The cast of A Transparent Musical, which ran at the Mark Taper Forum from May 23rd to June 25th, 2023.
Craig Schwartz Photography/Mark Taper Forum
Nonprofit leaders across the country are sounding the alarm as theaters near the point of financial crisis.
Los Angeles’ Center Theater Group, one of the nation’s largest nonprofit theater organizations, sounded early alarm when it announced in June that it would pause programming at the Mark Taper Forum, its smallest theater known for promoting new work, beginning next season and lay off 10 percent of the staff across the organization. The Public Theater in New York, another behemoth of nonprofits, followed shortly thereafter, announcing in July that it would cut 19 percent of its staff, having already paused its Under the Radar festival of experimental work.
Other well-known non-profit organizations such as the Oregon Shakespeare Festival in Ashland, Oregon; Chicago’s Lookingglass Theater Company and the Brooklyn Academy of Music, among many others, have seen cost-cutting, layoffs, and large-scale fundraisers.
Without a new model for theater production, nonprofits warn that this could only be the tip of the iceberg.
“I think in the next six months you’re going to see a lot more than what we’ve seen so far,” said Danny Feldman, artistic director of the Pasadena Playhouse.
The bone of contention is the fact that attendance hasn’t returned to pre-pandemic levels, which poses a problem as theaters increasingly rely on single ticket sales as part of their financial model. In addition, the cost of theater production is increasing due to inflation and labor shortages.
While some theaters use dynamic ticket pricing, where prices increase with demand, there is still a desire to provide the community with an accessible ticket entry point, meaning that ticket prices are largely unable to keep up with rising costs. Some have endowments, but much of these funds are subject to usage restrictions.
These factors are all coming together now that many theaters have been able to cushion their costs with government funds in recent years, such as the Shuttered Venue Operators Grant, which awarded grants of up to $10 million, and the Paycheck Protection Program, which allowed them to continue paying bills and employees even when theaters were closed during the pandemic. These funds have now been used up.
Meghan Pressman, chief executive of Center Theater Group, said the size of the organization allows executives to see the signs of the times earlier than in other theatres. Despite hopes for a turnaround this spring, attendance at all three of the organization’s theaters is still about 20 percent below pre-pandemic levels, and subscriptions are down an average of 40 percent. There has also been a decrease in donations.
This resulted in a budget shortfall of $12-13 million in the most recent fiscal year ended June, funded in part by extraordinary funds such as government grants and state and local donors. Unless changes were made to cut costs, the theater company would be on track to see a similar gap next year.
In the past, the Center Theater Group has been able to use its Ahmanson Theatre, which hosts many touring productions of Broadway shows, to offset some of the costs at the Taper Forum, which almost always operates at a loss. But ticket sales at the Ahmanson have also suffered a setback. And losses at Taper were expected to escalate next season, with a projected loss of $700,000 to $1 million per production compared to typical losses that sit at a low $100,000, prompting the decision to pause the program.
“What we’re finding, and it’s fairly common across the country, is that we still have the big hits, but they’re not necessarily hitting the pre-pandemic numbers, and the bottoms are hitting lower bottoms,” Pressman said.
There are differing ideas as to why viewership has declined. Pressman notes that surveyed visitors to the Center Theater Group are no longer complaining about fear of illness or fear of COVID-19 as they were about a year ago. But more broadly, theater managers believe habits may have changed.
“They’re not engaging in cultural participation in the same way that they were in the past,” Pressman said.
One criticism of the nonprofit theater sector in the face of these budget deficits is that the organizations are not well run or that they overspend on staff and executive salaries. But Feldman counters that compared to commercial theaters, nonprofit executives “can do a lot with little” and are now struggling with even fewer resources.
Bigger theaters are absorbing some of the losses for now by trimming programming and making cuts, while some smaller and mid-size theaters are sounding the donation alert.
