The curious case of the missing millions

EARLIER this year, comedian Barry Fearns made history when he became the first person known to have gone bankrupt as a result of performing at the Edinburgh Fringe: "It just got to the point where the weight of my financial difficulties had become such a stress that I couldn't move."

Fearns spent about £20,000 putting on This Sketch Show Belongs to Lionel Richie at the Underbelly in August 2007, and made less than £2,000 back in ticket sales. His biggest single costs were venue hire (£3,500) and accommodation for himself and his cast (£3,500) but he also paid to hire actors and rent a rehearsal space in London prior to his Fringe run. In addition, he invested heavily in a guerilla marketing campaign, based on the fact that he had changed his name to Lionel Richie by deed poll – part of a running joke far too convoluted to go into here.

Although the amount he paid to the Underbelly only accounted for a fraction of the amount he lost, Fearns feels that Fringe venues could do more to help out their acts.

"The venues could definitely be supporting people more," he says. "In my interactions with them I am seen very much as a dollar sign. I don't mean the staff, the staff are lovely, but just in the way the whole thing is run. There's no desire to make it easy or to invest in anything to help the performers, especially at the larger venues. It's almost like this mass of performers are buoying up the venue. When there are people making that much money, you wish they'd invest a bit more in making conditions a little better for us.

"Before now, at the Underbelly, my entire dressing room has been flooded. The amount of times I've been sat in a dressing room and you look around and it looks like some war-torn part of Sarajevo, and you think, 'How am I paying so much for these facilities? How am I paying thousands upon thousands of pounds to be at risk of trench foot?'"

Fringe venues are under no obligation to offer financial assistance to artists. In the majority of cases they act like landlords, simply renting out performance spaces for an amount agreed before the festival begins. If acts lose money during August, they alone are responsible, and the vast majority expect to make a substantial loss. Duncan Fraser, press and marketing manager at the Fringe, talks about the "lucky few" who manage to break even every year.

As if to prove the point, the American comedian Doug Stanhope offered a one-off show called A Day With Doug at this year's Fringe, in which someone could spend a day with him for £7,349. Why that specific amount? Because that's how much he estimates the average Fringe performer stands to lose during August.

Stanhope is amazed that British acts are prepared to risk so much money to come to the Fringe in an attempt to get spotted: "I don't know of any American comics who have gone to Edinburgh and done what UK comics do, I'm sure it's happened, but the ones I know only go over because they get some kind of deal. Renting out a venue for a month and hoping people are going to show up? Nobody does that in the US."

"I don't know who's screwing who exactly, but someone's gotta be making money. There's a line around the block every single night for somebody's show and at the end of the run they get a two-digit paycheque. That has happened to people I know. I won't name names, but these are people who have packed the house every night and come away with next to nothing."

Incredibly, even big-name comedians such as Stewart Lee don't always make money on the Fringe. Lee was furious in 2007 when the venue he was playing, the Underbelly, made public how much money he had earned from his Fringe show that year – a figure in the tens of thousands. He says that amount was in no way representative of how much he usually earns.

"I resented them publicising that figure, because I think it's rather misleading," he says. "I've been coming to the Fringe every year since 1987, apart from 2001. I made nothing in the first three years. I made £400 in 1990, £80 in 1991 then for the subsequent ten years I made losses of between £5,000 and £10,000 every year.

"In 2002 I made £600 and then in 2003 nothing, in 2004 about five grand, in 2005 about five grand, in 2006 nothing and then I made quite a substantial amount last year that Underbelly kindly told all the journalists about. It gives the impression that I come here every year and do that, but the fact is I don't.

"The problem with the Fringe is that in most cases everyone's costs are covered except those of the performers, because the spaces are rented from the venues. Not many of them are run on profit shares. Aurora Nova used to be, but everyone else's costs are underwritten by the performers. It's the biggest arts event in the world and it's basically built from the ground up by the performers themselves, who effectively pay for everything."

