An Economic Impact Study of Welsh National Opera Within Wales

Professor Dominic Shellard De Montfort University July 2010 Wales Millennium Centre inCardiff 1.2 1.1 1. Introduction National Opera Within Wales An EconomicImpactStudy ofWelsh 4 3 2 Economic Impact Study of UK Theatre willberepeatedinthenearfuture. Economic ImpactStudyofUK Itisintended thatthis Theatre, withBillMcdonnell,forArtsCouncilEnglandin2006. Study ofUK Palace Theatre aSocialImpact andtheAbbeyTheatre, Dublin.DominicShellardhasalsoundertaken asdiverseHullTruckof organisations Theatre, RhylPavilionTheatre, NottinghamPlayhouse,Mansfield DominicShellardandDerrick Ellisshavecompletedover25furthereconomicimpactstudies Since 2004, Department of Culture, Media and Sport for their deliberations on the ComprehensiveSheffield Spending and published Review in May 20042004. (www.artscouncil.org.uk), with the raw data being used by the measure the economic impact of theatre. UK It was undertaken by Dominic Shellard of the University of Council England, with the support of Arts Council Wales, Arts Council Scotland, TMA, ITC and SOLT,The tomethodology for this economic impact study emerged from a national study commissioned by Arts Society ofLondonTheatres Independent Theatre Council Theatrical Management Association

page 2 1.11 1.10 What isEconomicImpact? 1.9 1.8 1.7 1.6 1.5 1.4 1.3 Welsh National Opera page 3 and boosteconomicgrowth. circulatingaroundthelocaleconomy,supplies. Allthatexpenditureisconstantly helpingtopreservejobs, wagesandpurchasinga localcompanywhich other resultsinthatcompanyspendingontheirstaff ofthisincludesthepurchase ofsuppliesfrom money spentresultsinmorebeingspent.Anexample intoaccountthe‘knock-on’The effectwhich indirect impacttakes isgeneratedbythedirectimpact,where food, andclotheslocally. locally, wageswhich isthenspentonitemssuch ortheamountspentonresidentstaff asaccommodation, theamountspentonpurchasingimpact ismadeupofstraightlocalspending.For supplies example, makesacontributiontotheworthoflocaleconomyintwoways:directandindirect.Its WNO operatic excellence. totheWelsh ofWNO order toassesstheimportance economyin providing awideprogrammeof For thepurposesofthisstudy, istobemeasuredwithinWales therefore,theeconomicimpactofWNO in Mackintosh Ltd. MonteCarloandAmsterdamaswellcommercialproducerssuchPetersburg, asCameron Barcelona, study. ItsclientbaseincludestheRoyalOperaHouse,GlyndebourneandoperacompaniesinSt. consolidated withinWNO’s accountsandthoseelementsthatarerelevanttoWales areincludedinthis turnoverwas£1.4m.The company’s In2008/9 produced withintheworkshopsofWNO. resultsare whichCardiff Theatrical sellssetstocustomerswhich ServicesLtdisasubsidiaryofWNO areoriginally this study. of20 concerts andthoseperformedinWales therewereatotal and England.In2008/9, areincludedin The alsoperformsinitsownrightatStDavid’s Orchestra ofWNO Hall,CardiffandelsewhereinWales Oslo andCopenhagen. working inpartnershipwithoperahousesChicago,Munich, Geneva,Sydney, Berlin,Zurich, Barcelona, world, producingworktogetherunderco-productionarrangements.Recentcollaborationshaveincluded and, mostrecently, alsoworkscollaborativelywithotheroperahousesaroundthe inHongKong. WNO The companyperformsabroadoccasionallyincludingmajorcitiessuch asMilan,NewYork, Paris,Tokyo incomestream. beyond Cardiff,contributinganimportant therefore,drewaudiencesfromwell and0.5%overseas.WNO, Greater London,7%therestofUK approximately 74% camefromtheCardiffregion,9%Bristol6.5%Swansea3% thecompanyperformatWalesOf the45,000peoplewhosaw MillenniumCentreinCardiff, and sometimesLondon. England visitingvenuesinLiverpool,Birmingham,MiltonKeynes, Oxford,Bristol,Southampton,Plymouth As wellasperforminginCardiff,thecompanyperformsLlandudnoandSwanseawithinWales andtours andadministration. technical staff people,includingthechorus, orchestra, of238 creativeteams, Centre inCardiffwithapermanentstaff Welsh isaworldrenownedtouringoperacompanybasedatWales NationalOpera(WNO) Millennium Table theeconomicimpactofoperavenuesless 2:The formulaforcalculating 1.15 1.14 1.13 1.12 The Formula for Calculating EconomicImpact 1.16 1.18 1.17 Table theeconomicimpactofoperavenuesincluding 1:The formulaforcalculating the localandnationaleconomy, youcouldchoose toignoreturnoverandoverseasearningsemploy different economiceffect.Itisnotastrictlylinearmodel. specific economiceffect,whilstatheatre’s expenditureonwagesandsuppliesproducesacompletely turnoverismadeupofmoneyfromcustomers,fundersandbusinesses,producesa for example, and areviewingeconomicimpactasbeingaboutinputsoutputs,ratherthanprofitloss.So, it shouldbeadded),hasbeendecidedtoemploythe formula less fromSOLTimpossible forthenationalstudytocollectsufficientdata venues(throughnofaultoftheirown, produces aviablebutcautious result,thesmallestmultiplierpossiblehasbeenused of1.5. knock-on effectofspendingbytheopera companythroughoutthelocaleconomy. To ensurethatthisstudy formula,andshouldbeseenasaconservative calculated usingthesame consistent headlinefigureforeconomicimpactacrossthe sector. will,therefore,be The figureforWNO the followingformula: If, however, youwishtodefineeconomicimpactasbeingpurelywhatanoperacompanycontributes By includingturnover, thescaleofeconomic activityrelatedtotheoperacompany, youareestablishing there), youcouldusethefollowingformula: ifthetheatrewasnot economicactivityanareawouldloseintotal company (inotherwords,whattotal economicactivitythatis generatedbyanopera If youwishtodefineeconomicimpactasbeingthetotal There aretwomainwaysofdefiningeconomicimpact. This studywould ideallyliketoemploytheformulainTable 1,which includesturnover, butbecauseitwas Both formulas also employ multipliers. Multipliers are used in impact studies to take intoaccountthe formulasalsoemploymultipliers.Multipliersare usedinimpactstudiestotake Both However, the figure plus turnover will also be given to indicate what Wales would lose if WNO ceased to exist. (Turnover +OverseasEarningsAdditionalVisitor Spend+Salaries Formula for Calculating EconomicImpactIncludingTurnover Formula for Calculating EconomicImpactWithout Turnover + SubsistenceAllowancesGoodsandServicesExpenditure) (Additional Visitor Spend+SalariesSubsistenceAllowances (to take into account the knock-on effect in the local economy) intoaccountthe knock-on effectinthelocal (to take economy) intoaccounttheknock-on effectinthelocal (to take + GoodsandServicesExpenditure) x amultiplierof1.5 x amultiplierof1.5 turnover inTable 2tocalculatea calculation. turnover turnover

