In search of the financial encore

By SELWYN PARKER

Forget about she'll be all right on the night. The job of Greg Innes, chief executive of The Edge, is not what you may think.

If performers fluffed lines or, worse, failed to turn up, if scenery fell down, lights failed, and the live horse in the recent production of Carmen disgraced himself on the stage, he would not even have a job.

No, the pressure in Innes' job does not arise from the presumed calamities of live theatre.

"There is very little spontaneity in live performances at The Edge," he says.

"If there were, Murphy's Law would apply and something would probably go wrong. The stage is a pretty dangerous place."

Anyway, when Innes got the job six years ago, almost the first thing he did was to out the panic lying just below the surface in a business like his.

There are 2500 events a year, big and small, at The Edge and Innes, whose last job was chief executive of the Entertainment Industry Employers Association in Australia, wanted to make sure they went as smoothly as possible.

The solution, or at least part of it? Event management software that is at the heart of The Edge's operations.

It runs every tiny detail of every event, every arrival and departure, every coffee break, every guest speaker, every designated parking place, every ticket sold, everything that matters.

"Everybody in the office coordinates with the database," says Innes.

"It is all systems and people. Whatever business you are in, you can't get past systems and people."

So the job is a hot seat for long-term, rather than short-term, problems - in other words, money.

The buck for creating revenue stops in Innes' spacious office ("a legacy of my predecessor," quickly observes its cost-conscious occupant).

Innes is primarily responsible for producing a robust cashflow from the city's "cultural precinct" - Aotea Centre, Town Hall, Aotea Square, The Civic and Town Hall.

Thus, it is not a question of whether it will be all right on the night but whether it will be all right in 2004, the year Innes is working on right now by lining up enough live productions, conventions and conferences to keep the revenue flowing.

For this financial year, he is predicting slightly reduced revenue of around $15 million.

Still, that is not so bad. Since Innes took over The Edge's revenue has grown year on year by around 25 per cent.

The money does not come easily. "Nobody has to bring an event here," Innes says.

"They could go anywhere. In this business the client is king. That is why this is essentially a sales and marketing organisation."

When you can sign up live performances there are three main ways to do the deal.

The Edge can take all the risk and put in, say, $200,000 to $300,000, as it has for Paul Taylor's Dance Company in its successful campaign to develop contemporary dance in Auckland.

Or it can share the risk by mounting joint ventures, as it did with Australian promoter International Concert Attractions for the Andalusian Opera's Carmen and the forthcoming The Importance of Being Earnest.

Or just hire out the theatre, as it will do for Michael Edgley's Russian production of the box-office winner Swan Lake.

"That is the least amount of work for us," says Innes. This does, however, mean that Edgley's organisation takes all the considerable profit from a production which will probably sell out.

When you can get it, commercial music theatre delivers some of the cleanest revenue to The Edge, with gross profit margins consistently topping 70 per cent. But it is a notoriously unpredictable industry.

Last year's disastrous dearth of commercial seasons stripped $1.5 million out of budgeted revenue.

To put it another way, there just are not enough shows like Riverdance.

With the long-running, client-frightening controversy over the Aotea Centre receding, a consistent marketing strategy in place, the boost of the America's Cup and the low kiwi dollar, it is Mice - Meetings, Incentives, Conventions and Exhibitions - that provides more and more of the cashflow.

For the past two years, income from conventions has shot off the scale - nearly $5 million in 1998/99 and well over $6 million in 1999/2000.

By the way, do not mention the A word. It is not Aotea Centre but The Edge. The name has proved a successful coinage despite the misgivings surrounding its introduction.

"Aotea Centre means almost nothing internationally," says Innes, who would probably like to strangle every member of whichever council committee came up with the name.

"And, locally, it has a history of controversy. Nobody wants to deal with an organisation that has a history of controversy.

"In fact, nobody wants to deal with local government, for very good reasons," says Innes, rapidly warming to this theme.

"And who wants to deal with the Town Hall, which provides half of our revenue? That is why we trade as The Edge."

To read between Innes' lines, council ownership of The Edge is the headache. In short, although the operating costs of The Edge are nailed down more tightly than the scenery in the recent production of Aida, councillors do not seem to see the need to reinvest in the organisation.

By world standards, the council's average $2 million-a-year subsidy to The Edge is peppercorn. The Sydney Opera House's grant is $A18 million.

"Have you ever heard an Auckland councillor talk about net economic benefit to the city, including those who should know better?" Innes says.

"In Wellington and Christchurch, and in Australia, there is a far better understanding of the importance of infrastructure."

Trying to knock commercial sense into the city fathers sounds like a non-stop battle fought with budgets and the occasional heated word.

"We are prepared to step up and have the biffo if the biffo has got to be had," says Innes with some relish.

"I have learned that there is always somebody in the public sector who can hit harder than you.

"But the issue is who gets up off the canvas.

"It is persistence that counts. I focus on keeping everybody else out of the business so my staff can get on with their jobs."

Always on the edge, you might say.

* Your e-mails, hostile or otherwise, to Selwyn Parker at wordz@xtra.co.nz