Layoffs, Cost Cuts, Theater Companies – The Hollywood Reporter

The cast of “A Transparent Musical,” which was featured on the Mark Taper Forum from May 23 to June 25, 2023.

Craig Schwartz Photography/Forum Mark Taper

Nonprofit leaders across the country are sounding the alarm as theaters approach financial crisis point.

Los Angeles’ Center Theater Group sounded an early warning, as one of the nation’s largest nonprofit theater organizations, when it announced in June that it would pause programming at the Mark Taper Forum, its smallest theater known for promoting new work, starting next season and lay off 10 percent of staff across the organization. New York’s Public Theater, another behemoth among nonprofits, followed shortly thereafter, announcing in July that it would cut 19 percent of staff, after pausing the Under the Radar festival, which features experimental works.

Other well-known non-profit organizations such as the Oregon Shakespeare Festival in Ashland, Oregon; The Lookingglass Theater Company of Chicago and the Brooklyn Academy of Music, among others, had to undergo cost-cutting measures, layoffs, and large-scale fundraising campaigns.

Without a new paradigm for theater production, nonprofit leaders warn this could be the tip of the iceberg.

“I think over the next six months, you’re going to see a lot more than we’ve already seen,” said Danny Feldman, artistic production director for the Pasadena Playhouse.

The dispute centers around the fact that attendance has not returned to pre-pandemic levels, an issue as theaters increasingly rely on single ticket sales as part of their financial model. In addition, theater production costs are rising due to inflation and labor shortages.

While some theaters use dynamic ticket prices, where prices rise with demand, there is still a desire to provide an accessible ticketing entry point for the community, which means that ticket prices can largely not keep up with rising costs. Some of them have endowments, but much of that funding is in use.

Those factors are all converging now, since many theaters were able to cut costs in previous years with government funding, such as the Indoor Operators Grant, which provided grants of up to $10 million, and the Paycheck Protection Program, which allowed them to keep paying bills and staff even when theaters closed during the pandemic. This funding has now run out.

At Center Theater Group, CEO Megan Pressman said the organization’s sheer size allowed leaders to see the writing on the wall earlier than in other theatres. Although they were hoping for a change in directions this spring, attendance at all three theaters in the organization is still down about 20 percent from pre-pandemic levels and subscriptions are down an average of 40 percent. There was also an associated decline in donations.

This amounted to a budget gap of $12-13 million in the last fiscal year, which ended last June, and was supported in part by extraordinary funds, such as government grants, as well as state and local funders. If no cost-cutting changes were made, the theater group was on track to see a similar gap next year.

In the past, the Center Theater Group has been able to use the Ahmanson Theatre, which hosts many touring productions of Broadway shows.And To offset some of the costs on the Taper forum, which is always running at a loss. But Ahmanson’s ticket sales also took a hit. Losses at Taper were expected to mount next season, with a projected loss of $700,000 to $1 million per production, compared to typical losses of up to $100,000, which led to the decision to pause programming.

“What we’re finding, and this is very common across the country, is that the big hits, we still have them, but they don’t get to the high numbers that they necessarily were before the pandemic and the lows are hitting their lowest levels,” Pressman said.

There are differing ideas as to why audience numbers have declined. Pressman notes that the Center Theater Group’s surveyed attendees no longer complained of fear of illness or of COVID-19 the way they did about a year ago. But more broadly, theater leaders believe habits may have changed.

“They don’t engage in cultural engagement in the same way that they did,” Pressman said.

One criticism of the nonprofit theater field amid these budget shortcomings is that the organizations are not managed well, or that they spend too much on staff and executive salaries. However, Feldman objects that nonprofit leaders “do more with less” compared to commercial theaters and are now dealing with fewer resources.

Large theaters are able to take some losses, for now, by reducing programming and making cutbacks, while some smaller and mid-sized theaters are sending out the fundraising alarm.

Like others across the country, the Oregon Shakespeare Festival, which has three theaters, including an open-air Elizabethan one, has been dealing with rising costs, supply chain delays and labor shortages as it emerges from the pandemic. These problems were compounded by the increasing frequency of bushfire smoke, which led to cancellations of performances at its outdoor venue.

