Theatre: Shopping and Funding

The rationale behind arts sponsorship is simple: it's the company you keep. Generously donating money to a theatre won't directly improve profits, but the association with high culture does wonders for a business's image. That explains Allied Domecq's long association with the RSC and the Bush Theatre, or AT&T's relationship with the Almeida. In return for cash, sponsors see their names and logos adorning the posters and print of flagship companies, and everyone comes out of it looking good.

Neither of these businesses exert any influence over their theatre's programming or activities. Indeed, arts organisations' funding development officers justify their positions and (usually high) salaries by persuading companies and charitable trusts to donate cash in "no strings" deals. But the Jerwood Foundation's pounds 3m gift to the Royal Court - the latest round in the theatre's battle for survival - has changed all that and shockwaves are echoing throughout the arts world.

Founded in 1977 with the profits of John Jerwood's dealership in cultured pearls, the Jerwood Foundation has become a major player in the arts sponsorship game, with everything from prizes for painting and fashion to the building of a beautiful rehearsal space and artists' studios in south-east London. After relatively low-profile donations to organisations including the Court, the chairman and director, retired lawyer Alan Grieve retsructured the organisation as a charitable trust - thereby removing key members of staff - and began asserting a more public image providing grants for a library at Trinity Hall, Cambridge and a gallery at the Natural History Museum. It came as no surprise, therefore, that when the Court looked like it was heading for disaster with the Lottery-funded rebuild of its Sloane Square home, Jerwood came to the rescue.

The first hiccup came in the well-publicised shape of what is known as a "billing" argument. Grieve wanted the name changed to "The Jerwood Royal Court". After leaked internal arguments about a private body appearing to take too significant a slice of a publicly funded theatre, Culture Secretary Chris Smith stepped in to effect a compromise. The sign outside the rebuilt theatre will read "The Jerwood Theatres at The Royal Court Theatre".

As far as the public was concerned, that was the end of it. But inside the organisation, a far more dangerous row about sponsorship and artistic freedom has now hit boiling point.

The playwrights - without whom this new-writing theatre cannot function - wanted more detail about what Jerwood wanted from the deal. Stephen Daldry, the theatre's director, told a deputation that Grieve wanted nothing but tickets to the opening nights. Understandably, the wary writers asked to see the contract. Daldry suggested that the playwrights engage a lawyer to check it out and everyone relaxed.

Enter Lisa Forrell, a long-time Royal Court supporter, a respected lawyer and an experienced theatre director. She spoke to the Court's solicitor Simon Goldberg, of Simons, Muirhead and Burton - the last of whom, Anthony Burton, is also vice-chair of the Court's board, a not uncommon practice - and then wrote a letter asking that the contract should make the following points explicit: there would be no artistic interference from Jerwood with regard to programming, and that Jerwood would not read the plays in advance nor choose actors or other personnel.

The letter produced a panicked phonecall in which Forrell was told that she could not possibly expect such clauses and that the contract was already drawn up and practically signed. She was, however, allowed to see it on the undertaking that she would neither reproduce it nor show it to anyone. What she saw astonished her.

The contract is in two linked parts. The first, a deed of grant, deals with the pounds 3m donation to the new building. The second document sets down a five-year deal for future play sponsorship. In year one, Jerwood will give pounds 80,000 for new plays but in order to be eligible, playwrights must be:

a) British or Irish citizens;

b) Within 10 years of the start of their career;

c) A major "influencer" of contemporary playwriting.

Far from hands-off sponsorship, the Foundation was now laying down terms. These three criteria effectively excludes new plays from Court regulars such as Caryl Churchill, Harold Pinter, Timberlake Wertenbaker, and others who have been writing for decades. Overseas writers will be similarly ineligible. As for the third clause, influence can only be assessed retrospectively. How can a brand-new writer be regarded as a major "influencer"?

Furthermore, the contract guarantees pounds 80,000 for the first year only. For whatever reason, should it choose to do so, Jerwood could give almost nothing in the succeeding years. Worse still, Jerwood and the Court will mutually agree the plays to be sponsored and Grieve will be given an honorary seat on the board.

This flies in the face of past sponsorship deals and gives Grieve excessive power. He is sponsoring and choosing plays. He has no voting rights in board meetings, but he does have speaking rights. Who needs voting rights when you can voice extreme displeasure while holding the purse strings?

At a meeting with Forrell, Wertenbaker, Churchill, Pinter, Nick Grosso and Rebecca Prichard, Daldry reiterated the position that under no circumstances would the artistic integrity of the Court be threatened. But at a subsequent meeting of more than 30 playwrights, only one distanced himself from the unanimously worried response to management blandishments, and Forrell was given a mandate to oppose the execution of the agreement.

