KLPac’s income struggling to keep up with its upkeep costs

The hub is at risk of closing down due to the lack of funding, says its group GM


After 12 years of producing plays, the Kuala Lumpur Performing Arts Centre (KLPac) is barely keeping afloat, having to wrestle with expenses to maintain the hub’s upkeep — like most performing art centres in the country — as people are getting more frugal with their disposable expenses due to the high cost of living.

KLPac group GM Ian Chow said that the hub is at risk of closing down due to the lack of funding.

The arts hub’s marketing communications head Ang Yue May said, “Very few corporations are willing to fund operational costs or back productions as many companies do not have ‘arts’ as part of their corporate social responsibility pillar.”

Ang further added that art players are challenged by the lack of support and funds due to its lack of return on investment (ROI), which is caused by the arts’ intangible nature.

“It is also difficult for us to provide actual ROI as the arts is largely intangible — yes, we enrich and change lives, impart soft skills, bring people from all races together in our creative endeavours and we can tell success stories, but to monetise the impact of the arts remains to be a challenge,” she said.

“The immediate issues are only a short-term problem on its own. The arts industry needs more demand and for people to be willing to pay despite the lack of ROI,” said Chow.

He added that Malaysia’s performing arts scene is basically becoming a casualty because there’s a level of uncertainty in the corporate environment.

The recent Budget 2018 announced by Prime Minister Datuk Seri Mohd Najib Razak proclaimed that there would be an increase in tax deduction from RM500,000 to RM700,000 granted to inspire sponsorship by the private sector in local and foreign arts, culture and heritage shows and performances.

However, organisations are not jumping on the bandwagon to give away sponsorships and this is mainly because it requires being first approved by the government.

To do this, the organisation needs to get an endorsement letter from the local council and submit it along with a receipt for the amount sponsored to the Inland Revenue Board.

Furthermore, these benefits are only provided to organisations and not the individual art lover.

This delivers a fairly strong message. It affirms what Chow said — that people do want to come out and watch plays, but there exists a struggle in what they can afford to spend their disposable money on.

Apart from that, KLPac is also having to deal with upgrades and fixing that need to be checked off the to-upgrade list, but the centre is out of resources to undertake them.

“There are so many things that need to be upgraded, items that need hauling after a certain lifespan if we had the means, but the situation has it that we can’t,” he told The Malaysian Reserve.

At present, the centre can only replace some studio flooring that has come apart — such as the main staircase’s carpet.

“Due to financial limitation, we can only replace the timber strips flooring in two studios, as well as the carpeting of the main staircase, even though all the carpeting is in dire need of change,” Chow said.

According to the centre’s funding deck, KLPac’s annual revenue of RM3.46 million comes from ticket sales.

Meanwhile, the rest comes from sponsorships, which is funneled back into the centre and the many expenses that crop up — including rent, insurance, electricians, play royalties and utilities, sets, as well as costumes associated with each show.

However, the amount is not enough to sustain the hub as it requires at least RM4.18 million to do so.

Chow added that the centre’s expenses are broken down into three categories: The core, secondary and emergency.

For now, the theatre can only prioritise on forking out for the core and emergency expenses.

“The core and emergency expenses always get priority and if we have enough to spare, we will move on to the secondary list expenses,” he said.

“The core is the one we must shell out either on a one-off or monthly or instalment basis, otherwise there will be severe consequences such as electricity and water cuts.

“Items in the secondary list can go on for a while because it involves our suppliers, contractors and partners who grant us credit terms. Most of the companies on this list go all the way back since we first started.

“The emergency list is self-explanatory; they are the technical or centre breakdowns that disrupt our day-to- day operations such as lighting, air conditioning or sound system,” he explained.

On the brighter side, Chow said there are a few things the group does not have to worry about, such as production expenses and rental.

“At most times, ticket sales are sufficient to cover production costs. We also do not need to pay rental, thanks to YTL Corp Bhd who has kindly contributed to KLPac’s arts hub,” he said.

Chow added that The Actors Studio also aids KLPac by contributing a portion of their gross ticket sales from their productions to KLPac.

“The arts industry needs to be sustainable, and in order for it to stand on its two feet, there must be demand, supply chain and the willingness to pay for its value,” he concluded.

As of September 2017, the centre’s creditor list is at RM460,000.

KLPac initially had 12 sponsors signed up for a three-year term, but in 2011, this number dropped to three. Mercedes-Benz Malaysia Sdn Bhd remains the only founding sponsor, alongside JT International Bhd and The Actors Studio Seni Teater Rakyat.

The arts hub focuses chiefly on developing and nurturing the local performing arts and the culture landscape by hosting workshops, as well as offering courses like the annual Theatre for Young People and The Actors Academy.