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City Recital Hall – January 2015

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City Recital Hall – January 2015 ATTACHMENT A ATTACHMENT A EDITED VERSION OF POSITIVE SOLUTIONS REPORT: FUTURE MANAGEMENT AND GOVERNANCE MODELS FOR CITY RECITAL HALL – JANUARY 2015 ATTACHMENT A January 2015 Future Management and Governance Models for City Recital Hall Final Report Proposal by ATTACHMENT A Future Management and Governance Models 2 Prepared by Positive Solutions for City Recital Hall January 2015 Final Report ATTACHMENT A Contents 1. Brief and Methodology ................................................................................................................................... 5 2. Contexts .................................................................................................................................................................. 5 2.1 City of Sydney policy priorities ............................................................................................................. 5 2.2 The business of performing arts venues .......................................................................................... 7 2.2.1 Financial arrangements..................................................................................................................... 7 2.2.2 Booking arrangements ..................................................................................................................... 7 2.2.3 Operational functions ........................................................................................................................ 8 2.2.4 Measuring success .............................................................................................................................. 9 2.2.5 Management and governance implications............................................................................ 9 2.3 The expectations placed on performing arts venues ............................................................... 10 2.4 Operator models at performing arts venues ................................................................................ 12 3. Findings ................................................................................................................................................................ 14 3.1 CRH and the City of Sydney ................................................................................................................ 14 3.1.1 The venue ............................................................................................................................................. 14 3.1.2 Service agreement ............................................................................................................................ 14 3.1.3 Planning and reporting arrangements .................................................................................... 14 3.1.4 Finances ..................................................................................... Error! Bookmark not defined. 3.1.5 Staffing and Governance ................................................... Error! Bookmark not defined. 3.2 Interviews: Hirers and industry contacts ......................................................................................... 15 3.3 Evidence from benchmark venues .................................................................................................... 16 3.4 Income ........................................................................................................................................................... 22 3.5 Conditions for success ............................................................................................................................ 22 4. Operating models ............................................................................................................................................ 24 5. Preferred approach and recommendations ......................................................................................... 33 5.1 Key advantages and disadvantages ................................................................................................ 33 5.2 Conclusion .................................................................................................................................................. 34 5.3 Recommendations ................................................................................................................................... 34 Attachment A: Transition Plan ......................................................................................................................... 36 Future Management and Governance Models 3 Prepared by Positive Solutions for City Recital Hall January 2015 Final Report ATTACHMENT A Appendix One: Benchmarking information ............................................................................................... 39 Appendix Two: Venues previously reviewed regarding governance arrangements ............... 66 Appendix Three: Benchmarking - daytime programming .................................................................. 68 Future Management and Governance Models 4 Prepared by Positive Solutions for City Recital Hall January 2015 Final Report ATTACHMENT A 1. Brief and Methodology Positive Solutions has been engaged by the City of Sydney to provide advice on future management and governance models for City Recital Hall (CRH). The aim is to ‘ensure sound management and governance of the venue and its operations, enhance its reputation as Sydney’s premier fine music venue and contribute to the City’s cultural, social and economic objectives.’ To address the brief, interviews were undertaken with officers of the City of Sydney, with a small number of industry stakeholders, and with representatives at several benchmark facilities in Australia and overseas. Additional information on the benchmark facilities was secured to provide a range of illustrations of alternative approaches to performing arts facility management, especially in relation to recital/concert halls. This Draft Final Report presents the consultants’ findings and recommendations. 2. Contexts 2.1 City of Sydney policy priorities Released in May 2014, the City’s Cultural Policy and Action Plan, Creative City, presents a vision and framework for cultural development for the next ten years. The Vision states: Creativity is not confined to the number and quality of our cultural venues and infrastructure. It is there in the street life of the city, in expressions of creativity in the public domain and its virtual equivalents, and in memorable precincts that offer a critical mass of large and small-scale activity, interaction and experiences A number of other keynote statements introduce the Cultural Policy. They include: – Innovation is central to Sydney’s creative community – Sydney takes pride in its Aboriginal history, culture and its contemporary expression – Cultural experiences and creative opportunities are valued and accessible – Sydney’s diversity is prized and promoted – Sydney welcomes bold ideas, new visions and unexpected connections – Curiosity is encouraged and opportunities for discovery are everywhere Future Management and Governance Models 5 Prepared by Positive Solutions for City Recital Hall January 2015 Final Report ATTACHMENT A As one of Sydney’s signature cultural facilities, the City Recital Hall has the capacity to contribute to several of these themes, and to the night life, street life and cultural tourism offer of the City. CRH can also support some of the specific actions identified, such as the proposed theatre passport scheme, and the development of apps promoting the City’s cultural offer. There are a range of other policy frameworks which provide relevant contexts for CRH, including Sustainable Sydney 2030, the Economic Development Strategy and the Tourism Action Plan. Future Management and Governance Models 6 Prepared by Positive Solutions for City Recital Hall January 2015 Final Report ATTACHMENT A 2.2 The business of performing arts venues 2.2.1 Financial arrangements There are a range of different financial arrangements that apply between a receiving venue and a producer/hirer, ranging from hires, through shared income arrangements, to payment of a guaranteed fee to the artist or visiting company with the venue acting as the entrepreneur for the season. Each of these represents a different level of risk exposure for the venue, with hires presenting the least financial risk for the venue and guaranteed fees representing the greatest risk exposure whereby the opportunity to generate more income from ticket sales is traded off against the certainty of (lower) hire fees Income from hires is only one of a venue’s sources of income. The following illustrates a wider range of income and expenditure categories: Performing arts venue income and expenditure categories Income Expenditure Ticket sales (typically referred to as box Salaries office) Hire fees and associated charges Artists’ fees, programming, production costs Bar, catering and retail (rent from Marketing, box office and bar costs contractors or franchisees, or profit from and consumables the venue’s own management of these outlets) Sponsorship and fundraising1 Sponsorship and fundraising costs Subsidy from the owner (may be divided Premises, maintenance, refurbishment between subsidy for base operations and subsidy for specific program elements) Administrative overheads 2.2.2 Booking arrangements The overall objective of the hiring procedures in a receiving house is to maximise utilisation and financial return, often within the framework of agreed programming principles, such
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