Defining Professional NFP Theatre

In Chapter 6 of Stage Money, we discuss the problem of defining professional not-for-profit theatre.  The NFP part is easy, since charitable organizations must have a 501(c)3 certification from the IRS.  It's the word "professional" that is trouble.  In the NFP theatre world, there are theatres that are clearly amateur, where no one--or almost no one--is paid.  Then there are theatres, such as the members of the League of Resident Theatres or LORT, where almost everyone is a member of a professional union.  As such, LORT theatres are clearly professional.  Between these extremes is a continuum of different mixes of volunteer and professional.

We've just read a 1995 article by Joan Jeffri, "Nature's Journeymen: The Education and Training of the American Artist," available at Columbia University's Research Center for Arts and Culture site, that offers a structure for considering the definition of professional. Jeffri identifies three different definitions of professional which she says are "constantly being meshed, confused, or used interchangeably."  They are

• Occupational measures, such as, hours worked and money earned,
• Credentialing, holding a license to practice a profession, such as, a lawyer passing a state bar exam, and/or
• Quality of work performed.

For the sake of discussion in Stage Money, we identified membership in the Theatre Communications Group or TCG as the closest clear and distinct identifier of professional NFP theatre status.  This mark of professionalism is not the same as credentialing but resembles it in some ways.  Using TCG as a proxy for professional NFP theatre is far from perfect, as the book discusses.  For example, 18 of the 77 LORT theatres have not chosen to be members of TCG.

When friends in the theatre reviewed early drafts of Stage Money, this discussion was controversial for some.  In retrospect, we now realize the problem was that our friends had an unspoken definition of "quality of work performed."  One actually said, "I've seen the work of --------- theatre.  It may belong to TCG, but it's not professional."  If we had Jeffri's parsing of the definition of professional, we might have engaged our friends in a more meaningful discussion of the problem.

As to the quality of the art created by America's NFP theatres, we are not qualified to judge.  We don't think anyone is so qualified.

Who Works Off-Off-Broadway?

The Innovative Theatre Foundation has conducted a number of interesting and important surveys about off-off-Broadway.  The most recent survey, "Demographic Study of Off-Off-Broadway Practitioners," dated January 2010, looked at the artists and staff who work off-off-Broadway.  They collected over 4,000 completed surveys.  That's an impressive number but the survey cannot be considered representative of the universe of off-off-Broadway workers because the survey distribution wasn't random.  Be that as it may, the Innovative Theatre Foundation's data are the best available.

The survey found that off-off-Broadway workers resemble the averageUS resident a great deal, in terms of average age, breakdown of percentage by gender, and yearly income.   The income finding is a conundrum, as only ten percent reported work in theatre as their sole source of income.  Also, just over 50 percent of respondents live in Manhattan, where a US average income is not enough to live an average lifestyle.

The off-off-Broadway community has fewer African-Americans than the US population: five percent vs. twelve percent. The OOB folks are less than half as likely as the national population to be married and much less likely to have children living in their households.  OOBers are much better educated than the US population, with 85 percent holding a college degree.  The US percentage of college educated adults is 27.  Nearly one-third of respondents belong to Actors Equity, with another 16 percent belonging to other theatrical unions, such as American Federation of Musicians, Dramatists Guild, IATSE, Society of American Fight Directors, Stage Directors and Choreographers Society, United Scenic Artists, and others.

We wrote about an earlier survey by the Innovative Theatre Foundation here.

A Recommendation

Michael Riedel (pronounced reed-el) writes a column for the New York Post about theatre that is not just the usual stuff. Sometimes he shares juicy gossip; other times, he writes about turning points in the business of bringing a show to the commercial theatre. Some examples from just the last 4 weeks:

• An account of a backers' audition for the Alan Menken musical Leap of Faith. The musical is based on the 1992 Steve Martin film.
• Garth Drabinsky, awaiting sentencing in Canada for investor fraud connected with his theatre producing company Livent, was trying by phone to save the run of the Broadway revival of Finian's Rainbow. The revival, produced by David Richenthal, Jack Viertel, and Alan D. Marks, received strong reviews but built little box office, closing January 17th after 15 weeks and grossing $7.8 million. (We saw it. The material is old-fashioned but this staging, developed out of an Encores! performance, was charming. Jim Norton (Finian), Kate Baldwin (Sharon), and Christopher Fitzgerald (Og) were excellent. As Woody, Cheyenne Jackson is phenomenal: good looking, masculine, a superb singer, and absolutely relaxed on stage.) Drabinsky can't enter the US without being arrested for the Livent debacle.
• Riedel has written about the financial problems of Spider-Man, Turn off the Dark a few times. In a piece published January 11, he reports that the show, directed by Julie Taymor with music by Bono and the Edge, is back on, opening sometime in the fall. It's still estimated to cost $50 million, by far the most expensive show in Broadway history.
• With the show in trouble in its Chicago try-out, Riedel reported on December 28th that several principals for The Addams Family musical left the windy city for vacations in warm climates.
  

