Conditions and needs of the professional American theatre

j Report #11

Conditions and Needs of the str"™"1

Professional American Theatre

Research Division
May 1981

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Conditions and Needs of the
Professional American Theatre

National Endowment for the Arts, Washington, D.C.

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Library «f CMfrai Catalaf leg !■ PafeUcatfoo Data

National Endowment for the Arts. Research

Division.

Conditions and needs of the professional
American theatre.

(National Endowment for the Arts Research
Division reports ; 11)

"A condensed version of the report and
exhibits prepared by Math tech, Inc.

1. Theater— Economic aspects — United States.
I. Mathtech, Inc. II. Title. III. Series:
National Endowment for the Arts. Research
Division. Research Division report ; 11.
PN2293.E35N37 1981 338.4' 7792' 0973 80-12678
ISBN 0-89062-076-8

Manufactured in the United States of America

PREFACE

This report originated in a request to
the National Endowment for the Arts dur-
ing the Senate Appropriation Hearings in
spring 1976. Senate Report #94-880, on
the Arts, Humanities and Cultural Affairs
Act of 1976 (printed May 14, 1976 to ac-
company S.3440) included the following:
"The Committee notes favorably that the
Arts Endowment has increased its capabili-
ty to research needs in the arts. In this
regard, the Committee wishes especially
to emphasize that its requested study of
theatre needs, including the commercial
theatre as it relates to non-profit the-
atre activities and as general needs re-
late to the entire development of this
important art form, is long overdue. The
Committee expects a thorough report on
this matter within the next year."

The Congressional request resulted in
planning and preparation by the Research
Division of the National Endowment for the
Arts to develop the project subsequently
undertaken. Preparation included many
meetings and correspondence with the the-
atre community, but one particularly im-
portant development was the gathering of
representatives of theatre associations
and service organizations with research
capabilities on August 3, 1976, at which
information on current research activities
was exchanged by the League of New York
Theatres and Producers, American Theatre
Association, Black Theatre Alliance, The-
atre Communications Group, League of Resi-
dent Theatres, Off-Off-Broadway Alliance,
First American Congress of Theatre, Thea-
tre Development Fund, Actors' Equity Asso-
ciation, and the Council on Foundations.
Other meetings were organized independent-
ly by various groups in the theatre commun-
ity to provide advice and suggestions on
the type of research project that would be
most valuable. The Research Division's
deepest thanks go to all of the organiza-
tions and individuals who helped in the
formulation of the research plan.

The research project that was defined as
a result of the preparatory efforts was
organized in two phases. The first phase
was an intensive effort to collect, ana-
lyze, and report existing information that
describes the current conditions and needs
of professional American theatre. In the
second phase, an ad hoc advisory group,
broadly representative of the American
theatre, was organized to guide the work
of data collection and analysis and then
to utilize the information collected to

make recommendations on how to meet the-
atre needs. In both phases, the work was
responsive to the Congressional mandate to
investigate the needs of both nonprofit
and commercial theatre.

A first step in the research project was
to advertise for proposals. This was done
by means of a program solicitation re-
leased from the Research Division on Feb-
ruary 1, 1977. The competitive proposals
were evaluated at a special meeting by
representatives of both the nonprofit and
commercial theatre communities and by pro-
fessional researchers. Acting on the rec-
ommendation from the evaluation panel for
the proposals, a contract was entered into
by the Arts Endowment with the research
firm of Math tech, Inc. in Princeton, New
Jersey on May 12, 1977. An advisory group
was then formed with Harold Prince as
chairman. The other members of the advi-
sory group are named on page 7. Harold
Prince, as a member of the National Coun-
cil on the Arts, provided a strong liaison
between the advisory group and the council.
The Mathtech, Inc. research team was led
by Dr. Robert J. Anderson, Jr. assisted by
Hilda Baumol, Sonya P. Maltezou, and Rob-
ert Wuthnow.

Research Division Report #11 is a con-
densed version of the reports and exhibits
prepared by Mathtech, Inc. These have
been combined with the recommendations of
the advisory group ' s report presented here
in its entirety. The Mathtech, Inc. ma-
terial has been extensively summarized
as a practical necessity in view of the
quantity of detailed data, annotation,
and information source references they
contain. In the summary, data are pre-
sented with tables and figures when points
require visual elaboration, but such il-
lustrations are omitted when concepts and
conclusions could be presented succinctly
without them. However, the reader is re-
minded that this is a summary. For com-
plete information supporting the more
complex material, the original Mathtech
reports (listed at the end of this pre-
face) should be consulted. All of them
are available for study by those students
of professional American theatre who re-
quire more complete explanations and a
fuller presentation of findings than are
contained in the condensation. Persons
who wish to see the complete material are
invited to do so through the library of
the National Endowment for the Arts , which
maintains both reference copies and copies
available for inter library loan. Arrange-
ments to borrow the loan copies or to
work with the reference collection may
be made by contacting the Library , National

CONTENTS

PREFACE /page 2

LIST OF TABLES /page 4

LIST OF FIGURES /page 6

RECOMMENDATIONS OF ADVISORY GROUP /page 7

CHAPTER I

SUMMARY AND CONCLUSIONS /page 17

CHAPTER II

THEATRE ACTIVITY: ATTENDANCE, ORGANIZATION, AND AUDIENCES /page 21

CHAPTER III

THEATRE FINANCES /page 48

CHAPTER IV

THEATRE LABOR FORCE AND EMPLOYMENT /page 98

CHAPTER V

THE THEATRE COMMUNITY VIEWS ITSELF /page 109

CHAPTER VI

THE CONTRIBUTION OF THEATRE TO THE NATIONAL ECONOMY /page 127

REPORTS IN THE NATIONAL ENDOWMENT FOR THE ARTS RESEARCH DIVISION SERIES /page 131

Endowment for the Arts, Room 1256, Wash-
ington, D.C. 20506; 202/634-6740. The
reports and exhibits listed below are
available for examination there.

Research Division

National Endowment for the Arts

May 1981

Math tech, Inc. Executive Summary, The
Condition and Needs of the Live Profes-
sional Theatre in America, Phase I Report;
Data Collection and Analysis. Princeton,
1978.

. The Condition and Needs

of the Live Professional Theatre in Amer-
ica, Phase I Report; Data Collection and"
Analysis. Princeton, 1978.

. The Condition and Needs
of the Live Professional Theatre in Ameri-
ca, Phase II Report; Recommendations.
Princeton, 1979.

. The Condition and Needs

of the Live Professional Theatre in Ameri-
ca, Exhibit Volume I (Statements by The- *
atre Organizations) . Princeton, 1978.

The Condition and Needs of

the Live Professional Theatre in America,
Exhibit Volume II (Summary of Round table-
Discussions) . Princeton, 19 78.

_^___^ . The Condition and Needs of

the Live Professional Theatre In America,
"Transcript of Theatre Research Project
Advisory Group Roundtable, New York City,
9:00 a.m., October 18, 1977." Princeton,
1978.

. The Condition and Needs of

the Live Professional Theatre in America,-
"Transcript of Theatre Research Project
Advisory Group Roundtable, New York City,
2:00 p.m., October 18, 1977." Princeton,
1978.

. The Condition and Needs of

the Live Professional Theatre in America,
"Roundtable Discussion on Professional
Theatre in America Today, Los Angeles,
10:00 a.m., October 20, 1977." Princeton,
1978.

_____^ . The Condition and Needs of

the Live Professional Theatre in America T~
"Roundtable Discussion on Professional
Theatre in America Today, Los Angeles,
2:25 p.m., October 20, 1977." Princeton,
1978.

LIST OF TABLES

1 Regional distribution of theatre facilities and companies 1977 /page 16

2 Attendance by theatre type 1976-77 /page 22

3 Regional distribution of facilities suitable for Broadway tryouts
or touring 1976-77 /page 28

4 Regional distribution of dinner theatres 1977 /page 31

5 Regional distribution of summer stock companies 1977 /page 32

6 Regional distribution of summer musical theatres 1977 /page 34

7 Regional theatres with 1977 budgets over $250,000 /page 34

8 Sources of theatre information /page 43

9 Average production costs of Broadway plays and
musicals 1965-67 and 1975-77 /page 51

10 Cast size of Broadway plays and musicals between
1964-65 and 1975-76 /page 54

11 Average weekly operating expenditures of Broadway
plays and musicals 1965-67 and 1975-77 /page 57

12 Average weekly box office receipts of Broadway plays
and musicals 1965-66 to 1976-77 /page 61

13 Average cash flows of Broadway plays and musicals
1965-66 to 1976-77 /page 64

14 Annual rates of increase of Broadway financial indicators
1965 to 1977 /page 65

15 Average Broadway profits and recoupment periods for successful
plays and musicals 1965-66 to 1976-77 /page 65

16 Income and expenditures of fifty-nine larger nonprofit
theatres 1976-77 /page 66

17 Income and expenditures of thirty larger nonprofit
theatres between 1965-66 and 1976-77 /page 66

18 Rates of increase in income and expenditures of thirty larger
nonprofit theatres 1965 to 1977 and 1970 to 1977 /page 67

19 Average expenditures of thirty larger nonprofit theatres
between 1965-66 and 1973-74 /page 68

20 Annual rates of increase in expenditures of thirty larger
nonprofit theatres between 1965-66 and 1973-74 /page 71

21 Average expenditures of fifty-eight larger nonprofit theatres
by budget size 1976-77 /page 70

22 Average earned income of thirty larger nonprofit theatres
between 1965-66 and 1973-74 /page 72

23 Annual rates of increase in earned income of thirty larger
nonprofit theatres 1965 to 1974 /page 73

24 Sources of public and private support for thirty larger
nonprofit theatres between 1965-66 and 1976-77 /page 76

25 Income and expenditures of 113 developmental
theatres 1976-77 /page 79

26 Annual rates of increase in income and expenditures of thirty
developmental theatres between 1972 and 1977 /page 81

27 Average income and expenditures of fourteen larger developmental
theatres between 1972-73 and 1976-77 /page 80

28 Average income and expenditures of sixteen smaller developmental
theatres 1972-73 and 1976-77 /page 80

29 Average expenditures of three developmental theatres with 1971-72
budgets under $10,000 — 1971 to 1976 /page 82

30 Average expenditures of two developmental theatres with 1971-72
budgets of $10, 000-$25, 000—1971 to 1976 /page 84

31 Average expenditures of three developmental theatres with 1971-72
budgets of $50, 000-$80,000— 1971 to 1976 /page 86

32 Average expenditures of two developmental theatres with 1971-72
budgets of $100, 000-$150, 000— 1971 to 1976 /page 88

33 Annual rates of increase in expenditures of five developmental
theatres 1971 to 1976 /page 90

34 Average expenditures of New York City, regional, and ethnic
developmental theatres 1976-77 /page 91

35 Dnion and association membership 1961 to 1976 /page 98

36 Actors' Equity Association U.S. member work weeks by theatre
type 1967 to 1976 /page 103

37 Growth rate of selected weekly salaries between
1964 and 1977 /page 105

38 Growth rate of larger nonprofit theatre wage bill categories
1965-66 to 1973-74 /page 108

39 The multiplier process applied to a theatre dollar /page 128

40 1977 estimated expenditure base by theatre type
(millions of dollars) /page 129

41 1977 estimated audience expenditures (millions of dollars) /page 129

42 1977 estimated theatre economic impact (millions of dollars) /page 130

LIST OF FIGURES

I Attendance by theatre type 1976-77 /page 24

II Annual Broadway productions 1900 to 1977 /page 26

III Road activity — playing weeks in key cities 1948 to 1976 /page 29

IV Sources of plays produced on Broadway between 1964 and 1977 /page 36

V Sources of musicals produced on Broadway between 1964 and 1977 /page 37

VI Production costs of Broadway plays 1965-67 and 1975-77 /page 52

VII Production costs of Broadway musicals 1965-67 and 1975-77 /page 53

VIII Operating expenditures of Broadway plays 1965-67 and 1975-77 /page 58

IX Operating expenditures of Broadway musicals 1965-67 and 1975-77 /page 59

X Relative importance of "other income" for selected successful
Broadway plays and musicals 1965-66 to 1976-77 /page 62

XI Sources of private support for thirty larger nonprofit
theatres between 1965-66 and 1976-77 /page 74

XII Sources of public support for thirty larger nonprofit
theatres between 1965-66 and 1976-77 /page 75

XIII Public and private support for thirty larger nonprofit
theatres as a percent of operating expenditures between
1965-66 and 1976-77 /page 78

XIV Sources of public and private support for ten New York State
developmental theatres 1970 to 1976 /page 95

XV Sources of public support for fifty-four developmental,
theatres 1976-77 /page 96

XVI Sources of private support for fifty-four developmental
theatres 1976-77 /page 97

XVII Actors' Equity Association and civilian employment
1961 to 1975 /page 100

XVIII Average work weeks of Actors' Equity Association U.S. and
Canada members 1961 to 1975 /page 102

XIX The theatre's relation to the economy /page 126

RECOMMENDATIONS OF ADVISORY GROUP

Background . Phase II of the study on con-
ditions and needs of American professional
theatre called for recommendations by an
advisory group appointed by the National
Endowment for the Arts. These recommenda-
tions were to be based on statistical and
analytical data collected during Phase I
and the personal experiences, as theatre
professionals, of the advisory group mem-
bers. Those serving on the advisory group ,
representing a broad range of theatre con-
stituencies, are listed opposite.

The advisory group met seven times: three
meetings during the course of Phase I were
held to review with the contractor ' s re-
search staff the progress of their study
and to suggest areas needing stronger fo-
cus or more detailed information during
the short time available under the contract
terms , and four meetings were held to formu-
late recommendations to the Congress on
behalf of the future of American profes-
sional theatre. All material amassed by
the research staff and included in its
Phase I report to the National Endowment
for the Arts, as well as the personal ex-
pressions of the advisory group members,
served as the base for the development of
the recommendations included in this re-
port (Phase II of the study) .

The scope of inquiry. For purposes of
this study, professional theatre was de-
fined by the National Endowment for the
Arts as "the live professional presenta-
tion of plays, with or without music, be-
fore an. . .audience in the United States
and its territories . " The Arts Endowment
further directed that "both professional
not-for-profit and commercial theatre are
included in the definition and must be
considered in the research project."

During the formulation of its recommenda-
tions, the advisory group studied in de-
tail the statements prepared by the fol-
lowing theatre-interest organizations:
Actors' Equity Association, Off -Off -Broad-
way Alliance, Alliance for American Street
Theatre, Dramatists Guild, The League of
Resident Theatres, American Theatre Asso-
ciation, League of New York Theatres and
Producers, American Community Theatre As-
sociation, Performing Arts Repertory The-
atre Foundation, Theatre Development Fund,
Theatre Communications Group, and Black
Theatre Alliance. Transcripts of comments
made by 22 theatre professionals who par-
ticipated in the Los Angeles and New York
roundtable discussions were also studied.
These professionals are listed on page 109 .
These two sources, as well as the group's
collective professional experience, pro-

i2,:

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'Dramatists -Guild

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vided vital additional information to the
extensive data included In the body of the
Phase I report.

As indicated earlier, the charge from the
national Endowment for the Arts was to in-
vestigate the needs of "both professional
not-for-profit and commercial theatre."
The charge did not include a study of the
needs of avocational, community, or educa-

tional theatre. Therefore, the focus of
the study and recommendations is on the
needs of live professional theatre, com-
mercial and nonprofit.

Professional theatre cannot, however, be
divided simply into the two categories of
commercial and nonprofit. Each has its
own diversity. For example, the commer-
cial theatre includes not only Broadway
and its national touring companies, but
also large numbers of dinner theatres, bus
and truck touring companies, and Broadway-
type activities in other cities. The non-
profit sector includes institutional re-
gional theatres, ethnic and community-ori-
ented professional theatres, experimental
professional theatres working on the de-
velopment of new scripts and new forms of
dramatic presentation, and specialized
touring groups. The advisory group wishes
it understood that professional theatre is
a whole comprised of diverse parts. This
very diversity is its strength. No one
segment of American theatre thrives or even
exists without the creative contribution
of others.

Theatre in the United States, in contrast
to the live performing art forms of dance,
opera, and symphony, has strong commercial
and nonprofit sectors. Because of the ex-
istence of the well-known commercial
Broadway theatre, because of the existence
of the commercial motion picture and tele-
vision industries, and because substantial
amounts of money may sometimes be made
from these media, the public generally
perceives theatre as a potential money-
making operation which should pay for it-
self. A common belief is that if theatre
is good, it will not lose money. This at-
titude about theatre applies to nonprofit
professional theatre as well as to the
commercial theatre. Hence, the belief is
that all theatre should be able to at
least pay for itself, if not make money.

In contrast, the general public accepts
the premise that symphony, opera, and
dance need contributed support to survive.
It is accepted that these art forms can-
not pay for themselves through earned in-
come.

The nonprofit professional theatre has
grown significantly in number and range of
activities only in the last 15 to 20 years.
Chapter II describes the nonprofit the-
atre's development of sound management
and the high ratio of earned income to
operating expense; among strongly managed
regional professional theatres, between 60
and 70 percent of expenses presently are
covered by earned income— a high ratio
in the performing arts fields. It indi-
cates that many nonprofit theatres probably
have done their best everywhere to control

costs and to raise levels of earned income
while at the same time they have increased
difficulty in raising contributed income.
In a large number of nonprofit theatres,
attendance is running at more than 80 per-
cent of capacity. If these theatres are
to maintain their policies of reasonable
ticket prices in order to provide access
to theatre for all economic groups, if at-
tendance figures continue as high as they
are, and if annual inflation is assumed as
part of our economic system, then the only
way nonprofit theatre can survive is
through increased contributed support. In
order to stimulate this support, the pub-
lic's perception that theatre can and
should pay its own way must be changed.

The advisory group believes the federal
government can and should take a strong
lead in helping change this perception.
It should take a lead in providing addi-
tional substantial new fiscal support. It
should take a lead through corrective fed-
eral legislation to provide direct and in-
direct increased public support to profes-
sional theatre, and it should encourage
appropriate legislative action by state
and municipal government.

The information contained in the Phase I
report reveals a need for corrective leg-
islation and revised regulations in the
area of taxation.

According to the data included in Phase I,
the 1976-77 median annual income earned by
actors from employment in live profession-
al theatre amounted to approximately
$5,000. This situation is true not only
for actors, but also for other theatre
professionals. These data demonstrate to
the advisory group that a majority of the-
atre professionals, in both the commercial
and nonprofit sectors, work for salaries
in no way commensurate with their train-
ing, talent, and experience. Many actors,
therefore, must supplement their profes-
sional earnings through other types of em-
ployment.

The Phase I study reports that although
there is now some kind of professional
theatre in every state, large sectors of
the public still have no access to live
professional theatre, either nonprofit or
commercial.

