Why Fringe chiefs have put Summerhall box office payments to performers on hold
Organisers of the Edinburgh Festival Fringe say they are unable to release box office money due to artists and companies who staged shows at Summerhall due to the risk of the troubled venue going into liquidation.
The Fringe Society's lawyers have warned that direct payments should not be made to performers and producers left in limbo while the "arts village" is the subject of a “winding up” court case.
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Hide AdThe arts charity, which has suggested its decision provides the best protection for the box office income, is offering mental health, wellbeing and crisis meetings to affected artists who are struggling financially as a result of the escalating crisis at Summerhall.
Management at the privately-owned venue have revealed they have started to lay off some staff and reduce the hours of others while the legal case is ongoing after they were left with a "decimated" events programme, and unable to buy stock, pay suppliers or sell tickets.
The Fringe Society, which sells the majority of Summerhall's tickets through the official Fringe box office, has faced growing calls to distribute hundreds of thousands of pounds generated from record ticket sales at Summerhall since His Majesty's Revenue and Customs took court action over unpaid tax allegations.
Summerhall Management Limited, led by director Robert McDowell and chief executive Sam Gough, is contesting the HMRC action, but has had its bank accounts frozen while the case is ongoing.
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Hide AdThe Fringe Society has insisted it is "actively holding" the payments for Summerhall shows, which were due to be released by the end of October, as it offers the "highest likelihood" of the box office income being protected. It has raised the prospect of the ticket money being "lost" completely if it acts prematurely.
A statement has been released to affected participants on what it describes as "a very difficult and challenging situation" just days after it emerged that a luxury housebuilder is on the verge of buying up the entire 130,000sqft Summerhall site, which is reputed to be worth more than £10 million.
The HMRC action has led to the cancellation or relocation of dozens of events and shows planned to be held at Summerhall.
It is also unable to pay box office money still due to anyone involved in shows or events staged in recent months, including all Fringe productions.
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Hide AdSummerhall, one of the biggest Fringe venues in recent years, has faced an uncertain future since May, when it emerged that it was being put up for sale by owners Oesselmann Estate Limited.
The year-round venue, which opened for the 2011 Fringe, announced record ticket sales of more than 103,000 at the end of August.
However, an "urgent appeal" for financial support to help secure Summerhall’s future was issued in September amid warnings it was facing its "greatest existential threat."
Mr McDowell, who announced initial details of the HMRC case in early October, has since revealed Summerhall is being pursued for more than £500,000.
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Hide AdThere was no mention of the HMRC case in an announcement that housebuilder AMA Homes had been identified as the preferred bidder for Summerhall. Oesselmann said they were "delighted" by the developer's plans for the site.
The Fringe Society statement said there was unlikely to be any change in the situation over box office payments until Summerhall's case was heard in court in late November.
It has told artists and companies: "At the moment, the Fringe Society is not in a position to make payment of box office settlements to Summerhall companies directly.
"This is a very difficult and challenging situation, and we know the strain that it puts on you as individuals and companies. Summerhall Management’s [bank] accounts are currently frozen, they are under petition by HMRC and they are challenging this petition in court.
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Hide Ad"If successful, then their accounts will be unfrozen and we will look to make pay-out to them immediately. If they are unsuccessful, then a liquidator will be appointed and we will engage directly with the liquidator.
"As Summerhall Management are in a position where a liquidator may be appointed, the Fringe Society must have certainty before funds are transferred to ensure they are not lost.
"On the basis of legal advice, we are actively holding the pay-out pending the appointment of a liquidator as we consider this approach offers the highest likelihood of success of protecting your funds.
"We’ve spent time considering what specific action we could collectively lobby for. However, with no route to influence the court proceedings or HMRC, we don’t believe that there is anything we can do as a community at the moment.
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Hide Ad"We want to reassure you that we need to be in the strongest place to advocate for you collectively. For now, we must follow legal advice to ensure we protect your position."
Mr McDowell said the restrictions placed on Summerhall had been "extremely challenging", with most of the venue’s pre-booked events now called off or relocated elsewhere.
He said: "Summerhall Management has reached a position where we cannot generate or deliver enough activity and revenue to be able to continue as we have been since the petition was served.
"We have taken the difficult decision to further reduce activity and temporarily reduce contracted hours across the whole salaried team, as well as temporarily lay off operational team members whilst we continue to defend the action.
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Hide Ad"We have liaised with the Unite union, and have written and spoken to all staff affected. We hope that this is only a temporary measure. We understand how difficult this is for all those impacted. We are hoping a resolution can be achieved which will allow us to move on."
Mr McDowell said “all avenues” were being explored to try to make the payments due to artists and companies before the next court hearing.
He added: “The Fringe Society has taken its own legal advice. We cannot comment on what they have been advised to do.”
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