At the beginning of April, she outlined their opposition to the Court's solicitors and went on holiday. Upon her return, she was shocked to discover that the contract had suddenly been signed. The only concession has been over the question of citizenship. Eligible playwrights need now only be resident in the UK; tough luck for a British writer living abroad.

By caving in to Jerwood's demands, this theatre's independence and identity has been compromised. Thanks to the pounds 3m, the board has been relieved of the terrifying responsibility of fundraising in a cold climate. Under the rules of the intransigent Lottery, they had to find 25 per cent of pounds 28.5m needed for the new building. It was always going to be a tough call. A millionaire or business wishing to impress friends or clients is far more likely to align themselves with something like the Tate at Bankside than a theatre putting on plays with titles such as I Licked A Slag's Deodorant. Thus with pounds 3m outstanding and an imminent deadline, the board faced not only being left with a hole in the ground, but individual legal proceedings under the Insolvency Act which renders them personally liable for financial mismanagement. Pragmatism and a certain degree of panic ruled the day, but agreeing to link the building money to the play sponsorship deal asks more questions than it answers.

By taking the money, complete autonomy over programming has been relinquished. Although the Court's finances are currently assuaged by the box-office success of The Weir, it is running on a very tight budget due to a rolling deficit accumulated during the Daldry years. Thus, a new play by an esteemed playwright outside the Jerwood criteria is likely to be overlooked in favour of one within them and with the money attached.

Furthermore, the overt social and political criticism of some of the Court's writers might not suit the Foundation. Admittedly, its money has already been used to fund potentially dangerous work but had Grieve been in the selecting chair earlier, would we have seen plays such as Sarah Kane's fiercely angry Blasted or the dangerously titled Shopping and Fucking? A year ago, Grieve was already expressing doubts before being shown the script of Rebecca Prichard's Fair Game, which featured a rape scene. It ultimately went ahead, but only in a low-profile run.

Ian Rickson, the Court's artistic director, has attempted to placate the playwrights by asserting that he will not be showing scripts to Grieve, but that contravenes the contract. If he isn't reading the scripts, how will Jerwood and the Court "mutually agree" the choice of plays? Will they be selected via the ridiculous arrangement of a treatment or a plot synopsis?

And there's the worrying precedent of the Jerwood Screenplay award, the winner of which was directed by none other than Stephen Daldry. After its inaugural year, Jerwood withdrew its support. With no minimum sum stipulated for year two onwards, the same could happen here.

Grieve says he is determined not to interfere, but what happens if he leaves? Will his replacement be similarly disposed? Meanwhile, the foundation - which has only just acquired charitable status - is based in Liechtenstein. Should Jerwood renege on its commitment, recourse through the British courts would be extremely cumbersome. And why is one of our major arts institutions having to be kept afloat by offshore money?

The contract states that Grieve "will exercise no artistic control". He himself has stated that "this donation absolutely respects the artistic integrity of the theatre. The Jerwood Foundation has never, and will never, seek to influence the work of individual writers, and the artistic policy is a matter for the council and artistic director of the Royal Court alone." Yet if that's the case, why have the lawyers not removed the contentious contractual clauses? And why did the Court agree to their retention? And why link the contracts?

You can't have it both ways. Either you encourage hands-off donation or you relinquish control and return to the era of Renaissance patronage where artists sang the praises of a benefactor who, understandably, didn't want his feeding-hand bitten. So why did the Court go ahead and sign on the dotted line?

Ian Rickson argues that "the writers are my main concern". He does admit that "there are a few things that need ironing out," but won't say precisely what they are. He is, however, anxious to allay fears, asserting that "the programming remains uncompromised and I'm proud of that". He also believes that Grieve's position on the board "is not a big issue".

Others are less sure. None of the playwrights is party to the agreement, so legally nothing can be done. So as not to prejudice a possibly fruitful outcome, Forrell ensured that the delicate negotiations were kept under wraps but with the contract signed, the playwrights decided it was time to go public. She insists that she's not attacking the Court. "I'm sympathetic to the difficulties. But it must have complete artistic freedom." With this package woven so tightly into the fabric of the theatre's future, that looks increasingly unlikely.

And then there are all the other arts organisations desperately chasing donations. What's to stop others from citing this precedent and demanding branding, places on boards and similar control?

Few people shower money on arts organisations for completely altruistic reasons, and Grieve unashamedly wants to promote his new grant-giving body's identity. His pounds 3m is incontrovertibly useful but it certainly comes at a very high price.