While the commercial and nonprofit the-
atres combine to make the performing art
known as professional theatre, a recogni-
tion of the differences between them is
vital to the determination of a healthy
future for theatre in this country. Each
sector has a clear direction. These di-
rections are not in conflict. Rather,
they are complementary. For example,
plays originally produced on Broadway rou-

8

tinely are included in the seasons of many
nonprofit theatres; the apparent current
fiscal health of Broadway is at least in
part attributable to the development of
some plays by nonprofit theatres and their
subsequent production on Broadway. It
must not be assumed, however, that the
move to Broadway of such plays is the an-
swer to the fiscal needs of nonprofit the-
atre. Rarely do such moves provide the
originating theatre with substantial new
earned income because of the risks of
Broadway productions. The advisory group
believes interrelationships between the
commercial and nonprofit theatre should be
encouraged for the benefit of theatre as a
whole, while recognizing the integrity of
the motivation of each sector.

The commercial professional theatre must
strive to .make a financial profit for its
investors while providing the public with
entertainment of high-level artistic and
production quality. These plays are of-
fered at a price high enough to defray all
production costs and to provide the pros-
pect of a financial return to the inves-
tors.

While located primarily in New York, the
commercial professional theatre includes
full road companies touring the country,
bus and truck touring companies frequently
playing less than full weeks and often
one-night stands, as well as a large num-
ber of dinner theatres.

Because of the necessity of returning a
profit to the investors, there is a natur-
al reluctance on the part of many commer-
cial producers to undertake material which
they believe might not result in good box
office income. Artistic decisions (e.g. ,
the selection of plays, cast sizes, sets)
are influenced strongly by box office po-
tential.

While the return of some profit to the in-
vestor is, of necessity, a prime motiva-
tion, the commercial professional theatre
also provides special contributed services
to the New York community. Programs for
schools, hospitals, the aged, and the
handicapped are some of these services.
In addition, it offers internships to the-
atre trainees. Further, the commercial
theatre contributes to strengthening the
nonprofit theatre through grants from such
foundations as the Shubert Foundation.

The nonprofit professional theatre pro-
vides a multiplicity of theatre activity
with ticket prices scaled at levels to as-
sure accessibility. It includes a wide
variety of institutional types: the re-
gional professional theatres; professional
theatres which developed within, or for, a
specific ethnic community; and profession-

al theatres dedicated to the development
of new plays or new forms of theatre di-
rection and production.

Important to the existence of the regional
theatre are plays chosen specifically for
the community in which the theatre is lo-
cated. Most theatre seasons include clas-
sics drawn from the world's dramatic lit-
erature as well as new works and new forms
of theatre which comment on and reveal
contemporary society. In addition to main
stage productions and, in some cases, sec-
ond-stage experimental or developmental
work, the professional regional theatre
provides a variety of services to the im-
mediate community and region: touring;
performing in hospitals, prisons, and
schools; and the development of programs
for the elderly, the handicapped, and the
economically or socially disadvantaged.

Many ethnic professional theatres are mov-
ing from their original purpose of origin-
ating in and belonging to a specific eth-
nic community into broader-based urban
theatre institutions. These theatres now
are searching for ways to move more fully
into the economic mainstream of profes-
sional theatre while at the same time
maintaining low ticket prices. Currently,
up to two-thirds of their operating bud-
gets may be spent for the basic costs of
facilities, most of which are not large
enough to provide an important degree of
earned income.

Urban areas also are the locale of a ma-
jority of those professional theatres—
often relatively small in budget and in
staff— dedicated to work on new plays and
new forms of theatre. In most cases, lim-
ited physical facilities preclude earned
income from providing a major portion of
total income.

Theatre as an art form is concerned with
ideas. It celebrates, criticizes, and
comments on society. Generally, the non-
profit professional theatre provides the
environment and opportunity for experimen-
tation for the ultimate benefit of all
theatre. This type of activity is equiv-
alent to the research and development pro-
grams supported by industry in this coun-
try. Risks are inherent to creative de-
velopment. Because nonprofit professional
theatre is dependent upon contributions
from the public and private sectors, risks
are often fiscally dangerous. There are
bound to be some individuals who will be
alienated by what they hear and see. Some
may withdraw their support as a result of
a particular play or performance. Coupled
with the perception on the part of many
that professional theatre should pay its
own way through the box office, risk-taking
for the further development and strengthen-

ing of theatre as an art form can well
lead to a reduction in contributed in-
come. As a result, some theatre manage-
ments are subjected to increased pressure
to select seasons (particularly in the re-
gional theatre) which will assure maximum
potential box office income— a move toward
mass appeal more appropriate to the com-
mercial theatre.

The advisory group believes the public
sector, particularly the federal govern-
ment, should take the lead in support of
professional theatre. While perhaps main-
taining its current position of junior
partner (in terms of total dollars con-
tributed on a national scale) , the federal
government should assume a leadership role
in encouraging financial support from oth-
er parts of the public sector as well as
from the private sector.

The advisory group stresses the importance
to American society of the multi-faceted
artistic and economic roles of theatre.
The diversity of the advisory group mem-
bership, representing many different pro-
fessional theatre constituencies, assured
strong difference of opinion. That there
has been a high degree of consensus in
formulating the recommendations which fol-
low demonstrates the ability and desire of
the different segments of American theatre
to work together for the common good and
for the strengthening of theatre as an art.

The advisory group determined that both
general as well as specific recommendations
were appropriate . In addition , where enough
information was available, the group has
made detailed suggestions for carrying out
specific recommendations. In other in-
stances, recommendations are made without
suggestions for implementation. When the
group could not reach a consensus on a
particular issue, it was recommended for
further study. The advisory group was
unanimous in feeling that the federal gov-
ernment should establish some group, simi-
lar in composition to the present advisory
group, to continue investigation and study
of the needs of live professional theatre
and to make further recommendations to the
federal government.

RECOMMENDATIONS

Based on the information examined by the
advisory group, it is believed that sub-
stantial new federal funds are necessary
for the future health of professional the-
atre in this country. Recommendations for
such direct support are listed here. In
addition, the federal government is re-

quested to provide indirect support to
professional theatre through recommended
administrative and legislative action.

The advisory group recommends that the
federal government should make clear its
conviction that strong professional the-
atre is an integral component of this na-
tion's cultural life. It can do so by im-
plementing the following recommendations.

Professional Theatre Institutions

Increased federal funds should be provided
to enable artistically outstanding non-
profit professional theatre institutions
and organizations to achieve their artistic
goals.

The advisory group recognizes the vitally
important support accorded professional
nonprofit theatre by the National Endow-
ment for the Arts. The group feels, how-
ever, that the amount of money currently
available for such support is too limited.
With inflation causing a substantial annu-
al increase in basic operating and produc-
tion costs, theatres already covering
close to 70 percent of their operating
costs with earned income will be hard-
pressed to maintain this ratio. Ticket
prices are continually adjusted in re-
sponse to changing economic conditions;
theatre managements look constantly for
ways to augment earned income. Even if
successful in maintaining this ratio, the
remaining 30 percent or more (which must
come from contributed income of all sorts)
will represent an increasing amount of
money. Without increased public sector
support, particularly federal support, it
is probable that the nonprofit theatre
could be forced to make artistic decisions
on the basis of potential box office ap-
peal and to raise ticket prices to levels
precluding a broad-based audience. In-
creased support will assure the fiscal
strength of artistically outstanding pro-
fessional theatre institutions and groups.
This will enable them to continue produc-
ing experimental or new work of artistic
merit which may not attract substantial
attendance or box office revenue.

As mentioned repeatedly in the roundtable
discussions conducted by the advisory
group and in statements submitted for ad-
visory group consideration, strong profes-
sional theatre, dedicated to high artistic
standards, spawns and encourages a wide
range of avocational theatre activity.
Increased federal support directed toward
artistically outstanding theatre institu-
tions and organizations— regardless of

10

size or budget — will encourage stronger
artistic goals on the part of nonprofes-
sionals .

theatres. This would enable theatres to
plan more effectively than they now are
able to do.

Federal dollars should be used to establish
revolving funds to provide interest-free
loans to theatres to finance cash flow
needs . ~^

Nonprofit sector. Many theatres face se-
rious cash flow problems, particularly be-
fore the new season starts each year as
well as during the early months of the
season. As a result, theatres are forced
to borrow funds, normally paying the going
interest rate for such loans. Some the-
atres also use advance subscription money.
For theatres without a subscription audi-
ence (many ethnic and experimental the-
atres) , this subscription money resource
is not available. Thus, they also must
borrow, if borrowing is at all possible.
The payment of interest on the loans adds
to the financial problems of the theatres
and increases their need to raise addi-
tional contributed income.

The advisory group recommends establishing
federally funded cash flow loan funds, re-
payable without interest. Such funds
could preclude many current cash flow fis-
cal crises and could result in more real-
istic fiscal planning and fundraising by
the nonprofit professional theatres.

Commercial sector. The advisory group
recommends establishing a similar cash
flow loan fund (e.g., by the Small Busi-
ness Administration) for the commercial
professional theatre, either on an inter-
est-free or low- interest basis. Such a
fund could assist greatly in reducing the
cost to the private investor of pre-open-
ing expenses and could encourage the com-
mercial theatre in risking production of
plays of particular artistic merit which
might not otherwise be undertaken.

Federal funding cycles should reflect the
multiple-year needs of recipient profes-
sional theatre organizations. ~

At present, federal funds granted in sup-
port of theatre (e.g., those from the Na-
tional Endowment for the Arts) are provid-
ed on a one-year basis. Under present leg-
islation, the Arts Endowment could grant
funds for a multiple-year period. It is,
however, reluctant to do so as Congress
appropriates funds to it on an annual basis.
Multiple-year funding of the Arts Endow-
ment by Congress (on the pattern already
established for the Corporation for Public
Broadcasting) would enable the Arts Endow-
ment to provide multiple-year grants to

Many professional theatres have developed
long-range multiple-year plans, but are un-
able to move ahead with them with assur-
ance because it is not known from year to
year what level of funding they will receive.
Multiple-year funding would relieve pres-
sure on small administrative staffs from
the time-consuming annual grant application
process. The advisory group believes that
if the federal government takes the lead in
multiple-year funding, other donors might
be encouraged to do the same, freeing time
for theatre leaders to devote themselves
more fully to their artistic and manageri-
al responsibilities.

Professional Theatre Personnel

Increased federal funds should be provided

to assure theatre professionals salaries
at levels commensurate with their training
and experience in their professional
fields."

A constantly recurring theme heard by the
advisory group from virtually all theatre
personnel is that talented trained profes-
sionals earn relatively little in the pur-
suit of their craft. As a result, many
talented professionals leave theatre to
pursue more lucrative employment in tele-
vision or film in order to satisfy more
fully their personal and family fiscal
needs. Theatre thus loses many in whom it
has invested through training and experi-
ence.

A higher level of basic annual earnings
for the theatre professional must be
sought. The advisory group recommends new
increased levels of funding for theatre
institutions to enable them to achieve
this. Such funding will provide talented
theatre professionals with the opportunity
and the right to work in their chosen
profession.

Increased federal funds should be provided
to strengthen and expand selected train-
ing programs for professional theatre.

The advisory group believes that on a na-
tional basis there is not enough opportu-
nity for theatre professionals to receive
appropriate training for their craft. On
an individual student basis, the present
cost of professional training for theatre
is very high. This high cost, plus the

11

limited availability of scholarship money,
discriminates against entry into such pro-
grams by those who are not financially
well-off. The advisory group recommends
augmented federal funds to provide in-
creased accessibility to existing profes-
sional training programs as well as to
strengthen them. The advisory group also
recommends federal encouragement of new
programs and more career guidance.

Provision also should be made for the es-
tablishment of ongoing training opportu-
nities for practicing theatre professionals
to enable them to maintain and increase
their efficiency in their profession.

The advisory group recommends further that
federal agencies sponsoring existing or
planned personnel training programs should
include the training of theatre profes-
sionals keyed to the specific needs of the
professional theatre.

Federal funds could make federally sub-
sidized employment available in profes-
sional theatre.

The Phase I report indicates that theatre
employment periods are often short, re-
sulting in frequent spells of unemploy-
ment. The advisory group recommends that
appropriate federal manpower policy be de-
veloped to address this problem. The
group also recommends that those federal
agencies dealing with manpower and employ-
ment problems as well as with the stimula-
tion of employment (e.g., the Departments
of Labor, Commerce, HEW, HUD) should di-
rect part of their funding toward the em-
ployment of professionals in the profes-
sional theatre.

Increased Accessibility

Increased direct and indirect federal

;xon-

support should be directed toward; ~T
greater accessibility to live profess"
al theatre through touring to those geo-
graphic areas not now reached by profes-
sional theatre; 2) greater accessibility
for young people to live professional the-
atre through support of school tours and
student ticket subsidy programs; 3) great-
er accessibility by all sectors of the
population to professional theatre groups
reflecting our pluralistic

.c society.

Despite touring by both nonprofit profes-
sional theatre companies and commercial
road companies, there still remain large
areas of the country where significant
numbers of the American people have no ac-

cess to professional theatre. The Nation-
al Endowment for the Arts has taken an im-
portant step in providing greater accessi-
bility to live professional theatre
through its support of touring by some non-
profit professional theatres. Starting
with a pilot program involving two the-
atres in fiscal years 1973 and 1974, the
Arts Endowment Theatre Program in fiscal
year 1979 provided limited support to
enable 26 theatres to tour for a total of
86 weeks in 245 communities in 39 states.

The advisory group recommends an increase
in the funds available for this program
and the encouragement of participation by
professional theatre groups reflecting the
cultural diversity of our pluralistic so-
ciety. Further, the advisory group recom-
mends that increased federal funds be
available to reimburse professional non-
profit theatres for the cost of touring
programs to schools as well as for the
cost of tickets made available at signif-
icantly reduced prices to students.

In recent years, touring by national com-
panies from the for-profit professional
theatre has been reduced. This is due
primarily to the lack of appropriate per-
forming facilities in many areas of the
country. In some places, an inadequate
substitution has taken place with the one-
night-stand performances by bus and truck
touring companies. These performances are
often of lower artistic and production
levels than that which can be provided by
the national company tours. At present,
among the cities where the commercial pro-
fessional theatre feels it may be able to
meet touring expenses are the following:
Boston, Chicago, Detroit, Los Angeles,
Miami, Philadelphia, San Francisco, and
Washington, D.C.

The advisory group recommends that the
federal government investigate ways in
which additional facilities might be en-
couraged in other sections of the country
to provide greater accessibility to a much
larger segment of the population to high
level artistic productions of the profes-
sional commercial theatre. In addition,
the advisory group recommends that the
federal government encourage the creation
of structures for tour sponsor develop-
ment on the local level.

Taxation

Tax policy should be modified to provide

encouragement to the further development
of professional theatreT

Taxes are a burden to both commercial and

12

nonprofit theatres as well as to working
theatre professionals. While the theatre
community recognizes its responsibility to
bear its fair share of the burdens of pub-
lic finance, the advisory group believes
current tax policy discriminates unfairly
against theatres and their employees.
Throughout the country, theatre is a major
positive force in both the cultural and
economic lives of communities. It serves
as a major factor in stemming the decline
of the central cities by attracting people
to visit, live, and work in the cities.
Since the nature of the tax burdens on the
commercial and nonprofit theatre are rath-
er different, they are considered sepa-
rately.

The commercial theatre. The advisory
group recommends that federal income tax
law be changed in order to provide tax
incentives to promote the financial
stability of the commercial theatre.

The commercial theatre pays all of the
taxes normally associated with businesses.
Partners are liable for income taxes on
operating profits and on income realized
from resale of rights, as well as for
capital gains taxes on net income realized
from resale of shares in limited partner-
ships. The detailed financial data
examined in the Phase I report for Broad-
way productions financed through the
public sale of partnership shares show
that various tax expenses are incurred by
the companies and theatre owners during
production and operation. For Broadway
productions alone, taxes amounted to
approximately $4.3 million during 1976-77.
This represents almost 30 percent of the
estimated total investment in Broadway
productions during the same period. Ac-
cording to the Phase I data, the resulting
after- tax rate of return to the investor
amounted to approximately 6.5 percent —
a low rate of return on a high risk in-
vestment.

At present, the tax structure discourages
investment in theatre in comparison with
other forms of commercial activity. Sev-
eral forms of tax incentives available to
other sectors of industry are unavailable
to commercial theatre production companies
and theatres. For example, investment in
theatrical production companies is ineli-
gible for the investment tax credit.
Similarly, provisions of the law which
treat appreciation (or depreciation) of
capital assets differently from ordinary
income (so-called "capital gains" provi-
sions) are also not available on author-
ship rights, production rights, or
partnership rights.

Among actions recommended to the federal

government by the advisory group is legis-
lation to provide: 1) a new subchapter of
the Internal Revenue Code for theatrical
production companies similar to special
subchapters for banking, insurance com-
panies, regulated investment companies,
and real estate investment trusts; 2)
clarification of existing law to allow
theatrical production companies to capital-
ize pre-opening costs, to treat all income
up to the amount capitalized as a recovery
of investment, and, after full recovery of
investment, to treat all income as ordinary
income; 3) for a theatrical production tax
credit for investments by theatrical
production companies in other theatrical
productions; 4) capital gains treatment
to the sale of theatrical production
rights; 5) incentives for reinvestment
of ordinary income realized by investors
in theatrical production companies by
providing for a limited exclusion from
income for profits from a theatrical pro-
duction company; and 6) capital gains
treatment for royalties received by auth-
ors from theatrical production companies
solely for first production rights of
their work.

By acting positively on the above recom-
mendations, the federal government would
provide stimulating incentives for a
healthier commercial professional theatre
in this country.

The nonprofit theatre. A number of taxes
(sales taxes on tickets and real estate
taxes) affecting the nonprofit theatre
still exist in different parts of the
country. Of the 24 states with state ad-
mission taxes, 15 exempt nonprofit theatres.
The 9 states followed by the percent of
admission tax not granting such exemption
are: Florida, 4 percent; Georgia, 3 percent;
Idaho, 3 percent; Kansas, 3 percent; Minne-
sota, 4 percent; Nebraska, 2.5 percent;
West Virginia, 3 percent; Wisconsin, 4
percent; and Wyoming, 3 percent. A survey
by American Council for the Arts indicates
that 15 municipalities also impose admission
taxes. They are: Atlanta, Chicago, Denver,
Lincoln, Minneapolis, Norfolk, Oklahoma
City, Omaha, Phoenix, Pittsburgh, Richmond,
Spokane, Tacoma, Tulsa, and Tucson. Thus,
a nonprofit theatre in Minneapolis pays a
total of 7 percent admission tax on each
ticket sold (4 percent state plus 3 percent
city tax) . Real estate taxes currently
ranging from $700 to $15,000 are also levied
on nonprofit theatres in many counties and
municipalities .

The data included in the Phase I report
indicate that $1.7 million was paid in
taxes in 1976-77 by the nonprofit theatre.
This represents approximately 2 percent of
the total operating expenditures of those

13

theatres as well as 20 percent of the di-
rect support provided by the public sector.

