How some of the wealthy elite who run the Royal Albert Hall are profiteering by reselling their prize seats to touts
THEY’LL be playing Mozart’s Notturno in D Major at the Royal Albert Hall tonight, as part of the two-month festival of classical music that culminates with the pomp, circumstance and Union Jack-waving of September’s last Night of the Proms. The BBC’s annual series of 75 concerts is a staple of the arts calendar, broadcast to every corner of the globe and beamed to big screens in parks and squares across Britain. yet while orchestras play in perfect harmony, off stage there are noises of discontent — with top-notes of a very ugly scandal.
For the Royal Albert Hall — a charity whose patron is Her Majesty the Queen — finds itself at the centre of the latest murky row to tarnish the reputation of Britain’s increasingly noxious not-for-profit sector.
To understand why, one need only spend a few minutes using the internet to search for information about the aforementioned last Night, where the BBC Symphony Orchestra will this year be conducted by Sir Andrew Davis.
The unique celebration of British patriotism has been one of the hottest tickets in showbusiness for years.
To secure one of the 5,272 seats, which cost the ( relatively) bargain price of between £27 and £100, most ordinary members of the public must first attend at least five other Proms concerts. That entitles them to enter a hugely oversubscribed ballot for the right to buy a ticket.
Many thousands of classical music enthusiasts go down this arduous road every year. Many regard the last Night as a oncein-a-lifetime experience. Attending is a hard-earned privilege.
Unless, that is, you have oodles of cash to spare.
For, as so often in our increasingly commercial internet age — where everything seems to have its price — a hefty quantity of tickets also happen to be freely available to those prepared to throw vast sums of money at the problem. So it goes that websites such as the ticket re-sale site Viagogo were this week advertising seats in the stalls for £1,000 each.
To sit in a box in the second tier of the auditorium, you must fork out £1,600. The going rate for a ‘grand tier’ box seat, regarded as the best in the house, is nearer £2,500.
These prices are not, of course, being charged by the event’s organiser, the publicly- owned BBC. Nor are they being levied by the Albert Hall which, as I have pointed out, is a charity.
Since members of the public don’t receive their ballot tickets until a few days before the last Night, very few of them are in a position to cash in, either.
Instead, the vast majority of the tickets being flogged so shamelessly turn out to belong to a lucky — and, as we shall see, increasingly controversial — breed of individual known as a ‘Member’ of the 151-year- old Royal Albert Hall.
Members currently own some 1,270 of the venue’s seats, and they are each issued tickets to around 250 of the events that take place there each year.
These include not just the last Night of the Proms, but also such sought- after events as upcoming gigs by Cliff Richard, Jools Holland, Billy Ocean and The Beach Boys. MEMBERS of the Hall, a mixture of individuals and organisations, can buy or sell seats on the open market (one in the stalls currently fetches around £150,000). They pay an annual fee of around £1,500 for upkeep, and in return are able to do whatever they want with their tickets.
Many choose to return unwanted ones to the box office for resale at face value to the wider public. For this they receive a good share of the spoils, totalling around £5,000 per year per seat should they give up their ticket for every event.
Should members feel like maximising their financial returns, however, they can sell tickets for otherwise sold- out events on the open market. This can produce a substantial profit: some estimate between £15,000 and £20,000 per year per seat.
The list of members at the centre of this row provides a fascinating insight into the changing nature of Britain’s financial elite. Where once the list was dominated by philanthropists, boxes are now owned by major corporations such as Shell, BAE Systems and Aviva Insurance.
Anonymous financial entities control still more. A firm called Palmyra Holdings, based in the tax haven of Jersey, controls five.Two boxes are owned by Astor Care Tickets limited, a subsidiary of a company run by a doctor named Brian Cheung, that runs an Oxfordshire care home which has been much criticised by the Care Quality Commission.
Sixteen seats are controlled by the Albermarle Booking Agency, which runs them commercially. Coutts, the royal bank, and a Guernsey-based entity called Newstead Enterprises control others.
The Queen’s lady-in-waiting, the Hon Mary Morrison, owns two seats, while Jimmy Page of led Zeppelin has a box.
There is no suggestion that any of these individuals or companies flogs their seats online (a friend assures me that Mary Morrison, for one, finds the practice ‘ despicable’), but the fact that some members do put tickets up for resale at huge mark-ups has prompted criticism from a host of performers.
Rock stars Roger Daltrey and Paul Weller called the practice ‘ ludicrous’ and ‘despicable’. Harvey Goldsmith, the live Aid promoter, described it as legal, but ‘morally reprehensible’.
Five years ago, to cite one example, The Times revealed that Earl Spencer, who owns a box of 12 seats, was using the internet to sell his tickets to an Eric Clapton gig for a whopping £4,470, including fees.
In January last year, the Mail found that Spencer’s tickets to a concert staged by the Teenage Cancer Trust — with a face value of £130 a head — were being punted online for £417.50 each.
When he was accused of cashing in at the expense of a charity devoted to helping sick children, the Earl blamed a member of his staff, who he said had ‘failed to understand’ his instruction to return the tickets to the box office, rather than flogging them via the internet.
