Déjà Vu All Over Again

Posted by Bruce Miller
What we need is a bright idea. Or three or four.

In my humble opinion, Richmond theatres will face a challenge in the months and years ahead. I know that Barksdale and Theatre IV face that challenge right now, and I fear it’s more widespread than that.

Challenges are insurmountable only when we fail to recognize them. I've always believed that individuals and communities are better able to address challenges if they acknowledge them directly and work in a united way to address them.

I think the number of nonprofit theatres and the numbers of plays produced by these nonprofit theatres have grown faster than the number of Central Virginia ticket buyers and contributors committed to supporting these worthy ventures.

When this happens, everyone suffers. No one wins. Certainly not the theatre artists looking for work or the theatre audience looking for artistic quality. In the long run, having lots of theatres and lots of shows is good only when there are resources enough to allow every theatre and every show to succeed on its own terms.

I could be wrong about all this. Maybe all you other theatres in town are doing great.

But if we are a little overly crowded right now, it's not a first-time thing.

If you go back to 2001, the Richmond theatre scene was crowded with TheatreVirginia, Barksdale Theatre, Theatre IV, and Swift Creek Mill (known for many years in days gone by as the Big Four). Then we also had the Firehouse, Richmond Shakespeare, African American Repertory Theatre (in its infancy, I think), Richmond Triangle Players, Chamberlayne Actors Theatre, HATTheatre, the Carpenter Science Theatre, and Theatre at Bolling Haxall House. The other big game in town was Broadway Under the Stars—for profit and not local, but nonetheless acting as the 500 lb gorilla. Mystery Dinner Playhouse was also here as a for profit entity.

Forgive me for overlooking, I suspect, one or two others.

In those crowded times, if memory serves, all of the theatres—each and every one of us—struggled to survive.

Then, in 2001, Barksdale hit the financial skids, precipitating the Barksdale / Theatre IV partnership that exists today. In 2002, TheatreVirginia went belly up. And shortly thereafter, I don’t remember the year, Broadway Under the Stars collapsed, leaving its subscribers high and dry. For a couple comfortable seasons, professional theatre in Richmond seemed right-sized, and every theatre in town seemed to do well.

Doing well, of course, inspires doing more. And so we slowly began to add again. Sycamore Rouge, Richmond Ensemble Theatre, Essential Theatre, Barksdale at Hanover Tavern, Henley Street Theatre, Stage 1—all admirable efforts with much to recommend them. Firehouse, Richmond Shakespeare, Chamberlayne Actors Theatre and African American Rep all began to grow—considerably. And then this year, the return of the 500 pounder—the “Broadway series” at CenterStage.

None of this growth is bad. All of it is good. But if it presents new challenges, shouldn't we recognize and figure out how to address them as a community, not as one theatre vs another?

From all that I have heard and seen, we've now entered another period where many if not mosts casts in town are playing to houses much smaller than they deserve—no matter how good their show. I haven't heard from any nonprofit theatre that's meeting its fund development goal--although you may know something I don't. I have heard from several theatre managers who are wondering how on earth we’re going to hang in there without cutting back on our salaries, our AEA contracts, our artistic quality, and/or our risk taking.

Of course, that’s the last thing we should be doing. Cutting back is often the kiss of death.

Three of the new nonprofit theatres that began since 2002 have already closed their doors, due in each case to financial pressures.

One good sign this time around is this. Theatres all over town have begun to partner—creating one production where there otherwise would have been two. Barksdale and Theatre IV are working together on Sound of Music (one show that stands in for last year’s Annie and Millie). Richmond Shakespeare and African American Repertory Theatre are co-producing Othello. AART and Barksdale are co-producing both Black Nativity and Crowns. And Barksdale is co-producing Grapes of Wrath with TheatreVCU.

All this partnering would not have happened six or seven years ago. For those who don't realize it, take a look back. The spirit of cooperation among Central Virginia's theatres today is MUCH greater now than it ever was prior to 2002. I may be misguided--I know there are those who think I am--but I think this is a huge step forward.