Reidel's columns are available on the internet at http://www.nypost.com/columnists/michaelriedel. He also appears on a Channel 13 interview show, Theater Talk, which is now in syndication and may play in your market. Highlights are on http://www.youtube.com/theatertalk. He's worth following if you care about the theatre.

More Progress on the Book

Returned page proofs for Stage Money today. Bravo!

Good News

This blog is about the business and finances of the professional theatre, so this post is off-topic. But I had a small epiphany last week I want to share.

I was in NYC to see some theatre, go to museums, eat some good meals. As I entered the hotel elevator with the New York Times, a gentleman asked, "Any news?" I glanced at the front page, dominated by a photo of the destruction in Haiti. "As they say," I replied, "No news is good news."

As the elevator rose, I turned first to the the Arts section as I always do. Suddenly it occurred to me that the arts are the closest thing we can readily find to good news. Even a theatrical tragedy makes the heart well up at the thought of human creativity crafting a moment of completeness, a story that unlike real life has a wholeness. For those of us who love any of the arts--my favorite is theatre--the experience of the arts is usually the only good news readily available.

NFP Theatres Saw Trouble Even Before the Recession

It appears that the stress of the coming recession was affecting not-for-profit theatres before anyone used the "R" word.

Theatre Communications Group (TCG) released its latest survey of member NFP professional theatres. The survey covered fiscal years ending between November 2007 and September 2008. Theatre Facts 2008 in pdf format can be viewed here. Sarah Hart, writing about the report in the November 2009 edition of TCG's magazine American Theatre, noted that "not-for-profit theatres can often be like canaries in the coal mine, the first to show the effects of a poisonous environment."

The 2008 survey showed more than half of surveyed theatres ended the year with a budget deficit. In the five years before the opposite was true, most theatres ended the year with a surplus. Cash reserves were the lowest in the past five years when adjusted for inflation. Earned income dropped 7.2% between 2007 and 2008. Expenses rose; payroll for example went up 12.5% over inflation. With expenses rising, the percent of budget covered by earned income fell to 56.5% from 65.2% the previous year. And average endowment income was down.

The managing director of People's Light & Theatre Company in Malvern, Pa, said "I don't think we've ever seen anything like this. This year feels worse than 1990. I'm hopeful, but we may still have hard years ahead." In their 2008 IRS filing People's Light & Theatre reported revenues of $5.6 million and expenses of $4.6 million. Only 30% of income was earned income. It held assets worth about $6.5 million, a little over one year's budget. This is not a theatre in crisis, but it is worrisome that so much of its budget is covered by donations and grants.

The Impact of Brands in Theatre

Our book, Stage Money, notes that making money on Broadway or off-Broadway is not the only concern of a producer. Another need is to create a brand that can be exploited on the road and in regional theatres. Producers would like always to make money in New York, but they can see long-term returns for shows that at least create an image in the minds of local presenters and artistic directors. On November 20, Variety noted that for writers, too, a brand can mean money down the road, even if the NYC production closes at a loss to investors.

Robert Hofler's piece, "Life after death on Broadway: Even flops make money in amateur, stock productions," quotes Joe DePietro, book author of the Elvis Presley musical All Shook Up. Shook grossed over $12 million in 32 weeks on Broadway in 2005, rarely running at 75% or more of house. Ben Brantley reviewing the production for the New York Times declared "Yet another synthetic jukebox musical opened last night on Broadway, fresh off the assembly line" In its annual tote of Broadways hits and misses, Variety called All Shook Up a miss, meaning it did not return its investors' money. DePietro says, "I made tens of thousands of dollars from my first quarterly royalty check for the stock and amateur rights. I could barely make a living with 'All Shook Up' on Broadway. I bought a nice country house [from] 'All Shook Up' in stock and amateur."