page 4 Supplies purchased totalled £4,700,000. GoodsandServicesBoughtSuppliespurchased totalled 2.4 SubsistenceAllowances 2.3 Salaries 2.2 AdditionalVisitor Spend(AVS) 2.1 EconomicImpactofWelsh TheComponentsofthe National Opera 2. page 5 was paid. £271,000 cover thecostoftravel,accommodation,foodandotherlivingexpenses.Inyear2008/9, The companyalsoenjoysthesupportof35volunteers. plus 203temporarystaff. purchased withinandoutsidethevenuesusedbyWNO. parking, domesticcosts(egBabysitter, Carer),overnightaccommodationandanyfooddrink toseeaperformance,inadditionthecostoftickets, andcoverstransportcostscar WNO Audience members travelled to WNO venuesbythefollowingmeans: Audience memberstravelledtoWNO this figurebythenumberoftickets soldinWales intheyear(i.e.72,200 tickets x£26=£1,877,200) AVSThe total theaverageAVS iscalculatedbytaking perheadfromthequestionnairesandmultiplying Seraglio ateitherCardiffandLlandudnovenues. following productionsduringtheSpring2010 programmeofTosca, Carmen,andThe Abductionfromthe audiencemembersatthe This figurewascalculatedfromtheresultsofaquestionnairethatcovered883 The AVS madebyanaverageaudiencememberpervisitis£26. amountofAVStotal is£1,877,200. forWNO the For 2008/9, fromtheyearendaccountsto31stAugust 2009. Figures usedinthisstudyaretaken £8,202,000 was spent on salaries intheyear.£8,202,000 wasspentonsalaries was238 The averagenumberofpermanentstaff Mode ofTransport Public Transport By Foot Taxi Car These are paid by some opera companies to performers and support staff to These arepaidbysomeoperacompaniestoperformersandsupport staff Additional Visitor Spendisthemoneyspentbypeopleattending Number ofUsers (%) 89 1 3 7 If oneemploysthecomprehensiveformula,which includesturnover, theeconomicimpactrisesto£33,689,000. Welsh economywas: onthe economic impactofWNO By feedingtheabovecomponentsintoformula,itcanbeseenthattotal TotalThe Calculation ofthe EconomicImpact of Welsh National Opera (£1,877,200 (AVS) +£8,202,000(Salaries)£271,000 (SubsistenceAllowances)+ The EconomicImpactofWelsh National Opera (2009/10) Professor DominicShellard £4,700,000 (GoodsandServices)x1.5 De Montfort University Vice-Chancellor = £22,575,300 July 2010

page 6 An Economic Impact Study of Welsh National Opera Within Wales

Professor Dominic Shellard, De Montfort University July 2010