When markets become over-crowded, one or two of three things inevitably will happen. Central Virginia's theatres will discover new ways to co-produce and reduce the total number of productions, and/or we will find effective ways to increase overall ticket sales and contributions, and/or we will see another round of theatres begin to go out of business.

Several of us have ridden these waves before. They’re not fun. Maybe this time, we can all work together and find a way to make a win-win-win … say it nine more times.

Till then, for Pete’s sake, buy a ticket to a play produced in Central Virginia. Any play. Please?

--Bruce Miller

The Case for Confidence

Posted by Bruce Miller
(This is a re-posting of a previously published blog entry.)

"At Barksdale and Theatre IV we remain cautious but confident." That's what I said at the end of the previous blog posting, and that's how Phil and I respond to queries from national arts leaders who bring up the bad news from Wisconsin. With the demise of great colleague theatres such as TheatreVirginia, Madison Rep, Mill Mountain Playhouse in Roanoke, and Charlotte Rep, we expect to entertain questions about our financial health.

The good news is this. For years, our Boards of Trustees have been working intelligently and strategically to ensure that Barksdale and Theatre IV will not follow in the footsteps of these now defunct nonprofit companies. We have engaged in prudent and responsible business planning.

What follows are the five cornerstones that support our confidence, particularly as it relates to the recent closing of Madison Repertory Theatre.

1. The Greater Richmond metro area population as of 2008 is 1,225,626--more than twice the 555,626 people who comprise the metro area population of Madison, WI. This means our population should be two times more able to sustain both the for-profit "Broadway" series co-produced by CenterStage and a nonprofit major professional theatre like Barksdale.

2. According to IRS forms 990 for the year 2008 (the most recent year available):

Barksdale and Theatre IV had combined annual revenue of $5,049,376; Madison Rep had annual revenue of $2,023,579.

74% of Barksdale and Theatre IV's annual revenue was earned through ticket sales and tour fees, and only 26% came in through contributions. Only 53% of Madison Rep's annual revenue was earned through ticket sales, and 47% was dependent upon contributions.

Barksdale and Theatre IV ended fiscal 2008 with a positive fund balance of $1,761,395; Madison Rep ended fiscal 2008 with a negative fund balance of -$424,688.

3. Theatre IV fully owns and is able to borrow against the multi-million dollar historic Empire Theatre.

4. Barksdale Theatre and Theatre IV have developed highly diverse revenue streams, earning significant funds from ticket sales at three major venues and extensive touring throughout Virginia and 32 surrounding states.

5. During all the years when Barksdale and Theatre IV were asked to assist with various efforts to develop Richmond CenterStage, the Richmond leaders of CenterStage pledged not to compete with Theatre IV with regard to our core business--story-based plays and musicals for children and their families. CenterStage pledged not to book in our competitors' productions of major titles in which Theatre IV has invested millions of dollars, the productions we regularly revive from our repertoire. These major titles include Annie, A Christmas Carol, The Best Christmas Pageant Ever, Disney's Beauty and the Beast, Disney's High School Musical, Peter Pan, Rodgers and Hammerstein's Cinderella, Seussical, The Sound of Music, and The Wizard of Oz.

Conversely, Barksdale and Theatre IV have acknowledged CenterStage's need to mount an annual "Broadway" series for adult audiences, and to book in non-competitive, television-based children's programs such as Sesame Street Live, Dora the Explorer, etc.

If CenterStage honors its promises, we believe that Barksdale Theatre, Theatre IV and CenterStage's "Broadway" series will all thrive in our mid-sized market. Surely that is the goal. If CenterStage's leaders are true to their word, we will have a win-win for the entire community.
As I said, we remain confident, but we are not throwing caution to the wind. We continue to do all we can to ensure the success of CenterStage, while working hard also to build up the financial health of Barksdale Theatre and Theatre IV, Richmond's major professional theatre.

--Bruce Miller

A Cautionary Tale from Wisconsin

Posted by Bruce Miller
(This is an updated and amended version of a previous post.)

During recent meetings with Peggy Baggett, Executive Director of the Virginia Commission for the Arts, and Amy Dorfman, Program Director for the Shubert Foundation, Phil and I were asked to respond to the sad news coming from Wisconsin—the closing of Madison’s only professional theatre, the much loved Madison Rep (their bare stage is pictured above and to the right).

