Ten months into their pandemic-induced hibernation, midsize performing arts groups are surviving on a subsistence diet: Their staffs cut to the bone and earned revenue hovering around zero, they’ve sustained themselves on a diet of donations, salary reductions, and slashed production costs.
There are bright spots: Digital offerings, once little more than a performer streaming from a living room, have become increasingly sophisticated, with multiple cameras, open rehearsals, and “backstage” access. The pandemic relief bill, with its $15 billion earmarked for performing arts, may also represent a welcome cash infusion for many.
But mainly there’s uncertainty: Most organizations have drafted multiple budgets for 2021. Live performance dates are written in pencil, and while Dr. Anthony Fauci, the nation’s top infectious disease expert, recently said he believed theaters could reopen in the fall, the future remains far from clear.
“There’s no such thing as a budget: It’s called survival,” said Josiah A. Spaulding Jr., president and CEO of the Boch Center. “You really have to do 85 percent capacity to break even, so if you’re doing 25 percent occupancy, social distancing, we’re not going to open.”
The region’s midsize performing arts organizations, many of which are supported in part by endowments ranging from $7 million to $30 million, have many fewer resources than large cultural organizations such as the Boston Symphony Orchestra,whose endowment weighed in at $456 million last year. But they also have many fewer costs: no full-time orchestra to maintain, and that’s to say nothing of properties like Symphony Hall and the sprawling campus at Tanglewood.
These smaller arts nonprofits are mainstays of a statewide cultural economy devastated by the pandemic: Whereas the sector’s pre-COVID 19 economic impact in the state was valued at $2.3 billion, the first seven months of closures affected some 30,000 sector jobs and erased nearly $500 million in revenue, according to the Mass Cultural Council.
The Boch Center, which operates the Wang and Shubert theaters, has been particularly hard hit. Spaulding said that after laying off more than 200 part-time workers, shrinking the full-time staff from 50 to 15, and implementing pay cuts, the organization is still on track to lose an estimated $40 million if it remains closed through September.
The Huntington Theatre Company, which operates the Huntington Avenue Theatre and the Calderwood Pavilion at the Boston Center for the Arts, has also seen major reductions, furloughing nearly half its full-time staff, reducing hours for many of those who remain, and making deep cuts to its operating budget.
“We’re basically operating on a little under 50 percent of our normal operating budget,” said managing director Michael Maso. “We’re paying for that mostly through contributed revenue.”
He added that companies such as the Huntington can reduce their budgets so drastically because there’s much less money flowing through the organization: Ticket sales have evaporated, but so have production costs.
“We’re not producing plays,” he said. “We have a fabulous production staff, and almost all of those folks are furloughed because there are no productions to build.”
Groups that don’t have to maintain a physical theater can bring costs even lower.
“There are certain advantages to not being big in this environment,” said David Snead, president and CEO of the Handel and Haydn Society, who hasn’t reduced the organization’s administrative staff. “We don’t have a high payroll. We don’t have 100 musicians. We don’t have a building. Our fixed costs are pretty low, so when it came time to right-size to the available resources, that was something that we could do.”
“It’s the one time I would say the business model kind of acted in our financial favor,” said Gary Dunning, Celebrity Series of Boston president and executive director. He added that although he’s managed to keep on most of Celebrity Series’s full-time staff, workers he usually pays at venues around town are hurting.
“There are well over 250 people we engage through various vehicles, gig workers,” he said. “They are not receiving anything from Celebrity Series.”
So far, digital performances haven’t brought in much revenue, but they have helped organizations stay close to their subscriber base. In many cases, digital programming has enabled groups to reach broader audiences as well. Handel and Haydn’s joint venture with GBH to produce a socially-distanced “Messiah” last month netted some 140,000 viewers across all platforms — a massive expansion on the roughly 7,000 patrons who would typically see performances live at Symphony Hall.
“Our goal is not really about revenue in these streams,” said Snead. “It’s about connecting and growing the brand.”
Other groups have been innovating with the digital format as well. The Huntington has launched “Dream Boston,” a series of original audio plays by local playwrights. Celebrity Series’s upcoming season includes performances from local and international stages, and in late January the Boston Lyric Opera will release an animated stop-motion version of “The Fall of the House of Usher” by Philip Glass.
What’s clear is that some form of digital programming is here to stay, said Michael J. Bobbitt, incoming executive director of the Mass Cultural Council.
“Digital theater certainly has been the biggest thing for most arts organizations,” said Bobbitt, who currently serves as artistic director at the New Repertory Theatre in Watertown. “What can we do to make the space available for people that cannot get to your theater? How can we use our massive amount of creativity to merge live and digital?”
Many midsize cultural heads said their economic pain has been reduced by increased donations. At the Huntington, board members established an emergency fund to help keep employees on the payroll longer and the BLO’s board launched a multi-year $7 million funding initiative to support operations.
“This is the total we would need to give us some breathing room,” said BLO general and artistic director Esther Nelson, whose operating budget this year has shrunk nearly in half.
Similarly, thousands of regular patrons have helped bolster these groups’ finances by donating the ticket price for canceled shows.
“The vast majority of people have let us keep that revenue as a donation” said Snead, echoing several cultural heads.
But while increased donations have insulated some groups from the worst economic ravages, they may also make it harder for the city’s performing arts organizations to access the $15 billion earmarked for the arts in the latest pandemic relief package.
The grants will be disbursed in tiers during the first four weeks they are available: Only entities that have lost 90 percent of their gross revenue can apply during the first two-week tranche, followed during the second two-week round by applications from those that have lost 70 percent of their revenue. No more than 80 percent of the funds (or $12 billion) can be awarded in the first four weeks.
Organizations that don’t qualify for the early rounds will be left to compete with thousands of other such entities across the country for the remaining $3 billion. For these groups, it may be safer to apply for funding through the Paycheck Protection Program, a forgivable loan program included in the latest relief package.
“There’s a high risk they’ll run out [of grant money],” said Nelson. “Based on what I know now, we’re probably better off doing the PPP.”
Organizations that do qualify for the grants, however, could initially receive an amount equal to 45 percent of their 2019 gross earned revenue, capped at $10 million. Among them is the Boch Center, where Spaulding said he believed the organization will be eligible to apply in the first round and would qualify for the full $10 million.
“It will have a major play in us being able to survive,” said Spaulding, who added the money wouldn’t stop the Boch Center from emerging a smaller organization. “We’re going to open leaner and meaner.”