The advisory group finds it incongruous
that nonprofit theatres may well be using
federal or state and municipal grants to
pay federal, state, county, and municipal
taxes. Although the advisory group under-
stands that the federal government cannot
force changes in state, county, or munici-
pal legislation, it recognizes the power
of the federal government to "encourage"
such changes.

The advisory group recommends that the
federal government modify its existing
statutes in regard to unrelated business
income for nonprofit theatres. If the in-
come gap widens in the nonprofit theatre
world, increased pressure will be placed
on theatres from both public and private
sector donors to raise their level of
earned income. Many theatres have already
attained or are near maximum attendance
level. One of the remaining avenues open
to the nonprofit theatres is to generate
increased earned income through the devel-
opment of unrelated business activities.
Exemption of such income from taxation
could encourage its development and help
offset the steadily increasing dependence
on contributed income.

Finally, the advisory group recommends
continued deductibility of the cost of
theatre tickets used as a business expense.
This action would continue to help both
the nonprofit and commercial theatre.

Federal Leadership

The National Endowment for the Arts should
be maintained and strengthened as an inde^
pendent federal agency responsible for
leadership support to the professional
arts.

The advisory group recommends strongly
against the inclusion of the National En-
dowment for the Arts in a new Department
of Education. Professional theatre as a
living art form is not education in the
traditional sense. A Department of Educa-
tion must key its activities primarily to-
ward the needs and goals of institutional
education: primary, secondary, post-sec-
ondary, and vocational. Theatre does have
value for, and a role in, broad education-
al policies and programs, but it must re-
tain its own validity as an art form.

Since its establishment in 1965, the Na-
tional Endowment for the Arts has had an
outstanding record of support for the en-
couragement of professional artistic stan-

dards in theatre. The Arts Endowment has
demonstrated a willingness and ability to
differentiate between professional and
avocational artistic activities and it has
devoted a substantial part of its limited
resources to support of the professional
sector .

In order to continue and to increase such
support, the advisory group believes the
Arts Endowment must remain an independent
federal agency. The Arts Endowment should
serve as the leading element in the feder-
al government's role in devising means for
professional theatres to better aid them-
selves.

The federal government should encourage
increased international exchange of live

professional theatre.""

The advisory group recommends substantial-
ly increased federal support toward the
cost of performance abroad by American
professional theatres. While encouraged
by the establishment of the International
Communication Agency, the advisory group
is concerned that eligibility for partici-
pation in an expanded professional theatre
exchange program be determined by profes-
sionals.

Because live American professional theatre
is such a strong leader in world theatre
today, federal funds should be made avail-
able in amounts sufficient to cover the
travel costs of an increased number of
professional theatres invited to perform
abroad. The United States is one of the
few countries in the world which has qual-
ity professional theatre and which does
not subsidize travel to foreign countries
to any appreciable degree. The advisory
group recommends substantially increased
federal funds for this purpose.

The federal government should provide for

the continued existence of an advisory
group representative of all professional
theatre constituencies.

The deliberations of the present advisory
group demonstrate the deep interest on the
part of all professional theatre constitu-
encies in working together for the good of
theatre as a whole. Due to the time and
fiscal restraints of the present study, it
has been impossible to deal effectively
with all problems and perceived needs of
the live professional theatre in the Unit-
ed States. The advisory group recommends
strongly that the federal government pro-
vide for the existence of an independent
advisory group comprised of representa-
tives of diverse theatre interests. Such

14

a continuing advisory group would be
charged, for example, with supervising on
a continuing basis further studies, as
well as formulating specific recommenda-
tions to the government.

Further Studies

The advisory group recommends that studies
be made of the following areas of concern
so that appropriate recommendations can be
formulated.

1) Questions on the impact of labor/man-
agement relations: Does the current New
York Showcase Code inhibit the development
and potential success of new works? Is it
proper for theatre professionals to subsi-
dize the development of new plays? What
is the economic impact on professional
theatre of current regulations in a number
of the craft unions?

2) The area of taxation of the individual
theatre artist: The wide fluctuations in
theatre professionals ' annual earnings are
not dealt with appropriately by income
averaging. Is there another approach
which might better serve the needs of both
the individual artist and the Internal
Revenue Service? The recent limitation
placed upon the deductibility of expenses
relating to work spaces in theatre artists'
residences is another serious problem, as
is the confusion over the definition of
the term "employee" for federal tax pur-
poses. The advisory group feels a careful
study of current tax laws should be made

as they affect the professional theatre
person.

3) The adequacy of performing spaces
throughout the country should be studied
in connection with the advisory group's
strong recommendation for greater access
to professional theatre.

4) Employment possibilities for those
trained in the professional theatre: What
has happened to those who have majored in
college and university theatre programs?
What is the role of educational theatre in
this country? What needs does it fill?

In existing programs, what distinction is
made between programs using theatre as an
educational tool and programs using educa-
tion as a means of training for theatre?

5) The question of "national" theatre:
Should there be an institutionalized na-
tional theatre considering this country's
geography, needs, and resources? Is a
uniquely American national theatre already
in existence, or would a different type of
institutional approach better serve the

art form and the people?

6) A study of the role of amateur and av-
ocational theatre organizations should be
made. What, for example, is their role in
the increased development of professional
theatre? Do such groups exist because of
a demand unmet by existing professional
theatres?

7) The question of union and ethnic mem-
bership on boards and panels dealing with
professional theatre, both inside and out-
side the government, should be examined.
Some members of the advisory group feel
there is not enough union, ethnic, and
minority representation in public and
private decision-making or advisory groups
A study is recommended of the extent to
which the interests of these groups are
reflected in decisions affecting the pro-
fessional theatre.

15

Table 1

Regional distribution of theatre faculties and companies 1977

Middle Atlantic
New Jersey
New York Stat*
(excluding New
York City)
Pennsylvania
n«v York City

9

ie

20

6
25

18

39

Northeast

Connecticut

Main*

Massachusetts

New Hampshire

Rhode Island

Veraont

5
3
6

5

7
2
15
7
2
6

2

4
1

1
8

3
27

7
21

14

230

9

4
17

1
3

1

w. North Central

Iowa

Kansas

Minnesota

Missouri

Nebraska

N. Dakota

S. Dakota

7
7
6

e

3

1

3
4
2

4
5
7
4
2
2
6

3

2
11

2
4
1
1

South Atlantic

Delaware

Washington, DC

Florida

Georgia

Maryland

N. Carolina

S. Carolina

Virginia

w. Virginia

1

3

15

6

2
12

3
7
4

6

1
4
2

2
1

1
4
3
2
3
6
3
4
2

1
1
1
1

1

10

1

3
1

2

1
1
1
2

3

13

12

10

9

S

4

3

2

E. north Central

Illinois

Indiana
Michigan
Ohio
Wisconsin

14
11
9
12
13

8

3
2

10
11
10
11

4

2
1
3

7

4
2

3

1
1
3

1

3

1
3
1
1

51

1
7
4
6

W. South Central

Arkansas-

Louisiana

Oklahoaa

Texas

3
6
5

19

1
1
6

1
1

1
2

4

3

1
3
5

1
4

3

6

5

11

Mountain

Arizona-

Colorado

Idaho

Montana

Nevada

New Mexico

Utah

Wyoming

1
1

1
1

11

2
5

1
1

2

8

4
3
1

9

2

E. South Central

Alabama-

Kentucky

Mississippi

Tennass**

1
1

5
2

1
1

4
4
2
7

Pacific

Alaska

California

Hawaii

Oregon

Washington

27

1
5

4
1

15

3
1

1
6

13

66
6

4
10

Puerto Rico

__ —

—

—

— — —

1

Total* :--.-"'-".V"

at .■-.. so*

«7

'■ ■'

*1 .

S3 '-J.'-i-.T-^aiTjjIr-Jl"- _-4tf;:

'iKsM^SSi^ s«** ■ ' -•• -,*4§l , / p M0

■ ' - ■/£■•£: ■•■■ "■*'> -

i^£;ter*3'^

■ '■."*zr

32

• '•■'".-•'

. •^j:^v.'!:^;jaj?-

SJwaj.-.CSf.ir- :J»v?;>r*/<27 • :,_.<? ..-. .■ _.. 40 jr

16

CHAPTER I

SUMMARY AND CONCLUSIONS

Over a decade ago, in the first compre-
hensive investigations of the economic
conditions of American theatre, William
J. Baumol and William G. Bowen, authors
of Performing Arts ; The Economic Dilemna
(New York: The Twentieth Century Fund,
1966) , and Thomas Gale Moore, in The
Economics of the American Theatre
(Durham: Duke University Press, 1968) ,
concluded that the theatre was caught in
a perpetual cost-revenue squeeze. They
argued that this was caused by a tendency
for the costs of producing a live per-
formance to grow more rapidly than the
revenues obtained from it, and there were
few possibilities in live performances
for increasing productivity that char-
acterizes the rest of the economy. Baumol
and Bowen called this phenomenon the
"cost disease." The relatively slow
growth rate of revenues, these studies
found, was due to fierce competition from
other art and entertainment forms and to
a commitment by some performing arts
groups to keep admission prices low in
order to reach as wide a public as pos-
sible.

Of their prognoses for the future, Baumol
and Bowen wrote:

"This conclusion has implications that
are rather sobering. It suggests that the
economic pressures which beset the arts
are not temporary— they are chronic. It
suggests that if things are left to them-
selves deficits are likely to grow. Above
all, this view implies that any group
which undertakes to support the arts can
expect no respite. The demands upon its
resources will increase, now and for the
foreseeable future. Happily, however, we
shall see that contributions have also
been growing and that there is some
reason to hope that the sources of phi-
lanthropy will be able to meet much of the
expanding' need for funds. Some classes
of performing organization— especially
the established groups and those with
well-organized fund raising machinery-
may, therefore, find survival in the
future no more difficult than it is
today. But for the small, more experi-
mental and less well-organized groups, and
the organizations which are not operated
on a non-profit basis and so do not live
by philanthropy, a state of financial
crisis may not just be perennial — it may
well grow progressively more serious."

This report examines what has happened to
the condition of the live professional
theatre in America between 1966 and 1977.
Have the effects of the cost-revenue
squeeze become progressively worse, as
predicted? What is the current economic
condition of the professional theatre,
what accounts for this condition, and how
has it developed within the period?

Theatre in America is diverse and "profes-
sional" is a difficult critical term. The
following criteria were established as
guides to gathering data for this study.
A theatre had to meet one of the following
conditions :

It had to be eligible for support from the
theatre program of one of the major grant-
ing institutions (e.g., the Arts Endowment,
a state arts council, Ford Foundation) ;

It had to be a member of the Theatre Com-
munications Group;

It had to employ actors under Actors' Eq-
uity Association contracts;

It had to employ paid actors or clearly
intend to pay actors.

Information was gathered on the live com-
mercial and nonprofit professional theatre
in every state (see Table 1) . A limited
amount of information is also included on
amateur school and community theatre to pro-
vide a more complete picture of the nature
of theatrical activity in the country. While
the report is filled with data on trends and
conditions , it is not a complete , logically
consistent collection of information on all
aspects of the theatre of the sort availa-
ble for some economic activities (as can be
found in the National Income and Products
accounts) .

A word on the statistics: There may be a
tendency for numbers, particularly many
figures relating to a broad subject, to
take on a life of their own. The reader
may begin unintentionally to equate bigger
with better (or with worse) . There is no
intention here to suggest that one sort of
data on a theatre — attendance or number of
productions or box office grosses— implies
anything about the artistic importance of
that theatre. Data alone do not set pri-
orities for government policy. Special
attention is called to Chapter V in which
theatre professionals discuss the condi-
tion of the theatre from perspectives of
committed, experienced artists and work-
ers. Their insights give dimension to
the partial picture of economic data.
Economic facts are but one part of the
state of theatre in America.

17

The analysis in the following chapters
demonstrates that the theatre has adjust-
ed well to the changing economic condi-
tions between 1966 and 1977. Theatrical
activity expanded, while the relationship
between costs and revenues remained about
what it was at the time Baumol and Bowen
(1966) and Moore (1968) made their stud-
ies. The tendency for a cost-revenue
squeeze is serious, however, and the
future remains uncertain.

One measure of growing interest in theatre
is attendance. In 1977, it was estimated
to be 63.8 million at prof essional theatre
(not including street theatre) and 60.7
million at amateur theatre. A conserva-
tive estimate is that 1 out of every 10
adults attended a live professional the-
atre performance in 1977 and 1 out of 3
attended some sort of theatre.

In the professional theatre, there were
3,200 productions with 95,000 performances
in 1977. Activity seems to be increasing
overall, with some indicators remaining
constant while others grow. For example,
attendance on Broadway has shown no long-
term tendency between 1952 and 1977.
After the drop in attendance during the
early 1970s, there has been a remarkable
increase in the last three years to earlier
levels. Similarly, the number of pro-
ductions on Broadway since 1952 and the
number of performances since 1947 have
fluctuated about a fairly constant number
over the period.

Theatre activity has increased regionally.
The larger nonprofit theatres doubled
their attendance since 1966 to more than
11 million. Among a sample of 30 estab-
lished nonprofit theatres (with budgets
in excess of $250,000 a year), the number
of productions remained the same between
1965 and 1977 while attendance during
this period increased (from 2.5 million
to 3.8 million at their home theatres),
and the number of performances has grown
at an average rate of 2.5 percent a year.
Dinner theatre audiences have risen to
11.1 million, finding audiences in the
country, where little professional
theatre has existed. And still another
sign of increasing activity is that the
number of new plays produced each year
seems to have doubled since 1969.

A remarkable pattern underlying the data
in Tables 1 and 2 is the size and variety
of professional theatre outside of New
York City. New York City accounts for 19
percent of the total audience figure while
81 percent is distributed throughout the
rest of the country. There are several
reasons for this dispersal and important

among them are two trends: the growth of
nonprofit regional theatres and the emer-
gence of truck and bus touring operations
with split weeks and one-night stands (a
total of 3.8 million attendance in 1976-
77) , making performances in small popula-
tion centers possible; these have wide
support.

Nonprofit theatres, regional and other-
wise, are a recent development and have
changed the nature of American theatre.
Almost all nonprofit theatres operating
today were founded in the last 20 years
and the increase in their activity has
been extraordinary. It appears that
about half the professional theatre acti-
vity in America today is nonprofit and
half is commercial. Moreover, these sec-
tors share plays, productions, facilities,
and personnel.

When 15 to 20 million people over the age
of 16 attended the professional theatre
during 1976-77, it is of interest to know
something about them: who they are, what
theatres they attended, and why. A pro-
file of theatregoers based on data from
established theatres shows that they are
better educated and more affluent than
the general population. There are more
young persons in the audience than in the
population as a whole and fewer old per-
sons; the split between male and female
is about even.

Audiences attend a wide range of types
of professional theatre. In 1976-77, the
breakdown by share of total admissions
was: large commercial touring, 18 percent;
dinner theatre, 17 percent; Broadway, 14
percent; large summer musical theatres, 10
percent; regional theatres (other than
League of Resident Theatres or LORT) , 10
percent; LORT (large regional) , 9 percent;
summer stock, 8 percent; truck and bus
touring, 5 percent; small budget theatres,
3 percent; outdoor dramas, 3 percent; and
nonprofit touring, 2 percent. There do
not appear to be major differences among
audiences for different types of the more
established theatres, but there is no data
on audience characteristics for experi-
mental theatres. Experience and opportun-
ity are apparently the biggest factors as
to whether people attend.

Two studies (Baumol, Hilda and William.
The Impact of the Broadway Theatre on
the Economy of New York City. New York:
League of New York Theatres and Producers,
1977, and Cwi, David and Lyall, Katharine.
Economic Impact of Arts and Cultural
Institutions: A Model for Assessment
and a Case Study in Baltimore. Washington,
B.C.: National Endowment for the Arts,
1977) indicate that the economic effects

18

from theatre are substantial. The Baumol
study estimated that the Broadway theatre
contributed about $160 million to the
economy of New York City during the 1974-
75 season, and a total of about $270
million to the national economy. From the
Cwi and Lyall study it was shown that 8
cultural institutions (including 3 the-
atres) in the Baltimore, Maryland area
generated almost $30 million of income
in 1976. Using a conservative assumption
that the average ticket price (see Table
2 for corresponding admissions) was $6.50,
and using the procedure described in the
1977 Baumol study of the impact of Broad-
way theatre, the conclusion is that the
nation's professional theatre could have
contributed to the Gross National Product
approximately $2.1 billion in 1976-77.

Whatever the theatre's effect on the econ-
omy, the economy certainly influences the
theatre. The pressures of the cost-
revenue squeeze become apparent in looking
at the finances of the professional the-
atre. For example, the cost of producing
Broadway theatre has increased since the
mid-1960s at the rate of 5 percent per year
for musicals and 10 percent per year for
plays .

A similar situation exists for nonprofit
theatre. Operating budgets for the lar-
ger nonprofit theatres have increased
about 9 percent per year. Cost-saving
measures have brought these budgets into
balance for the most part; that is, unan-
ticipated deficits are rarer than they
were in the 1960s, and earned income (box
office receipts, among other things) has
increased at the same rate as operating
expenses.

The American theatre appears financially
stable with costs, prices, and activities
higher. Investment on Broadway has in-
creased at a rate of 5.9 percent since
1964. The average return on publicly
offered Broadway investments is estimated
at 13 percent since 1964, not high when
compared to other risky business ventures.
(Reportedly, the return rate for Broad-
way was higher from 1947 to 1958.)

In the nonprofit theatre, there are larger
cash reserves and theatres handle their
cash flows more carefully. Among the
largest theatres, budgets have increased
more than the general rate of inflation,
indicating real growth in their activities.
Although nongovernment donations are
still larger than government ones, the
share contributed by the public monies is
increasing (from 3 percent of operating
expenses to 10 percent in the last dozen
years) . The small nonprofit theatres have
increased their budgets by 10 to 20 per-

cent a year, a sign of considerable growth.
They are more dependent than the larger
nonprofit theatres on contributions, par-
ticularly government funds.

In addition to theatre finances, another
indicator of the economic health of the
theatre is facts about its labor force-
unemployment, wage rates, and earnings.
The data show conflicting patterns. On
the one hand, the labor force of artists
has become larger as measured by the rate
of increase in union membership; for
example, during the period 1961-75,
Actors' Equity Association's membership
increased at a rate of 3 percent per year.
This indicates growth in the theatre when
compared to a population increase of 1.6
percent and a labor force increase of 2
percent.