Madison is the capital of Wisconsin, a city renowned for its appreciation of the arts. Madison Rep had been nobly serving its capital city for 40 years. In some circles—not all—the Rep’s closing is discussed in relation to the 2004 opening of the new and restored Overture Center, the impressive performing arts complex that includes and surrounds the historic Capitol Theater in downtown Madison.

Word-of-mouth indicates that two of the reasons that led to the closing of Madison Rep were these:
1 In terms of ticket sales, Madison Rep found it difficult to compete with the heavily marketed and highly commercial “Broadway” series at the Ovation Center.
2 In terms of contributions, Madison Rep found it increasingly difficult to raise the funds they needed once the financial troubles of the Ovation Center began putting increased pressure on Madison’s giving community.

Honestly, I don’t know if these word-of-mouth speculations are true or not. No one who has shared them with us is opposed to the Overture Center. No one is trying to place blame or accuse anyone of bad intentions. Everyone, including me, is trying merely to examine the situation to figure out what went wrong. Armed with this knowledge, everyone hopes to prevent a reoccurrence of Wisconsin’s bad news in other states across the country.

I thank Robert Chappell, spokesperson for the Overture Center (pictured to the left), for correcting me when I included some slightly off kilter information regarding the Overture Center in a previous iteration of this posting. I thank him also for adding his perspective, which I quote below.

Here's how Mr. Chappell explains the Overture Center's connections to other Madison performing arts facilities: The "Capitol Theater opened in 1928. In the mid-1970s, the city bought it and built the Madison Civic Center around it. The Civic Center opened in 1980. Also within the Civic Center was Isthmus Playhouse, which became home to Madison Repertory Theatre. In 1998, the arts community and city government decided that the Civic Center would expand and become the Overture Center for the Arts. In 2004, 'Phase 1' of the Overture Center opened, followed by 'Phase 2' in 2006. Part of 'Phase 2' was the renovated Capitol Theater and a renovated Playhouse, which continued to be home to the Rep."

Heralded as a major economic development initiative for downtown, the Overture Center was championed by Madison’s business and civic leaders. The Overture Center has been bringing "Broadway" to Madison since the early 80s when its precursor operated as the Civic Center.

In 2005, the Overture Center refinanced its construction debt when a trust fund that "was supposed to pay for construction debt lost value after 9/11." In 2009, three Wisconsin banks threatened the foreclosure of the Overture Center if the debt owed by the Overture Development Corp. was not repaid soon. http://badgerherald.com/news/2009/02/05/banks_threaten_to_cl.php

The “Broadway” series in Madison is a cornerstone of the Overture Center’s business plan. Large marketing budgets, with major dollars coming from locally generated contributions, were developed to buy TV and other advertising for the “Broadway” series. As more Madisonians began attending the “Broadway” series, attendance at Madison Rep began a gradual decline.

"Those two things are unrelated," Robert Chappell commented to me. "The Broadway series brings quite a different audience than the Rep did. The Rep produced primarily straight plays, with an occasional musical. Overture's Broadway season was and is exclusively musicals."

Many of you who read this blog may remember that TheatreVirginia’s subscription decline from 12,000 in the early 90s to just over 2,000 in 2002 was inversely proportional to the rise in subscriptions to Richmond’s Broadway Under the Stars. Madison Rep had 2,400 subscribers when it closed; TheatreVirginia had 2,300.

Faced with declining ticket sales and disappearing contributions (based in part, some say, on the increasing calls for funding of the new and financially strapped Overture Center), Madison Rep recorded accumulated deficits of $140,125 in 2004-05, $357,279 in 2005-06, and $465,850 in 2006-07. A major Save the Rep campaign in 2007 reduced the accumulated deficit only minimally, resulting in a 2007-08 accumulated deficit of $424,888, more than 20% of annual operating budget.

After reading the first sentence of that last paragraph in the earlier iteration of this post, Robert Chappell commented: "We feel strongly that we (the Overture Center) do not compete with our resident companies for contributions, and in fact go out of our way to support their fundraising efforts."

