Spat with U.K. theaters reveals tension over service charges

LONDON — When popular U.K. standup Sarah Millican announced in September that her 2013 national tour would not play any theaters run by Ambassadors Theater Group, the U.K.’s largest theater owner, due to rampant upcharges on tickets, industry ears pricked up: Someone lifting the lid on the controversial theater practice of add-on ticket fees is music to the ears of legit producers — whose ongoing need to do deals with theater owners keeps them publicly silent even as such fees eat away at their profit margins.

The boycott is reminiscent of Pearl Jam’s battle in the mid-’90s against U.S. ducat monolith Ticketmaster, which levies such service charges on all its tickets, to any type of event.

In the U.K., every theater owner uses its own ticketing operation: ATG owns dedicated outfit ATGtickets, Cameron Mackintosh’s Delfont Mackintosh organization has one and Andrew Lloyd Webber’s Really Useful Theaters has Seetickets.

Those individual operations allow for some decidedly murky handling of ticketing income on the part of theater owners.

As Millican states on her website, “I don’t agree with the extra charges ATG put on top of the face value ticket price to you the customer and a number of other restrictions they have in place, so that’s why I’ve avoided their venues this time round.”

It’s not just talent that’s unhappy; producers are too. For instance, one U.K. producer says that a show in a West End house with a standard £67 ($107) top will, after VAT (U.K. sales tax) and the offending ticketing charges, yield the producer just $74. These fees are levied by all theater owners, and in many cases have been significantly increased. Those escalating charges have major implications on a show’s ability to pay back investors.

Fees can account for a major chunk of the money shelled out on an individual ticket purchase. For instance, anyone wanting to buy a ticket to see standup comic Jimmy Carr at Milton Keynes Theater, one of ATG’s 39 houses, must book through ATG’s own ticketing system. The ticket’s face value is $41.84, but costs rise as the buyer proceeds through the online system. A per ticket fee of $6.27 is added, along with a transaction fee of $4.59, so that what initially looked like a pair of tickets for $83.70 weighs in at $100.80 — more than 20% in additional charges.

Howard Panter, co-owner and co-chief executive of ATG is sanguine about his company’s position, pointing to a recent audit of the company and its ticketing systems in which his staff was cited for its attention to customer service.

“The bottom line is, we think we give a better service, and that’s why the charges are there,” he says.

Yet, within 24 hours of Millican’s boycott, ATG had announced details of what many regard as a PR spin to justify how ticket service charges are spent: a $24 million investment plan to refurbish some of the buildings in the ATG portfolio. ATG property director David Blyth says the plan will “dramatically increase the customer experience and preserve our beautiful, historic buildings.”

Moreover, Panter told Variety ATG has been in lengthy discussions over restructuring its fees, with one possibility being a fee determined as a percentage of the ticket cost rather than as a set charge.

“We have 600 products at any one time — productions on sale for different times of the year,” he says. “They’ve all got their own particular economic dynamic. One size does not fit all.”

But it’s not just producers who are unhappy over the upcharges: Agents, too, are becoming increasingly riled up as deals over fees and royalties for creatives worsen.

Behind the scenes, the atmosphere is growing ever more toxic. It’s looking as if Millican may accidentally have lit quite a short fuse.

Filed Under:

Follow @Variety on Twitter for breaking news, reviews and more