Employment data on actors show a different
pattern. While total actor employment has
increased (the fastest rate is for dinner
theatres followed by nonprofit theatres) ,
it has not done so as quickly as union
membership. The result is that the average
union actor finds less theatre employment
each year. During the 1975-76 season,
only 60 percent of paid-up Actor's Equity
members worked at least once under Equity
contract. And half of these worked less
than 15 weeks. Average work weeks per
member have fallen from 13 (in 1965-66)
to 10 (in 1975-76) . Figures from the
United States Bureau of the Census and
United States Bureau of Labor Statistics
put the unemployment rate for actors be-
tween 30 and 50 percent since 1970. This
rate seems much higher than could be
explained alone by such frictional
unemployment as actors moving between
assignments and the fact that not all
actors are suited for all parts.

Most actors receive low incomes. While
the weekly minimum salaries_for union
members have increased to equal or exceed
general rates, the median annual income
of Equity members working under Equity
jurisdiction did not exceed $5,000 in any
year during 1970-77. The median income
of Equity members from all sources in 1976
was between $7,000 and $9,000 a year. The
data also show some trend away from using
highly paid actors and actresses and also
that labor expenses in relation to total
production costs have decreased slightly.
The patterns of high unemployment, rapid
labor force growth, and low incomes suggest
a deep commitment by the actors to the oc-
cupation and a willingness to undergo eco-
nomic hardship to engage in it. Many the-
atre workers supplement their incomes with
other jobs, earning as much from outside
sources as from the theatre. A number of
actors live in households with other sources

19

of income; only a fortunate few earn
enough in the theatre to provide for their
own needs and those of a family.

Employment and annual high incomes were
much more secure for nonartistic theatre
workers. Median income from all sources
for stagehands (New York City Local No. 1)
was over $12,000 per year, and for press
agents and managers, median annual income
under union employment was $10,000-$15,000.

It should be noted that the data on theatre
labor tend to reflect the larger and finan-
cially better-off sectors of the theatre.
For example, earnings may be less in the
smaller, developmental theatres.

During the difficult period of the 1970s,
the professional theatre made several cost-
saving and revenue-generating adjustments.
One such instance is in the cast size of
Broadway shows, which has fallen in recent
years. For musicals the average dropped
from 36.8 members to 27.2 (1964-65 to
1975-76) and for plays from 13.4 to 11.4
(1968-69 to 1975-76) . The nonprofit thea-r
tre has lengthened its seasons, cut the
number of productions, and increased the
average length of run (from 20 performances
in 1965-66 to 27 in 1975-76) . Also, newly
constructed theatres are generally larger
than older ones by a substantial margin.
Theatres are pursuing new management tech-
niques to handle finances and new marketing
methods to attract and retain audiences.

There are limits to these measures, how-
ever: Casts can only be so small, seasons
so long, and productions so few. Theatre
professionals interviewed share the same
concerns: Are less risky works being pro-
duced? Has the theatre used up its ingenu-
ity in increasing earnings and controlling
costs?

There are three possible futures for the
theatre. First, the theatre may continue
to find ways to control costs and increase
revenues. If so, there is every reason to
believe that the next decade will show con-
tinued increases in activity and financial
stability.

The second possibility is for the theatre
to became increasingly dependent on public
and private contributions for its existence
and growth. Under this alternative, earnings
would cover an ever-shrinking portion of the
theatre's budget; the theatre would become
progressively dependent on philanthropy.

The third possible future is that financial
constraints will cause the level of thea-
tre activity in the country to fall. This
alternative , although it may sound alarmist ,
should be regarded as no less plausible

than the two named previously. Economic
history gives many examples of goods and
services that are no longer readily avail-
able because the cost or producing them has
outgrown a public willingness or ability
to pay for them.

It is not certain which combination of
these futures is most likely. Clearly,
many of the more obvious and easily imple-
mented measures for controlling costs and
increasing earnings are already being ex-
ploited, but they are limited in the extent
to which they can continue to hold costs
and revenues in balance. The individuals
most knowledgeable about the status and
prospects of the theatre— professionals
in the theatre community— are worried
about the theatre's ability to cope suc-
cessfully in the future.

The conclusions of this report are guarded.
Many of the questions raised about the fu-
ture of costs and revenues have not been
answered definitively. The results suggest
that the theatre may be in for a period of
retrenchment if substantial new sources of
revenue are not found.

20

CHAPTER II

THEATRE ACTIVITY:

ATTENDANCE, ORGANIZATION, AND AUDIENCES

This examination of the conditions and
needs of the professional theatre in
America begins with a description of
activity in three broad (and sometimes
overlapping) areas. The first area con-
centrates on attendance totals and the
number of tickets sold. Trends are iden-
tified when such data are available. The
second area looks at different types of
theatre sizes and number of facilities,
attendance figures, number of perform-
ances, productions, and playing weeks,
relationship between commercial and non-
profit theatre, and the number of new
plays. The third area deals with social
characteristics of theatre audiences and
with the attitudes of attenders (frequent
and occasional) and nonattenders toward
the theatre. Existing data on the the-
atre in America are seriously incomplete.
Many of the figures reported in this chap-
ter must be regarded as tentative esti-
mates.

The conclusions to be drawn from the data
are interesting in themselves but are also
to be understood in relation to the entire
report. First, it is clear that the audi-
ence for live theatre is enormous, and
there are indications that it is increas-
ing. Perhaps 16 to 20 million people at-
tended professional theatre in 1977.
When amateur theatre is included, the
audience for professional theatre is not
only large but it is also dispersed widely
throughout the country. Attendance is
divided among a variety of theatres and
there is an increasing tendency toward
diversification and regionalization. Well
over half of all professional theatre
attendance consists of audiences for re-
gional, stock, and dinner theatre, while
New York City accounts for less than one-
fifth. Qf total ticket sales.

Regarding attendance by theatre type,
large regional theatres have doubled
their attendance between 1965 and 1977 to
11 million. This increase can be attrib-
uted to an increased number of perform-
ances for each show, which has gone up at
a yearly rate of 2.45 percent. During
this period the number of productions has
been steady since the 1970s; the percent-
age of the house capacity filled has re-
mained about the same. This pattern of
more performances of the same number of
productions is probably one way theatres

have controlled costs. Broadway attendance
has recovered from the decline of the
early 1970s and, at 8.8 million in 1976,
seems to be returning to earlier levels.
The number of productions has been roughly
constant since the 1950s and the number of
playing weeks is now the highest since
1948.

Road productions (tryouts, national com-
panies , and bus and truck operations ) have
a total of 14.7 million in attendance.
The building of new college auditoriums
and multi-purpose civic centers during the
1960s has been a factor in this increase,
especially for the bus and truck shows
which alone count for an audience of 3.3
million. In its swings of activity, the
road follows Broadway with a lag of a year
or two.

Dinner theatre, too, has grown greatly,
particularly outside of traditional the-
atre markets. While precise figures are
hard to come by, a conservative estimate
is that the 1976 dinner theatre attendance
was 11.1 million. In the same year, sum-
mer theatre of various sorts totaled over
13.2 million and small budget nonprofit
theatre 8.6 million. The activities of
this last category are particularly im-
portant to the theatre as a source of new
artistic and cultural expressions. It in-
cludes the 200 Off-Off-Broadway theatres
which are the core of the developmental
and ethnic theatre movements and which had
an estimated 1.7 million attendance in
1977-78.

Not only is attendance up in these theatre
forms but there is evidence that the num-
ber of new plays produced throughout the
country has doubled in the past 10 years.
With all this increase in activity has
come a change in the organization of pro-
fessional theatre through the growth of
nonprofit theatre which began in the 1960s.
While most commercial activity is organ-
ized on a production-by-production basis,
many nonprofit theatres have sought to be-
come permanent institutions in their com-
munities. Yet in spite of the very real
differences between them, the evidence is
that commercial and nonprofit theatres
share facilities, plays, and personnel.

There are sound reasons — because of the
economics facing both types of theatre —
for believing that this interdependence
will increase in the future. Each type of
organization offers certain advantages
that complement those offered by the other.
The nonprofit theatre is well-suited to
the development of new works and talents,
and to the production of works with little
commercial potential. The commercial the-
atre may provide a vehicle for national

21

Table 2

Attendance by theatre type 1976-77

Capacity
(seat 8)

Perform-
ances

f Attendan
I Jmillionst

Broadway

;39

>.3X

49,000 £^S^y£ 10,800

*ms%

Road

Dinner

Large musical
arenas and hardtops

te'y^MJ^ts 700,000 t^£z£££ 9y000 fS^M

99,000

3,000

,£'■£.-%. ^>?

ESSS^ 45,000 kia5gJSRftl8 32,000 {^3^^^

Small summer stock

Outdoor

K^-'^IO.

*■«

100,000

3gat|fl&4 22,000 t^«-»i^#

ru^A-j*

2,000 i^l^'^'vUV

LORT

r yg-.uzz

38,400

13,200

^MU^. ""Vj

Nonprofit touring

fiH. - <• ■" <;"-■ - 4&

3,000

aUU^^M-

Other small

budget

[:" ;; -520 *&

— -

^B^Cif^^^:

Total

r" 1,541 ;

1,031,400

l^r 3^.99"^

95,000

*-:.63»8.--:>v . ;« -j

Community

l: 2,500,^

—

45,000

*-7; .„

College

\z;7&&m$&

- —

[;;^.T,500,;^

30,000

1" 9j0:,vJh^^

High school

1% 3niooo:vf

— -

^:jofT0Op;^

150,000

^5*0 :--: v

Total

f ^5,000~ *;<

P^4f^BM^

225,000

ir-60^7., ;:;,-;;.H;

and international recognition of artistry
as well as attractive financial rewards.

The social characteristics of theatre au-
diences indicate these audiences are, in
relation to the general population, more
educated and more affluent; they contain
more young adults and more persons from
professional occupations (but about the
same number of men and women; however, fe-
male professionals attend more often than
males) ; they are more likely to be urban
and from the northeastern region of the
country. Apparently there is little
difference among audiences for the differ-
ent types of theatre on which data was
collected. However, little is known about
the new audiences for regional and dinner
theatre; and developmental theatres in
particular are likely to attract a differ-
ent audience than the more established
theatres .

22

The evidence of trends in attendance sug-
gests that, after a decline in the early
1970s, attendance has returned at least to
the levels of the beginning of the decade.
If this is the case, the estimates for
1972 would approximate the attendance in
1976-77: all the estimates fall within
the range of 55 to 65 million tickets
which represent 16 to 20 million persons
attending professional theatre. It is
likely that attendance figures for amateur
theatre are at least this large.

In addition to these totals, estimates of
trends in attendance, average audience
size, percent of capacity filled, and av-
erage ticket price can be calculated for
Broadway, the road, and regional theatres.

Broadway attendance reached a high in
the period of nearly 11 million during
the 1967-68 season. It dropped steadily
to a low of 6 million until the 1972-73
season. While sources within the theatre
industry arrived at a somewhat lower fig-
ure for the 1967-68 season (9.5 million),
there is agreement that attendance de-
clined from the mid-1960s through the ear-
ly 1970s. On the surface, these yearly
figures appear to indicate that the slump
of the early 1970s was temporary and that
attendance is recovering. It is instruc-
tive to consider the longer-range trends
for Broadway attendance. Figures indicate
that during the early 1970s slump, atten-
dance was lower than anytime since the
Great Depression of the 1930s. Even after

Figure I

Attendance by theatre type 1976-77

I 1 *'t ■Ul»^^»— ^g»^^^»

f -

r — ■ ■.•=-» =7 V--S--» -<r..-« '

* ~ -* -

J- - - .. * .<•_.. _. -.-•• .-.•- - . -

■*. . -i- -

■ •<- »d -«*■* .; :r-;

*- . --" •■ . -£r« .-*-•>„ -.*-*- e«*

Broadway

-^S&

Pl«%-

»_. jvi. -J' •,-

Truck and bus

t"' | ' • .: -•*?•».-"•: ?J* 1

~-S «2£ ,vf' -r«-"c5i- .* t-j

?>v« ■' * ■?? *^ *> »-<

J ^^^^| — -V ••-"wt -.— /'

- ,.-. -^Or'-i *~

U6%

Large musical

W H ... — - .•--_-' -.'■■'—.- -

r ':.:'.V. -.IT VTT^V Regional

Small budget
Nonprofit touring

f .

. -•. % * +■

^ -

^*,»'' -i ■!,»£",. ■T'i-. - ... ^ _.il vL

J;"*3 ^"» i.'-*

P 10% "*s': :*; - 7 '

3^3H — *~'-r -
J8I ^

• .a-,- . • st- - ■...

: -sc :>"

| J 3% [ v*

■y^f^j

■

I "^9

. * - . " ' ■>..--

"

■^" . .*■-

fio%

1 fcl3%~-l-

• v7J.rt-.ii ■--■

r^^^2%..---i

--'■-) ^ . " •

• — ■■*"■ ■»

^ .«_- yr

0

Percent

S,.-

10

X5

■~A~. --..:;-»

L—

Also, the data show that theatre audiences
seem to feel very committed to the the-
atre, satisfied with their experiences,
and consider the experiences highly valu-
able. People go to the theatre if they
are familiar with it and if they have the
opportunity; they fail to go if they lack
exposure and (for selected groups) because
of cost, inaccessibility, and fear of go-
ing out at night. Theatre attendance also
depends on the distance of the theatre.
Radio, TV, and movies do seem to compete
with theatre, especially for younger and
older audiences.

Finally, there is evidence that while the
general public is in favor of supporting
the arts through taxes, there is no wide-
spread agreement on support for the the-
atre in particular. At the end of this
chapter is an argument that price in-
creases may dampen ticket demand more than
earlier studies suggested.

These conclusions are based on existing
data which are seriously incomplete. Thus
many of the figures reported here must be
regarded as tentative estimates. No new
surveys of audiences were undertaken but a
comprehensive list of existing studies and
sources on theatre audiences was assembled.
This task was made easier by the work of a
concurrent research project on the arts,
National Endowment for the Arts Research
Report #9, Audience Studies of the Perform-
ing Arts and Museums: A Critical Review
(see list at the back of this report) . The
authors graciously gave access to the stu-
dies they had gathered. Data were obtained
from a variety of sources, including thea-
tre service organizations , commercial trade
publications, individual theatres, grant-
making institutions, community and state
arts councils, and government agencies.

THEATRE ATTENDANCE

There are several different approaches in
estimating total American theatre atten-
dance. Given the data available, the best
overall estimate is based on surveys which
ask people how often they attend. One
national survey which asked questions
about theatre-going was undertaken in 1973.
Although several years old, its figures
probably do not differ greatly from cur-
rent ones.

When 32 percent of the national adult pop-
ulation sampled in 1973 said that they had
attended a "live theatre" performance at
least once in the previous 12 months, this
would mean that 46.6 million adults had
gone to the theatre that year. Moreover,

9 percent of the sample reported attending
only once, 12 percent two or three times,
6 percent four or five times, 3 percent
six to nine times, and 2 percent more than
nine times. On this basis, the estimated
number of tickets sold (or given away)
would be 157.8 million.

There are two problems here: the reported
attendance may have been inflated because
people responding to surveys sometimes
wish to appear more knowledgeable about or
more involved in the subject than they
really are; and the survey did not distin-
guish professional theatre from school
plays, free community programs, church
skits, amateur theatre, and so forth.

Because of these problems another estimate
was made drawing on a Ford Foundation sur-
vey of 12 cities in 1972 and using its
figures in combination with the national
survey. The Ford Foundation reported that
16 percent of its urban sample had seen at
least one professional play the previous
year. According to the national survey,
theatre attendance in cities and suburbs
was 1.4 times higher than in the country
as a Whole. This would mean that approx-
imately 11 percent of the nation, or 16
million adults, saw a professional play in
1973. If one then uses the national sur-
vey's ratio of tickets to attenders, the
tickets sold to professional theatre would
be 54.4 million.

As a check on this figure, theatre atten-
dance can be estimated by examining the-
atre' receipts. In 1972 the U.S. Census of
Business reported $277.2 million in re-
ceipts for "producers of legitimate the-
atre." Of this, $52.3 million was from
Broadway where the average ticket price
(February 1971) was $7.81, which would
result in an estimated attendance of 6.7
million. Corresponding figures for the
"road" (commercial touring) were $49.7
million in receipts with an average ticket
of $5.96, yielding 8.3 million attendance.
If half the remaining $175.2 million in
receipts is attributed to the larger res-
ident and stock companies (average ticket
$5) and half to smaller theatres (with a
$3 average ticket) , this would result in
additional attendance of 46.7 .million.
The overall total is 61.7 million.

Separate estimates of attendance can be
made for each of the various types of pro-
fessional theatre in 1976-77 (see Table 2).
By this method, total attendance is 63.8
million for that season. Figure I (on the
following page) shows comparative attend-
ance by a slightly different classification.
Here "Road" is divided into "Large road"
and "Truck and bus"; "Regional and small
budget" together approximate the "Other
small budget" of Table 2.

23

Figure II

Annual Broadway productions 1900 to 1977

26

three years of increase, the 1976-77 weekly
attendance figures remain lower than for
any year between 1943 and 1970.

Attendance for road (national touring com-
panies only) performances are available
only since 1970 and indicate that the road
follows Broadway with a lag of one or two
seasons.

In contrast to both Broadway and the road,
attendance at LOST (League of Resident
Theatres) and "other" regional theatres
has risen steadily over 11 seasons. The
figure for 1976, in fact, was about double
that for 1966. In other words, while
Broadway and the road have held their own,
regional theatre attendance has grown dra-
matically. This is an important trend,
one that probably would be even more pro-
nounced if attendance trends of dinner and
stock performances were available for the
same time period, since all indication's
are that these have grown, too. For what-
ever reasons, it appears that a signifi-
cant degree of " regional! z at ion" has taken
place in patterns of theatre attendance
over the past decade.

This increase in attendance is not the re-
sult of upward trends in average audience
size and in percent of theatre capacity
filled. These have remained almost con-
stant during the past seven seasons of re-
gional theatre. Instead, the increase has
to do with the number of performances giv-
en, which is discussed in the next section.

Finally, information is available for es-
timating trends of the average ticket
price for Broadway, the road, and regional
theatre for the seasons between 1970 and
1977. Ticket prices in all three have
risen substantially — by about 20 percent
for regional theatre, 40 percent for Broad-
way, and 45 percent for the road.

These increases raise the question of what
their effect has been on attendance. The
relation between price and demand is con-
sidered in more detail later in this chap-
ter, but it is apparent that increased
ticket prices have not produced a corre-
sponding decrease in attendance. Nor does
there seem to be any clear connection be-
tween year-to-year changes in ticket price
and year-to-year change in attendance.
When Broadway prices increased the most
(between 1974 and 1975) , attendance also
increased that year, as it did the next.
What cannot be concluded from these data
alone, of course, is whether or not the
increases in ticket price may have damp-
ened potential attendance, that is, wheth-
er or not attendance may nave been still
higher had ticket prices not been raised.