In the fall of 2008, the recession hit and caused additional declines in ticket sales and contributions at Madison Rep. Accumulated debt rose to over a half million. In March of 2009, the nonprofit company closed its doors forever.

Many performing arts centers enter into non-compete agreements with the symphonies, ballet and opera companies that rent their facilities, but seldom with the major nonprofit theatres in their communities. Statements have been made in Richmond that a successful “Broadway” series will increase ticket sales to local theatres. “A rising tide lifts all ships” has been repeated many times. This is a catchy and sometimes relevant slogan, but I don’t know of any experienced arts leader who honestly believes it applies in these cases, at least in the short to mid-term.

I'm grossly over simplifying the complex Wisconsin story. This is a cautionary tale, after all, and not meant to be a work of journalism. I don't mean these meanderings to reflect poorly on the Overture Center, Madison Rep or any entity, about which I know only what I read and hear. If you live in Wisconsin, please don't think I'm trying to represent myself as any kind of expert with regard to your local issues.

Having said this, I believe our honest conversations with national arts leaders about the closing of the Rep have been and will continue to be informative and helpful. Those who don't examine history are doomed to repeat it. Conversations about the troubles at Madison Rep challenge us in constructive ways.

At Barksdale and Theatre IV, we are not blind to the comparisons between Madison and Richmond. Nonetheless, we remain cautious but confident. Tomorrow, I’ll discuss why.

See you at the theatre!

--Bruce Miller

A Day in the Life of a Theatre Checkbook

Posted by Bruce Miller
It was my turn to sign checks this morning. Lucas Hall, our accounts payable manager, sends out checks two to four times a week. He rotates signing privileges among four of us, so that one of us doesn’t get stuck signing 100 to 150 checks at any one sitting.

In light of recent discussions about the significant costs of sustaining a professional nonprofit theatre operation in Richmond, it was interesting to me, as I was signing away about $25,000 this morning, to record this one tiny snapshot of what Barksdale and Theatre IV spend almost every working day of the year.

I was lucky. This signing didn’t include a show payroll. Show payrolls take the longest.

Here’s what we paid out to vendors today, rounded to the nearest dollar:

$ 3,522 – quarterly payment, Hugs evaluation
$ 598 – partial payment, printing of TIV 09-10 mainstage brochure
$ 778 – printing of TIV annual appeal
$ 553 – annual development trip expenses
$ 610 – HVAC maintenance, Empire & office
$ 145 – copier maintenance, office
$ 450 – set and costume storage – one month
$ 1,096 – partial payment, TIV 09-10 tour brochure
$ 112 – one night, Millie security
$ 1,199 – ad buy, newspaper
$ 3,380 – monthly electric, Empire, office, one actor house
$ 2,919 – monthly water/sewage and gas, Empire
$ 500 – website ad buy
$ 2,173 – set materials this month
$ 3,485 – monthly rent: office, parking, actor house
$ 354 – t-shirts for summer camp
$ 146 – brake repair, one tour van
$ 342 – ad buy, university student directory
$ 200 – monthly IT services, office & box office
$ 239 – Empire dumpster
$ 97 – gas for production van
$ 166 – copier maintenance, Empire
$ 25 – overflow answering service, TIV America
$ 278 – utilities, one actor house
$ 2,010 – monthly phone / Internet

These bills add up to approximately $25,000. All told this week, we paid out approximately $139,000. Our average weekly payout is $96,000. All told this year, we’ll expend approximately $5 million.

People often ask, “Where does your money come from?” Many people think there’s some sort of fund from which we draw to pay our bills. There isn’t. That $96,000 average weekly expenditure comes from the $96,000 we need to bring in each week. If the money doesn’t come in, it doesn’t go out.

In the case of Barksdale Theatre and Theatre IV, on average, $38,275 comes in each week in Richmond ticket sales, $33,480 comes from tour revenue, $1,490 comes from miscellaneous revenue (playbill ad sales, concessions, facility rentals, special projects, etc.) and $22,275 comes in from contributions and special events. This means that approximately 23.3% of our revenue is contributed. The national average for a professional theatre is 40%.

