The news spread quickly — and far. A social media post from Atlanta Lyric Theatre on March 7 stated that the company had closed its doors after 42 years. The announcement caught most everyone off guard, not just because of its abrupt nature (no capital campaign or last-ditch effort to save the organization) but the unsettling reminder that arts organizations can be fragile.
On March 9, Decatur’s OnStage Atlanta sent out a plea to its patrons to help raise $150,000 to work on paying back an Economic Injury Disaster Loan, as well as rent and utilities. According to Barry West, the company’s board chair, the company has so far reached a third of its goals.
During the pandemic, theaters have collaborated and talked regularly. Alex Scollon, managing director at Actor’s Express, spearheaded a recent open letter to the community, signed by dozens of arts leaders, discussing life after the pandemic and their financial dilemmas.
According to the letter, “coupling lower than average attendance with the fact that arts funding is the smallest fraction of philanthropic giving means that there are simply not enough resources available for the short term health and long term viability of the Metro Atlanta cultural arts community.”
The letter says the pandemic exacerbated what was already a challenging situation. “Community funders and foundation leaders who previously funded the arts have significantly delayed releasing funds, have not focused on the arts during the pandemic and recovery or have ended their arts support altogether,” the letter states.
Many theaters operate without a safety net and a financial reserve that can tide them through a rough period. “The tricky thing that everyone is trying to navigate is, if it’s true that one underperforming show can really complicate your operations or threaten your existence, what happens when you have multiple underperforming shows in a single season?” Freddie Ashley, artistic director of Actor’s Express. says. “How long is that sustainable?”
ArtsATL recently spoke to theater administrators across the city to gauge how they are coping financially with the last three devastating years.
Mike Schleifer, managing director of the Alliance Theatre, is brutally honest that his company is in a deficit position this season and will be so again next year. “It used to be the exception, not the rule, that a theater would be in a deficit position,” he says. “Right now, I don’t know of a theater that is not. Now it’s the exception, not the rule, to be balanced.”
An existential crisis exists, he believes, around the American regional theater, and while the Alliance has been in a position to weather the storm, not everyone is able to. “The Lyric is an illustration of that, but they are not the only canary in the coal mine.”
Schleifer says that most theaters operate without any safety net. An artistic director friend of his always used to say he was two bombs away from closing — and that was a decade ago. A new national group Schleifer is part of, the Professional Nonprofit Theater Coalition, formed to work on government relationships and advocacy. In a recent survey of its members, 57 percent indicated their theater only has enough cash on hand to support operations for six months or less, and 11 percent reported only enough for a calendar year. All respondents indicated they would have a deficit in fiscal 2023.
Even reserves seem to be dwindling. “Lots of folks have burned their reserves and are tapping their endowment if they are lucky enough to have one,” Schleifer says. “If not, they are trying to establish lines of credit. If they can’t do that, they’re doing last-minute and last-ditch sustainability campaigns. And some are closing.”
As the producing artistic director of Georgia Ensemble Theatre, Anita Farley thinks a lot of theaters are within a couple of payrolls from having to shut their doors. “We are all living on the edge,” she says. “I think it’s pretty serious.”
It has been particularly challenging to get audiences back for the Roswell troupe. “Last year, it seemed like every time we were on track to get back, we had to make adjustments — and those adjustments cost money,” Farley says. “We went into this year with less money and audience members were skeptical [about returning].”
In February, the company hosted a benefit performance of Love Letters with performers Tony Shalhoub and Brooke Adams. The event was profitable and helped the company get through their recent production Women in Jeopardy, pushed back from a January bow. They are, however, looking at a new model of how to run the theater. Last week, the company announced that James Donadio, the organization’s artistic director, is stepping down.
Chandra Stephens Albright, managing director of True Colors Theatre Company, agrees that virtually all theaters, including hers, are in a deficit. Thanks to a Small Business Administration loan, True Colors was able to hang onto staff, offer virtual programming and finish up a five-year strategic plan. “We used that to keep us on course and stay focused [on important issues],” says Albright.
Their audience has been slower to return than others, especially because they serve an older Black female population — an age group hit hardest by Covid.
Both Matt Torney, artistic director of Theatrical Outfit, and Natalie Barrow Delancey, executive director of City Springs Theatre Company, are fairly new to running their organizations. Torney replaced Tom Key, who held the artistic director job at Theatrical Outfit for 25 years, and, on his first official day, Torney had to cancel a season. He also inherited a capital campaign for renovations.
“Our journey has been a little different,” he says. “We’re on steady financial ground but, like every organization in the county, under pressure.” Outfit was able to build up an operating reserve during the pandemic with the capital campaign but has yet to return to a sustainable business model in terms of audiences. “I would not say we’re hitting the panic buttons, but we are recognizing the industry is fundamentally changed.”
