Tim Maycock’s career spans both cultural sector finance, but also big business. He’s currently Head of Finance at Birmingham Hippodrome, with an annual turnover of £25m. Prior to working at the Hippodrome, Tim was the personal wealth manager for one of the richest men in the UK.
We caught up with him to see what insights he could share about cultural financial planning and what transferrable lessons he learnt from his time in big business.
How did you get to where you are in your career now, what have you learnt about finance along the way?
Before moving to the Hippodrome, I was the wealth manager for one of the richest men in the UK. It was an interesting role, but my boss wanted me to move full time to London. I was less keen – my wife and family are settled in Birmingham, and it’s an amazing city with so much going for it.
Parallel to that I saw the role at the Hippodrome.
The Hippodrome is a very special place for me. When I was growing up in Birmingham, my dad was a journalist. He’d get free press tickets to shows at the Hippodrome. Those visits were so special. And now as an adult I can appreciate that the Hippodrome is really unique in the region. Our primary method of making money is through selling tickets to great shows, and we recycle that cash into a wide range of activities that deliver real value to the region. For example, we have a dedicated team that works with 36 schools on a weekly basis. It’s a really positive way of making money – through shows we know our audience are going to love. I’m proud of what we do and how we do it.
From your background in private finance, what have you observed is different about finance models in performing arts?
There are differing models across the sector from the purely commercial to the fully subsidised. The key for me is identifying the value that the organisation is providing. When the link to the value provided is clear, whether that is value to paying customers or value to funders, the money and sustainability follows.
In normal times, the Birmingham Hippodrome generates almost all of our income from our main stage shows, however the pandemic has meant we have had to access other sources of funding, which we have been very grateful to receive. One thing that has struck me is the amount of time and resource it takes to put together good applications. For smaller organisations requiring grant funding, dedicating so much time to the application process might not be possible, which is why the focus on value, or should I say, aligned values is so important.
What’s your perspective on the cultural sector generally and its approach to trading and entrepreneurship… with an “outsider’s eye”, what tricks are we missing?
I felt pretty useless when I first turned up, and asked a lot of daft questions. But by questioning everything, and asking ‘why’ a lot, we have been able to increase our gross margin and decrease our delivery costs, which means there is more cash to be able to support the public benefit activities.
There has also been a great deal of focus on linking activity with the strategic objectives, and while we are not there yet, saying ‘no’ to those projects that don’t fit or that we can’t do justice to leads to further efficiency.
It’s interesting hearing about how you’ve been able to carve out more operating budgets. Are there any transferable lessons from how you’ve been able to do that for smaller organisations with less resources?
My perspective is very focussed on the Midlands. I don’t have much experience beyond that in the cultural sector. But, within the area, I feel like more collaboration would yield greater efficiency . To some extent that’s the responsibility of bigger organisations, like the Hippodrome, doing more to help our smaller up and coming organisations.
One thing we have rolled out is called the Creatives Card, which means that anybody who self-identifies as an artist can come in and use the building during the day, including during rehearsals, to sit in the cafe, with no obligation to buy things, use the free WiFi. It’s a scheme that won’t cost us much but will hopefully help those looking for a welcoming space to meet and rehearse.
From your perspective as a cultural leader, what do you see as the main barriers to change and growth for the sector at the moment – particularly thinking about the long term effects of COVID and BREXIT?
The lack of certainty.
When every day is just crisis management, which is where we are at the moment, we get absolutely no time to think strategically about the long term. Most of the time the battle is just keeping the doors open and the lights on.
Everyone felt pretty confident in the autumn – we were running alongside the Delta variant – but it felt manageable. With Omicron, I was convinced we’d be shut down straight after Christmas; if not back to a full lockdown, like those imposed Wales and Scotland. I’ve got friends in similar roles in Cardiff and Edinburgh; they’re shut. Incredibly, we’re still open. A huge amount of time went in over Christmas planning for another shut down. It’s that constant uncertainty that’s the challenge. You can’t blame anyone for it, we’re all at the mercy of the virus.
In terms of planning further forward, there’s a reticence from those taking commercial risk to push the boundaries, especially if it could get cancelled last minute. I’m hugely grateful that artistic producers continue to tour productions in the current environment; because they are putting up a lot of the risk upfront: there’s no such thing as cancellation insurance because of COVID.
Yes, early in the pandemic I was part of a working group set up by UK Theatre who were lobbying the government for an insurance mechanism whereby producers could get cancellation insurance, much like what happened in the TV industry.
But in the end, it was just too big a number. A national closure of theatres would lead to a huge insurance claim that would be too big, even for the government. So I’m very, very happy that the industry has found a way to carry on anyway, and put things back out on tour, albeit at a higher level of risk.
And now the government is saying lateral flow tests are no longer going to be free, because COVID’s going to be with us for the foreseeable future, and they can’t keep paying for the testing kits indefinitely. There’s a sense that this level of uncertainty is going to be the way things are for some time – how do you normalise that in financial forecasting, can you?
Unfortunately, I think we just have to sit tight and see how things look in March. I guess the one thing that would certainly help is assurance from the government that national lockdowns would go hand in hand with furlough. We survived 534 days of shutdown because of furlough. And knowing that – either for certain industries or as part of a wider principle – that if there is a national lockdown, there is going to be a further scheme, would be really helpful.
Sadly, we did have to go through a redundancy programme earlier in the pandemic, which was driven by the fact that furlough was originally going to come to an end in October 2020. So we had to insure ourselves for a period when it didn’t exist. We were 129 and we dropped to 75. We’re now back up to 100. Making those longer term commitments to staffing levels, in the face of uncertainty, is really, really hard.
Are there any case studies that come to mind of effective entrepreneurial endeavours in the cultural sector?
The case studies that give me hope are those where organisations are taking traditional artforms and finding inventive ways of reaching diverse new audiences. The CBSO are doing great work: they started playing in Hockley Social Club to crowds that wouldn’t regularly fill the Symphony Hall. And they’re able to access it in a way that suits them, in a way that will mean something to them.
There is also some great work going on with the social impact investors – loans are made to organisations that wouldn’t be able to access traditional sources of finance, which place a value on more than just financial return. But as these are loans there is a focus up front on financial sustainability, which requires the value proposition to be clear from the start.