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Some Musical Groups Face Failing Financials

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Common sense dictates that musicals cost more to produce than plays: multiple sets, larger casts, and even the most minimalist orchestras drain the budget. Ticket prices, of course, tend to be higher, but when recession hits and the wallets of patrons thin down, companies specializing in musical theatre can be especially hard hit.

Consider a pair of examples from November alone. In Pennsylvania, the Pittsburgh Musical Theater announced it needed $500,000 to ensure long-term solvency, including $150,000 right now to keep the doors open. And Austin Musical Theatre, one of Texas's most popular arts groups, suspended operations, needing to raise $500,000 by Nov. 18.

Companies focused on new musicals, particularly in the New York City area, are being confronted with rapidly deteriorating financial situations as well. For example, the 34-year-old York Theatre Company is carrying a deficit in excess of $400,000, and CAP21, which develops both plays and musicals as well as functions as a school, is weighing which projects to cut back on or eliminate as the season goes on.

The York: Stemming the Tide

"We tried to be discreet about our financial situation," says York Theatre Company Artistic Director James Morgan, "because getting the word out can be hurtful to a company if it's not handled correctly. But we also think this theatre is worth fighting for—and we've been through this before. Back when [founding Artistic Director] Janet Hayes Walker died, we were also in bad financial shape; there was even a decision back then to close. But the board then, as now, felt things were salvageable."

The question, of course, is how, and pressed to reveal what the York is doing to prevent a total shutdown, Morgan cites two recent developments for the group: the receiving of a $150,000 capital improvement grant from New York City and a $50,000 challenge grant.

"The [grant] helps us enormously because we can use it to buy things like lighting equipment, the computers we lease, and the Xerox machine we use, so we can ultimately cut down on operating expenses. Now, we don't see the results immediately in our budget—it's not like the City just gives you the money; you buy things and they reimburse you—but it will help us prepare for the long run."

With regard to the challenge grant (offered by an "anonymous donor"), Morgan says the company is working swiftly to meet the "challenge"—raising $50,000 that will be matched dollar for dollar. In part, the grant will enable the York to mount the first show of this season: "Porterphiles," a revue of hitherto unknown Cole Porter songs, running Dec. 3 through Jan. 12.

"We're also looking for a development director," Morgan adds, "because even with what's happened, given the number of creditors and loans we have, there's still a significant deficit….it's a big juggling act." Morgan also notes that while the York's popular "Musicals in Mufti" series is continuing—ending this weekend, in fact, with "New Girl in Town"—their ability to mount a full season of new works will be questionable going forward.

Small CAP Musicals

Over at CAP21 (Collaborative Arts Project 21), Artistic Director Frank Ventura is witnessing his ten-year-old organization face some powerful financial stresses as well. They are currently mounting "Beach Radio," a new musical, but the production is, in a sense, a small consolation. Before Sept. 11, CAP21 was set to announce its first-ever three-play season. The fallout continues for the group to this day.

"Within the first six weeks after Sept. 11," Ventura says, "we lost all the major funding we were expecting—for all our programs, not just productions. Every nonprofit group that had rented our theatre for during the year cancelled—all of them. In six weeks, we were down $300,000. We met with our board and had to take a really cold, hard look at our company—a battle, really, just to keep our theatre. We focused on our conservatory of 200 students, of which 30 or 40 were actually living on Water Street at the time of the attack, so it was an adjustment for everyone. We let three staff members go, and our season got put off—and it's not like we had another option. We spent the summer doing a season brochure, and they were sitting in a post office south of Houston Street during the anthrax scares—thousands of pieces we spent thousands of dollars on, all gone. It was like everything crashed down around us."

A year later, Ventura says he's thrilled to finally get "Beach Radio" on its feet ("We called in every favor"), but the company still needs to raise $250,000 by next May to avert major cuts in programming.

"We won't close our doors," Ventura says, should the financial gods not look upon CAP21 kindly, but "we won't be producing the way we thought we would" if the funds don't come through. "We'll either have to find the money or we cut programming. Our decision time is January, based on year-end appeals to individuals, and whether we think corporations and foundations will come through for us. But we're not—not—closing our doors. It's just going to be the amount of work we do. That's all that might change."

How Do You Get There From Here?

Ventura's face-the-music attitude is about all that one can expect from an artistic director in such a difficult situation, but the question still remains: How do companies focused on musicals (or any companies, for that matter) make that final lurch from being in financial distress to actually having to close their doors?

According to Michael Barnes, a theatre reporter from the Austin American-Statesman who has chronicled the rise and fall of Austin Musical Theatre, it takes a confluence of factors—a perfect theatrical storm—to bring companies to their knees.

In the case of the Austin group, he says, "this is a very young organization, just six years old, that has never seen bad times before…they went from virtually nothing to a million dollars per production in 60 seconds flat, plus they have a board that has never seen bad times either. Unlike, say, companies in New York—more mature organizations—this has really flummoxed them. Also, it's very hard to make a million dollars back at the box office, even with a 1,200-seat house. Costs are very high for musicals, and even planning for tighter budgets doesn't much matter—symphonies are also folding left and right, or else they're raiding their endowments. Everybody at the high end of the arts—except for the very biggest groups with the safest endowments—are facing choices: to fold; to cut back; to try to make a go of it. If you're a veteran organization, you go back to what you know works and you don't freak out. You don't just say, 'We're suspending operations! Send us money or we'll shoot this puppy!' You have to have other ways of dealing with it.

"Also," Barnes concludes, "musical companies will hurt the worst in a bad economy because of ticket prices. They have to charge, even in regional theatres, $65 to $100 a ticket, and those numbers are a luxury for people. To survive, these musical companies are going to have to learn how to be nimble."

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