John McColgan 'This is not an ordinary business... it's roulette'
Almost 100 million people have seen 'Riverdance', generating up to €3bn in revenues. Impresario John McColgan tells Donal Lynch how Ireland's greatest ever dancing show works.
Noam Chomsky once said that when you enter the business world "where art meets commerce", things can quickly get quite depressing.
He was obviously never in Riverdance HQ, John McColgan's chic, high-ceilinged office just off Capel Street in Dublin. It's quite cheerful here.
Pictures of fresh-faced film legends such as Liam Neeson and Gabriel Byrne sit alongside photos of McColgan posing with Tony Blair and Bill Clinton and the slightly downbeat note sounded by posters for relatives failures such as The Pirate Queen and moderate hits such as The Shaughraun and Sive are easily drowned out by the deafening cha-ching noise that resounds in your head when you see all the Riverdance memorabilia.
But should it matter which productions were profitable and which were not? Like the best parents, McColgan seems to love them all equally. He is an impresario who sits in the theatre and asks what kind of emotional journey he can take an audience on, but he is also a hard-nosed entrepreneur in charge of a franchise that has been described as "nothing less than a travelling cash machine".
The numbers are simply staggering: the show is in its 21st year, nearly 100 million people have seen it. Tickets for the upcoming Gaiety show range up to €50 a pop. It is more expensive in Germany at €66.50 to €130 or in London at around €67. However, China and tours to emerging economies have cheaper rates. Even with an average global price of €30, it could see the show generating revenues of €3bn since 1994.
Margins on big theatrical extravaganzas are not high but over the last two and a half decades McColgan, his wife and business partner Moya Doherty and their management team will have refined the costs and oiled the logistics machine carefully. The pair are thought to own 65.6pc of the parent company. Clearly estimates of their wealth at €80m look well shy of the mark.
And even today, while business isn't as brisk as it once was - he puts this down to the sheer numbers that have already seen the show - it is still a handsome moneyspinner and is in the throes of another big European tour, hitting Ireland later this year.
McColgan has high hopes, however, for his latest big production, Heartbeat Of Home, a Riverdance-scale stage show which made its debut in Dublin 2013.
"I was talking to friends of mine who are businesspeople afterwards and they were saying to me this is not a business, it's roulette. And in some ways I have to agree. Each time you put it out there, it's risk", he says.
"The way theatres are filled is by group bookings, so you have guys all around the States who round up theatre fans into groups. But they live and die by reviews too, so when the group bookings stop that's always a worry."
Heartbeat represents a type of consolidation for McColgan, a U2-ish attempt to give the masses something different with a pinch of the same. He hopes it will appeal to the same enormous worldwide audience that ate up Riverdance. This time around, though, they've steered clear of New York's vicious theatre critics - aside from anything else "the unions there are very difficult" - and the show is gradually being rolled out in different countries.
"It is profitable," he says, before correcting himself. "It will be profitable.
"It takes a number of years to really see the money back, though. You need to ensure that the tours are washing their face at least and that they are at the same time building the international reputation of the show. Merchandise and DVD sales are not really where we make our money. The main income stream is ticket sales."
McColgan says that he is the "more risk-taking inclined" one in his partnership with Doherty - but both of them were sure back in 1994 that borrowing heavily to finance the Riverdance stage show was the right thing to do. That confidence came on the back of the audience reaction during the Eurovision interval act.
"Usually if you're going to get an ovation, some people will hesitatingly get to their feet first," he recalls. "But when this ended there was just complete silence for about a minute and a half and then everyone jumped to their feet at the one time.
"It was an unprecedented reaction in terms of my experience. Bill Whelan released the single of the music and it went to number one in the British charts. The terrible situation in Rwanda had happened and we put out a video in aid of that. We really felt that we had to launch the stage show. To me the risk was minimal. And the tickets disappeared the second they went on sale."
After the enormous success of the show gathered more momentum the dynamics of the Riverdance group changed. There was a boardroom row, leading to legal action between Pat Faulkner, the former MD of Abhann Productions, another of McColgan's companies, and the creators of the show (the action was eventually settled in 2000 for a rumoured £4m).
More famously, Michael Flatley left the show amid creative differences with McColgan and Doherty.
"Michael is a very talented and charismatic man, he made a major contribution to Riverdance in the beginning."
Replicating the success of Riverdance has been elusive both on stage and with some of McColgan's other ventures. Famously The Pirate Queen, McColgan's big-budget Broadway blockbuster, lost about €16m, after New York theatre critics tore it limb from limb. He was also behind the genius smart WorldIrish internet business - an Irish-themed social media venture.
McColgan and Doherty have plenty of other business interests though. Tyrone Productions is probably the biggest television production company in the country, although McColgan says: "it's difficult to be profitable - the margins are so small, especially when you're working for the domestic broadcaster. Some years you make money, some years we don't."
