The Playgoer: Following the Money

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Monday, May 08, 2006

Following the Money

Two revealing readings today on the financing of the arts, both for profit and "non."

Every day I feel closer to agreeing with Shubert master-producer Gerry Schoenfeld who offers the alternative binary "taxed" and "nontaxed." One would have thought the one distinguishing feature of a "not for profit" venture is the right to lose money. While they've always been required to have Boards of Directors to oversee things and prevent rampant corruption and mismanagement, ask any arts administrator and you'll hear how the corporate-trained personnel on these Boards are just simply hardwired for zero tolerance of ever being "in the red." The result is that these institutions end up just as concerned with net gains as Broadway and Hollywood and Wall Street. The only difference with these "profits" is that they don't go into the pockets of the artists making the product, but must be reinvested into the company--as the Board sees fit, which will mean into the business side more than the artistic.

Look no further than the "business press" itself to explain all the complications of this. The Wall Street Journal has this from Saturday on "Merger Mania in the Arts"--a trend sparked by ever more "Arts Consultants" and "creatively thinking" funders.

But it isn't perfect harmony. These mergers often run into the typical problems that face companies that tie the knot, from falling short of lofty financial goals to accounting systems that don't talk to each other. There are unique challenges, too. Symphonies and other groups have passionate fans who see them not as businesses but as treasured institutions. Some of these deals also roil musicians who worry about their reputations being sullied by joining up with less-renowned institutions.

"You're dealing with a merger that's much more potentially problematic than a normal corporate merger, because it's about things people care about emotionally," says Keith Lockhart, music director of the Utah Symphony, which merged with the Utah Opera in 2002.

One factor behind the deals: The growing role of corporate executives on cultural organizations' boards. Groups have been recruiting veterans from the private sector to bring business acumen to their back offices. Another driver: a small cadre of consultants carving out a niche advising arts mergers. And increasingly, big foundations, with less money to spend, are giving money to groups only when a partnership is involved, to make sure their dollars are spent efficiently.

And how's this for creative solutions:
The increasingly business-oriented mind-set on boards has played out in a variety of ways in the cultural world...Minnesota's St. Paul Chamber Orchestra in the past few years began tying salary to the organization's financial performance for everyone from the executive director to the musicians.

Holy shit! Can you imagine actors' salaries being dependent on ticket sales? Think of the implication here for low "performance"; with the audience at Well at only one-third capacity, obviously Lisa Kron, Jane Houdyshell and company can't act.

Meanwhile, over at the Great White Way...

The Times looks at the growing acceptance on Broadway of (capitulation to?) high-end "Premium" priced (i.e. $250 and up) tickets for select orchestra seats. What originally was seen as a scam by the real life producers of The Producers worthy of that within the show, is now a business model. Imagine the climate in which one gladly claims public bragging rights for such practices:
"I'm not going to bother with 'I told you so' because I never imagined what a hit was like," said Mr. [Richard] Frankel, who endured the screaming when he and his fellow producers proposed the $480 ticket. "I am saying a little bit of thanks on our behalf for taking the heat for doing it when we did it."

The reporting here is valuable. But note how nobody is quoted as saying this might be a bad thing. In fact I wouldn't be surprised if the reaction among many NYT readers to the article's little consumer -guide of a sidebar is, "Gee, where do I get such tickets!"

The definitive take on this phenomenon on this is still Michael Feingold's raw response from four years ago "$480 A Seat, or Personal Reflections on American Values, The Theater, Money and the Life We Don't Lead: A Free Association." The Producers was stil the exception then. But he saw the trend coming, a trend now confirmed. And the question the Times doesn't ask is: okay maybe today this is just about ten or fifty select seats. But how many years off are we from the whole first ten rows being $500 a pop, especially if it's a hit show? Then the whole orchestra plus front mezzanine? What Roman-coliseum or Victorian era class divisions may then ensue--that is, if there are any affordable seats left at all.

Once ticket prices go up, they don't too easily come down...


Anonymous said...

From my perspective--as a naive observer of the non-profit behemoths--it's hard to know what society gains from allowing an organization like the Roundabout, for example, to operate un-taxed.

What does the company's non-profit status allow it to achieve that the free market wouldn't provide on its own? What artistic risks are taken by the company that, if it were a for-profit enterprise, would be off the table? (Those aren't rhetorical questions.)

Another, tangentially related question: It's not hard to see what the Roundabout gains from sending Christopher Plummer into donor living rooms. But what does Plummer get out of this arrangement? It's great, of course, that he's putting his time and energy into raising money for the arts. But does he really believe that Roundabout is where donors will be getting the biggest artistic bang for their buck?

Andrew said...

Thanks for the link to the Feingold article, which is excellent.