A for-profit Chicago storefront theater bucks the traditional nonprofit model

John Carnwath, Chicago Arts Resource website

With a lot of nonprofit theater companies struggling to make ends meet in a tough economy, it seems implausible that anyone in their right mind would start a storefront theater company expecting to make money. Yet Dan Abbate has done just that. He started Gorilla Tango Theatre as a for-profit business in 2006 and sees that model as the future for live theater entertainment.

How is Gorilla Tango different from other small theater companies in Chicago?
Gorilla Tango has always approached its work as a for-profit business; the product this company sells just happens to be live entertainment. Our success is a direct function of our business model being based on profitability and sustainability, rather than a specific creative agenda. This enables GTT to be nimble and adjust our product mix based on market demand.

If your objective is to make money, why did you decide to open a theater? Managing theaters isn't generally thought of as a surefire way to get rich.
The key words in that question are "generally thought of." Taking a for-profit approach to an industry that is generally written off as done "just for the love" gives us a great competitive advantage by doing it "just for the money." It's just as easy (or difficult) to make money running theaters as it is in any other business. The people who don't succeed in theater probably couldn't run any other sort of business either.

You recently opened a second theater in Skokie and you founded Gorilla Tango Capital to finance productions at other venues. What are your plans for the future?
We have been working with our attorneys to develop a license agreement to create a network of corporate as well as independently owned and operated GTT's all across the country. This will give us a national distribution system for the most successful productions. In the next 12 months we plan to run test residencies of a few of our most popular shows in New Orleans, Los Angles, New York, Miami, Philadelphia and Richmond (followed by London and Toronto if all continues to go well). Preliminary results in these cities are very positive and mirror our success in Chicago.

Defunct Syracuse Symphony to be reborn under a co-op business model

Jessica Novak, Syracuse New Times, 12/5/12

When the Syracuse Symphony Orchestra announced plans to file for bankruptcy in April 2011, the bad news shook up all of Central New York. The 79-year-old organization had a rich history, but suddenly no future. Musicians dispersed and SSO patrons were left with non-refundable tickets, sadness, confusion and anger at the collapse of the organization.  But a Nov. 28 press conference heralded a fresh start for a resurrected orchestra. Jon Garland, musician and chairman of the Musical Associates of Central New York -- a temporary name for the orchestral unit -- promised the new entity "will make you proud." The new name for the organization will be formally revealed at a "Holiday Symphonic Spectacular" on Dec. 14.  The new group is designed similar to a cooperative. Representatives from organizations of higher education, city groups, the community and musicians themselves will all work together in a partnership in which they all share some financial risk. "If you open a business, you pay yourself less until everything else is paid for," he explained. "You hold funds back. We think the enthusiasm [from the community] will translate over to support and patronage."  County Legislature Chairman Ryan McMahon simplified even further: "The musicians have a lot more skin in the game. They're all stakeholders in the new model. They'll get paid when there's money." Similar models have been used by other successful orchestras. The New Orleans Symphony filed bankruptcy in 1991 and soon after transformed into the cooperative-style Louisiana Philharmonic Orchestra. More than 20 years later, even after the devastation of Hurricane Katrina, the LPO is still healthy.

Trendwatching: Nonprofit museums renting out their art to for-profit exhibitions

Sebastian Smee, The Boston Globe, 11/24/12

Visitors to [Boston's] Museum of Fine Arts this holiday season won't find many of its most prized works of European and American paintings. 26 have been sent to exhibitions in Italy organized by a private company called Linea d'Ombra, for a large, undisclosed fee. The practice of charging fees for lending works is not new, but it remains controversial. Linea d'Ombra is run by art historian-turned-entrepreneur Marco Goldin. During the past decade, Goldin has found success persuading Italian cities to pay steep fees to mount popular exhibitions of borrowed artworks. Renowned as a showman, Goldin uses aggressive marketing to promote the exhibits. The MFA is the biggest lender to the exhibitions in Vicenza and Verona, but it is not the only major institution involved. Other lenders include the National Galleries of Scotland and the Wadsworth Athenaeum in Hartford. Museums that have lent generously to previous Linea d'Ombra's exhibitions include the Louvre and the Musee d'Orsay in Paris, and the Van Gogh Museum in Amsterdam. In 2008, partly in response to Linea d'Ombra's success, the Italian branch of the International Council of Museums put out a paper condemning the practice of charging for loans. It noted its own ethical code, which states that museum collections are for the benefit of the public and should never be considered financial assets. According to Anna Somers Cocks of The Art Newspaper, "Italy's towns are wasting millions on importing these potboiler exhibitions instead of putting the money...into bringing their own museums into the 21st century, so they would have something lasting and growing. This has come about because the [Italian] museums are run according to such rigid and antiquated rules they cannot rival Goldin's marketing skills. The towns know they can't make the money back just in ticket sales, but believe that there is a wider economic benefit." In a 2008 column, Somers Cocks warned great lending museums like the MFA "risk killing the goose that lays the golden eggs. After all, why should they be deserving of tax-free status, of donations from business and the rich, of being considered superior to ordinary commercial life if they themselves become so commercial as to rent our their collections?"

Commentary: You and me and the L3C

Andrew Taylor, ArtsJournal.com blog The Artful Manager, 12/7/12

On November 16, I moderated a panel discussion in New York on the Low-Profit Limited Liability Company (L3C), and its potential for the arts. The panelists included two of the leading national experts on the business entity (Marc J. Lane and Rick Zwetch), alongside two masters from the theater world (Gregory Mosher, Victoria Bailey), and one change agent from the arts business infrastructure (Adam Huttler). The video from that panel is now online, and worth a watch. There's been such bubbling of enthusiasm for the L3C form in the arts community (or at least in pockets of it), it was fantastic to gather such smart people and explore its purpose and potential. The L3C is a business entity in the legislation of 9 states and one tribal nation. The L3C was designed to receive a special type of investment from foundations, Program Related Investments, but also seeks to gather resources from a full range of socially conscious investors. In a world where wealth is continually seeking opportunity -- to  make more wealth, to make things happen, to shape the community, to solve challenging social problems -- the L3C offers one more channel for wealth-holders who want both social impact and return on investment, likely at below market returns. After the panel, I'm convinced that the L3C offers another useful tool for creative enterprise. But I think it will be used and useful in a fairly narrow range of circumstances, in which it can make a big difference. It's a new power tool to make things happen. And we need as many tools as we can get. Michael DiFonzo, producer of the event, promises updates and next steps on the official event website, so stay tuned for more.