Theatre Communications Group - Taking your Fiscal Pulse January 2009

Yesterday I read the new Theatre Communications Group (TCG) Survey – Taking Your Fiscal Pulse January 2009 (link below as is today's BLOOMBERG article about it). This is a great new program that TCG launched last fall as a way to get more immediate information between the annual fiscal survey.

It seems to present a clear picture of what we have known for a very long time – the midsize theatre is an endangered species. Certainly no theatre is safe, but in this case the middle of the road is where you can get hurt the most.

Definition of midsize seems clear - group 5 seems to be in the most precarious position with group 4 and 3 not too far behind).

It appears that if you a large – you can restructure and trim. If you are smaller – you are lean and mean and can maybe adapt better. Of course in the current economy I wouldn't count on anyone on the spectrum to be safe or for old rules about the top and bottom to play.

Most theatres seem to be trapped in the same vicious cycle of expenses: A sturctural deficit that is basically a budget line at this point; programming trimmed tight to keep the structural deficit as low as possible; over-worked, underpayed, staffs who accomplish extraordinary things while working themselves to the point of exhaustion thus creating huge turn-over; a old financial model that only examines earned to contributed revenue and a ratio that is 50:50 on a good day; leadership who simultaneously (and in a somewhat schizophrenic manner) are trying to figure out how to down-size without diminishing mission activities and trying to be innovative to survive, grow and stabilize. The mid-size theaters just seem to have super-sized versions of these issues.

Of course there are a lot of pros to being mid-size especially depending where you are geographically. And we as an industry need to focus on the positive characteristics. After all what do you do to save an endangered species? You take bold, proactive steps to protect it.

http://tcg.org/pdfs/tools/fiscal/Taking_Your_Fiscal_Pulse_January_2009.pdf

BLOOMBERG:

Cheap Seats, Staff Cuts Are on Tap for U.S. Nonprofit Theaters

Feb. 20 (Bloomberg) -- U.S. nonprofit theaters are cutting staff and expanding discounts as they anticipate disappointing ticket sales and fundraising, according to a new survey by the Theatre Communications Group.

In a January survey of 210 member theaters, the group found 77 percent are "reprojecting" expenses for the coming year. Theaters with a budget of at least $10 million are cutting spending by an average of $750,000.

More than half of those who completed the "snapshot survey" online expect year-end deficits and "cash flow problems."

The survey confirms that nonprofits are getting clobbered by a contracting economy and a Standard & Poor's 500 stock Index that's cratered 45 percent in nine months.

About 10 U.S. theater companies in the U.S. have shut down recently or announced they're in dire straits. Among the largest was the American Musical Theatre of San Jose, which filed for bankruptcy protection on Dec. 23.

Most of the theaters predict that ticket sales and fundraising from individuals and corporations will fall short of initial projections. Nearly a third said they'll substitute small-cast shows for larger ones. More than half plan new ticket discounting.

Lower Salaries

Theater salaries are headed lower, even though much of the non-unionized rank and file barely earn a stipend as is. (TCG won't release salary statistics it collects.) According to the survey, 69 percent of theaters said they're reducing or freezing salaries. And 48 percent will reduce administrative staff.

"Survival is about having strong organizations going into this," said Christopher Shuff, director of management programs for New York-based TCG. "There was an economic downturn eight years ago and it wasn't anything like this."