licensing, health and safety regulations

•Programmes - charges for complimentary copies - editorial control - charges for extra design and changes

•Merchandise arrangements, commission, staffing

•FOH restrictions inside and outside on advertising

•PRS - who pays for which part of what tariff

•Foreign artists - the law requires the theatre to withhold tax at the standard rate of weekly payment until Inland Revenue give the clearance on foreign artists

•Weekly payment to producer (usually Thursday following end of each week)

•Advertising - approvals of copy, fly posting, etc.

•VAT - is it self-billing.