Commentary: If this current rash of bankruptcies isn't a blip, just what is it?

Louise Stevens, "ArtsMarket on..." blog, 4/19/11

The news about the bankruptcy filing by the Philadelphia Symphony Orchestra has stirred angst around the globe. But the bigger news is hidden in the comment made by the American Symphony Orchestra League's Jesse Rosen: "This is not a blip."  No, it isn't, and that's the real story.  Bankruptcies aren't new to the performing arts. Every recession in recent history has forced a few organizations that are under-endowed and over-contracted to face the music. Theaters, ballet [and] opera companies, orchestras and performing arts venues have all been victims.  But now that we all see the world in the post-Wisconsin-public-employee-union-pension world, different questions are being asked about the long term viability of performing arts institutions.  This is an industry that is firmly union based. When they are asked to save performing arts organizations from bankruptcy, many donors know that what they are really being asked is to maintain union agreements -- often agreed upon in far rosier days -- and in some cases to preserve or potentially bail out union pension funds.  Simply put, too many contracts have promised too much that can't be met. Business leaders who are increasingly refusing to bail out individual institutions are seeking larger, systemic adjustments.  Many understandably worry at the signals they send to their own employees when they step in to bail out arts union jobs providing six figure wages and generous pensions.  Politicians feel the same way: How can tax payer dollars go to bailing out private sector union workers when public sector unions are up against it? Donors feel it, too. When institutions as venerable as the Philadelphia Orchestra declare bankruptcy - potentially making it possible to liquidate endowments that were never to be liquidated - why would any individual of means write that seven or eight figure check for an endowment meant to keep organizations safe forever?  Are there solutions to this mess? Sure. But the adjustments are nasty business.  As the old saying goes, you have to raise the dragon to slay the dragon. One of our field's many dragons is that we want a mid-20th Century performing arts system in a 21st Century world. We don't want the pain of recognizing that our consumer tastes, interests, budgets, and technology have so dramatically and fundamentally changed our arts consumption and behavior that we aren't ever going back.  Are we ready to live in 2011?  Because if we are, and we recognize that this Philadelphia story is not a blip, we better get busy in rethinking the entire financial and operational model of the performing arts while it is still possible to restructure outside of bankruptcy court.

 

Commentary: What's a theatre company to do when the economy crashes?

Pamela Rosen, Theatre Bay Area Chatterbox blog, 4/14/11

As we begin to emerge from the "great recession"... it makes me wonder: how did successful [theatres survive]?  What caused others to fail?  And most importantly, what can struggling theatres do now to shore up their futures? 

> In 2008, our economy fell apart quickly. Many companies reacted by putting on traditionally crowd-pleasing shows they thought would draw big audiences. But family-oriented productions couldn't bring in the family if the tickets were priced out of [their] budget. One producer at the now-defunct Alameda Civic Light Opera explains, "We looked out into the audience during Annie and saw half-filled houses. Meanwhile, families were walking away from the box office after seeing the ticket prices. It's not like the audience wasn't there, but the shows weren't affordable anymore."  It's unlikely ACLO would be have been able to recoup their losses with last-minute fundraising. The window of opportunity had closed.

> The Willows Theatre Company in Concord closed its doors in 2009 and moved operations to its smaller cabaret house in Martinez, but is now roaring back. How did they manage it? With the company's closure, the surrounding businesses also suffered a drop in business. The Willows had developed such close relationships with those businesses that the theatre had become indispensible. An outcry from those businesses enabled The Willows to reorganize and return. Today, they have a new artistic director and a solid five-year plan.

> An upstart non-profit in San Leandro, Curtain Call Performing Arts, arose as a direct result of the recession, with a goal to provide affordable theatre to everyone regardless of the state of the economy. To do this, the Board created a unique charter: raise the all the funds to mount a show before a production begins, then charge no more than $12 a ticket. They've mounted three productions this way, and even offered $1 tickets to children with a paid adult during a specified matinee.  It's an interesting model. The board is forced to continually innovate with creative fund raising and volunteer coordination.  Curtain Call partners with other arts organizations to share the profits and the audience. They've built an impressive audience base and a large pool of volunteers.

All over the Bay Area, theatre companies are still struggling. Those with a long term plan, an understanding that the purpose of a board of directors is to raise money and develop external relationships, that also have the flexibility to scale productions costs to swing with a volatile economy, will flourish. We're not out of this yet. For some companies, it's too late. But there's still a chance for others to mobilize and heed the lessons of the last three years. What steps has your company taken to weather the economic downturn?

 

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Going green would save UK theatres over 8 million a year, claims report

The Stage, 4/21/11

Savings worth 35 million can be made by theatre, music and visual arts over the next four years if the sectors reduce their energy use by 25% during that time, according to green arts organisation Julie's Bicycle.  This includes 8 million savings in the theatre sector if it cuts its energy use by 8% to 10% year on year between 2011 and 2015. The figures are conservative estimates because they are based on today's energy prices and do not take account of rising costs. Sian Alexander, theatre associate director at Julie's Bicycle, said the business case for reducing venues' energy consumption is "compelling".  Julie's Bicycle insists that many of the savings can be achieved at little or no cost -- through behavioural change within organisations and investments with short payback periods.  David Blyth, property director at the Ambassador Theatre Group said he had seen the impact of small changes on energy expenditure when the company ran a pilot initiative at the company's Piccadilly Theatre: "All our bars across the West End have bottle-cooling fridges which, to date, are on day and night, 24/7. Just switching them off after the show, using timers, and turning them on an hour before the next show does make an impact. We have also used things such as movement sensors within dressing rooms and backstage corridors because, with the best will in the world, performers leave dressings rooms and leave the lights on."  Phil Brown, ATG's group head of safety and environmental services, said:  "If we could get an industry agreement that we all switched our [marquee] lights off at midnight, and that happened in all theatres in the West End, I think there would be huge savings. But I think one theatre company is reluctant to do it if the other theatre companies are not doing it, and that is the sort of thing that really needs joined-up thinking." 

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