THEATRE ORGANIZATION AND ACTIVITY

The following section discusses basic sta-
tistical data on such matters as theatre
facilities, ticket sales, productions, and
performances for various types of theatre.
The data are primarily from theatre activi-
ty in the 1976-77 season but whenever pos-
sible comparisons are made with the past.
As with any attempt to describe a complex
activity, the categories for theatre types
are in some sense arbitrary. They are
chosen as a convenient and useful way to
describe theatre activity and they are
based on such considerations as Actors'
Equity Association contract types and Na-
tional Endowment for the Arts Theatre Pro-
gram classifications.

There are several sorts of theatres for
which there was little data available and
so little analysis has been done. This
does not imply any judgment about the rel-
ative quality or importance of the work of
such theatres, only that time constraints
and availability of information meant that
the coverage had to be less detailed.

The following types are considered:

Broadway

Road

Dinner

Summer

Regional theatres
with budgets
over $250,000

Of f -Br oadway
Regional theatres
with budgets under
$250,000 (inc. Off-
Off -Broadway)
Black & Chicano
Other small theatres

The examination of theatre organization
and activity concludes with the relation-
ship between commercial and nonprofit the-
atre and data on production of new plays.

Broadway

Broadway currently consists of 39 theatres
that operate under Actors' Equity Associa-
tion's Production Contract. Most of the
productions in these theatres are present-
ed on a commercial basis. In the 1976-77
season, these 39 Broadway theatres pro-
duced 63 plays for 10,776 performances to
an audience of 8.8 million. With a total
seating capacity of 49,000, the average
theatre capacity was 1,256.

The data on Broadway theatre have two in-
teresting features. First, Variety re-
cords that the number of productions mount-
ed on Broadway grew from 1900 until 1928,
declined between 1928 and the early 1950s,

25

Table 3

Regional distribution of facilities suitable for Broadway tryouts or touring 1976-77

■■■ HBfl HHI 1 - *£j$.t*v ■

t Civic ..~ Capacity-
Region \ -centers J. . ( seats ) ,4

Col-
leges

Capacity
(seats)

... — t ■ .... ■-■_*■,.■

Gommer- Capacity
cial (seats). ~

Total
facil-
ities

Total

capacity

(seats)

Middle «»- , i>r :^«iw • -*-- v . i -.;,*•
Atlantic \" 29 V- * ' 75,77? .^

11

15,950

»■

i'S-'. 12,597.~5

47

104,324

Northeast fc.;--^~- r^r.-^-. .9 riOO .?:

4

6,525

i

A.'

• -5 . ^*-«= ;. •;• -8 « JL18 -ft

13

23,743

West North ^-i-*v -'-i-rC. — . --••: --*::
Central fh ,:i<^. '- i? . ^42 , 384>

13

21,056

:

3 7,359

32

70,799

South £■ > ; -, ■-*. -• * . h>
Atlantic r 35- - B7,017^.

15

27,821

-■

3 _ 4,90oV

53

119,738

East North ^-v?'":. .->;r :* £
Central p. -34 ; * 84,606-

17

48,478

V

. :.*•"• .~a4r»o'*i

59

147,834

West South r-o ;. '. *j. . ,.^.-1.^ .» ij>
Central |r 30 ? . - -48 » 3* 2 :■%?

13

34,090

X

*

r«. .•■--. - - **^S* * , *-JV*m ^

33

82,452

Mountain t- 11 « j*-r .21»243,^

7

12,150

h'

X* ... l,814>c

19

35,211

East South j iv_i-:--*¥' » tv'- -£f<$£&
Central for J£ -ft-t . -44>O80 ^

3

7,575

*-• /:';S*^1:.-S'"j- •;-*■: V.2£

20

51,655

Pacific £ 19" 49,541 ?v

4

9,621

•
f.

-10 «■■■/■ .rrr-18 *7fit>"~

33

77,930

Total F. H857>?cc 462 ,114 *

87

183,266

r

•37- *f • *^-»^08 1 306 *t

309

713,686

do their own booking, and have a guarantee
of 50 or 60 percent of capacity (which may
or may not include local expenses and ad-
vertising) . Operating costs are roughly
similar to Broadway costs. There is some
saving on designers' fees, royalties, and
rent; but transportation costs must be
built into the packages and there are ho-
tel and restaurant expenses for the per-
sonnel.

The third tier in the road network is made
up of bus and truck companies performing
one-night stands. Here the set is "soft-
er* and can be struck in an hour or two.
The company can play in six different
places in one week, proceeding to the next
stop after each show. The theatre pays
the producer a straight fee rather than a
guarantee or a percentage.

One of the important differences between
the modern road tour and those of the past
is that of the facilitiea available to
road tours, only 37 of the 309 theatres
where they play remain privately owned.
The remaining houses, except for some mu-

nicipally renovated old theatres, are multi-
purpose halls used for music, dance, rock
attractions, movies, conventions, meetings,
and community activities; 87 are college or
university-owned facilities and 185 are civ-
ic centera (see Table 3). There are road
houses in 43 states, a degree of dispersion
surpassed only by the summer stock and small
theatres (see Table 1).

Much of the data for estimating road acti-
vity comes from Variety reports of box of-
fice grosses in. the key cities which in-
clude both tryouts and large touring pro-
ductions. These two types of productions
use the same theatres; together they had
an audience of 11.4 million in 1976-77.
Tryouts , however , are a small part of this
figure. They take place in a few well-
equipped theatres with established audi-
ences. Also, they are being supplanted by
less expensive ways of testing audience
reaction before an official Broadway open-
ing. Tryouts are in a decline while tour-
ing increases.

Bus and truck operations represent an ac-

28

and since then has been roughly constant
(see Figure II). Along with this overall
pattern are sharp year-to-year swings of
activity. Each season's activity depends
on unpredictable variables such as the
availability of capital and the decisions
of relatively few people on whether to
mount a production. The number of perform-
ances per year is probably the best ba-
rometer of public interest. (Yearly gros-
ses , for example, are affected by infla-
tion.) What the performance figures show
is that despite continued business stagna-
tion, the ills of the inner city, the
flight of population, and the rising costs
of theatre attendance and associated ser-
vices such as taxis and restaurants, the
public is returning to Broadway theatre.

The number of playing weeks (8 perfor-
mances per week) has fluctuated sporadi-
cally between 1,325 in 1948 and 1,012 in
1953, until the catastrophic 1972-73 sea-
son which had only 889 playing weeks.
This was followed by an immediate upturn;
and 1976-77, with 1,347 playing weeks and
roughly 10,700 performances, was the best
year on record.

The 1977-78 season was reported to be
even better, with every Broadway theatre
in operation and productions waiting for
a theatre vacancy. Extra seats were
placed into the theatres since the pre-
vious high points in the 1920s and perfor-
mances are now given in the summer, thanks
to the installation of air conditioning,
so there is a potential for more perfor-
mances and larger audiences than ever
before.

The pattern of fewer new productions (but
record audiences) seems to indicate that
Broadway financial backers are very care-
ful about incurring risks, no doubt be-
cause of the high cost of mounting a pro-
duction. They are investing in only a
few, promising ventures and they are using
more and more material that has been test-
ed elsewhere, either in regional theatres
or from Off -Broadway productions.

Koad

In addition to its New York City audience
of 8.8 million, the Broadway complex
reaches beyond local Broadway perform-
ances with pre-opening tryouts, traveling
road companies of current -or recent shows,
and special touring productions adapted
for multi-purpose auditoriums in smaller
population areas. Zn the 1976-77 season,
these combined road activities accounted
for approximately 14.7 million paid admis-

sions. By comparison, the total sale of
theatre tickets in New York City— Broadway,
Of f -Broadway , and Off-Off-Broadway com-
bined—was about 10 million.'

The modern commercial road touring system
is an ingenious three-tiered network de-
signed to bring live theatre to large and
small population areas with suitable per-
forming space. Theatre clubs which spon-
sor local performances of road productions
are common, and both professional managers
and unpaid volunteers book attractions in-
to their communities.

The first tier in the network is composed
of national touring companies. These are
the deluxe operations— lavish productions,
comparable to the Broadway original, which
are staged, cast, and rehearsed by the or-
iginal producers, often while the parent
show is still running on Broadway. They
are booked into "key cities" (Los Angeles,
Washington, D.C. , Chicago, Boston, De-
troit, San Francisco, Philadelphia, Bal-
timore, Miami, Dallas, Cleveland, St. Louis,
Wilmington, and Pittsburgh) for at least a
week or as long as business remains brisk.
Everything travels— cast, crew, musicians,
sets, props, and even lights if necessary.
Ticket prices sometimes equal New York's
and these productions work against a guar-
antee of about 75 percent of capacity at-
tendance.

The Independent Booking Office is the
chief distributor of the national tours.
In 1975-76 this office scheduled eight mu-
sicals which toured for 356 playing weeks
(2,848 performances) and nine plays which
toured for 292 playing weeks (2,335 per-
formances) . The Office estimates that
there are about 140 theatres in 34 states
and the District of Columbia that can han-
dle productions of Broadway size and com-
plexity. However, the number of cities
that can financially sustain a run of the
increasingly expensive major productions
seems to be shrinking. Most of the 140
theatres cited are used for other purposes
or are not used at all.

The second level in the road network is
composed of bus and truck companies oper-
ating on a split-week basis. During the
last 10 years or so, special mobile opera-
tions have been developed to serve small
population centers. The sets, lights, and
costumes can be dismantled in two or three
hours and loaded onto a truck, which then
drives to the next booking. The cast and
the crew travel by bus.

Theatres that can sustain at least a three-
day run, or have less sophisticated theat-
rical facilities, will book a split-week
production. This is a full rest aging of a
successful Broadway show. The producers

27

created a supply of large, modern theatres
and auditoriums where performances can
take place. These theatres have an aver-
age of 500 more seats than their earlier
counterparts. Also, they are considerably
larger than Broadway houses, which may ex-
plain their relatively high profitability.

A third reason road activities have ex-
panded is the emergence of bus and truck
operations. And lastly, it seems that
throughout the country, a public has been
educated to the idea of live theatre, pos-
sibly through the audience-building ef-
forts of the nonprofit regional theatres.

The persons interviewed for this study
were unanimous in their belief that a mar-
ket always exists for such proven (and
scarce) material as successful Broadway
shows. They also maintain that there are
not enough suitable houses in operation
to satisfy the potential demand even for
this limited supply. New theatres built
in the 1960s, which were often funded by
public subscriptions and municipalities
through the leadership and prompting of
the local arts councils, have begun to
fill this need. Space in civic centers is
leased at prevailing market rates, inci-
dentally, and such rentals can be a pro-
fitable operation for the municipality.

It is not known what effect increasing the
number of Broadway shows and facilities
would have on tryouts and touring opera-
tions. According to theatre sources,
truck and bus tours are no longer growing
operations. They originally met theatre
requirements of the large, multi-use
buildings constructed in the 1960s.

Dinner

Dinner theatre, which started to expand in
the early 1970s, is one of the largest
sources of employment for actors, accord-
ing to Actors' Equity Association. These
theatres are run for profit, often by
small entrepreneurs with experience in the
food or theatre business, who are reluc-
tant to disclose details of their opera-
tions. The study data are incomplete.
Apparently, dinner theatres have an ex-
tremely high attrition rate, and yet
between 1971 and 1977 their numbers have
burgeoned, with many enterprises now
well-established .

The cost at a dinner theatre for meal,
show, and parking is $9-$ 13 per person for
well over half the theatres. Prices are
very competitive, and profits are usually
made on sales from the bar. The theatri-

cal fare is light, consisting almost en-
tirely of musicals and comedies. It is a
highly important new industry, and many
dinner theatres are now in areas where
live theatre has not previously flour-
ished.

There are 67 Equity companies and 61 oth-
ers listed in Leo Shull's Dinner Theatres
(New York: Leo Shull Publications, 1977) .
All of them, whether Equity houses or not,
are commercial. According to information
from the League of New York Theatres and
Producers, the median size of a house is
290 seats and the average number of pro-
ductions is 10 a year. Por an operation
to remain in business, an average of 75
percent of capacity is necessary. Esti-
mated yearly dinner theatre attendance is
based on 80 percent capacity in each the-
atre, 6 performances per week for 52 weeks.
The actual seating capacity and annual
number of productions was available in most
cases; otherwise the 290 seat median house
is used as an average seating capacity.

Based on these figures, dinner theatres
during the 1976-77 season had an annual
attendance of almost 11.1 million at
32,000 performances. This is certainly
underestimated, for there seem to be many
local dinner theatres throughout the coun-
try which could not be identified.

There is some reason to suspect that din-
ner theatre is a spontaneous, grassroots
effort to provide a local entertainment
version of a night out for dinner and a
Broadway show for those who live in areas
where the opportunity has not existed.
For example, William Gardner, who runs the
small, prestigious Academy Festival The-
atre in Lake Forest, Illinois, says, "As a
theatre that is attempting to do the clas-
sics and more difficult modern plays, we
find our audience is growing, and we find
them coming from dinner theatre. They are
people who left their television sets to
see television stars and old-time movie
stars in dinner theatres. If the experi-
ence of going to the dinner theatre has
been a pleasurable one, they will try oth-
er theatres."

Table 4 gives the geographic breakdown of
dinner theatres according to Actors' Eq-
uity Association, personal interviews, and
Shull's Dinner Theatres. They are more
concentrated in the South Atlantic states
and the Midwest than in the traditional
theatre markets of the Northeast and the
Pacific coast— an indication that they are
attracting a new audience for live perform-
ances. Well over half draw on areas with
a population of less than a million in a
100-mile radius; often dinner theatres are
located on the fringe of a city or in its
suburbs. Slightly more than half of the

30

tivity that grew up during the 1960s
with the construction of new civic centers
and college and university auditoriums.
Based on the 1976-77 itineraries of most
of these productions, there were approx-
imately 1,600 performances. Attendance
was 3.3 million (assuming an average 80
percent of capacity) . Combining this es-
timate with the figures for large produc-
tions and tryouts would mean that the to-
tal attendance for road theatre activity
in 1976-77 was 14.7 million.

In Economics of the American Theatre,
Thomas Moore pointed out that, "Before
World War I Broadway existed largely to
supply the Road with shows. Productions
were launched in New York and Chicago with
the intention of trying them out. After a
relatively short run, they were sent on
tour. " Moore concluded that in the 1960s
the situation had been completely re-
versed, and he foresaw "an unhealthy fu-

ture for the Road." Broadway-type per-
forming activity outside of New York did
decline markedly in the 1950s and 1960s,
Moore noted, reaching a low of 643 playing
weeks by the 1964-65 season. Since then,
however, the trend has reversed and al-
though there have been sharp, cyclical
swings, as seen in Figure III, the road is
grossing almost as much as Broadway.

There are four reasons for the recent up-
swing in road activity. First, there is a
large market for plays that have had suc-
cessful runs on Broadway, and the road
profits from Broadway success. Previously
a producer would wait until a Broadway
show was established before mounting a
traveling show; the tendency now is to
have as many companies on the road as soon
as possible to help offset the enormous
costs of a Broadway production.

Second, the building boom of the 1960s

Figure III

Road activity —playing waaka in key dtiaa 1948 to 1976

PQ ■mj>.*j '

■ ■■-m;u*T" j»p'.- t* w'"uwuy-'v sqi; w

1100

29

Table 5

Regional distribution of summer stock companies 1977

Region

"Total;-*'

^Zaotk-*''J ^^Cautmcx^ * ''"-^' • -companr
^l«ge.:,;profIt;i"Xial Other Mes \r?*s Equity

Percent ^capacity,' Estimated
Equity ^:*(»eatsV:^ attendance

Middle
Atlantic

11

*il-

68

19

28% P^sSiHn^ 1,236,970

Northeast

m

a§3Bars^^^»^v ; 11

^9

7^

20

34%

y .-\>22/8Z2'>

798,770

West North jr. r£
Central hS2I-

:^;«.V,:'::-::r,-?:a|> . 2

*-*/ 31

1

3%

f 12V7a3&

447,405

South
Atlantic

r. -
i ■•■■ '£*■

^V-V ..- - ...... ■_

34

6

15%

760,410

East North I
Central f 29 -

.V^^TL*.- 5

59

; +* .

13

22%

J25^i048|J

876,680

West South » "-'.

Central fc 1

i ■

1 3j """ - "... ;-."

J7

.-?•••;£

—

0%

99,750

Mountain

r 12

t

:\:^;--^~:^w::v '. *-€■

^ -34

*■ -^

2

8%

f ^9,172^

321,020

East South' i
Central | 4

4 iip/-;::M ; :,- - 3

-S

- V-

1

13%

L-.i?'?25^-.

130,375

Pacific

rii

.^^-: -1. 2*

£ v"20

" rjjp

1

5%

; ^219^;

252,665

Total

p.40::

., ;r64;^~~-r ;<65 ^. __ "41

1.-A1P,

»"»Tan

63

20%

[140VS87X

4,924,045

Theatre Association, 1977). The data sum-
marized in Table 5 are based on these
sources , on information from Actors ' Eq-
uity Association, and on interviews con-
ducted with theatres. While incomplete,
the data are an indication of summer stock
activity throughout the country. There
are 310 theatres in this category, and
they were attended by almost 5 million
people in the 1976-77 season. The number
of theatres increased by 11 percent and
states with summer theatres increased from
34 to 45 states between 1965 and 1977.

Only about 20 percent of summer theatres
have contracts with Actors' Equity Associ-
ation and many are operated for profit.
Less than 40 percent of summer theatres
gave information on salaries, and only one
third of those giving such information
said that they pay actors at all. There
is an ample supply of young, would-be pro-
fessionals willing to work for nothing or
very little, because experience is re-
quired to join Actors' Equity Association
and enter the profession.

Close to half of the summer theatres are
located on college and university campus-
es. Some of these operate as classes for
advanced students and charge tuition.

Others provide a large range of theatre
from fully professional to resident groups
built around one or two members of Actors'
Equity Association. In addition, about 20
percent of summer theatres are a wide as-
sortment of nonprofit theatres ranging
from highly professional, respected com-
panies to teenage summer schools. And an-
other 20 percent are commercial theatres,
many of which present a summer of 10 to 12
one-week runs of specially packaged trav-
eling productions rather than producing
their own shows.

Table 5 gives geographical distribution
of summer theatres. College-affiliated
summer theatre is strong almost every-
where, and other summer theatres are con-
centrated in the resort areas of the East
Coast and the North Central states. There
are summer theatres in 48 states.

32

Table 4

Regional distribution of dinner theatres 1977

Region

jr ^Equity*

Non- Perform-
Equity - ances .-

Produc-
tions

.^aoapaci-ty^f Estimated

attendance

';;^i«eats};

■£ftt-

Middle
Atlantic

12

4,750

190 fe^i#Jisip3l

1,286,688

Northeast

5

2,750 ]

; '--,--

110

l ;;5**49

1,409,989

West North
Central

2

:2,750

110

1,021,862

South
Atlantic

20

8,750

a

350

[ r'5fi>i434':

■ v

2,604,326

East North
Central

4

3,750

- '-■'-'

150

t._ ■'-". .'v"'; '..-,.