Board chairwoman Diane Yeo said attendance is back up this year, after falling the previous year, but the theater still needs to launch two major fundraisers, $2.5 million and then an additional $7.3 million, to complete the 2023 season. Now OSF is looking to raise at least $12 million to $13 million for the 2024 season.

The theatrical organization has already become more dependent on charity in recent years, rather than individual ticket sales. OSF has already been through layoffs and is looking for more ways to cut costs – noting that there are high fixed costs in terms of premises and maintenance.

“We are all going through the same analysis, and we all bemoan the fact that there is still no perfect business model that can work,” Yu said.

One idea that will emerge amid the crisis is to turn to the federal government for a bailout, such as suggested in a July 19, New York Times Guest Op-Ed. It’s an idea that many nonprofit theaters are on board with, particularly when it comes to increasing funding for the National Endowment for the Arts, and thus increasing grants to theaters.

“It’s just a changing field,” Feldman said. “The way we look at it is we’re on Mars now, and the gravity rules that applied in 2019 to 2020 don’t apply anymore, and a bunch of us are trying to navigate that and we’re looking for oxygen to help us get through it.”

A group of more than 100 nonprofit theaters across the U.S. has already formed the Nonprofit Professional Theater Alliance during the pandemic, to lobby for nonprofit theater to be included in the Shuttered Venue bill. Since then, coalition members, including Teresa Coleman Wash, Executive Artistic Director of the Bishop Arts Theater Center in Dallas, have continued to meet with lawmakers in Washington, D.C. in order to build relationships and familiarize themselves with the theater industry for potential future legislation.

“We’re planting seeds that we hope will be fruitful in the years to come in really beneficial ways,” Wash said. Its theatre, which has also seen declining audience numbers, is to some extent offset by charitable support for the time being. But she fears it will end, she says. Organizations of color, like hers, don’t traditionally receive the same level of outreach.

Additional funding is especially necessary, Feldman and others argue, as theaters try to figure out the way forward.

The Center Theater Group has named Snehal Desai, formerly of Los Angeles’ historic East West Players, as its new Artistic Director starting in August and has hopes that he will be able to reinvigorate programming and form there with his “innovative and experimental approach,” Pressman said.

The Pasadena Playhouse, which took home the 2023 Regional Theater Tony Award, had a huge hit with its Sondheim Celebration last season, which featured two Sondheim productions as well as a Bernadette Peters production. Feldman notes that this was a huge swing with the theater’s budget losing $1 million, and ticket sales still lower than expected. But that was offset by increased fundraising and the theater finished in the black for the year.

“We’ve invested in great artistry on stage, and that was our gamble and it paid off in a number of ways,” Feldman said. “But next season is a new season, right? How are we going to continue that, that is the question we are asking.”

He pointed out that the theater is currently in the midst of renewing subscribers for the next season, which is approximately two-thirds of the way to their goal, but they will have a better idea of ​​where they are in September. They are also looking to recruit film and television actors, who are now on strike with SAG-AFTRA, for their next two shows. There is interest, Feldman says, but there remains uncertainty about the timing of the shows and the length of the strike.

The Oregon Shakespeare Festival has appointed Tim Bond, who was OSF’s associate artistic director in the past, as its new artistic director, after incumbent Natucky Garrett resigned from the position in May after four years in the position. In addition to the funding crisis, Garrett, who was the first woman of color to lead the organization, received death threats during her tenure and pushbacks for its programs, which included variety selection and expanded beyond the reach of Shakespeare.

Although theaters don’t know what the new model moves forward with, Pressman said she’s somewhat optimistic about the moment, given the fact that nonprofits are coming together and speaking out and the fact that many are choosing to use this as a time to experiment. However, there is also a fear of what will happen on the other side of that.

“Times of crisis lead to really amazing innovation for an industry, so I’m really excited to see what that comes out of,” Pressman said. “But it’s still really worrying. Businesses are really fragile right now and fragile.”