Sunday, May 5, 2013

Between a rock and a hard place

It's interesting (and not always fun) to be working with a theater where I know the budget intimately (because I've been on its Board of Directors) and where I work with performers a lot.

For example, at Altarena, where I do a lot of work and have been serving on the Board until recently, we just learned (it was announced at the theater's 75th Anniversary Gala last night) that our recent production of RENT was the highest grossing show in the theater's history, quite a compliment to its cast and crew.

Now, we don't do AEA contracts, our actors are not paid except for a tiny stipend, our musicians and production staff stipends are near the bottom of the market range even for "nonprofessional" performers, and we rely on volunteers for some functions like ushering.  So, does "highest grossing show ever" mean that the theater's leadership is cackling with glee as they sit on a pile of money that is not being disbursed to performers, whose passion the board is counting on to overlook the extra money?


It means the theater is that much more likely to finish the year in the black.  It means we can afford to replace sound and lighting equipment that costs thousands of dollars and without which shows like RENT wouldn't be possible.  It means we can do the necessary building maintenance so that a 60-year-old non-seismically-designed building can continue to host plays and musicals without water leaking onto people and with the comfort of air conditioning in summer and heat in the winter.  It means we can produce nice-looking postcards, posters, vinyl banners, oversize posters, and programs to promote the show.  It means we can continue to offer cookies and snacks at intermission on a donation basis, rather than charging for them, which would require us to obtain a separate retail license and do a fair amount of tax related paperwork to document retail operations, separately from our 501(c)(3) tax paperwork.  It means we can actually hire employees on salary (with the attendant mandatory benefits, such as unemployment, workers' comp, and so on) to do jobs like managing the box office and front of house, rather than relying exclusively on a corps of volunteers (who'd have to be managed by someone anyway) to do those jobs.  It means we can have a sound insurance policy that would be in place to cover expenses if a performer or patron had an accident on the premises.  It means we are in good financial health overall, which is, ironically, important when trying to raise money from foundations and other grants: they are more likely to support theaters that are on reasonably firm ground and have demonstrated the ability to manage their finances responsibly, rather than theaters on the brink of extinction where the perception is that good money would be thrown after bad.

I can understand why actors don't always see this.  When a show is not selling well, actors see empty seats and wonder we don't give out more comps or sell more half-price tickets.  (This is why.)  When a show is selling really well, they wonder why we don't offer performers more money. When a show is selling moderately well, the same performers who wish we could offer them more money will tell their friends to "go on Goldstar to get half price tickets".

Many shows lose money, especially musicals with large casts.  Yes, they can sell well, but even if the actors are working basically free, expenses such as costumes and cast comps are proportional to the number of performers, and the house holds exactly the same number of paying customers whether the show's expenses cover a cast of 2 or a cast of 20.

Let's do the math.  The estimated production budget for RENT was $29,315.  While our base ticket price is $23, the average revenue we realize per seat is a good deal lower, when you include comps, subscribers (whose per-show cost is around $16), and so on. Let's be generous and say we make $20 per seat, which I can assure you is an over-estimate.  RENT was performed in-the-round, a configuration that accommodates about 150 patrons.  Doing the arithmetic, we need to sell out ten performances just to break even, assuming the show doesn't go over budget in any way.  (The books aren't closed yet, so I don't know if it went over budget.)

So "highest grossing show ever" does not mean the theater's flush with cash.  It means the show did not lose money, it made a modest amount over budgeted expenses, and will make it possible for the theater to finish the year in the black and not in the red.

It'd be great if more performers understood that equation, but given how many small theaters have shut down in last few years because of bankruptcy or poorly-managed finances, and how many more teeter for years on the brink of extinction, maybe this is the most that board members can ask for these days.  I encourage actors and directors who've never tried their hand at the business of show business to get themselves invited to sit in on a couple of board meetings to understand why it's kind of a thankless job.

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