Royal Albert Hall Investigated Over Member Seats

David Iliff. License: CC-BY-SA 3.0 – Royal Albert Hall

The UK’s Charity Tribunal is investigating the Royal Albert Hall because some of the Hall’s council members, who own seats in the venue, are reselling tickets allocated to them on the secondary market.

The Charity Commission argues that, since seat holders are also on the Hall’s governing council, they might place greater importance on their own enrichment than on what’s best for the charity. The commission has been engaged with the Royal Albert Hall over the matter for some time now.

Due to the complexity of the issue, the reasons for which are outlined below, and the Hall’s busy schedule, an amicable solution hasn’t been found yet. And now it looks, as if it won’t, as the Charity Commission has sought and received the consent of the Attorney General to refer a number of questions concerning the Hall to the Charity Tribunal.

A spokesperson for the commission said: “We are pleased that the Attorney General has agreed that these matters can be heard by the Tribunal and has given consent for the Commission to bring reference proceedings. This is a long running issue which we hope the Tribunal will be able to assist in resolving. We will now work to prepare the appropriate application to be submitted to the Charity Tribunal.”

The issue is complicated, because as a registered charity, the Hall has the legal requirement to operate for the public benefit. At the same time, the seats held by the Hall’s seat holders are their private property, some of them have been in families for generations. Pollstar reached out to the UK Charity Commission, asking on what grounds the tribunal seeks to restrict private individual’s doing with their property as they please.

In the commissions view, the fact that the majority of the Hall’s council is made up of seat holders constitutes a conflict of interest, and the commissions guidance on conflicts of interest states: “Trustees have a legal duty to act only in the best interests of their charity. They must not put themselves in any position where their duties as trustee may conflict with any personal interest they may have.”

The Royal Albert Hall’s response: “The Royal Albert Hall was disappointed to hear that the Charity Commission has taken this route. Over many years, the Hall has engaged in a meaningful way to resolve what is a complex set of issues, however the Commission has chosen to refuse to meet us, whilst pursuing what will be a costly and drawn out route.

“The Hall has a full program of events and has just seen the most successful opening of a Cirque du Soleil show, Ovo, which runs until March 2018. Whilst we will, of course, co-operate with this process, our focus will remain on entertaining audiences and to enhance our considerable charitable activities. Our unique structure and self-funding operating model, which requires no regular government subsidy, enables us to evolve our Grade I listed building and continue our charitable outreach work that benefits and touches many hundreds of thousands of people in our communities every year.”

The Hall’s annual review shows it invested £8.4 million ($11.6 million) into the building and service, including capital expenditure, and £0.4 million ($0.6 million) into education and outreach projects.

The Royal Albert Hall is a Grade I listed building that receives no annual public funding to cover running costs. Sir Henry Cole championed the construction of the building, following the untimely death of Prince Albert in 1861. A funding scheme was developed, encouraging subscribers – mostly individuals, a few corporations – to purchase seats in return for accessing events.

But because not enough subscribed, a new scheme had to be found. Eventually the money was raised through a combination of individual subscribers, the commissioners of London’s iconic 1851 Great Exhibition of the Works of Industry of All Nations, who purchased 500 seat, and the building’s contractors, who took 300 seats in part payment of their fee. Those seats were later sold on to the Commissioners.

The commissioners, however, were unwilling to pay for the losses the Hall was generating in its early years – it opened in 1871 – and so, from 1908 onwards, the 800 seats were assigned to the Hall. From then on, it was the individual and corporate seat-holders, known as Members of the Corporation, who became the only “financiers of last resort” for the Hall, according to its documents, “and through annual subventions (in those many decades when losses were made), supported and maintained the Hall.”

Said members agreed to maintain the Hall for the public benefit, an arrangement that hasn’t change until today. At present, the Hall’s 24-strong governing council is made up of 19 of the Members of the Corporation as well as appointed members that don’t hold any seats.

Seat holders currently exclude themselves from 140 shows each year (90 in line with the Hall’s provision, the rest voluntarily). The performances seat holders have excluded themselves from are largely the more popular and, for the charity, profitable events in the annual calendar.

“Over and above their voluntarily having excluded themselves from these performances, they also pay a ‘Seat Rate’, which currently contributes almost £1.9m annually to the charity,” the Hall’s documents state.

Promoters that want to play the Hall are informed that they aren’t letting the seat holders seats, which also means that seat holders’ seats are excluded of any secondary ticketing provisions any promoter may implement – which was at the core of a debate around the Royal Albert Hall’s seat allocation policy at the beginning of last year.

The Hall points out that due to the nature of the seat allotment, it has never had any right to the seat holders tickets, and therefore, seat holders are not taking away from the charity by doing with their tickets as they please. The Hall, it argues, and event promoters do not forego any income by virtue of the seat holders attendance, neither are they able to determine a face value price for seat holders’ tickets, nor restrict their use, given that the seats are not a subset of the Hall’s or the promoter’s inventory.