The new owners of Secret Cinema want to be the Netflix of live events | secret cinema

TThe new owners of Secret Cinema have their end of Hollywood. Nearly three years after setting their sights on the immersive cinematic experience, they are reviving their global expansion plans as part of a strategy to become the Netflix of live events.

When they first arrived in London in early 2020 to discuss a possible acquisition, the company was celebrating a successful adaptation of a show from that streaming platform: more than 100,000 fans would finally attend their real-world imagination of Stranger Things.

But two months later, the UK went into lockdown and Secret Cinema, accustomed to charging up to £139 per ticket for its £9m immersive screenings featuring actors and elaborate sets recreating worlds from Star Wars to Dirty Dancing, was left behind. He was caught in a row for almost £1m in emergency aid he received from the government’s cultural recovery fund.

“First we met with the management of Secret [Group] in January 2020, just before the pandemic,” says Brian Fenty, co-founder of US digital ticketing firm TodayTix Group, which acquired the parent company in a $100m (£88m) deal at the end of the month. past.

“They had Stranger Things in London, which was exceptional, and they had woven these relationships with [Hollywood] studios They attracted audiences of all ages and backgrounds. Then they launched the pandemic on us. We had to focus on our 300-employee team, so that paused.”

Brian Fenty, co-founder of digital ticketing company TodayTix Group, which now owns Secret Cinema. Photograph: Jill Mead/The Guardian

Along with the rest of the live events industry, Secret Cinema has been hit hard during the pandemic. Turnover fell by more than 60%, from £15.7m to £6.1m, between 2019 and 2020, plummeting to just £452,000 last year, with pre-tax losses topping £12m in the last three years.

Under the leadership of Max Alexander, a former telecommunications executive and former managing director of Andrew Lloyd Webber’s theater empire, the Really Useful Group, the UK-based cultural phenomenon came close to going global.

Just before the lockdown, Secret Cinema launched its first international event, bringing Casino Royale to Shanghai, after a UK production with 120,000 attendees and an £8m box office. Unfortunately, Covid meant his execution was called off after six weeks.

And a newly signed multi-year deal with Disney, which would ultimately lead to its production of Guardians of the Galaxy, currently playing at Wembley Park, promised to unlock a trove of crown jewel franchises to fuel expansion plans. .

The deal with TodayTix, founded by Broadway producers Fenty and longtime friend Merritt Baer (they met at drama camp as kids), was supposed to provide the financial muscle, until Covid shut down live events. .

“Everyone around us in the first or second quarter of the pandemic was like, ‘What’s your transmission pivot? Isn’t transmission your savior?’ or ‘Are you going to get another job, Brian?’” says Fenty, who began his business career developing marketing and ticketing for the New York Yankees. “But for us [in-person] events were not only the past but also the future.”

Merritt Baer, ​​longtime friend and co-founder of TodayTix, the digital ticketing company.
Merritt Baer, ​​a longtime friend of Fenty and co-founder of TodayTix. Photograph: Jill Mead/The Guardian

TodayTix, which has expanded into creating its own events, including a nightclub in New York’s Times Square and hosting concerts with Broadway stars in Brooklyn, now wants to go beyond ticketing technology to become in a complete media company.

“Think of other tech companies that went into content,” says Baer, ​​whose resume includes producing The Merchant of Venice, starring Al Pacino, and receiving a Tony Award for Death of a Salesman. “Netflix is ​​a great example. At first, they sought to learn simply by renting other people’s movies. Now look at your content business. TodayTix Group has a fantastic opportunity.”

Secret Cinema is part of that strategy. With backers Bain Capital and Great Hill Partners, TodayTix intends to put you back on the path of global expansion.

The search for permanent locations in London, Los Angeles and New York is underway, to allow for longer runs of the most successful shows, and a US tour of productions is planned for next year.

“We want to extend the same approach and strategy to rotate shows and let them run,” says Fenty. “Any West End producer, when they have a hit on their hands, they’ll keep it going. It’s about flexibility.”

TodayTix has acquired Secret Cinema from Active Partners, a London-based private equity firm co-founded by former BBC chairman Gavyn Davies, which has invested in companies including Soho House, food chains Honest Burger, Leon and Caravan, as well as cycling brand. Raphael.

(L to R) Natalia Dyer, Gaten Matarazzo, Joe Keery, Joseph Quinn, Maya Hawke, Priah Ferguson, Sadie Sink, and Caleb McLaughlin in Stranger Things.
Before the pandemic, real-world versions of Stranger Things attracted audiences of all ages and backgrounds. Photograph: Courtesy of Netflix

Active Partners had acquired the majority stake from Secret Cinema founder Fabien Riggall in 2016. Riggall, who started the business in 2007, retained a minority stake and although he was not actively involved in the day-to-day running of the business, he only stepped down as director. last month.

Riggall seems keen to stay in the creative industries, starting four new ventures this year under the Metrodome name, though the Secret Cinema purchase is understood to include non-compete clauses restricting the creation of a copycat operation.

One of Riggall’s new ventures is transforming the derelict Allders department store in Croydon, south London, into an arts and entertainment space. The Westfield shopping center abandoned plans to develop the site last year.

The British taxpayer also has a £4m stake in Secret Cinema through the government’s Future Fund, which is run by the state-owned British Business Bank set up during the pandemic to lend to start-ups.

Like all Secret Group investors, the government will receive tiered payments for its participation over a three-year period based on the performance of the business.

Fenty and Baer say they fully support Secret Cinema’s management and model, even though the company has never made an annual profit in its 15-year history.

“It’s about giving them access to marketing, to working capital,” says Fenty. “Secret Cinema’s home is London, and always will be.”

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