■,J5,864

1,463,653

West South
Central

L >^7;r^.

5

3,000.

.^f

120

L ^ 3,223 •

1,303,660

Mountain

5

T '-2/750

*?§?

110

t"^;a^557:

887,826

East South
Central

* * *M '.'-'-'■ i«V=

6

* a,750:

70

J*'-..-\. ''<*!, - --<■ . '7*...

l"^2^01

549,369

Pacific

5 .i.^SS^W^

2

J^750

-:«-^

70

j;;^:-2#429.

\ ■*■■■*£ **"

606,278

Total

61

r 32,000,

1,280

Tf 444V606;

"'**"- y..";~" ' •

11,133,651

dinner theatres have Equity contracts. A
large dinner theatre hires 50 to 60 part-
time people, many of them students, as
actors, technicians, waiters, and other
helpers. In addition to the usual res-
taurant staff, a dinner theatre generally
requires two to four additional full-time
people at the box office.

Summer

A variety of purposes are served by summer
theatre. Aside from its function of sell-
ing entertainment, it is traditionally the
area in which neophyte actors and other
theatre professionals gain experience and
credits. Some studies indicate that sum-
mer theatres contibute to the economies of
surrounding areas; the large musical tents
and other theatres in resort areas, many
of them profitable enterprises, do a thriv-
ing business.

Summer theatre is found in almost 400 lo-
cations in virtually every part of the
country — on college campuses, in huge out-
door facilities in large cities, at his-
torical sites and religious centers, and
serving summer resorts. The fare ranges
from classical and avant-garde drama (typ-
ically on college campuses) , through yearly
Shakespeare festivals, to touring packaged
productions of older Broadway plays star-
ring television personalities and movie
stars. Musical productions represent a
popular form of summer theatre fare
around the country.

There are 63 theatres that have summer
stock contracts with Actors' Equity Asso-
ciation. Apart from these, it is difficult
to find information on the number, geograph-
ical distribution, size, professionalism,
and level of activity of such theatres.
There are, however, two handbooks that are
published as guides for those seeking em-
ployment, Leo S hull's Summer Theatres (New
York: Leo Shull Publications, 1977) and
American Theatre Association's Summer The-
atre Directory (Washington, D.C.: American

31

Table 6

Regional distribution of summer musical theatres 1977

Region V' 'itlea

Middle Atlantic twR^^S^ 10"4

Northeast

•^^ :■- C

•^"a^^

West North Central *V;^£53f'

South Atlantic

East North Central

West South Central

Mountain

East South Central
Pacific

Total

30

Season
in weeks

f anoa»':£-u*'

Total

capacity

(seats)

10

4-40

11

11

13

22,748

15,581

M&&**i#3S

^~—

>»-'- ^BOSFrg 12,172

3t5-;

20,160

-..<?:.

n44

»* 1*

5,216

^78

3,000

3,107

98,210

W&.

s^;

*i£

19,333 ^J-B##3^7£

h^r si7^4^

^; 254,480

I

*-
P

t ,,- 017,000

6,580,798

Table 7

Regional theatres with 1977 budgets over $250,000

^^■■■■■■■■VIPHHHHIHBHHHHHHIHHB^T^^HHSS^ ■■Hum

Region

r

Tactt-^**

ities -.:•'

Produc-
tions

f

•_ ^Perform- ^
?~fc-a«iee8"7:^:-?:::'

Total

capacity

(seats)

r

Estimated

attendance

Middle Atlantic

t

-*~ 71^'".. :

71

r

V3/708;f5r

6,603

c

1,757,919

Northeast

I.

1.1 t

81

i

~ 3.V802 ;*

8,978

k-

754,131

West North Central

1

t

~r- 4,^,. -,::

23

i

t

v921 ^r

2,449

i

485,439

South Atlantic

I

i

9

52

»

1,454

4,187

528,009

East North Central

i-

•9

60

r

1,849

6,937

j.

724,977

West South Central

t

•^ -..3 ;-

19

t
■

1

569 17

1,565

i-

353,878

Mountain

i--.

1

6

\

"ao9 '--""

518

•

39/778

East South Central

i

-r- 2

15

1

412 ; -

1,406

t

,175,152

Pacific

r

10

69

1

2, =421 vr

5,731

\

1,328,053

Total

-*-f-^-65---;-jr

396

t'
1

13,245* ••- ->■

38,374

t

*,t>37,336

34

Summer musical theatre. Thirty theatres
with more than 1,000 seats were found
which devote themselves to musical the-
atre. Estimated attendance for summer mu-
sical theatre in 1977 was 6.6 million.
The largest theatre is the St. Louis Muni-
cipal Opera which sells out its 11,475
seat outdoor proscenium theatre once or
twice a year. About a half dozen of these
theatres, notably the huge municipal the-
atres of the Midwest, are nonprofit opera-
tions backed by private citizens who act
as guarantors. Business is good, and the
guarantors are seldom called upon to con-
tribute financial support.

There are two privately owned and operated
chains— the John Kenley Players in Ohio
and Music Fair Enterprises in the Middle
Atlantic region. Most of the rest are
privately run summer musical theatres. A
new nonprofit, 3,000-seat facility opened
for the 1977-78 season in Tulsa, Oklahoma.

The season is typically 10 to 12 weeks.
(Although they are not exclusively summer
operations, the four Music Fair hardtops
which run 40 weeks each year are included
in the data.) Virtually all have full Ac-
tors' Equity Association employment.
Ticket prices are surprisingly low, rang-
ing from $2 to $13. Most of the houses
keep under a $10 maximum, and John Kenley
Players charges only $4.95 per person.

Most theatres do some production, at least
occasionally, and they all construct their
own scenery locally. Prices range from $1
million for a proscenium production equal
to Broadway to $500,000 in an arena stage.
Operating costs are about $20,000 to
$30,000 a week, and there is almost always
a star heading the cast. A good deal of
sharing of productions goes on among these
theatres, although sets are not exchanged
and only the company travels. Music Fair
Enterprises estimates that its productions
can run from two weeks (for the occasional
failure) to two years, and they have occa-
sionally brought popular attractions to
Broadway.

There are several points to note about
summer musical theatres. They serve a
large audience in a short season. They
are likely to be profitable, no doubt be-
cause of the huge facilities in which per-
formances are given. While the operation
would languish without a constant supply
of new material from Broadway, productions
are always mounted outside of New York
City. The musical "tent" theatres cast
their shows in New York, Chicago, Cali-
fornia, or locally. They build their own
sets, market their own products, and
attract visitors, thus passing on many
economic benefits to their communities.
Also, the municipal musical theatre houses

are old, established community services.
Table 6 (on following page) gives details,
based on Actors' Equity Association infor-
mation and interviews, of the size and dis-
tribution of musical theatres , which are lo-
cated mainly in summer resort areas of the
Northeast and the Midwest. The data here
are not an estimate but are based almost
totally on actual attendance figures.

Outdoor amphitheatres. There are approx-
imately 53 large amphitheatres in which
great pageants on religious or historical
themes are performed during the summer.
The Institute of Outdoor Drama gives de-
tailed information on 40 such theatres.
In 1976-77 these theatres presented an av-
erage of 51 performances each, and the
audience numbered a total of 1,714,963.

Regional Theatres with Budgets
Over $250,000

Much of the nonprofit regional resident the-
atre activity in this country takes place
in 65 full-season theatres. All except one
work under Actors' Equity Association LORT
(League of Resident Theatres) contracts.
They range from companies in which all ac-
tors are members of Equity to companies
that mix Equity with non-Equity actors.

The size and the nature of these opera-
tions vary; the average theatre has
about 560 seats. While some of the 65
theatres are extremely active in develop-
ing new talent and the work of new play-
wrights, others present the classics and
re-stage established Broadway plays.

Performances of subscription series pro-
ductions and of total productions have
both moved upward over the 12 -year period,
with subscription series performances in-
creasing at a rate of 0.75 percent per
year and total performances at the rate of
2.45 percent per year.

This combination of the number of produc-
tions together with a gradual increase in
the number of performances means that in-
dividual productions are being performed
a greater number of times. During the
1965-66 season, the average number of per-
formances of a production was 20; the peak
was during the 1974-75 season with an av-
erage of 30. The pattern is an extremely
interesting one. It shows one way in
which the nonprofit theatre has combated
the "cost disease." Since with every pro-
duction there are certain fixed costs, for
costumes, scenery, and the director's and
designer's fees, these can be spread over

33

Figure IV

Sources of plays produced on Broadway between 1964 and 1977

-1964-65 '1968-69- * J97CKW ^a971-72? JS72-r22 J973-*74 1974-75 , 1975^76 J976-77

--- '.z^,-:L. ~;.*?i^ ?.:: >?:£ -v.: - ' .'-a- aSaa^Maafa in*, : ■"r^f-T'i T*&% £j f "^ -'f ?f-;?tf aaefeS :fiK «£ ■' 'V' - : ' x r

major commitment in the lives of those who
pursue it. Neither does it have the tran-
sitory quality of summer stock, as it
struggles to be permanent.

The best work of these theatres is dis-
cussed in scholarly journals and repre-
sents the United States at international
festivals. Audiences are typically small
and often intensely committed. New plays
and experiments in direction, lighting, and
staging can be tested with little finan-
cial risk. Other professionals draw upon
the work of small theatres and may adapt
and popularize the innovations.

These theatres are virtually all nonprofit
operations, and most have at least applied
for some sort of state or federal assis-

tance. Such theatres were identified us-
ing the records of Theatre Communications
Group, Alternative Theatre, Grassroots Al-
ternate Roots Directory, the records of
the National Endowment for the Arts, New
York State Council on the Arts, Ford Foun-
dation, and data from participants in the
New York Theatre Development Fund (TDF)
voucher program and its spin-offs in Buf-
falo, Boston, and Chicago. The small New
York theatres accepted for inclusion in the
TDF voucher program, which requires "pro-
fessional aspiration," virtually define
Of f -Of f -Broadway .

The other two important concentrations of
about 50 theatres each are in California
(with centers of activity in Los Angeles
and the San Francisco Bay Area) and Chicago;

36

a larger base by increasing the number of
times each production is performed. How-
ever, there may also be some sacrifice of
artistic objectives if fewer works are
tested in actual production. There may
also be a greater tendency to play to more
•popular tastes; a long run is economical
only if there is an adequate audience.

The financing of regional resident the-
atres is through box office receipts, oth-
er earnings, and municipal, state, and
federal subsidies along with contributions
from private foundations, businesses, and
individuals. These theatres have been de-
veloping new audiences, and they attempt
to be a community resource, bringing pro-
ductions and services into schools, pris-
ons, hospitals, and small, outlying com-
munities. Their facilities are often used
by other local and amateur groups and com-
munity organizations.

Table 7 summarizes certain activities of
these theatres, based on information from
Theatre Communications Group, National En-
dowment for the Arts, and Actors' Equity
Association. Although concentrated on the
two coasts, they are located in 29 states.
Their combined annual attendance is 6
million in house. In addition, they often
tour throughout their regions, playing to
an additional audience of approximately
1.5 million. No estimate has yet been
made of the number of institutional visits
they routinely provide.

Off-Broadway

The Prophetic Theatre* (New York: Coward -
McCann & Geoghegan, 1972) in 1952 when
The New York Times reviewed Circle in the
Square ' s production of Summer and Smoke
at a small Off -Broadway theatre in Sheridan
Square, and focused public attention on
the exciting work being done away from
Broadway .

Stuart Little wrote, "Off-Broadway is de-
fined by the variety of its uses. It is a
showcase for new actors and directors, a
place where new talent can be discovered.
It is a place to revive Broadway failures
and restore the reputations of playwrights
who may have been ill-served in the regu-
lar commercial theatre. It provides the
means of encouraging the growth of the-
atres that exist in time and so engage the
loyalties of talented professions (so)
that they can develop continuity of pro-
duction and a consistent artistic policy."

By 1964 , production costs had risen from
$1,500 to $15,000 and weekly operating
costs had tripled, going from $1,000 to
$3,200. The widely criticized Actors' Eq-
uity Association contract raised the Off-
Broadway minimum from $50 to $60 per week
and many tiny theatres could no longer
support the general burden of escalated
costs. In 1964, Off-Broadway activity
started to decline. The Off -Broadway con-
tract has now become a catch-all for the-
atres larger than showcase but smaller
than Broadway.

What about the functions outlined by Stu-
art Little? They have found a new home in
Of f-Of f Broadway where the same economic
battle is being waged.

Technically, Off-Broadway covers 25 or 30
houses with seating capacities under 300
in Manhattan outside the Broadway theatre
district. These theatres, available for
indeterminate runs, operate under Actors'
Equity Off-Broadway contracts. As with
Broadway, Off-Broadway is defined in terms
of real estate. Off-Broadway is no longer
a significant arena. In 1975-76, the
last year for which there are figures, 46
productions were staged in 24 different
houses, but exactly half were from non-
profit resident theatres with main staqes
elsewhere in the city. Another 10 were
staged by commercial producers. In com-
parison with Broadway, costs and salaries
for Off -Broadway are lower, the risk is
smaller, and the potential financial
return is smaller. Off -Broadway does,
however, bestow some of the glamour of a
Broadway run. There has been much discus-
sion of the reasons for the rise and pre-
cipitous decline of Off -Broadway. The
movement probably began, according to
Stuart W. Little, author of Off-Broadway ,

Regional Theatres with Budgets
Under $250,000

This category of small-budget theatres is
the taproot of professional American the-
atre, providinq life, enerqy, and susten-
ance to the entire complex. It is the
arena where aspiring professionals are
trained and seasoned, a laboratory situa-
tion for experimental and innovative the-
atre work, a place where minority cul-
tures, women, and special interest groups
can dramatize their aspirations and devel-
op their cultures , a low- cost theatre
which the young, the old, and the poor can
afford to attend. Those who work in the
professionally oriented small theatre,
many of whom make their livings elsewhere,
are dedicated primarily to the pursuit of
artistic goals. Such theatre differs from
community and school theatre in that par-
ticipation is seldom an avocation, but a

35

of about 8,000 per year, an estimate of
the 1977-78 attendance in New York for
Off -Off -Broadway, black, and Hispanic
theatre was 1.7 million. It will be seen
from Figure IV and Figure V that this
sector of the New York theatre is a signi-
ficant contributor of material to the
commercial stage. It is also the largest
showcase for new plays in the country.
Between 1964 and 1977, the percentage of
shows playing on Broadway first produced
elsewhere ranged between 15 and 60 per-
cent.

Los Angeles. Professor Jon Cauble of the
University of California at Los Angeles,
in his unpublished report, Equity Waiver
Theatres (Los Angeles: University of Cali-
fornia, 1976) , reported on theatres with
seating capacity of less than 99 for which
Actors1 Equity Association requirements
were waived in 1972, making it possible
for these theatres to employ professional
actors. Since then, the number of these
theatres has doubled to 54. The number of
productions has more than tripled, as has
the number of plays produced by each unit.
The average length of a season is 22.3
weeks, or 75 nights a year. These the-
atres operated at 59 percent of capacity
in 1977 with an average audience of 47 per
night and a total audience of 190,000.

atre clubs in the tri-state area around
New York as well as in the city itself.
These "outing" clubs offered a night of
dinner, theatre, a birthday bonus for each
member, and price incentives utilizing the
TDF voucher program.

^he 1977 BTA directory listed 106 compan-
ies in 25 states and the District of Col-
umbia, including The Negro Ensemble Com-
pany, a full-scale regional theatre. Dr.
John M. Goering and Terry Williams* 1977
unpublished study, Black Theatre and Dance
in New York: A Study of the Black Theatre
Alliance, reports that 25 representative
companies gave their average age as 9.56
years. The average capacity of the 25
theatres was 355 seats, and the average
theatre produced 9.65 plays a year.

An important contribution of the black
theatre movement to American theatre has
been the development of a black audience
which also attends other theatrical pro-
ductions. Much amateur performance ac-
tivity using Broadway plays with black
themes also takes place in predominantly
black schools.

Other Small Theatres

Black and Chicano

During the 1960s and 1970s, a variety of
forces influenced black theatre. These
included the rise of black consciousness,
financial support from foundations, indus-
try, and the New York State Council on the
Arts, and the emergence of several gifted
black playwrights. Dozens of training pro-
grams, workshops, professional companies,
and community and street theatres came in-
to existence. These were run by blacks,
dealt with black themes, and appealed
mainly to black audiences. This movement,
represented by the Black Theatre Alliance
(BTA) , is distinct from the contributions
of a large number of black producers, per-
formers, musicians, and technicians who
work iri the mainstream of American theatre.

Chicano theatre, which is more rural in
character than black theatre, operates
mainly in California, Arizona, and New
Mexico. It is allied with black theatre
through the Black Theatre Alliance.

In the late 1960s the black theatre move-
ment carried on a vigorous and novel audi-
ence development program, organizing the-

There are many small theatres with vary-
ing degrees of professional orientation
about which little data are available.
For example, the amount of theatre for
children in the country is immense, with
regional theatres, summer stock companies,
and a variety of small theatres producing
children's plays. It has not been pos-
sible to estimate this activity and these
audiences have not been counted in the
tables. There is a small association of
major producers of children's theatre.
It seems likely that children's theatre
plays an important part in the development
of a future audience.

Women's theatre — that is, theatre dealing
with the themes of the women's liberation
movement — is fragmented and has a high at-
trition rate, although it persists
throughout the country with, perhaps, as
many as 100 such groups. Its special
problem is the one that besets women's or-
ganizations generally— the reluctance of
funding agencies to support them even at
the level of other special interest
groups. They are often collectives, pro-
duce a small number of plays, commonly de-
velop their own material, and have a life-
span of three to four years . At the pres-
ent time there are about 15 women's the-

38

Figure V

Sources of musicals produced on Broadway between 1964 and 1977

mmmm

0 ^M^T^^

^/iS3i"^t*2*i ^jSSs. -£r ~'~*i?~ •"'■£*■ /v-?3

t^SjTr SS**".^»9t >

-*0:V

o^v ^'«S~4:* .

-•*■

"■»«.••* '"*?i»fV

<,■&-. ^-tc?;::.r«ii -70 - >' ■--

i

Tt.8?

"• '"-1.*.*,

-SO
-40
-30
-20
-10

L

\. ^^.4964^65 74966-89 .'4970-71 4974-72 il972r?»? 4973-74 -1974-OS ,4975-76 r 4976-77

i*-

hi Mm ■ i fa

laatMwd War r "--• ■» ii L-~ f ' ■ton -»fTiM— - r'f' * ~"i If" " iMW

!■■! •f'nwtwi<i'whi<erXi "tub ■ weaitetf iTWtfafcfaifcmt . nij-t- v^i*" -'- **£. .-.'.- ».*>:«..

all of these areas are of increasing impor-
tance as casting and production centers.

At least 620 small theatres are located in
50 states and Puerto Rico.

