Music company Stage Entertainment is undergoing a major reorganization. In the last financial year, the company, which has grown under the leadership of Joop van den Ende, posted a loss of €19 million due to efficiency problems and a number of disappointing productions. Consultants from Alvarez & Marsal have been called in to review Stage Entertainment’s country organizations and oversee the restructuring, which will result in the loss of between 350 and 400 jobs.
Stage Entertainment was founded in 1998 from the Dutch entertainment company Endemol. Under the leadership of Joop van den Ende, the music company has grown into the largest music producer in Europe. Stage Entertainment is active in eight countries around the world, including Russia and the United States. The company not only produces musicals, but also has its own network of theaters at its disposal, and until recently was active in ticket sales. Famous musicals from Stage Entertainment that are currently being shown in our country are Grease, The Bodyguard, De Tweeling and Robert Long.
In mid-September 2015, van den Ende sold 60% of his shares to CVC Capital Partners, a British private equity firm – keeping the remaining 40% himself. One of the reasons for the switch to sales was that the music company had to professionalize. Family businesses like Stage Entertainment sometimes forget to “keep the organizational lines tight,” Van den Ende told Radio 1 Journal at the time. Following the completion of the deal, Van den Ende stepped down as CEO of the company and currently serves as a part-time producer and supervisory director. He was recently replaced by Just Spee, who previously served as CFO and later CEO of Endemol Group.
Reorganization plan
After about four months, it seems that there is already a great need for professionalism. Of the company’s approximately 2,650 jobs, between 350 and 400 will be eliminated in the near future. This radical reorganization is necessary to restore the profitability of the music company. In the last financial year, which ran from August 2014 to July 2015, Stage Entertainment recorded a loss of €19.1 million and its turnover fell by €32 million to €482 million. In the previous year, the company achieved net profits of more than 11.5 million euros. For the sake of profitability, Van den Ende previously decided to say goodbye to the “ticketing” business, as the ticket sales department of Stage Entertainment was called.
Alvarez and Marsal
The reorganization plan results from an analysis by Alvarez & Marsal, a consulting firm that gained international fame for its role as lead manager of the Lehman Brothers bankruptcy. The boards of Stage Entertainment and CVC Capital Partners have appointed management consultants to examine various divisions in the country in terms of performance, efficiency, potential cost savings and risk reduction. Little is known about the RFP process – A fascinating detail is that Stage Entertainment CEO Spee himself worked for Alvarez & Marsal from 2005 to 2013 as Managing Director of Europe. During his time in Consulting company He served as Endemol’s interim CFO for about two years, after which he was tempted to make the switch.
The major reform process is now underway. Temporary contracts have not been extended for some time now. Last Thursday, 20 employees, including the commercial director for the Netherlands, were told that their jobs would disappear as of February 1. In Germany, the musical Hinterm Horizont about pop artist Udo Lindenberg has been canceled (as of August) and the theater at Potsdammerplatz has been closed as of 1 September. We have reached the very painful stage when the reorganization becomes tangible. Now it’s about the people and faces you’ll miss. We know this has to happen. “But it looks terrible,” said Martin Van Nispen, a spokesperson for Stage Entertainment.
Overall, between 350 and 400 music production company jobs will be lost around the world, according to current plans. Other decisions may be made based on Alvarez & Marsal’s research. This may mean saying goodbye to one or more of the countries in which the company is active. The need to produce all musicals and shows yourself is also always taken into account – allowing other theatrical performances in theaters may reduce financial risks.