The 2000 Broadway flop Seussical gets more than 700 productions annually in the US. Of the 2006 flop The Wedding Singer (picture on left), composer Matthew Sklar says, "It hasn't made me a rich person, but it has allowed me to write two more shows in the last two years. There are usually 60-70 productions of 'Wedding Singer' being planned at a time." The off-Broadway succès d’estime musical The Last Five Years is the financial "bedrock" of composer Jason Robert Brown's career. "If the only validation I got in this business was from the reception of my shows in New York City, I'd be doing something else by now," he said.

Note that usually producers and investors share in royalties for professional productions for 18 years after the first-class production opens but typically do not share in amateur rights.

By the way, I'd post a link to the Variety article, but Variety has essentially closed down its website to all but paying customers.

It Could Be Worse for the Arts; Like Sports

Anyone who has seen Avenue Q—and if you haven't, you should—knows the meaning of the word schadenfreude. It's one of those German portmanteau words, combining the word for "sorrow" and the word for "joy." It means to take pleasure in someone's misfortune. I think of a quote attributed to Clarence Darrow, the mid-20th century lawyer for liberal lost causes: "I have never killed a person, but I've read many obituaries with great pleasure."

All this is a lead-in to write about an essay by Mike Boehm in the Los Angeles Times concerning the NEA's "Survey of Public Participation in the Arts." Boehm's article, titled "The arts see encouraging news in NEA survey," can be found here. The only encouragement in the NEA survey I can see is that some findings are an occasion for schadenfreude, although Boehm doesn't use the word.

Some parts of the survey were released by the NEA last summer. Those findings are reflected in the Afterword of Stage Money, by the way. The whole report was published November 2009.

The overall finding is that attendance at all arts is down by 4.4%, compared to the survey the NEA conducted six years before. Two arts categories did increase, non-ballet dance performances and musical theatre. The musical theatre as a percentage of the population went down a smidgen but population growth increased the total number of attendees. Since the NEA's first survey in 1982, attendance at musical plays declined from 18.6% to 16.7%. For non-musical plays, the decline was more modest: from 11.9% to 9.4%.

What's the encouragement here? It's this: attendance at sporting events went down even more, from 48% in 1982 to 30.6% in 2008.

I don't find this encouraging. Sports are encountering the same pressures on audience numbers as the arts: competition from television and the internet and to some extent a reduction in free time and spending money.

A principal with AMS Planning & Research, a consulting firm advising performing arts centers, is quoted in the LA Times piece, saying, "A lot of times sports is better on television -- instant replay, the comfort of your chair, the close-ups. An arts experience is essentially a live experience, and it's an intimate experience. I think that's helping to keep people going."

Amen.

The Sudden Death of Brighton Beach Memoirs

It's always sad when a show closes in its first week on Broadway. Brighton Beach Memoirs grossed no more than $125,000 a week in sales during previews, not enough to cover running costs. The $3 million investment in the revival is lost. People in the business are asking "Why?" partly as forensic discovery: they want not to make the same mistake in the future.

The November 1 NY Times article by Patrick Healy "Neil Simon Flop May Be a Case of the Missing ‘Wow’" was an example of reasons being as plentiful as blackberries. No big star, like Jude Law in Hamlet. No marketing campaign creating the impression that this revival was a not-to-be-missed event. No wow factor. Comedy has changed since the playwright Neil Simon's heyday. The economy has made audiences more choosy about spending $100-plus on a play.

The Culture Monster blog for the LA Times by James C. Taylor, also dated November 1, covers some of the same ground but is more concise. "Everyone knows that the old days of premiering a play on Broadway without a big star are over. Neil Simon used to be a star. He had the kind of name recognition to alone spur tickets sales — but those days are long gone." Taylor sums up the production that opened as "strong if not scintillating."

Michael Riedel writing in his column in the November 4, NY Post puts out new information, suggesting the damning fault that caused the failure could be the NY Times itself. Not its critic but its advertising department. The paper offered the show weeks of ads in the paper and on its Web site at steep discounts. In exchange the paper wanted exclusivity. Brighton Beach Memoirs couldn't advertise anywhere else until after opening night. Most producers know that multiple approaches to advertising are needed. Many producers are openly questioning the value of large ads in the NY Times, a media outlet that was once considered essential for theatre productions.