I’ll crunch these numbers a little more in an upcoming post.

--Bruce Miller

The Good and the Bad at Mill Mountain

Posted by Bruce Miller
We LOVE Mill Mountain Theater, one of our co-producers of Blackbirds of Broadway not so many years ago and a cultural cornerstone of Roanoke for over 40 years. It was with a heavy heart that I read this press release last night from their Board of Directors:

“Roanoke, Virginia, Jan 20, 2009

Mill Mountain Theatre’s Board of Directors announced today that the theater will close its doors on January 21 in order to focus on a reorganization of the Theater’s productions and business operations. Layoffs will begin on that date.

Sharply declining income, reduced state funding, lower than expected donations, changes in consumer entertainment choices, and the effects of today’s challenging economy have left the Theater unable to cover its operating costs. Existing debt is compounding the theater’s financial difficulties.

This difficult decision has been made after a long and thorough scrutiny of alternatives, reforecasts, and requests for relief made to donors and existing creditors.

‘Our traditional business model no longer works. We want to be responsible stewards of our community’s long-standing financial support so we are taking a break from business-as-usual to reinvent Mill Mountain Theater. We are taking an intermission,” says a theater spokesperson, “and plan to reemerge stronger and better than ever.’

Theater Board of Directors and staff are working closely with local officials and key contributors to create a model for the Theater’s future that acknowledges the organization’s historical importance to the region’s identify and tourism initiatives, while being sensitive to today’s economic realities. An aggressive fund-raising campaign based on the new business plan will begin upon the announcement of the plan’s details.

Theaters across the United States, including Broadway, are experiencing the effects of the economic downturn with rising costs and decreased attendance. According to the New York Times, ‘The annual post-holiday doldrums in the theater district are proving particularly doleful in 2009, as more than a dozen plays and musicals—almost half of the current lineup, incredible though it may seem—get ready to close by the end of the month.’ Regional theaters, all approximately the size of Mill Mountain, in Ohio, Florida, Minnesota, and Boston have all closed in recent months.

Theater officials assure Roanoke arts patrons, ‘Mill Mountain Theater is doing the responsible thing and securing its future by reinventing and reinvigorating how we do business.’ The first production of the newly reinvented organization is planned for the 2009 holiday season. Season ticket holders will receive vouchers for cancelled plays that can be applied to next season’s shows.

Of the plays remaining its current season (sic), Mill Mountain will present Driving Miss Daisy (WALDRON STAGE, January 21 – February 8, 2009). The theater box office will close on January 21 but tickets can be purchased by cash or check at the theater box office in the lobby of the Waldron Stage at the Church Avenue entrance one hour before the show.”

The Roanoke Times further reports today that Mill Mountain’s “staff will be let go as of this Friday, January 23, and plans for the theater’s future are uncertain.”

Our hearts and prayers go out to all of our colleagues who will be losing their Mill Mountain jobs at the end of this week.

The bad news is that Mill Mountain is in a position where they are forced to let go their staff and cancel the rest of their season. And that’s pretty bad news.

The good news, and we should celebrate this, is that the Board is facing these challenges responsibly. They are NOT closing the theatre. They are choosing to engage in the hard work of reinventing the theatre to suit emerging financial realities.

I am hopeful that Mill Mountain will return and once again light up its beautiful theatre in the heart of Roanoke. I congratulate the Board on NOT throwing in the towel and walking away. It takes courage, commitment and smarts to continue to fight the good fight, even when the Board, I’m sure, is broke, exhausted and demoralized. Three cheers and then three cheers more to all the Mill Mountain Board members who are refusing to let their institution die. That, my friends, is what it takes.

Business-as-usual is tough. Reinventing the business is a LOT tougher. But a small group of good people can make it work, and, in Mill Mountain’s case, it appears that that is exactly what's happening.

During the long hard days that now begin, Barksdale and Theatre IV will offer whatever support we can to the Mill Mountain Board as they take up this yoke of responsibility and move forward with determination and creativity. God speed.