Of f -Of f-Broadway . The heart of the small
theatre movement is still in New York City
with about 200 theatres which form the
internationally known Off-Off-Broadway
theatre .

Reliable performance and attendance fig-
ures were qathered for about a quarter of
tne Of f -Off -Broadway , black and Hispanic
theatres then eligible for inclusion in
the TDF voucher program in an unpublished
1974 report by Mathematical Inc., The Off-

Off-Broadway Theatre and Its Funding. A
theatre of median size had 100 seats, 6
productions per year, 95 performances, and
a yearly attendance of 8,230.

Only a few of these theatres have operated
over a long period of time. In 1974 when
there were only 81 theatres in the TDF
program, there was an enormous mortality
rate as some theatres were caught in
squeezes between inflation on the one hand
and limitations on box office prices re-
quired by Actors' Equity Association on
the other. New theatres have sprung up
since and TDF listed 208 small theatres
eligible for voucher payments in 1977.

Based on the assumption that each theatre
still plays to the 1974 median audience

37

sector/ and then divide their activities
between the commercial and the nonprofit
theatre.

These facts indicate the degree of inter-
dependence in American theatre. Reactions
to this interdependence differ. For one,
there is some fear of competition on both
sides. Commercial producers complain that
nonprofit shows are funded with the tax
dollars which their operations pay. On
the other hand, nonprofit producers often
feel that they alone bear the burden of
risk, and that the public is lured away
by the bait of "popular" entertaiment.

William Gardner, of the nonprofit Academy
Festival Theatre in Lake Forest, Illinois,
believes that a proliferation of theatri-
cal activity serves the common good. Be
points out that when The Act was selling
out the Shubert Theatre in Chicago with a
top ticket price of $22, he was doing a
very respectable 85 percent of capacity
with a new play by John Guare only a few
miles away.

Bernard Jacobs, president of the Shubert
Organization, described his perception of
the interdependence between commercial and
nonprofit theatre to the First American
Congress of Theatre as reported by Stuart
Little in After the FACT , A Report on the
First American Congress of Theatre, (New
York: Arno Press, 1975) : "There is a mis-
conception among all of you in terms of
creating the impression that there is a
we- they. As I see it, there is no future
for the profit theatre as we know it. If~
there is going to be a theatre that sur-
vives in this country, it has to be a the-
atre which is going to produce all the
things that all of us want to produce.
All the diverse points of view that we
have should be represented. It is very
important that all of us remain together.
Every time one of you gets excited and
threatens to walk out as you dicl yesEerday
and again today, you do all of us a great
disservice, because there is a common ap-
proach to theatre that we all have. Those
of us who are on our side of the table, if
you want to call it that, really are on
your side of the table. We are interested
in doing everything that we can to help
/our kind of theatre, because theatre will
not otherwise survive in this country.
The real issue is do you want theatre to
survive, do vou want live performances to
survive, or do you want the whole thing to
die. It isn't a matter of the commercial
theatre dying. Each time any part of the
theatre, commercial or otherwise, dies, a
part of each dies with it."

'lot all segments of the theatre community
ire enthusiastic about the apparently
-rowing interdependence. In particular.

many in the nonprofit community fear that
commercialization of work will, by acci-
dent or design, become the primary motive
of nonprofit theatre activity rather than
a serendipitous by-product of its artis-
tic goals. If that happens, it is pointed
out, there will be a loss to both artistry
and to commerce. In any case, interdepen-
dence is a fact and the relationship be-
tween the two kinds of theatre is now in a
state of flux.

New Plays

Another indication of theatre activity in
the country is the number of new plays
which are produced. Bere there seems to
have been a veritable explosion of energy.
Donald Fowle of the New York Public Li-
brary has kept records of new plays pro-
duced over the past 10 years (including
productions by college and amateur the-
atre) . Bis figures indicate that the num-
ber has more than doubled since 1969.
While such activity is increasing through-
out the country, New York City continues
to be the main location where new material
is presented and represents more than half
the total . The theatres reporting to Fowle
produced an average of 2.75 new plays in
1977.

Other similar evidence comes from the Na-
tional Endowment for the Arts, which re-
ports that during the 1976-77 season the
large nonprofit theatres applying to the
Arts Endowment's Theatre Program had done
an average of two new plays each and small
nonprofit theatres nearly three plays
each.

Catalysts for this growth have been such
organizations as the Office for Advanced
Drama Research of the University of Min-
nesota, Rockefeller Foundation, Eugene
O'Neill Theatre Center, and Ford Founda-
tion. Also, developmental nonprofit the-
atres have proliferated and a number of
them are dedicated exclusively to the work
of new playwrights through staged read-
ings, workshops, and showcase productions.
Increasingly, novice playwrights are able
to have their plays* read, criticized, and
performed by professionals.

THEATRE AUDIENCES

The data examined in the following sections
demonstrate that approximately 20 million
Americans over the aae of 16 attended at

40

atres in New York City, including the Wo-
man Rite Theatre in its sixth year, New
York Feminist Theatre Troupe, women's The-
atre Company, and Spiderwoman.

Regarding ethnic theatres , a list of 75
drama organizations has been compiled for
New York City which includes 16 ethnic
groups. "If we admit solo artists per-
forming dance-dramas, the total rises to
90, and with dance and music groups in-
cluded, the grand total is approximately
150. And there may be more!" remarked Sy
Syna in "Ethnic Theatre Flowers in New
York," Wisdom's Child, February 23, 1976.

There are various ways of performing in a
foreign language. Some groups perform in
the original language in a traditional
way, while others mix languages and style.
For example, the Theatre of Russian Amer-
ican Youth performs Russian translations
of Charley ' s Aunt . Many Hispanic theatres
play in Spanish and English on alternate
nights. Some groups mix languages in the
same production, an approach that perhaps
reached a high point when The Chinese
Group at La Mama presented A Midsummer
Night's Dream with the actors speaking ei-
ther Chinese or English depending on their
fluency. The Chinese Opera Club, which
performs in Mandarin, has been successful
with subtitles flashed on a screen. Other
ethnic groups, such as the Irish Rebel
Theatre and the Jewish Repertory Company,
work only in English.

At last report there were approximately
nine native American theatre groups con-
cerned with Indian problems and culture.
They operate mostly in the Southwest (Ari-
zona, California, New Mexico, and Oklaho-
ma) , but there is also activity in New
York, Illinois, and Seattle.

Finally, there are street theatre groups.
Part of the turbulence of the theatre in
the 1960s spilled out into the streets
and parks, and impromptu and scheduled
performances and street festivals brought
dramatized social messages to the communi-
ties. Practitioners ranged from the in-
ternationally known Bread and Puppet The-
atre, which fashioned grand papier-mache
masks and baked bread to share with its
audience in the streets of Coney Island,
to community-designed and performed pre-
sentations. The movement has come to be
represented by the Alliance for American
Street Theatre.

Funding has fallen off in the 1970s, but
the Alliance for American Street Theatre
still counts a membership of over 200
organizations (many of which operate con-
ventional theatres) and interested in-
dividuals as well.

Relationships Between Commercial and

Relationships get
Nonprofit Theatre

The preceding discussion and analysis, based
as it is on specific types of theatre, may
unintentionally emphasize differences be-
tween commercial and nonprofit theatre.
This approach might leave the impression
that each type of theatre operates in iso-
lation from the others. Nothing could be
further from the truth. There is a great
deal of sharing of facilities, works, and
personnel in theatre today.

First, material is exchanged. As estimat-
ed by the League of New York Theatres and
Producers, 75 to 80 percent of the plays
and musicals used by all other theatres in
the country have had a Broadway run at
some point. Between 1964-65 and 1977, the
percentage of plays and musicals on Broad-
way which were first produced elsewhere
has ranged between 15 and 60 percent. On
the other hand, many plays done by the
nonprofit theatre began on Broadway. Dur-
ing the 1976 season, 45 percent of the
plays at a sample of LORT theatres were
first produced on Broadway.

These statistics focus on segments of the
theatre where there is a relatively large
sharing. There would be much less com-
monality between experimental theatres and
Broadway, for example. Nonetheless, it is
probably fair to say that sharing is a
general procedure, and that scripts and
personnel routinely cross the boundary be-
tween the commercial and the nonprofit
theatre. Tax-exempt, nonprofit produc-
tions sometimes (this is the exception)
move to a Broadway stage and use the pro-
fits to subsidize their ongoing activi-
ties. Commercial road companies of Broad-
way successes routinely play to millions
of people in theatres operated by local
governments and nonprofit institutions.
It is not uncommon for both commercial and
nonprofit theatres to put money into the
production of another nonprofit theatre in
return for an option to use the property,
thus sharing the risk. The same producer
may stage commercial and nonprofit ven-
tures virtually back-to-back, scrupulously
maintaining relevant financial structures
for each. Showcase productions are staged
on a nonprofit basis sometimes with the
intent of attracting financial backers for
commercial productions. It is not uncom-
mon for a play which originated with a
nonprofit company to tour on a commercial
basis, appear in a nonprofit showcase,
such as the Kennedy Center or elsewhere,
and come to Broadway as a profit-seeking
undertaking. Often, playwrights, direc-
tors, designers, and actors develop their
talents in the workshops of the nonprofit

39

of approximately 20 to 25 percentage points.
Overall , it appears that education and income
are important social factors influencing
theatre attendance. The relative importance
of the two is not clear.

Occupation . Among theatregoers in the la-
bor force, professional, executive, and
managerial occupations outnumber other oc-
cupations at a ratio of more than two to
one. These patterns are generally reflec-
ted in all the major theatre types. For
example, Broadway audiences in 1976 con-
sisted almost two-thirds of people in such
occupations while only one-quarter of
these audiences were from other occupa-
tions; and among those in regional the-
atre, audiences are typically at least
two-thirds in professional, executive, and
managerial occupations. This is true de-
spite the fact that only about a fourth of
the overall labor force in the United
States is in these occupations.

The largest categories of theatregoers not
defined as part of the labor force are
homemakers and students. At regional the-
atres, between 10 and 20 percent of the
audiences are homemakers. By comparison,
the latest study of Broadway audiences
shows that only 2 percent are homemakers,
a significantly smaller proportion than in
1964. It is not clear, however, whether
this reflects real changes in attendance
patterns or whether it is a product of
differences in the study's methods. Stu-
dents also comprise between 10 and 20 per-
cent of regional theatre audiences, but
make up a somewhat smaller proportion of
the Broadway audience. Retired persons
appear to comprise only between 5 and 10
percent of theatre audiences, a proportion
consistent with earlier findings about the
underrepresentation of older people among
theatregoers .

Geography. Theatre attendance in the United
States varies considerably from one region
to the next. Low percentages in the South-
west and in the South may have implications
for the future of theatre in light of re-
cent population shifts from these areas.

There is also a variation in attendance by
place of residence. The residents of
small towns are only about half as likely
to attend the theatre as are the residents
of cities and suburbs, and residents of
rural areas are only one fourth as likely
bo attend theatre as suburban residents.

finally, apart from other geographical
lifferences, theatre attendance also seems
:o vary significantly from one metropoli-
tan area to another. The interesting fact

is that for professional theatre these at-
tendance differences are almost entirely
due to those who have gone more than once.

Such differences do not seem to correspond
to other differences among these cities,
such as size, population density, income
levels, education levels, or even the num-
ber of actors in the city. It appears
that part of the variation in theatre at-
tendance from one city to the next is a
function of the degree to which theatres
have pursued vigorous marketing policies
and the degree to which these activities
have been reinforced by other kinds of
cultural opportunities available locally.

Frequent and Infrequent Attendance

In general, the same social and demographic
characteristics that predict someone will
attend the theatre also predict that some-
one will attend frequently. For example,
the young and the better educated are not
only more likely to attend, but to attend
frequently.

Considering only theatre attenders, there
are interesting differences that distin-
guish frequent from infrequent attenders.
In Broadway audiences, men are in the ma-
jority, but this is more often the case with
infrequent than with frequent attenders.
Also, while the median age of Broadway at-
tenders is relatively young and getting
younger, frequent attenders tend to be
somewhat older than infrequent attenders,
probably because they are better off fi-
nancially; and the proportion of students
also drops off among frequent attenders,
probably for the same reason.

Perhaps the most important finding has to
do with professional occupations. Among
men, the proportion of professionals is
nearly the same for both frequent and in-
frequent attenders; but among women it is
much larger among frequent attenders.
What this suggests is that the increasing
numbers of women in professional occupa-
tions may be having a significant impact
upon the frequency with which women
attend the theatre.

For regional theatres, the differences
between frequent and infrequent attenders
are similar to those for Broadway in some,
but not all, categories. Again, frequent
attenders are more likely to be older and
less likely to be students and, among
women, they are more likely to be in the
professions. However, the ratio of men to
women is nearly the Same among both fre-
quent and infrequent attenders.

42

least one professional theatre performance
during the 1976-77 season. Many people
attended more than once. It is estimated
that there were close to 60 million tick-
ets sold in this season. Well over half
of all theatre attendance consists of au-
diences for regional, stock, and dinner
theatres. Other data presented in the
following sections address such questions
as how people learn about a production, buy
their tickets, travel, reasons for not at-
tending, beliefs about the degree to which
theatre should be supported, and the rela-
tionship between ticket price and demand.

Social Characteristics

1973 (partly a result of greater numbers of
matinees among the performances presented) .

Education. Theatre audiences consist
largely of the better educated. Almost
two-thirds of the regular theatregoers in
the United States, for example, have grad-
uated from college while only 12 percent
of the general adult population of the
United States has done so. At the other
extreme, just 2 percent of regular the-
atregoers only have grade school educa-
tions, whereas this group makes up 38
percent of the adult population. This
pattern seems to hold for all the differ-
ent kinds of theatre on which there is
information.

Gender composition. Theatre audiences are
comprised almost equally of men and women.
However, there are interesting variations
among different types of theatre. Broad-
way audiences tend to attract slightly
greater numbers of men than women, a ratio
which has remained constant over the past
15 years. But women outnumber men in re-
gional theatres and in a national survey
of attendance at both professional and am-
ateur theatre. No research has been con-
ducted to determine why these different
patterns exist. Evidence on the impact
that greater numbers of women in the pro-
fessions may be having on theatre atten-
dance is considered below.

Age. Studies of almost all types of the-
atre indicate that in comparison to the
general population, the young tend to be
represented in theatre audiences more of-
ten while the old tend to be less so. For
instance, 44 percent of the United States
population is between the ages of 16 and
35, but more than 50 percent of most the-
atre audiences fall within this category.

In contrast, about one third of the adult
population in the United States is over
age 50, yet only about a quarter of most
theatre audiences is comprised of this
group. The median age of theatre audiences
is typically from three to five years
younger than that of the general popula-
tion. The exception to this pattern was
shown in a Washington State study where
theatre audiences tended to be somewhat
older than in other parts of the country.

It should also be noted that theatre audi-
ences seem to have become younger in the
past 10 to 15 years. For instance, the
median age of Broadway audiences has de-
clined from 40 in 1961 to 34 years old
in 1976. The median age of Off-Broadway
audiences declined from 39 years old in
1964 to 32 in 1969. And the median age of
audiences at the Guthrie Theatre in Minne-
apolis declined from 36 in 1963 to 31 in

Comparisons between the Guthrie Theatre
and Broadway show no strong trend away
from this pattern. (There is some evi-
dence of slightly increased proportions
of the grade school educated and slightly
decreased proportions of the high school
educated.) The absence of trends in the
educational composition of theatre audi-
ences is puzzling in view of the fact that
there have been rising levels of education
in the population. This discrepancy,
however, may be a product of the younger
age of current theatre audiences (more
persons who have not yet finished their
education) , or it may be due to differ-
ences in the age groups that were included
or excluded in the various studies.

Income. As might be expected from the ev-
idence on educational levels, the incomes
of theatre audiences are also high. The
higher the income level, the greater is
the proportion of persons who attend the
theatre. For instance, 22 percent of a
national sample who had family incomes of
$15,000 and over in 1972 attended the the-
atre frequently. In comparison, only 11
percent of those with incomes between
$10,000 and $15,000 attended frequently,
and only 6 percent of those with incomes
below $10,000 attended frequently.

Higher incomes and higher education levels
—which of these factors influences the-
atre attendance the most? Research has
not provided a conclusive answer to this
question, but an important clue is avail-
able from a study of theatre attendance in
12 metropolitan areas. When the effects
of these two factors on theatre attendance
were examined, it was found that education
had approximately twice the effect of in-
come. Within each level of education,
differences in income produced differences
in theatre attendance of approximately 10
percentage points. But within each level
of income, differences in education pro-
duced differences in theatre attendance

41

In the same year that TKTS began , TDF also
started its successful Off-Off-Broadway
voucher program. With TDF help, this pro-
gram has been imitated in Buffalo, Minne-
apolis-St. Paul, Boston, and Chicago. The
system is simple. In New York, persons
eligible for the TDF mailing list purchase
vouchers for $1.50 each in sets of five.
A single voucher is worth $2.50 toward ad-
mission to the theatre accepting it, which
then returns the voucher to TDF and re-
ceives $2.50.

The voucher program offers several advan-
tages which have important implications in
understanding the future need for continu-
ous support of theatre activity. First of
all, it is economical. After the initial
expenditure for computerizing the program,
it can handle an extremely large number of
transactions at very little added expense.
Secondly, there is easy control over who
is subsidized. Both voucher purchases and
performing groups can be determined in ad-
vance. For example, in New York City the
program is meant to assist the economically
fragile Off -Off -Broadway theatre movement.

Another aspect is continuous quality con-
trol. The level of subsidy depends com-
pletely on the number of voucher users
each theatre can attract, relieving the
funding agency of the burden of making a
long series of evaluations. Finally, it
helps to cut fundraising costs. There is
less need for theatres to engage in com-
petitive grant applications. The size of
the voucher subsidy depends on artistic
appeal to the chosen audience.

There are criticisms that can be made of the
voucher programs . Most of the subsidy money
has gone to the larger , better-known organ-
izations with established audiences rather
than to the tiny but artistically important
experimental theatres as originally hoped.

An evaluation of a Buffalo, New York pro-
gram points out that 20 percent of the peo-
ple use vouchers to "try out different
kinds of events than they would normally
attend, " which indicates some kind of broaden-
ing of the audience base. However, 30 per-
cent use them "to save money on tickets to
performances which they would otherwise
attend, " indicating that the program is only
partially fulfilling its ambitious goal to
"attract a new audience of those who do not
ordinarily attend performing arts events
for economic or other reasons . "

In addition to information and tickets,
there is a variety of data available with
regard to audience travel habits to and
from the theatre; where people live, how
they get to the theatre, and how long it

takes them to get there. Indications are
that most people are not willing to travel
long distances to attend.

