Arts companies are fighting to the death for crisis funds

Many Australian theatres might have reopened in recent weeks, but most of the drama is still happening behind the scenes.

Six months into the pandemic and only now are various groups starting to find out if they’re eligible to apply for any of the scarce federal government crisis funding or even scarcer state funds.

The messy and vague process is pitting large organisations against small, and solvent against bankrupt, in what is being dubbed the “arts hunger games”.

Ironically, an industry traditionally defensive of free speech has now hunkered down with most arts bodies refusing to speak about the whole process lest they jeopardise any chance of support.

Those seeking some of the $250 million in federal funding fear that the larger more financially prudent companies are being penalised at the expense of smaller non-viable companies on the brink of collapse.

For the paltry $50 million NSW government bailout money, it is the opposite: smaller companies claim the larger more recognised names like Sydney Theatre Company (STC) are receiving preference.

What is clear though is that the whole sector is being held to a much tougher standard for federal support than private companies who did not have to use up all their cash reserves and sell assets before benefitting from vast government subsidies.

Take Australia’s biggest arts company, Opera Australia (OA), for example. It warned of its precarious financial position in the early days of the pandemic — which came as a shock as it was considered to be in a more secure financial position than most, after decades of building up its reserves.

OA has held on but recently put its Alexandria warehouse base up for sale. The reason? It’s apparently not even eligible to apply for the federal government funding until it has depleted its assets.

The feds seem to be saying: unless you are on the brink of collapse you need not apply.

The short-sightedness of the problem is obvious in the OA case. The inner-city warehouse was purchased to keep down the cost of storing and transporting its vast sets. Once the warehouse is sold, the company will have to lease somewhere further out of town thus sending costs skyrocketing. 

The short-term gain from the money will barely keep them going for a year and the problem they had solved by buying the property will become a long-term one again.

They also own their headquarters in Surry Hills, which presumably would have to be on the block as well if the crisis continues indefinitely.

(Many other companies are jealous of the prime real estate which OA has managed to acquire over the years. It’s reminiscent of the debate over the insured versus the non-insured when it comes to victims of bushfires. Should homeowners who are prudent and saved for a rainy day be punished while those who didn’t get the same treatment?)

Opera Australia refused to comment as it is in the midst of a legal battle over the staff cutbacks it announced as part of the financial restructuring.

Meanwhile Sydney’s other major cultural institution, the STC, did not confirm reports it has received a swathe of the NSW Rescue and Restart package, but it did tell Crikey it had not received any federal funding.

STC added it has no property assets and “we are drawing on our reserves like most companies are”.

Sydney’s usually outspoken Belvoir St Theatre is even more circumspect, stating it has not received any NSW assistance and it is currently preparing a submission for federal assistance. 

“We have limited reserves currently,” a Belvoir spokesperson said in reply to written questions from Crikey.

It is a similar story around the country. The State Theatre Company of South Australia (STCSA) executive director Julian Hobba told us they have “not received any additional funding from the federal government as a consequence of the COVID-19 shutdown.

“Our financial reports will show a reduction in our reserves due to the business disruption. However, we understand that STCSA has suffered a much smaller hit to our reserves than our colleagues at major performing arts company interstate.”

Meanwhile a parliamentary inquiry has been announced by the Communications and Arts Committee into the impact of COVID and what can be done for the creative sector, but its vague terms of reference will unlikely actually save anyone anytime soon.