The Economics of Entertainment

The woman is swaying in her seat, inhaling in a drunken hiss and dragging her feet along the floor. The driver stares straight ahead, looking mildly uncomfortable.

Grinning, her head wobbling slightly on her neck, she leans as far forward as possible and whispers loudly to the cabbie, “I looove you!”
The other people in the room – and the director, Paul Bianchi – laugh.

The woman and the man acting as the cabbie are seated in two chairs in the middle of the Ann Arbor Civic Theatre studio in downtown Ann Arbor – a high-ceilinged, mostly empty room with a wood-paneled floor and a piano at one end. It’s an evening in early June, and they’re auditioning for “Hellcab,” a play depicting a day in the life of a Chicago cab driver.

A day in the life of AACT itself is challenging in a different way. Like virtually all nonprofits, including those in the performing arts, the local theater faces some less-than-entertaining concerns this season. Although leaders of the theater say it isn’t in crisis, the nonprofit has made some cuts to save money, and is trying to get creative about ways to bring in revenue.

Performing Well, Despite the Economy

Overall, AACT has been “pretty lucky,” said Suzi Peterson, the theater’s managing director. They don’t depend heavily on grants for funding, which has helped, since that source has dried up somewhat as funders face their own financial struggles. And donations from individuals are on the rise. In fact, the theater’s membership and individual giving is higher than it’s been for the past several years, Peterson said. Membership giving and donations account for $20,000 of the past season’s $200,000 budget. Peterson said that’s roughly 20% more than last year and quadruple what it was in the year 2000.

“That sort of income is doing pretty well,” she said. “Our donors have been really supportive.”

However, corporate donations aren’t as strong. “It’s going to be a lot tougher this coming season,” Peterson said. “Companies just don’t want to let go of their money.”

Corporate donations accounted for about $50,000 of funding for the theater’s last season. That amount has stayed steady in recent years, but theater staff expects that it may drop next season. Corporate and individual donations (including grants, which Peterson said vary) make up 40% of the theater’s funding. The remaining 60% comes from ticket sales. Ticket sales have decreased somewhat, but they’re holding fairly steady. Peterson attributes this to AACT’s move to reduce prices last summer. “I think because of that, people were more able to afford seeing one of our shows,” she said.

Ann Arbor Civic Theatre isn’t alone in facing fallout from a struggling economy. Another local theater, Performance Network, announced in April that it needed $40,000 or it would close – an appeal that resulted in a rush of donations. Peterson said the Civic Theatre didn’t notice any impact from that situation – that is, it didn’t appear that donors shifted funding from their theater to Performance Network. And Civic Theatre workers wanted Performance Network to pull through. ”We’re all sort of in this – the arts business – together,” Peterson said.

As for sending out financial alerts of its own, Peterson said she didn’t recall ever doing that, although they have faced tough times in the past. ”We’ve had some lean years,” she said. “And we’ve definitely had some emergency meetings trying to figure out what to do.”

Final results aren’t yet in for the theater’s current fiscal year, which ends June 30. The theater’s main stage season (which includes large productions at the Lydia Mendelssohn and Arthur Miller theaters on the University of Michigan campus) runs from September to June. The studio series, which involves smaller productions, takes place in July and August.

Although the theater isn’t facing any financial crisis at the moment, Peterson said the staff has still enacted cost-cutting measures “just in case” there’s a drop in funds next season. Their goal is to turn out productions of the same quality for less money.

A little over half of their $200,000 budget is used for productions, and the rest goes to overhead. AACT doesn’t own the buildings it uses, so it has to pay rent. And there are salaries for its workers. The theater employs five paid workers. Two of them – including Peterson – work half-time. The others work only a few hours a week, Peterson said.

Advertising is one “really expensive” area that has been cut, Peterson said. The theater is looking for alternative, free ways to spread the word about their work, such as creating a Facebook page and further expanding the theater’s online presence.

They also save money on costumes by not buying new ones for each show. “Instead of buying costumes that we need, we have several volunteers that build new costumes themselves,” Peterson said. AACT maintains a costume shop – located in the same building as the theater’s studio at 322 W. Ann St. – where costumes used in productions over the years are saved for future use. Although they don’t keep all of their costumes because of space constraints, Peterson explained that they hold onto “really unique” ones. For example, they’ve kept some heavily beaded gowns that took hours of labor to create. They also keep costumes that were made for specific animals or characters in their productions. “There are some it feels like we reuse every year,” she said.

