PRODUCING THEATRE USING THE OPEN BOOK MODEL “AN INTRODUCTION”

A guest blog by one of my oldest friends… Nick Field:

Ok, so I was reading Mark’s useful tips on ‘How to Build a Successful Theatre Company’ and he’s kindly invited me to blog about how my theatre company produces shows.

It’s important to talk about the financial side of things. Even if you’re all friends and get together and decide to put on a great show on a shoestring, it invariably will cost you money (as well as a whole lot of time). There’s no faster to way to destroy a budding theatre company (or friendships) than by getting into a mess about the financial side of things.

Sure, we all make theatre for the love, and not for the money, but if you’re going to do it more than once, you need to at least aim to break even, and why not try to make a little profit to put into the next show?

THE PROFIT SHARE MODEL
Many fringe theatre productions, especially in London, are produced under what’s known as ‘profit share’. This usually means that no-one receives a proper salary, and that any ‘profit’ made at the end gets distributed amongst the company. The sad reality is however, is that often there doesn’t tend to be any profit, apparently. An actor may get a token envelope at the end of the run from the Producer, but who knows who got what?

Actors tend to do it for the practice, and more often for the potential exposure to the industry, but their agents don’t like profit share. If any of the actors have had a bad experience where they’ve seen the producer or the director at the end of the run buying Mojito’s at the bar whilst smoking a Cuban cigar, and they haven’t got much more than their bus fare home, it doesn’t make them want to work with that company again. And I’m not being that dramatic; I’ve had those ‘profit share’ experiences myself as an actor.

So, how do we make theatre without proper salaries, sharing the spoils if there are any, and do it in an ‘open, honest and ethical’ way?

THE OPEN BOOK MODEL

Open Book Management is a process in which all of the employees of a company are able to look at all of the financial and business information of that company. And are then expected to help drive business success.

It’s not new in business, but it is in theatre, which is why my theatre company Red Table started using it and it hit the front page of ‘The Stage’ last year.

HOW IT WORKS
For every play that we produce, the financial information will be made available to every member of the company. Every actor (and member of the company) will be able to see how much money goes on advertising, salaries, insurance, printing, props, set design, set build, illustrators, photographers.

And everyone will be able to see ticket sales as they come in.

Every week, during both rehearsals and production, everyone involved will be able to see how far away we are from profitability. And then, when we cross breakeven, how much they’re going to get from the production.

HOW THE PROFIT GETS DISTRIBUTED
This is how we do it at Red Table; we work out a budget for a show and attract investors to put money in to cover it. Investors might be the cast, friends, family, angels or even the producers. In our case, they invest in units of £100.

When the money starts coming in, if the show breaks even (the money made equals the money spent), the investors get their money back first.

After break even, the investors will get a 10% maximum return on their investment. So if your uncle has put £300 into the project, you’ll give him back £330.

After the investors have been paid their 10% ROI (Return on Investment), any surplus money goes into a profit ‘pot’, which then gets distributed out amongst cast and crew. It needn’t be equally split either, we use a points based system which is weighted according to the contribution made, but I can talk more about that another time.

IS THERE ONLY ONE WAY TO USE OPEN BOOK?
No. Our way is a guide. The main issue to realise is that all money coming in and out is recorded, transparent, and freely available to all those involved in the production to see.

DO YOU NEED SPECIAL EXPERTISE TO USE OPEN BOOK?
All you need is common sense, a knack of keeping a record of what comes in and what goes out, and an ability to use some kind of spreadsheet program such as Excel.

OTHER BENEFITS
There are lots of ‘fringe’ benefits (pardon the pun) to using the Open Book Model, but chiefly:

The entire company are able to contribute to the productions success and lend ideas on how to save and make money for the show. Everyone is involved, and everyone can see what’s happening.

You’ll attract more experienced actors, designers, lighting technicians both now and in the future if they feel that their hard work is not being exploited.

WILL OPEN BOOK MAKE THE SHOW A SUCCESS?
No. Not in itself. There are many other factors to look at, both in producing a show, and making sure the actors, designers et al. all get a clear contract stating what is expected of them.

EQUITY’S STANCE
Our announcement and front page headlines caused somewhat of a stir in the fringe circuit. Some welcomed the approach, others berated it, claiming to be already transparent.
Equity have long been campaigning for the establishment of a minimum wage in fringe theatre. Frankly I support them wholeheartedly, and wish for the same myself. Everyone should be paid a decent salary.

However, as long as small theatre companies don't have public funding, they will continue to try and make theatre with little money, under the banner of ‘profit share’.

If you’re going to produce a show and build a theatre company, using the Open Book Model at least gives you the opportunity to be ‘open, honest and ethical’ when it comes to financial management.

For more info, please visit www.redtabletheatre.com