Edward Snape, Raymond Gubbay and Luke Johnson launch Fiery Dragons

Theatre producer Edward Snape, opera impresario Raymond Gubbay and former Channel 4 chairman Luke Johnson have united to form a new commercial theatre production company.

Fiery Dragons, which was launched today and is a co-producer on the forthcoming West End production of The Ladykillers, will use the government-backed Enterprise Investment Scheme so that investors in the company can enjoy certain tax benefits.

Unlike the standard theatre producing model, where investors buy units in a specific production, investors in Fiery Dragons will buy shares in the company, with their investment then spread over a number of shows over at least a three-year period. Investors can then potentially realise a profit by receiving dividends or selling their shares.

Fiery Dragons will work closely with, but independently of, Fiery Angel – Snape’s production company, which was also set up using EIS with a number of investors, but is now solely owned by Snape and his wife and business partner Marilyn Eardley.

Snape, Gubbay and Johnson will serve as directors of Fiery Dragons, as well as being minority shareholders.

Snape told The Stage: “One of the reasons why I’m doing this is because I did this on a smaller scale [with Fiery Angel] and it worked and we had five shareholders who were delighted with a profitable result at the end of what we deemed was an appropriate life for the company.

“It is surprising that there is so little specialist tax help [for theatre] in terms of how film has benefitted by various lease back arrangements over the decades to support British film. The only thing that theatre really can do is the EIS. There is considerable tax relief on both sides – there is relief, God forbid, if any money should get lost and there is relief if the company is profitable.”

He explained that Fiery Angel will continue to create and develop shows as an independent producer, and has a first-look arrangement with Fiery Dragons as a co-producer. Fiery Dragons will also invest in other shows, not created by Fiery Angel.

An investment document has been published this week and the company is looking to raise £1 million of initial working capital. Snape said the directors had not ruled out the possibility of other ‘dragons’ joining them as directors.

Snape added that Fiery Dragons would tend not to function as a lead producer on theatre projects, instead spreading its investment over a number of shows, and that it would look to span the commercial and subsidised sectors. Other planned productions include a West End staging of Me & My Girl and a sequel to The 39 Steps. The company plans to act as a co-producer on three to five shows a year.

He said the directors “firmly believed” they could make the company a success, but admitted the scheme would not appeal to all theatre investors. “Some people would rather invest in one particular horse – to use an analogy – than the stables. The choice is there for people to make, it’s another option. Also it’s something to put away for three or four years,” he explained.

Gubbay, meanwhile, will continue to serve as chairman of Raymond Gubbay Ltd. and stressed that his work with Fiery Dragons would focus on theatre production so that it did not interfere with his opera, concert and ballet business, which was bought out by Deutsche Entertainment AG in 2008, but retained Gubbay as an active chairman.

He added: “The business model [of Fiery Dragons], I think, is very sound. When you’ve got theatre and entertainment in your blood – as I have had all my life – the chance to try something a little new in the same kind of area is really exciting. Even at my advanced age, I still get such a buzz out of it.”