The real reason for the failure: all of the above. When we have read of certain upcoming revivals in the past, we have sometimes asked, "Who cares about another company of. . .? " You fill it in from your own list. Ours might include from recent years Grease, Hair, A Chorus Line. The first two of this short list made a profit and the third probably broke even, although we didn't want to see them. The idea of a no-star revival of a Neil Simon play on Broadway seemed like a loser to us from the get-go. On the other hand, one must be prepared to be surprised. We were not the only theatre-lovers who were stunned at the joy in the riotous--and profitable--revival of Boeing-Boeing. When it comes to new productions, revivals or new material, the risk of financial failure is very high. So it is with all new businesses, a topic covered in detail in Stage Money, still scheduled for May 2010 release.

Photo at right: Playwright Neil Simon and 

"Creative Accounting" and the NFP Theatre

We are always interested in financial details about the professional theatre. This month's issue of The Believer has a new feature called "Creative Accounting," described as "an ongoing series that will show where the money goes for all of the major creative industries. Future issues will cover book publishing, television, fine art, and public sculpture."

The two-page piece details the costs--$170,029--entailed by the Civilians, a NYC-based theater company, to commission and workshop a new play. The Civilians are an unusual troupe. In their own words, "The primary activity of The Civilians is the creation of original projects from investigations into real life. Using methods that combine documentary and artistic practices, The Civilians’ process encourages a deep, inquisitive engagement between the artists and their subject matter. The resulting shows are boldly theatrical, often incorporating elements of musical theater."

The play in question, Brooklyn at Eye Level, is about the Atlantic Yards development in Brooklyn. The Atlantic Yards is a mixed-use commercial and residential development project of 16 high-rise buildings, currently proposed in the neighborhoods of Prospect Heights and Park Slope. The development includes the Barclays Center, which would serve as the new home of the New Jersey Nets. Like many large-scale developments, the project is very controversial.

The Civilians divide their project into three parts. Investigation, over $36,000, covered interviewing local children, adults, and real estate experts. An Urban Studies student was funded to provide context on the history of Brooklyn. Transcribing 250 hours of taped interviews was over $2,500. The second part lead to the first presentation, at a cost of over $71,000. Development, another $62,000, included additional interviews and commissioning a playwright, at $10,000, to shape the play. It ended with a second workshop that ran for four days at the Brooklyn Lyceum. The show was not reviewed, but New York Magazine placed it in the "Brilliant/Highbrow" quandrant of its Approval Matrix for December 22, 2008. A fun song from the show, "Four Brooklyns," is online here.

If you don't know The Believer, it is worth a look. Published by the folks responsible for McSweeney's, it describes itself as "a monthly magazine where length is no object. There are book reviews that are not necessarily timely, and that are very often very long. There are interviews that are also very long." It teeters among contradictory qualities: ironic, sincere, trendy, unfashionable, serious, funny, over-serious, and sometimes more than a little cliquish.

Personal Earnings on and about Broadway

It's raining money for some on Broadway. Daniel Craig and Hugh Jackman, stars of the new drama A Steady Rain, are earning nearly $100,000 each a week, according to Michael Riedel writing in the NY Post.

Although their base salary is only $40,000 a week, they get a percentage of the box office. The play is slated to run for 12 weeks, leading to each actor receiving $1 million by the close in early December. In the first week of previews, only five performances, the straight play sold 100 percent of the house with an average ticket price of $143.35; the top ticket price is only $128--not counting premium seats, which are selling.

The Post adds that Julia Roberts was said to earn more than $150,000 a week in the revival of Three Days of Rain on Broadway in 2006. Matthew Broderick and Nathan Lane each made more than $110,000 a week in The Producers and The Odd Couple. They're probably worth it. When David Hyde Pierce left the musical Curtains for a vacation week in 2007, box office fell by $240,000, according to Variety.

Bloomberg.com reports that Charlotte St. Martin in her second year as executive director of the Broadway League received $340,105 in salary and benefits. Poor Ms St. Martin: she has to work 52 weeks for that!

Incidentally, Michael Riedel's column is often a juicy read. He reports the scuttlebutt, the gossip, the stuff you don't get on the theatre blogs or on Playbill.com. He is also the co-host of Theatre Talk, the NYC public television interview show available on the Web. It, too, is worth a look.

Progress on Stage Money

Just finished the copyedited manuscript for Stage Money. Hurray!