Be that as it may, the affair raised contentious issues.
Firstly, as a charity the Royal Albert Hall is subsidised by the taxpayer. It saves £2 million-
‘ Roger Daltrey and Paul Weller called touting by members ludicrous and ’ despicable
£3 million a year in corporation tax, pays no V AT, is not charged normal business rates, and leases the ground it stands on, a prime piece of London real estate, for rent of 5p per annum. It also received lottery grants totalling £40 million in recent years.
The fact that such cash — from the pockets of ordinary Britons — is being spent on a venue which can be used by a collection of very wealthy people (and organisa - tions) to generate money is, many believe, morally questionable.
‘One person ’s tax relief [the Albert Hall] is another’s tax burden,’ says Paul Palmer, director of the Centre for Charity Effectiveness at Cass Business School in London. ‘So you and I are effectively subsiding multimillionaires who are trading Albert Hall seats as assets and making money from them.’
Secondly, and perhaps more importantly, the online market in members’ seats has highlighted the fact that the Royal Albert Hall is governed in a manner which contradicts normal guidelines.
For, in addition to having a valuable commercial interest in the running of the venue, members control the charity that runs it, the grandly named Corporation of the Hall of Arts and Sciences.
Under an arrangement dating back to Victorian times, 18 of these well- heeled individuals occupy seats on the charity’s 23member board of trustees, giving them effective control over every aspect of its running , including the line -up of events that are staged there (which of course has a direct impact on the amount that tickets can be sold for).
Trustees are elected by fellow members, via a ballot in which the owner of each seat gets one vote.
All of which means that the Corporation, a registered charity , is controlled by a group of people who have a huge financial interest in its management.
Moreover, several trustees own large numbers of seats, many of which were purchased as invest - ments, and are flogging tickets in a manner designed to maximise returns. Between them, the board controls 160 seats, which are conservatively valued at £25 million. Should they choose, they could make between £2.6 million and £3.2 million a year with them.
The Charity Commission believes this situation to be deeply at odds with standard practice, which dictates that T rustees should never financially benefit from their role with a non-profit organisation.
They also say it presents a potential conflict of interest: while the Royal Albert Hall’s formal objective is to ‘promote . . .the Arts and Sciences’, trustees’ decisions on how to fulfil this brief could, in theory, be influenced by desire to maximise their personal income. For example, board members might be tempted to use their influence to ensure that a particular slot in the calendar was used for a concert by a modish pop star, rather than a worthy (but less desirable) classical music event featuring, say, a youth orchestra.
Or they might resist a proposal to make the Last Night of the Proms one of the 150- odd events each year for which Members are not given tickets, but are paid a flat rate so the entire Hall can be let to a promoter.
Such situations are, so far as we know, entirely theoretical. The Royal Albert Hall admits there is ‘an authorised conflict of interest in our constitution’, but says it is ‘managed through a conflicts of interest committee’, to protect the organisation’s ‘integrity’. However, the Charity Commission takes a different view. The regulator believes it to be wholly unacceptable for a major - ity of T rustees to be exposed to such a conflict of interest.
Last year, it asked the then attorney general Jeremy W right, the Government’s most senior law officer, to refer the structure of the Hall to the Charity Tribunal, which rules on charity law.
The attorney general initially agreed, only for the charity to make what the Commission described as ‘legal threats’. Mr Wright therefore changed his mind in March ‘to prevent unnecessary litigation’, asking the regulator to seek an alternative solution.
That has not proven possible. So earlier this month, the Commission re-applied to the Attorney General for the matter to be ruled on by a Tribunal. Inevitably, the Royal Albert Hall is once again consult - ing lawyers. An expensive legal showdown beckons.
‘A gang of very wealthy individuals, who have property rights that are under threat, are sure to hire the most expensive lawyers in the land to defend them,’ is how P aul Palmer, of Cass Business School, puts it. ‘So the Commission will have to take them on. But they are, in my view , bringing charities in general into disrepute. So it ’s a case that needs to be heard.’
Sharon Hodgson, a Labour MP who campaigns against ticket touting, agrees. She has called the situation at the Hall ‘shameful’ and says ‘action needs to be taken’. CERTAINLY, the sums involved are considerable. Last year, the billionaire industrialist Jim Ratcliffe spent £2.76 million on a 12- seater box in the Grand Circle.
In March, a neighbouring one went on sale for £3 million. ‘Boxes of this nature tend to appreciate greatly over time and are a genuine generational purchase,’ said the agent, Harrods Estates.
Two of the most controversial members of the Royal Albert Hall are a financier named Leon Baroukh and his family , who own around 50 seats, and Richard Waterbury, the chairman of pensions for a chemicals company, who controls 29.
Their seats appear largely to be run as investments, which is particularly provocative since both Baroukh and W aterbury are senior members of the Royal Albert Hall’s board of trustees.
Does their combined commer - cial interest in the charity — worth upwards of £13.5 million — mean they should be excluded from involvement in running it?
The Commission says yes. The hall says no. The public, who help pay for this great monument, are free to make up their own minds about which side is in the right — and what it might say about who really rules Britannia.