City Springs has a small budget deficit but nothing that should be too severe, says Delancey. Yet, with audiences picking and choosing what they’re going to see these days — and more day-of-show purchases and less season subscriptions — sales are not where they need to be. All of the company’s productions are musicals, too, with large casts and plenty of expenses.
A priority moving forward is to build reserves. “With us only being in season five, we haven’t had time to build [those],” Delancey says. “Over time, we will be very focused on that. My primary focus outside of running the theater is raising money.”
Although they, too, are operating with a small deficit, Aurora Theatre is sound for now, says managing director Katie Pelkey, who says that the Lawrenceville-based company was putting in financial practices before the pandemic to make sure they were maintaining and replenishing reserves. They are slowly building their base up again. “Pre-pandemic, our subscriber base was about 5,000 people for the signature series,” she says. “We are back up to just shy of 3,000 now.” It helped considerably that Aurora never closed and was able to reach people with events such as outdoor shows.
Synchronicity Theatre’s numbers have been trending a little higher than the national average for ticket sales, according to artistic director Rachel May. The company also generates money with rental opportunities. “We have been fortunate in that way,” says May. “We are unique in that we have three spaces we can rent to other organizations and have a lot of classes and camps around the city that are an income generator. We have a number of earned income streams that have helped when ticket sales aren’t there.”
Jeff Watkins, artistic director of Shakespeare Tavern, feels fortunate that the company finished a capital campaign in March 2020 before the pandemic and used some funds for reserves. He calls the company stable but says if next year doesn’t improve, he might have to make changes. What he does worry about is paying his staff. “Unlike a lot of theaters, we are open every week of the year and we’re issuing 50–60 paychecks a week,” he says.
For Paul Conroy, artistic director of Out Front Theatre Company, creating more special programming, using his cabaret space more and creating free events to drive awareness has been his approach. He says his company is not doing wonderfully but not doing poorly either. Meanwhile, Carolyn Cook’s Théâtre du Rêve — a recent guest at Out Front — is on solid financial ground. Cook, who serves as producing artistic director, attributes this to not having the overhead of a venue, generally producing only once a year and being, as she says, “tiny.”
As challenging as the Covid era years have been, many theaters have had much to crow about. Aurora opened the new $35 million Lawrenceville Arts Center in 2021, and Theatrical Outfit is debuting its long-planned new lobby. Out of Hand’s Equitable Dinners events and collaborations have exploded, according to Ariel Fristoe, the company’s artistic director. Some recent local productions have been commercial successes, such as Alliance’s The Hot Wing King, Out Front’s fall musical Kinky Boots and Theatrical Outfit and Dad’s Garage’s The White Chip.
While many Broadway shows closed early during the pandemic, The Broadway League reported for the week ending March 19, 2023, that 29 productions had collective grosses of $34,124,422 and an audience of 259,832, compared to grosses of $26,657,435 and an audience of 196,039 the same week in 2022. Among the productions on Broadway that were at 100 percent capacity are & Juliet, Six, Parade 2023, Hadestown and Hamilton. The hope is that, slowly, audiences are coming back.
To encourage stability among the arts, organizations in Atlanta prepared a five-pronged plan to “to fundamentally change how arts and culture are supported in the city and move the industry forward, not based on scarcity but instead on a model designed to let the arts thrive as a core value of our city and state,” according to the open letter.
Strategies include reaching out to philanthropic foundations for donations; proposing doubled grant-making for the state while enabling easier fund access; asking the Community Foundation of Greater Atlanta to hire an arts program director; requesting that tax credits for film and TV industries be extended to arts nonprofits; and calling upon media companies to advocate for the arts. Patrons are asked to attend arts events again, spread the word and financially support if able.
One administrator who’s advocating for changes in the business model of how theaters run is Lisa Adler, producing artistic director of Horizon Theatre. She hopes the idea of tax credits for the arts is one that can get off the ground soon and is excited that individuals are asking the film industry to make investments in nonprofits.
The message she wants to put out is not one of gloom and doom but that the theater community is proactively working to adapt. “We are responsible business people; we are putting plans in place for our organizations to survive and strive,” she says. “But we are calling the alarm that we need help and are getting ahead of the problem rather than waiting until we are ready to close and call the problem out. We don’t want people to think everything is going to close tomorrow because that is not the case.”
Jim Farmer covers theater and film for ArtsATL. A graduate of the University of Georgia, he has written about the arts for 30-plus years. Jim is the festival director of Out on Film, Atlanta’s LGBTQ film festival. He lives in Avondale Estates with his husband, Craig, and dog, Douglas.