McColgan and Doherty have become fabulously wealthy on the back of Riverdance as well as from the sale of a stake in Today FM. They invested heavily in property. When the show's profits began coming in, the couple moved home from North Co Dublin to Loughlinstown House in Co Meath.
The Regency building on 16 acres has had a string of famous past owners: Lord Headford; the fashion designer Ib Jorgensen; and a former chairman of British Steel have all enjoyed the six-bedroom mansion, now updated to include a jacuzzi, snooker room and private leisure complex.
In 1997 they paid close to £1m for Dane's Hollow, a bungalow on 4.5 acres on the Bailey at Howth. The house has spectacular views of Dublin Bay and the couple brought in an interior designer from Britain, and enlisted the help of TV gardener Gerry Daly to landscape the grounds.
As their mini-empire expanded, the couple bought two neighbouring properties on Howth Hill. They moved into a Georgian house, The Tansey, buying the building and grounds for just under £4m before selling the place on for a similar price.
Outside of Ireland the couple had houses in Florida and a house in the south of Spain, an apartment in Manhattan and another home in Martha's Vineyard.
According to McColgan their property empire has been pruned back in recent times, however. "Sometimes you get too excited and you've too much property", he says. "We've kind of retreated a bit. We weren't getting the use out of it. We had investments in property and yeah, we did lose money."
The stock market didn't really interest him, he says. "We didn't really invest in shares. We always felt old-fashioned bricks and mortar would be better. How wrong we were, But it's all coming back."
McColgan and Doherty were key investors in the most high profile property deal of the boom. They hooked up with Derek Quinlan and other investors - initially including Sean Fitzpatrick - to buy the iconic Savoy Hotel group in London for just over €1bn. The pair had made good money being part of a number of other Quinlan hotel deals.
"I was very impressed with Derek Quinlan in the early days," he says. "There was a sense that he couldn't go wrong - he just had the Midas touch. He borrowed and borrowed and bought and bought - and somehow through it all he always seemed to make money. By the time things went wrong for Derek we weren't involved with him."
McColgan is good at letting go - and if he's magnanimous about the ups and downs of the business, it might be because he's clawed his way up from the bottom.
His family were from Strabane, Co Tyrone, but he grew up the eldest of nine children in Wexford where his father worked at the Philips factory.
When he was 14, one of the lay teachers in his school beat him so badly that he couldn't put his hands on his bike's handlebars - and on the walk home he resolved never to return. "My father didn't speak to me for years after that."
He started work immediately, taking on a series of jobs - as a telegram boy; in a factory in Finglas; in Best Menswear on O'Connell Street. He had ambitions to become an actor and got a scholarship to the Abbey - but instead took a job as a vision mixer in RTE and slowly climbed his way through the ranks at the national broadcaster.
It was while there that he met his first wife, Tolka Row actress Virginia Cole, with whom he had two children, Justin and Lucy. The marriage lasted less than 10 years and McColgan was once so hard up that he travelled by bus to deliver gifts to his first family.
Today the Riverdance creator could probably buy the bus company with his spare change. With Doherty, whom he married on Christmas Eve, 1986, he had two children - Danny, a noted actor, and Mark, who is an illustrator.
"We both do different things," he says of his business partnership with Doherty. "Moya is fantastic on the funding and the management and the HR, we work together on strategy. I'm the principal creative. I'd say 90pc of the time we agree, but we don't agree all the time. "It's a mixed blessing, it's hard to come home and not talk about work. But we've got better at that over the years."
These days he's nurturing his talent for photography and he will stage an exhibition, which will be opened by his old friend Gay Byrne, on March 30 at the House Restaurant in Howth.
He has a real passion for it but you get the feeling, that nothing will truly usurp the roulette table of theatre.
"It's not about money at this stage," he tells me. "That's not the motivation. When you're sitting in the audience and you can feel that energy as they go on a journey with you - that's what it's all about."
'I'd be the more risk-inclined one'
My favourite investment is…
"Well, we invested in quite a lot of shows here but after that I don't really believe in investing in shows I'm not a part of. We've been approached several times to put money behind shows but we're not professional investors and generally we try to mind our own business."
My worst moment in business was…
"The review of 'The Pirate Queen' from 'The New York Times'. Starting in Broadway gives you a brand - but there are a lot of productions that don't open there for that reason."
The big lesson I've learned is…
"I suppose that you have to learn from your mistakes and keep going. Take Andrew Lloyd Webber as an example. After 'Phantom Of The Opera' he had six or seven shows - including 'Whistle Down The Wind' - that bombed, and yet he still had the balls to try again."
My next move is...
"Well, amongst others I'm resigning as chairman of Today FM. In its own demographic it's doing well and it's made money for us - we sold it to Scottish radio 10 years ago."
Sunday Indo Business