La Scala: An Economic and Cultural Multiplier

AN ASK BOCCONI STUDY FOR TEATRO ALLA SCALA HIGHLIGHTS THE WHOLE RANGE OF VARIABLES TO BE CONSIDERED WHEN ESTIMATING THE VALUE CREATED BY A CULTURAL INSTITUTION

With a turnover of € 113.8 million in 2011, Milan’s Teatro alla Scala is the third producer of shows in Italy and the only opera house that can compare to international benchmarks for size and volume of activity; the second biggest italian theatre, Arena di Verona, is about half its size. A study conducted by Bocconi’s ASK Research Center analyses La Scala’s balance sheets and highlights the value created by this cultural institution.

The analysis of the theatre’s economic impact shows that for every euro received in public and donors’ contribution, la Scala generates, beyond its turnover, 2.7 extra euros, even though the funding received is not given to the theatre to generate economic returns. This wealth derives from the theatre procurement (vastly from local suppliers), from the economic activity generated by hosted artists andby students of the Academy,and from the expenses made by Italian non resident and foreign public.

On the revenue side la Scala has been able, before and more than the other Italian opera houses, to increase the incidence of ticketing and sponsorships, that currently represents 40% of the theatre turnover. The revenue structure of La Scala may be compared to that of Royal Opera House in London and Opéra de Paris (with revenues of respectively € 197.2 and 132.9 million) and the same applies to cost structure. While State contribution, though, covers51% of the cost of personnel at La Scala, in Paris the share is 98% and in London 63%.

For each euro of public financing, Teatro alla Scala receives 1.46 euros of private funds (including box office). Opéra de Paris receives 0.86 euros, while Royal Opera House, in a country with a long traditionof private contribution to cultural institutions, receives 2.8 euros of private funds for each euro of public financing. Anyway, the monetary value of public financing to the Royal Opera House is larger than that of La Scala.

The audience consists of over 400,000 people and is composed for approximately 70% by residents of the broad Milano area. Nearly one third of them hold subscriptions and are the loyal local public. Growth of online ticketing has made it possible to the theatre to significantly increase the international span of its public. International sales account for 45% of online ticketing. Special events, such as the week devoted to Wagner’s Ring cycle, turn out to be particularly attractive for the foreign audience. In the past decade nations represented have increased, together with a sharp increase of the Russian audience.

“The importance of Teatro alla Scala, though, is not limited to the economic value created, which is however relevant”, Paola Dubini, the ASK Research Center director explains. “Our study shows that La Scala is part of an international geography of production and circulation of artistic projects which includes a small number of actors and immensely contributes to Italy’s prestige and visibility. Italian opera is undoubtedly an international cultural heritage, but it would be wrong to take this “cultural rent” for granted. We have to thank institutions such as La Scala if this heritage is still a characteristic our country can be proud of and if opera still makes sense as a form of expression. La Scala is a valuable tool of cultural diplomacy and artistic creation”.

The La Scala study is part of a larger ASK research project about the relations between artistic production and economic wealth. Other parts of the same project are the book Stefano Baia Curioni devoted to the opera market (Mercanti dell’opera. Storie di Casa Ricordi, Il Saggiatore, 2011) and the study Alex Turrini and Giulia Cancellieri presented at Kyoto’s 17th International Conference of the Association for Cultural Economics International which identifies political renewal as a key driver of innovation in opera companies' musical seasons.

CLICK HERE to download the presentation of the study in .pdf format

by Andrea Celauro