All of London's His Stage

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If content is king in the new world of global media, the composer Andrew Lloyd Webber is no minor princeling. His The Phantom of the Opera has played in London's West End for 13 years and has grossed an astounding $3.1 billion worldwide in ticket sales, to say nothing of CDs and sweatshirts. From his pen have also flowed Cats, Jesus Christ Superstar, and Starlight Express. And Evita, with a little help from Madonna, grossed $146 million as a movie after racking up millions as a play. Last week Lord (he was made a baron for life in 1997) Lloyd Webber cast a different sort of vote of confidence in the business of entertainment. He paid just over $150 million for the Stoll Moss group, adding its 10 top-flight theaters in London to his existing portfolio of three. It makes him the most important impresario in British commercial drama.

His bet on the West End looks like a canny one. While lots of shows flop, total box office revenue has risen in 12 out of the last 13 years, to $425 million last year when more than 12 million tickets were purchased at an average price of $35. That's the nightly equivalent of over 425 double-decker busloads of theatergoers. William Jackson, managing director of NatWest Equity Partners, which took a 50% share with Lloyd Webber's Really Useful Group in the 13 theaters, says that "not only are the assets themselves attractive, but the demand for live entertainment is increasing, and there is also a trend toward convergence between filmed entertainment and theatrical entertainment."

That means profitable opportunities to turn plays--especially the kind of blockbuster musicals Lloyd Webber himself writes--into films and, as shown by the current stage success of Disney's The Lion King, to turn highly promoted films into money-spinning plays. Lloyd Webber's new real estate includes the London Palladium and the Theatre Royal Drury Lane, famous large houses ideal for launching plays splashy enough to cross the oceans and morph into movies or television. He and his partners are buoyant about other opportunities too, including the possibility of acquiring major theaters in Europe and the United States. In a few years they hope to take their private company public.

There were grumbles that Lloyd Webber might homogenize the West End by trying to fill all his theaters with his brand of popular musical or even his own works, but he scoffed at that idea as not only impractical but commercially suicidal. The theaters will still present a mix of plays, he says, which fits with a strategy of trying to develop a variety of marketable content. "With control of these high quality drama houses, think about his ability to hammer alliances with young playwrights who can produce good plays that also have film potential," says Stephen Bannon, managing director of SG Cowen, who advised Stoll Moss's parent company. Lloyd Webber's firm also has the heft to produce plays rather than simply accept rents from independent producers as is traditional.

But overall British reaction to Lloyd Webber's coup was highly positive. "He has a real love for the theater, and that's what's needed," said Emma De Souza, spokesperson for the Society of London Theatre. Better yet, he beat out several American bidders, including the U.S. company SFX, which bought 23 British theaters for $259 million last year. There was a collective sigh of relief in the West End that Yankee executives with cash registers for hearts would not be grabbing this crown jewel of British culture. Lloyd Webber argued that the deal "has got enormous implications for keeping the theater in the hands that it should be kept in, and not in the hands of pen-pushers and number crunchers."

In fact, the deal seemed constructed to disturb as few people as possible. Stoll Moss is a subsidiary of the family firm headed by the Australian businesswoman Janet Holmes Court. Its theaters were profitable but she needed cash for the company's core Australian operations. She will remain a long-term consultant. Stoll Moss's existing management will also be retained. This make-nice strategy anticipates that winning cooperation from the composer's contacts will be vital to keeping the theaters filled with successful new plays. But some job losses are possible when the Stoll Moss and Really Useful ticketing operations are combined.

Lloyd Webber has ambitious plans for his new venues. He thinks Indian music will be the next big rage. And, among other projects, he is working on a musical with the comedian Ben Elton based on Northern Ireland's years of sectarian bloodshed. If almost anyone else tried peddling these ideas he would be laughed all the way to Liverpool, but as Jackson says, "Lloyd Webber is the most successful composer of all time, who appeals to a 66-year-old Japanese guy as well as a 12-year-old California girl." Owning London's most famous theaters may not make his talent divine, but if any doubt remained, it certainly confirms him as a superstar.