Like others across the country, the Oregon Shakespeare Festival, which has three theaters including an Elizabethan open-air theatre, has been grappling with rising costs, supply chain delays and labor shortages in the wake of the pandemic. These problems were exacerbated by increasing smoke levels from wildfires, which resulted in performances at the outdoor venue being cancelled.
Attendance is picking up again this year after falling the previous year, CEO Diane Yu said, but the theater had yet to launch two large-scale fundraising campaigns of $2.5 million and then another $7.3 million to complete its 2023 season. Now OSF is looking to raise at least $12-13 million for the 2024 season.
Theatrical organization has already relied more on philanthropy than on individual ticket sales in recent years. OSF has already suffered layoffs and is looking for other ways to cut costs – but finds that there are high fixed costs associated with the buildings and maintenance.
“We all go through the same analysis and bemoan the fact that there isn’t yet the perfect business model that would work,” Yu said.
One idea emerging amid the crisis is to turn to the federal government for a bailout, as suggested in a July 19 New York Times op-ed. Many not-for-profit theaters agree with this idea, especially when it comes to increasing funding for the National Endowment for the Arts and thereby increasing theater grants.
“It’s just a changed field,” Feldman said. “From our perspective we are now on Mars and the rules of gravity that applied in 2019-2020 no longer apply and many of us are trying to navigate there and we are looking for oxygen to help us get through.”
A group of more than 100 nonprofit theaters across the US formed the Professional Non-Profit Theater Coalition during the pandemic to advocate for the inclusion of nonprofit theaters in the Shuttered Venue Act. Since then, members of the coalition, including Teresa Coleman Wash, executive artistic director of the Bishop Arts Theater Center in Dallas, have continued to meet with legislators in Washington DC to build relationships and familiarity with the theater industry for possible future legislation.
“We’re planting seeds that we hope will bear fruit in really meaningful ways for years to come,” Wash said. Her theater also saw a decline in audiences, which was initially offset to some extent by philanthropic support. However, she fears this may be coming to an end, as organizations of color like her own have not traditionally been given the same reach.
Additional funding is particularly needed, Feldman and others argue, as theaters try to find the way forward.
The Center Theater Group has hired Snehal Desai, a former member of LA’s historic East West Players, as its new artistic director starting in August and hopes his “innovative and experimental approach” can reinvigorate the program and models there, Pressman said.
The Pasadena Playhouse, which received the 2023 Regional Theater Tony Award, enjoyed great success with its Sondheim celebration last season, which included two Sondheim productions and a Bernadette Peters production. This was a big turnaround, notes Feldman, as the theater expected to lose $1 million and ticket sales were still lower than expected. However, this was offset by increased fundraising and the theater was in the black for the year.
“We invested in great art on stage, it was our gamble and it paid off in so many ways,” Feldman said. “But next season is a new season, right? How do we continue, that is the question we ask.”
The theater is currently in the midst of renewing its subscribers for the upcoming season and is already about two-thirds of its way towards its target, but will have a better idea of where it stands by September, he said. They are also considering hiring film and television actors who are currently on strike at SAG-AFTRA for the next few shows. There is interest, Feldman says, but still uncertainty about the timing of the shows and the length of the strike.
The Oregon Shakespeare Festival has hired Tim Bond, a past associate artistic director at OSF, as its new artistic director after Nataki Garrett, who held the position, resigned from the position in May after four years at the helm. In addition to the funding crisis, Garrett, who was the first woman of color to head the organization, had received death threats and backlash during her tenure on her program, which featured a diverse cast and stretched beyond Shakespeare.
While theaters are yet to know how the new model is progressing, given that nonprofits are banding together and speaking out, and that many are choosing to use this as a time to experiment, Pressman is reasonably optimistic for now. However, there is also fear of what will happen on the other side.
“Times of crisis lead to some really amazing innovations for an industry, so I’m really excited to see what comes of it,” Pressman said. “But it’s still very worrying. Businesses are really fragile and vulnerable right now.”