The Playgoer: "No Profit Like Nonprofit"

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Tuesday, June 05, 2007

"No Profit Like Nonprofit"

Jeremy Gerard (formerly of Variety) had a nice 'n' nasty little roundup on the Roundabout in Bloomberg last week. It gets at the question about the company that comes up more every season--just what is the de facto difference between the Roundabout and a commercial theatre concern like the Shuberts?

The Roundabout's continuing expansion has inflamed Broadway's commercial establishment. Producers such as Rocco Landesman, who owns Jujamcyn Theaters' five Broadway houses, has accused Haimes [Roundabout AD Todd Haimes] of running a wolfish commercial operation in the sheepskin of a publicly funded institution.The Roundabout rarely produces new work, focusing primarily on
revivals of musical and dramatic classics.

"There's no profit like nonprofit,'' says Gerald Schoenfeld, the chairman of Broadway's biggest landlord, the Shubert Organization. It's a phrase he's famous for coining, and it's been taken up as a mantra by many of his colleagues in commercial producing who feel that the playing field is not level. As with the other nonprofit companies operating Broadway houses -- Lincoln Center Theater and the Manhattan Theater Club -- the Roundabout pays lower labor costs than commercial producers, even as they compete for customers and charge similar ticket prices.
Haimes' defense?

"The commercial theater is based on the producer model: You raise $2 million for a show, and if it fails, with the next show you start from zero again,'' he said over coffee in a diner near Studio 54. "In the nonprofit world, you can't operate like that. If you lose $2 million, you start your next show with a $2 million deficit.''

Okay, not sure I understand the significance of that. Isn't someone running at a "deficit" when Pirate Queen goes down the tubes? Or does losing your own money and your investors' not count, compared to grants and tax deductible "donations"?

I will come to Haimes' defense on one point, though, that Gerard maybe short-shrifts him on. Roundabout has certainly increased their interest in new work. They acquired and renovated the old American Place Theatre (now the Laura Pels) mostly for that purpose. While I don't think "Pig Farm" and "Mr. Marmalade" may point the way for the most forward looking new American plays, I'd say those choices at least took some chance with their subscriber base. Point is, they have a space at least supposedly dedicated to new work. (And the occasional small revival like the recent Suddenly Last Summer.)

But here's something even more revealing.

Federal and state funding of the arts has dwindled in the past two decades, and institutional support from giants such as the Ford and Rockefeller foundations has been largely replaced by individual donors. The Roundabout, with 45,000 subscribers, operates on a $40 million annual budget. Income includes $14 million from subscribers, Haimes said; about $12 million is contributed and another $1 million comes from fees, rentals and other sources. That leaves $13 million that must be generated by single-ticket sales.

So, if I have this right, government and foundational grants decrease, shifting the burden-slash-influence increasingly to "individual donors." At the Roundabout subscribers account for $14 million to the budget; individual ticket buyers supply $13 million of the budget; "contributors" $12 million. Three-way-split. Subscribers and contributors combined make up for 2/3rds of the dough, plus the added influence of having the company's ear. (Going to all those functions, for instance.)

You have to wonder what kind of consideration is given to the non-subscriber, non-donor. That, by the way, would include most people under 35. (Yes they do have "HipTix", I know, but, believe me, they yank that card away as soon as your 36th birthday!) It would also include most people in the under $100,000 income bracket. Obviously one-third of your budget can't be dismissed. But when it comes to season planning and ticket prices, it becomes harder and harder under this model to take a chance. A chance, remember, not to lose profit but simply to operate under deficit. (You know, like the US Government.)

Well every major city has its elite state theatre. Maybe the Roundabout (plus Lincoln Center, plus Manhattan Theatre Club) are ours. But still, it saddens me to be reminded of those simple words I saw at the footer of a Federal Theatre Program I once saw: "This theatre is your theatre. You are responsible for its creation and its progress."


Anonymous said...

I'm not really sure why you're glossing over the difference that Haimes is pointing out between "non-profit" and "for profit" groups. It's an interesting distinction.

Every Broadway show is financially its own "company". So when that "company" fails, the organizing producing group has certain financial recoarse that's not available to the "non-profit company".

The "non-profit company" carries their debt to the next show and through the season until they get rid of it. And their "backers" - known as "contributors" in this case - don't "lose" any money when the doors close because the debt's too big since, from a tax point of view, they already lost the money when they made the contribution (thus the deduction). More to the point, "non-profit company" backers never "make" any money from a hit.

It's not an investment that way - the way it is for the backers of a commercial production.

You should save your snark for what you're really not happy about - what you consider timid artistic choices by the Roundabout.

Though, of course, I think it's great that someone has developed a regular audience for some kind of theatre.

