By Barbara Lewis and Muvija M
LONDON (Reuters) – London’s West End theatres are enjoying record ticket sales and drawing millions of pounds of investment as a pandemic-era tax break that will become permanent next month persuades some producers to choose Britain over Broadway.
A record 17.1 million people attended West End shows in 2023, and a similar number in 2024, according to the Society of London Theatre (SOLT). That compares to 15.3 million in 2019, before COVID-19 shut entertainment venues globally.
Audiences in New York are meanwhile down by nearly a fifth from pre-pandemic levels, figures from the Broadway League show.
Producers cite lower costs in London than on Broadway, which has a comparable but less generous tax scheme, as well as the attraction of one of the world’s richest theatre traditions.
“I will absolutely say, and I say this both with knowledge and with love, the UK is the best place in the world to make and to see theatre,” SOLT board member Patrick Gracey said.
Gracey, who has produced West End and Broadway shows, led efforts to persuade Britain’s Labour government to maintain the scheme introduced by its Conservative predecessor, which offers tax relief for touring shows of up to 45% of production costs.
Finance minister Rachel Reeves confirmed in October the tax break would stay rather than progressively decrease from April.
“The costs themselves are lower (in London), but the tax incentive makes it a no-brainer,” said New York-based accountant and theatre specialist Scott Bartolf, who works with producers in both cities.
GREATER VARIETY AND BIGGER PRODUCTIONS
Theatre industry bodies elsewhere are calling for similar initiatives, including in Gracey’s native Australia.
“(The tax scheme) has been widely recognised as a game-changer for the UK theatre industry,” Live Performance Australia said in an emailed statement. “It has made the UK a much more compelling proposition for investors in theatre.”
Henny Finch, joint CEO of London’s Donmar Warehouse, said the tax break was a lifeline without which the theatre would have to reduce the size and number of new productions.
And because it applies to touring productions, theatres outside the British capital, many of which have seen their funding dwindle with public spending cuts, also get a boost.
Steve Mannix of the Mercury Theatre in Colchester, southeast England, said the tax break helped provide “an essential source of income for regional theatres”.
New York’s tax incentives, in place since 2021, allow Broadway theatre companies to claim tax credits for up to 25% of production expenses, capped at $3 million per production.
The scheme, worth a total $300 million, is due to expire in September, but under New York budget proposals could be extended for two years with a top-up of $100 million.
Even so, producing a musical on Broadway costs 3-5 times as much as in the West End, according to an analysis by Gordon Cox, contributing theatre editor for Variety.
The Broadway League has more than 700 members, including producers, theatre owners and operators. It estimates 12.3 million admissions in the 2023-2024 season, which ended in May last year, 16.8% less than the record hit in 2018-2019.
That partly reflects the slower return of audiences from the outskirts of New York, said the League’s president Jason Laks. Ticket prices are also far higher than in London.
Laks also saw Britain’s tax scheme as a lure.
“Our Broadway theatres can’t move, but the productions can, and I get that, and so a producer may choose to produce or open a show in the UK because of the favourable economic tax credits that they have over there,” he said.
ECONOMIC RATIONALE
Britain’s creative industries are among those identified by Reeves as potential motors for economic growth, and the 126-billion-pound sector has shown a faster recovery from the pandemic compared to the wider economy.
Research by SOLT has found that for every pound spent on a theatre ticket, 1.40 pounds is spent in the local area, including in bars and restaurants.
Harder to measure is the West End’s contribution to Britain’s soft power: it attracts tens of thousands of visitors each day to its 39 theatres in the heart of London. Broadway has 41 theatres.
Arts minister Chris Bryant told Reuters via email the tax relief would help to ensure “top quality productions” across the country and especially in London.
“London is the world’s premier destination for theatre-goers, drawing in hundreds of thousands of people every year, and making a significant contribution to the capital’s economy,” he said.
LOCAL VERSUS NATIONAL
Data obtained by Reuters via a freedom of information request show London productions received 42 million pounds of 66 million paid in theatre tax relief in the financial year 2021-22. The rest of the southeast received 6 million pounds, and other regions between 1 million and 2 million pounds apiece.
But provincial theatres have also benefited.
Producer Jamie Wilson said the tax scheme had influenced his decision to trial musical “The Devil Wears Prada” on audiences in Plymouth, southwest England, before its London opening.
Leeds Playhouse, whose “In Dreams” premiered in the northern English city then moved to Toronto, said the tax break “has enabled us to continue to co-produce shows … which otherwise would have been threatened by the current economic pressures”.
Regional theatres nevertheless “desperately need more money to support the infrastructure”, Wilson said. A SOLT report published in July 2024 found 40% of 65 theatre venues surveyed across the UK would become too unsafe to use within five years without a capital injection.
With producers saying there are not enough West End venues to meet demand, those theatres could get a boost if more Broadway productions head to Britain.
“They won’t be able to find a West End theatre, so they will be looking for a regional theatre to open those musicals, which is great … for the regions,” Wilson said.
($1 = 0.7788 pounds)
(Reporting by Barbara Lewis and Muvija M; Editing by Catherine Evans)
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