--Bruce Miller

This Labor Day, Celebrate Arts Employment

Posted by Bruce Miller
Today, Barksdale and Theatre IV employ 37 arts professionals working in full-time jobs. It was 39 a few months ago, but we’ve had to reduce staff by two due to financial woes associated with the national recession.

This seems like a lot of people, and it is. But when you consider all we do (33 different productions, many of them touring throughout 32 states, plus all the ancillary activities), we’re actually understaffed.

In addition to these 37 full-time positions, we employ:
· several wonderful box office workers who are paid on an hourly basis, · several talented interns who work on a seasonal basis for weekly stipends,
· several skilled part-time workers who put in less than 40 hours per week in various capacities,
· tens of touring actors who keep Theatre IV’s national tour going strong, and
· legions of freelance actors, directors, designers etc whose talents power our mainstage productions.

We also budget $15,000 per year for hourly production overhire.

All told, Barksdale and Theatre IV invest approximately $2.2 million annually in Virginia’s workforce. If that doesn’t seem like a lot to you, then you’re not one of the ones loosing sleep every two weeks worrying about how we’re going to meet payroll. There’s no grand fund set aside somewhere to cover these and other expenses. We pay out only what we bring in. To meet budget, we need to sell approximately $70,000 per week in tickets and tour shows, and raise approximately $30,000 per week in contributions. During this recession, meeting these goals has been, and will continue to be, very challenging.

That's why I vigorously support continued state funding for the Virginia Commission for the Arts. Additional state cuts will mean additional layoffs, and additional layoffs, at Barksdale and at other nonprofit arts organizations statewide, will ultimately increase rather than decrease Virginia's financial woes.

The arts are a labor intensive industry, which is good for Virginians and the state economy. On average, Virginia’s arts and cultural organizations spend 44.2% of their revenues on labor, 37.2% on other production expenses, 9.8% on facilities, 7.4% on marketing, and 1.4% on state and local taxes and fees. This is a nonprofit industry.

In 2000, Virginians for the Arts, our statewide advocacy group, did an economic impact study in cooperation with the Virginia Commission for the Arts and the Virginia Association of Museums. The study was prepared independently by The Wessex Group, Ltd., located in Williamsburg. I mentioned this study in a previous post. The findings of the study indicate that eight years ago, arts and cultural organizations comprised a major sector of the Virginia economy.

In 2000, 12,507 Virginians were directly employed by arts and cultural organizations (full-time and part-time). They were paid $157.8 million in salary and benefits. An additional 6,344 full-time Virginia jobs were financed indirectly by the economic impact that arts and cultural organizations have on Virginia’s support businesses and independent contractors. All told, in 2000, $306.6 million was paid to 18,851 Virginia workers by Virginia’s arts and cultural organizations.

Additionally, the 2000 study found that arts and cultural organizations in Virginia annually generate $849 million in revenues for Virginia businesses and $342 million in revenues for Virginia tourism businesses through spending by out-of-state visitors who come to see Virginia’s arts and cultural organizations. That’s a total injection into the Virginia economy of nearly $1.2 billion.

I know, it’s a lot of numbers, and they’re eight years out of date. But they’re important. If we don’t celebrate employment in the arts, nobody will. Many of those who make decisions about state funding simply don’t care about the intrinsic value of the arts, but they might care—they ought to care—about how the arts positively effect Virginia’s economy.

Labor Day originated in 1882 when the Central Labor Union of New York City asked the nation to take a day to value America’s workforce, the engine that always has and always will power our nation. This made sense to the U. S. Congress, and so they made Labor Day a federal holiday in 1894. Today, Labor Day is honored by all 50 states.

We who work in or care about the nonprofit arts sector need to make sure that we also get in the game. We need to remember that Labor Day not only marks the closing of our neighborhood pools, plus the beginning of the Virginia public school year and the NFL and NCAA football seasons. Labor Day is our chance to remind all Virginians that the nonprofit arts sector and its 18,851 jobs represent an irreplaceable force in the state economy. The arts are not a frill or a nicety. We are a cornerstone industry, crucial to the Commonwealth and its financial well-being.

--Posted by Bruce Miller