Brian said...

i'm not sure that your criticism of the roundabout is entirely fair. if subscribers and "individual donors" like the work that the roundabout does, good for them for supporting it. if you or i are fans of the roundabout's work, we can give money too -- though in smaller amounts.

it's not clear to me what you're asking the roundabout to do -- produce plays that their main supporters don't like? their problem really is that they've opted to enter the bigtime -- with a big house on 42nd St and big movie stars in leading roles. if you're looking for a theater that listens to smaller-scale individual donors and individual ticket-buyers, i think you're almost necessarily going to have smaller scale and lower profile productions -- which might be artistically much more adventurous (which is something i personally would be in favor of). if the roundabout is going to compete on Broadway, then it's only natural that they adopt a semi-commerical mentality when making progamming decisions. Are you asking them to produce shows they know their base won't come to see?

Anonymous said...

The roundabout's attitude toward subscribers ought to be two pronged (at least). First, yes, please the conservative subscribers who just want to see Kristin in The Apple Tree. Keep that base happy. But at the same time, they need to cultivate the next generation of audience members who in 30 years won't give a !@#$# about The Apple Tree, whose tastes will be of their generation. You do that by offering cheap tickets and exciting shows to audience members under 40. (I guess that's where Hiptix helps) The RTC is doing a pasable job of pandering to its old base but doing a lousy job of attracting younger, more daring viewers that will keep the company afloat in 10, 20 years, when its subscribers start dying off. Every major nonprofit in this city needs to invest in the future subscribers, who are 25, 30, 35 now.

Anonymous said...

Anonymous, start your own theater company.

The Roundabout is successful because they actually speak to something a large group of people want.

That's their job.

Stop trying to change something that works for other so that it only works for you.

This sniping at companies that actually know how to get an audience is annoying.

Playgoer said...

The objections here to some of my conclusions are duly noted, and I'll try to think of how to refine. I agree the technical/financial distinction between commercial and nonprofit is not insignificant. (Although I still don't get how Haimes is claiming a commercial producer or investor's personal loss is somehow a less perilous write-off than the literal write-off of a company operating in the red.)

And as I state at the end, at the end of the day I accept that the Roundabout will never be a populist theatre and that it takes all kinds, etc. What I mean is, I'd be MORE fine with the Roundabout being who they are if we really HAD more populist alternatives. Instead--and it doesn't matter whether it's their "fault" or not--they're a behemoth who sucks up all the advertising, press, and grant funding needed to promote and support poorer smaller companies.

As for J's contention: "The Roundabout is successful because they actually speak to something a large group of people want"...I can't accept that either. Let's not to easily equate this company's success with some ringing vox populi endorsement of "the people." They're not who they are because of sheer number of attendees. They're who they are because of their endowment and they're real estate holdings.

Plenty of Roundabout shows draw low capacity ("Prelude to a Kiss," a recent example.) Plenty get horrible reviews and no one likes them (e.g. Greenberg's "Naked Girl on the Appian Way.")

How about "they speak to something an unusually AFFLUENT group of people want." Because at the end of the day, appealing to that sliver of a demographic is what makes or breaks a company.

Anonymous said...

may the gods of nonprofit protect theater companies their biggest fans -- complacent gloaters like J Cale. As a company grows and prospers, so its responsibilities grow, and RTC has a responsibility to foster the next generation of playwrights so that in 30 years they can mount lame revivals of them.

Anonymous said...

sorry, the above should have started: "may the gods of nonprofit theater companies protect them from their biggest fans..."

Anonymous said...

Playgoer, I think your definition of who the Roundabout appeals to/works for is plenty appropo. I'm definitely guilty of overstating my point, but I think it's still true that even with low capacity, we are talking about a company that's drawing focus here because of its percieved success.

Or course, it is hard for me to see how their "unusually affluent" audience "they" speak to is muche different (in the broad outlines of this discussion) from almost any major non-profit audience. For instance, The Public's audience - a huge percentage of them come from the Upper East side - not exactly lower income geography.

Theatre at these larger place requires lots of money. Once they've figured out how to get that money, their artistic choices are their own... though I'm NOT sticking up for their choices.

To anon, a gloater?


While criticism can be healthy, I'm simply tired of hearing complaints about what some theater companies should do with the money they raised.

The complacency rests with those who sit at computers taking pot shots at the established theatre world rather than going out and making their own world.

Anonymous said...

I sometimes wonder about overhead at the nonprofits. If you go to MTC's website, for example, there's an awful lot of people who 'work' there. Many are probably unpaid, but it would be interesting to know what AD's, etc, get paid in comparison to actors, writers, etc.

Anonymous said...

Isn't Haimes raking in more than $1 million for his brilliant artistic choices? And don't nonprofits have a special deal with Equity so they can pay their actors and other creative types lower rates than in a commercial enterprise?