The theater also recycles props and wood and materials from its sets. “We’re just trying to find ways to build sets economically,” Peterson said.

Using email and the internet instead of paper to communicate with its donors and audience is another way that the theater saves money, since printing is expensive, Peterson said.

The one thing they don’t want to cut is their performances. “We don’t want to cut the number of productions we do because they’re important,” Peterson said. The past season included 13 productions: 6 main stage, 2 junior theater and 5 studio series. That’s 2 more productions than the previous year, which Peterson said is a response to more people wanting to direct shows.

Season tickets for the Civic Theatre’s next season are currently on sale, and Peterson said the budget for the next season is in place. And although they’ve made cuts just to be safe, she noted that the theater has seen a good response for next season already.

Actress and AACT board member Kathleen Beardmore expressed optimism for the upcoming season. “I just feel really good about this upcoming season and its ability to draw a variety of audiences,” she said.

Beardmore, who was on the play selection committee for the season, explained that this year’s lineup includes some well-known pieces – like “The Producers” – that are bound to draw people in. She said the selection of shows also represents a variety of themes, from lighter to more serious. “We’ve got a nice variety,” Beardmore said. “I think that gives us a chance to draw an audience from a variety of directions.”

In terms of cost-cutting measures, Beardmore said that the board looked at “both sides of the equation” – expenses and revenue. She agreed that the theater wants to preserve its wide variety of quality programming. “I think we have to be careful about not cutting too deep,” she said. “We don’t want to cut so deep that we change the essence of the organization.”

Instead, the theater is trying to focus on individual donors. Beardmore said AACT is fine-tuning its message to remind people of what they personally get out of the organization.

Second, the theater is looking to events other than shows for fundraising. They recently held a wine-tasting, for example. “We don’t have to just do things that center on performance,” Beardmore said.

Finding Value in the Arts

Peterson said she’s aware that several local arts organizations, including University Musical Society, are still waiting on grant money from the state that they may never get. “There’s a part of me as a private citizen, I understand the state is just in awful shape,” Peterson said. “But I don’t like the idea that the arts is the first to get cut.”

Following the “Hellcab” audition, Paul Bianchi spoke to The Chronicle and echoed Peterson’s sentiments about the importance of funding for the arts. Cutting arts funding from the state is “penny wise, pound foolish,” he said. “That’s seed money that grows.” He explained that many other businesses – such as restaurants and parking facilities – profit from cultural activities.

Peterson emphasized that theater and the arts play a vital role in the community in other ways. One of the ways the theater specifically impacts Ann Arbor is by exposing children to the arts through its junior theater program. “We’ve seen so many kids come into the program…not really knowing what the arts are,” she said. Those same kids come out of the program with not only a better understanding of the arts but more self-esteem and confidence from being onstage, Peterson said.

But a trip to the theater isn’t just good for kids. Many of AACT’s patrons have problems in their lives with finances or family or both. When they come to see a performance, they can spend two hours and “not have a care in the world,” Peterson said. She described the theater as having the ability to “lift you away from your struggles,” if only for a few hours.

Sha James, one of the actors at the “Hellcab” audition, said the theater offers a unique opportunity by bringing together people of all ages and ethnic backgrounds. “If anything needs funding, I think it’s the arts,” James said. “Where else could I go and meet so many other different people?”

David Babcock, who also auditioned for the play, agreed that people should still make funding the arts a priority in hard times. “I know that it’s tough for everybody,” Babcock said. “But if people are regular givers to the theater, they should try to budget that in.”

Besides donating money, community members can help out the theater by volunteering. Whether it’s helping to sort out costumes or working backstage, there are many ways to contribute, Beardmore said. The theater has supporters and members from all walks of life and all professions, which Beardmore identified as one of its “greatest assets.”

“We have to keep a place in our world, as we face hard economic times, for the arts,” Beardmore said. “The arts are often where you’re seeing innovation, and if we don’t need that in our community, what do we need?”

Overall, Peterson said she’s nervous about the theater’s future but feels that it will pull through. After all, it’s already survived 81 years.

“We made it through this long. We’ve just got to stay hopeful,” Peterson said. “We have no idea what this next season is going to hold.”

About the writer: Helen Nevius, a student at Eastern Michigan University, is an intern with The Ann Arbor Chronicle.