It's tempting to blame venue managers for all this but, incredible as it may sound, even the people running the "Big Four" venues – Underbelly, Gilded Balloon, Pleasance and Assembly – claim that they lose money in August.

"The income that we bring in doesn't exceed our costs," says Charlie Woods, the co-director of Underbelly. And are the rest of the Big Four also operating at a loss? "Yes, they are. That's the whole reason for the Edinburgh Comedy Festival. If we can bring in decent, proper, sizeable sponsorship and therefore improve our marketing then a) we can reduce the cost to the performer and b) by being able to afford more marketing we'll be able to bring more people into Edinburgh to watch shows, therefore increasing box office revenues.

"At the moment, across the Fringe, venues are selling an average of between 50 and 60 per cent of their seats. But it's a whole different ballgame if you can make that 60 to 70 per cent or 70 to 80 per cent. Of course there are some shows that are selling out, but there are a whole lot of other shows that aren't. We just need to get more people in."

In a financial climate where not even the Big Four are able to turn a profit, the Stand Comedy Club's Fringe operation starts to look like some sort of financial miracle. Not only does its director Tommy Sheppard say he manages to make money for himself ("although it doesn't feel like a lot for the amount of effort that goes in") he also guarantees all 32 of the acts in the Stand programme that he will cover any losses they incur during August (although they have to pay for their own accommodation).

"Some of the smaller shows in Stand IV, Carey Marx for example, need to sell about 11 and half tickets a night to break even," says Sheppard. "Once he gets to the 13th ticket we split that 80-20 in his favour up to the capacity of the room. If he only sells ten tickets and the budget falls short, we make up the difference – he doesn't have anything to pay.

"In fact, in order to try and keep morale up, realising that shows will build audiences during the run, we also start with a clean sheet every week. We do the accounts on a Sunday night for that week, and if somebody's made a loss, that loss isn't carried forward – in other words, they've still got a chance to keep some money.

"That's just for morale. If people feel their show's starting to build but they're carrying heavy losses from the first few days it can feel like they're just working to pay off their debts. The last thing I want is for people to go on stage thinking., 'How much is this costing me?' which is exactly what goes through people's minds in other venues. Our objective is to make it manageable for people to do the show."

Sheppard also claims to be able to offer cheaper ticket prices than other venues for exactly the same acts. "How come the same performers are playing for the same amount of time at The Stand this year, but they're up to 30 per cent cheaper than they were last year?" he asks.

"David O'Doherty, Stewart Lee and Jo Caulfield have all moved from the Assembly and the Underbelly to the Stand – same people, same amount of time, same quality of show – and it's cheaper. So not only do the performers get a better deal, the punters get cheaper tickets.

"I don't know why we have cheaper prices for comedy – I don't see why we need to have. The Underbelly have got far more rooms than we do, they've got an economy of scale that we don't have. We can only have a customer if they've already bought a ticket, but these bigger venues also have bars which give them a big commercial edge.

"Granted, I do have the advantage of not having the same infrastructure costs (the Stand, unlike any of the Big Four venues, is a year-round operation] but only in Stand One. At the other three Stand venues I have the same costs. I've had to spend a small fortune getting Stand III up and running this year – it seemed like we were buying kit every day to make it work."

So how is Sheppard able to make a profit for himself and also insure all his acts against losses while other, much larger Fringe venues don't appear to be able to do either? Without access to the relevant paperwork it's impossible to tell. However, one thing's for certain: as long as the current situation persists, performers like Barry Fearns will continue to lose money.

That said, Fearns was back at the Fringe this year, splitting the cost of a room at the Gilded Balloon with 12 other comics and performing a show on the Free Fringe in order to keep costs to an absolute minimum.

"I'm still of the belief that the important thing is to be out there entertaining people," he says. "I want to get so good that I can't be ignored, but that takes time and practice. The only thing you can do is carry on going. Giving up is not an option."