The effects of distance, on attendance are
especially apparent when theatre audiences
are divided into casual and frequent at-
tenders. The percentage of people in New
York State who attend the theatre once a
year is almost the same among people who
live close to the theatre and among people
who live farther away from the theatre up
to approximately 20 miles (after which the
proportion drops off) . But the percentage
of those who attend more than once a year
declines with each succeeding increase in
distance from the theatre and differences
of one or three miles away are important.

The other piece of evidence that a number
of studies have obtained regarding travel
to the theatre concerns the method of
transportation used, which varies greatly
depending on location. For example, 92
percent of audiences travel to the theatre
by automobile in Washington State compared
with only 4 8 percent who travel to Broad-
way by automobile. In New York City, the
availability of public transportation is
crucial to the theatre. Among Broadway
audiences, for example, 17 percent said
they returned home by subway, 14 percent
by bus, 9 percent by taxi, 7 percent by
train, and many probably used a combina-
tion of these means of transportation.

Attitudes Toward the Theatre

Attitudes do not necessarily reflect the
ways in which people actually behave. Peo-
ple may tell a pollster that they would be
willing to pay $5 more a year in taxes to
support the theatre* but that does not mean
that they would actually vote for such a
tax measure. Yet, attitudinal information
is revealing. If everyone polled would be
willing to pay $5 instead of $25 to support
the theatre, this information would help
predict support for alternative tax policies.
In general, attitudinal information is par-
ticularly useful whenever comparisons can
be made, as in the foregoing example, or
among different parts of the population or
regarding different issues.

Commitment to the theatre . Do people attend
the theatre because they deeply respect,
value, and enjoy it? Or do they attend
simply from habit or because it is "the
thing to do"? The answers to such questions
are important in forecasting how consistent
theatre demand may be in the future.

There are several sorts of information
about which a picture of the theatre audi-

44

Table 8

Sources of theatre information

1 MBHHHMMI r* ~*3MHHHHHKMHI

Friends or
relatives

Newspaper
ads

Mail order
notices

Newspaper
stories

Critics '
reviews

Radio
or TV

Broadway
1964

28%

23%

2%

29%

7%

Off-Broadway
1964

24%

30%

9%

23%

3%

New York
City 1973

42%

38%

17%

21%

19%

4%

New York
State 1973

48%

32%

24%

18%

10%

8%

Washington
State 1975

33%

28%

30%

17%

10%

13%

Information, Tickets, and Travel

As seen in Table 8, people generally rely
on friends and relatives, newspaper adver-
tisements, and mail order notices for in-
formation on what theatre is available
and when. The exceptions are newspaper
stories , which play a larger role for
Broadway and Of f -Broadway, and mail order
notices, which may be more important for
regional theatre. Less educated and less
affluent persons tend to rely on informa-
tion from friends, while more educated
and more affluent persons rely to a great
extent on newspapers and mail order no-
tices. These differences correspond with
the findings of more general research on
differences in communication and reading
habits between social classes. Not sur-
prisingly, mail order notices are much
more important as sources of information
for subscribers than for nonsubscribers .

The sale and marketing of tickets is re-
lated to audience habits. For instance,
subscription sales have been an effective
way to attract audiences to theatres out-
side of New York City. Theatre Communica-
tions Group (TCG) reports that regional
theatres with subscription audiences sell
61 percent of their total seating capacity
in that way. As a percentage of box of-
fice, subscription sales are highest in
areas which do not have a wide variety of
attractions and lowest where theatres are
abundant. While it is not possible to
know what audience habits would be if

these seats were only available separately,
it seems reasonable to assume that people
would be less faithful in attending.
It is worth noting that audiences have
been sought out through a number of inno-
vations in ticket marketing in recent
years. There has been, for example, an
increasing use of credit cards, telephone
orders, and Ticketron for sales. Espe-
cially interesting are programs started by
the Theatre Development Fund (TDF) in New
York City in which marketing schemes are
linked to theatre support. In one, TDF
purchases tickets to productions of high
artistic merit early in the run and makes
them available, at a discount, to persons
who otherwise might not attend (and the
production is, in effect, partly under-
written during the initial portion of its
run). In another, the Times Square Ticket
Center (TKTS) markets unsold ticxets at
discount prices on the day of the perfor-
mance. A study of its effect in 1974
showed that at least 75 percent of the $2
million paid out to participating theatres
in the first season of operation (1972-73)
was money that would not have been earned
at the box office. The additional audi-
ence thus attracted turns out to be dif-
ferent from the traditional Broadway one:
they were younger (median age 30 as compared
to 39.9), predominantly middle-income white
collar, and often attended theatre on im-
pulse. TKTS now accounts for approximately
5 to 6 percent of the Broadway gross receipts ,
and money earned from a small surcharge
helps subsidize other TDF programs.

43

The third explanation for which there is
evidence is the possibility that people do
not attend the theatre because the theatre
is inaccessible. There seems to be consi-
derable evidence to support this explana-
tion. For instance, 40 percent of the
public sampled in 1973 said there was no
theatre readily accessible to their home,
50 percent said there were not enough
places for cultural events in their commu-
nity, and 41 percent said that theatre
performances were almost never available.

People living in small towns and rural
areas are much more likely than people
living in cities and suburbs to say that
theatre is not available. If this is put
i with other evidence showing that rural
people are just as likely as urban people
to express interest in the theatre, it is
clear that theatre attendance in rural
areas might be greater if performances
were more readily available.

A fourth explanation for lack of theatre
attendance concerns the possibility that
people are afraid to go out at night.
This possibility has become of increasing
concern to the theatre community since
many theatres are located in downtown
areas where crime rates have risen. It
also seems a likely explanation, in addi-
tion to lower levels of interest, for the
lower rates of attendance among older
people .

Finally, there is evidence for the argu-
ment that people do not attend the theatre
because of competition from movies and
television. In particular, it has been
suggested that the easy accessibility and
somewhat simpler style of movies and tele-
vision has replaced the theatre and other
cultural activities, especially for the
less educated and for the young, who have
been raised on these media, and whose ex-
posure to other media is limited.

But do movies and television actually com-
pete with plays, or do people like both,
but for different reasons? When asked to
compare the theatre, television, and movies
with specific reference to creative or ar-
tistic satisfaction, the less educated are
much more likely to prefer television to
the theatre. Age groups choose the theatre
in about equal proportions, but movies are
strong competitors among the young audi-
ences, as television is among the old.

Perhaps the crucial question, though, is
whether movies and television actually in-
terfere with theatregoing. The best data
on this question come from a study con-
ducted in California. Going to the movies,
it turns out, seems to be positively asso-
ciated with going to the theatre.

For example, people who never attend the
theatre say they go to an average of 4.4
movies a year while those who attend more
than 5 plays a year go to an average of
8.5 movies. Movie attendance, like the-
atregoing , is also higher among the college-
educated than among the grade-school ed-
ucated. There is, however, no evidence on
whether or not theatregoers would attend
more frequently if they did not go to movies.
With regard to television, there seems to
be clear evidence that it serves as a sub-
stitute for the theatre. Both direct and
indirect comparisons indicate that those
who watch television more attend the the-
atre less.

To summarize, the reasons that people give
for not attending the theatre suggest that
lack of interest is probably the greatest
overall factor, especially for the less ed-
ucated. The cost of attending cannot be to-
tally ignored, but it is not as important
as might have been expected. For people
living away from large cities, inaccessi-
bility is probably the most significant ob-
stacle to attendance . Fear of going out at
night is a major obstacle for older people.
And competition from movies and television,
particularly the latter, appears to be an
important factor among the less educated
under age 20 and over age 50.

Support of the theatre. Recent studies
suggest that there is not much public
favor for government support of the theatre .
Only 14 percent of the culturally active
population favor government support for
Broadway plays or commercial touring produc-
tions. The proportion favoring government
support for nonprofit professional theatre
is somewhat larger (29 percent) , but still
represents a minority of the population.
By way of comparison, the proportions favor-
ing support from businesses are larger. But
even here they do not suggest a significant
mandate. On the whole, it appears that the
public feels that the theatre should sup-
port itself.

Another attitude which bears directly on
the public's willingness to support the thea-
tre concerns the availability of theatre
for children. Almost everyone agrees that
children need to be exposed to cultural
events. Racial and ethnic minorities, in
particular, feel that more facilities and
performances should be available for their
children. It also seems significant, in
view of the information regarding a lack of
interest in the theatre among the less edu-
cated, that they are just as likely to want
more cultural activities for their children
as the more educated.

The effect of price on ticket demand.
Most of the available evidence on the ef-

46

ences ' commitment to the theatre can be
pieced. Perhaps the clearest comes from
questions which ask audiences how satisfied
they are with the performances they have
just seen. These questions typically show
high levels of satisfaction. During its
opening season in 1963, audiences of the
Guthrie Theatre in Minneapolis were asked,
"How well does the way you are enjoying to-
day ' s performance compare with what you ex-
pected?" Only 6 percent said "not as well. "
Ten years later this proportion had risen
slightly— to 9 percent— but still indicated
that the overwhelming majority were pleased
with what they were experiencing. Indeed,
in both years, approximately half of those
surveyed said the performance was better
than they had expected.

In New York State, a similar question was
put to theatre audiences statewide: "Do
you agree or disagree that most performan-
ces like this one seldom live up to one's
expectations?" Only 13 percent said they
agreed. The same study also found that
only 14 percent agreed with the statement,
"There is very little new in theatre; most
modern plays are just rehashes of what's
been done better before . "

Another way in which commitment to the the-
atre has been assessed is by asking questions
about the value of the theatre. Responses
to these questions also indicate a high
level of commitment. Among "frequent at-
tenders" in a recent representative sample
of the nation, and a similar sample of New
York residents, approximately 5 out of 6
responded positively to questions about
the value of the theatre (e.g., how impor-
tant is it for young people to see live
acting, and is live performance more mean-
ingful than TV or movies?) . What these
data also reveal is that even in the gen-
eral public there seems to be a high level
of commitment to the value of the theatre.
Between two-thirds and three-fourths re-
sponded positively to these questions.

Perhaps a somewhat more discriminating pic-
ture of audience commitment to the theatre is
that obtained from looking at the reasons
people give for attending theatre . The re-
sponses to a variety of reasons given by audi-
ences in the states of Washington, New York,
and California suggest that intrinsic reasons
far outweigh extrinsic reasons. For example,
70 percent of respondents in New York listed
the "work(s) being performed" as an impor-
tant factor in deciding to go to a play in
comparison with only 14 percent who said
they "just wanted to go out to some per-
formance."

Reasons for not attending. Although those
who attend the theatre seem to be highly

committed to it, the vast majority of the
public seldom, if ever, attends. What are
the reasons that people give for not at-
tending the theatre, the obstacles they
perceive as standing in their way? The
following discussion pays special atten-
tion to those reasons voiced frequently by
people already found to be underrepresent-
ed~ in theatre audiences— the less educat-
ed, the poor, older people, and people
living in small towns and rural areas.

Five general reasons for not attending the
theatre have frequently been suggested in
previous studies of the theatre— lack of
interest, economic barriers, inaccessibil-
ity, the problem of going out at night,
and competition from movies and television.

Lack of interest, the most frequently
cited reason for not going to the theatre,
is particularly important among the less
educated. To a somewhat lesser extent,
lack of interest also seems to be one of
the reasons why older people attend less
frequently than younger groups.

It's important to recognize, however, that
older persons ' reasons may differ not be-
cause of age but because they're generally
less educated. There is a pattern evident
that college-educated respondents are much
more likely to say that they are interest-
ed in the theatre than their parents,
while grade-school educated people are
considerably less likely to say so. Re-
sponses suggest that there may be a slight
increase in cultural interests among all
groups, and this increase is greatest
among the more highly educated.

This type of argument suggests that people
don't attend the theatre because they have
not been socialized to enjoy and appreci-
ate it. The alternative to this argument
is that people do not attend the theatre
simply because of economic barriers — they
cannot afford it. Given the high costs of
theatre tickets, it seems plausible that
economic considerations do present a bar-
rier for some, especially people from
lower income families. As might be ex-
pected, people with low incomes are more
likely to say that cost keeps them from
attending the theatre than people with higher
incomes. Two things should be noted how-
ever. One is that the differences between
responses of lowest and highest income
categories are generally not great. The
other is that even -among the lowest income
category usually only a minority lists cost
as an obstacle to theatre attendance . While
economic barriers should not be totally
discounted as a reason for nonattendance ,
they do not seem to be a major factor in-
hibiting attendance.

45

CHAPTER III

THEATRE FINANCES

It is clear from the discussion in the pre-
vious chapter that there is a great deal
of variety and activity in the American
theatre 4 and the signs are that theatre is
on the increase. The question addressed
in this chapter is: What does profession-
al theatre cost and how nas it been financ-
ed? In pursuing answers, data are examined
on revenues, costs, prof it margins (for the
commercial Broadway theatre) , and income
gaps (for both larger and smaller nonprofit
theatres) . The general conclusion is that
the theatre has done a good job in resist-
ing the "cost-revenue" squeeze described
by Baurool and Bowen. On Broadway, invest-
ment has remained roughly constant while
the average return on investment has been
about 13 percent since 1965. In the non-
profit theatres, the relation between earned
income and expenditures has been roughly
the same since the early 1970s. In both
sectors of the theatre, effective measures
have been taken to boost revenues and to
hold down costs.

A sample of Broadway productions from the
1965-66 season through the 1976-77 season
shows wide swings and fluctuations from year
to year in investment and receipts, but
overall it shows that investment in plays
has increased 6.4 percent and in musicals
4.1 percent; total overall investment has
been 5 . 9 percent, the same rate of increase
as the wholesale price index for this period.
In other words, investment has remained
the same when adjusted for inflation.

On Broadway, production costs are increas-
ing for nearly every major budget item.
In general, production costs for musicals
have gone up more slowly than have costs
for plays. This suggests that producers
have been particularly careful to take
cost-saving measures for the high- invest-
ment musical (which, on the average, is
3 times more expensive to produce than a
play) . One area which reflects these econ-
omies is that of cast sizes, which have in-
creased very slowly for plays (1.3 percent
per year) and have decreased for musicals
(3.4 percent per year) . In addition to using
fewer performers for musicals, there is ev-
idence that lower-paid performers are being
used for both plays and for musicals.

Operating costs (those incurred during the
run of a play) have increased much less than
production costs. In fact, when adjusted
for inflation they actually have declined.

Here , too , plays have had a faster increase
in costs than musicals.

The picture for receipts is mixed. Box of-
fice receipts are up on Broadway since the
1965-66 season, but when these are adjusted
for inflation there is a decline over the
period. In terms of gross receipts, there
was a remarkable recovery in the mid-19708
after a fall from 1968 to 1973. It should be
noted that a significant item in receipts
is income from subsidiary rights, which is
quite important to the finances of a produc-
tion and covers a large share of the costs
for successful musicals and plays.

Broadway shows are profitable. Since 1965,
the overall rate of return. for musicals is
16 . 4 percent and for plays 7.6 percent , but
this rate does not seem particularly high
for such a high-risk business (in no season
were there more successes than failures
among Broadway shows ) . There is some incon-
clusive evidence that the overall rate of 13
percent return on investment is lower than
in previous periods.

The general conclusion concerning the fi-
nances of the larger nonprofit theatres
(theatres with budgets over $250,000) is
that they show real growth in their budgets
since 1965: earned income , unearned income
(contributions) , and total expenditures all
have rates of increase which are greater
than that of the wholesale price index . In
the 1976-77 sample of these theatres , earned
income accounted for 62 percent of expendi-
tures and unearned income for 35 percent,
and there was a 3 percent deficit overall
(58 percent of the theatres had balanced
budgets or surpluses). Salaries, the larg-
est single expense item, have decreased in
their share of the budget since 1965. (A
similar decrease was true for Broadway.)

Subscription ticket sales for larger non-
profit theatres are strongly on the increase
and, with 39 percent of total earned income ,
have replaced single and block tickets as
the largest source of income. Total ticket
revenue has kept up with rising costs, an
important achievement in a time of inflation
and increasing activities. Contributions
to these theatres have gone up at an annual
rate of 13.4 percent since 1965. While the
private sector (foundations, businesses,
and individuals) gives the larger share
(65.3 percent in 1976-77) , the public sec-
tor (federal, state, and municipal govern-
ment sources of support) is gaining. Pub-
lic monies and grants have risen since 1965
from 3 to 10 percent of total expenditures.
The broad outlines of the financial picture
for the smaller developmental nonprofit
theatres show that in 1976-77 earned income
was 45.8 percent of expenditures and contri-
butions 51.6 percent, and there was an over-

48

feet of price on ticket demand is based on
methods or data that can be seriously fault-
ed. One method of assessing the relation
between ticket price and demand has been to
examine changes from year to year. If de-
mand decreases after prices increased, a
negative relation is assumed to exist be-
tween the two. The information on trends
in attendance and in ticket price presented
earlier in this section suggests that there
does not seem to be such a relation. Also,
Baumol and Bowen reviewed several similar
trends for orchestras and operas and sug-
gested that, although there was some nega-
tive relation, the effects of price increases
were apparently temporary and could have
been caused by other factors. More recent-
ly, an unpublished detailed analysis of the
relation between price and attendance at
Broadway theatres was conducted by Robert
T. Deane and I. Ibrahim for the Research
Division of the National Endowment for the
Arts. This model study for an economic da-
ta program on the conditions of arts and
cultural institutions found no significant
relation between price and attendance, a
finding that agrees with the conclusions
of Anthony Hilton ("The Economics of the
Theatre," Lloyd's Bank Review, July 1971)
and Thomas Moore, Economics of the American
Theatre (Durham: Duke University Press, 1968) .
The Dean and Ibrahim study also examined the
relationship between price and attendance
among theatres in 26 cities studied by the
Ford Foundation, finding again no signifi-
cant relation. The tentative conclusion
that emerges from these studies is that at-
tendance does not respond significantly to
ticket price.

The problem with these studies, however, is
that they do not approximate experimental
conditions. There are many other changes
in economic conditions from year to year or
from city to city (such as inflation and
rising incomes) that may influence the re-
sults. In the absence of experimental in-
formation, several audience surveys have
attempted to determine the relation between
price and demand by posing hypothetical
price increases and asking theatregoers how
this would affect their attendance patterns .
The results from these surveys present quite
a different picture from the studies just
cited.

A summary of results from a Washington
State study demonstrates the effect of price
on ticket demand. Using a theoretical mod-
el, the actual amount of income that a the-
atre would earn based on an average ticket
price of $4.50 was calculated assuming a
baseline audience of 100. When a $2.00 in-
crease was instituted, theatres would very
likely lose money for two reasons: a sub-
stantial number of the people to whom this
increase was proposed said they would sim-

ply no longer attend , and an additional num-
ber said they would shift to cheaper seats
(despite a $2.00 increase, the average tick-
et price would increase by only 91 cents,
from $4.50 to $5.41). In other words, de-
mand is sufficiently responsive to price
that the higher prices would be more than
canceled out by fewer persons attending and
by shifts to lower-priced seats.

In the case of a $2.00 price increase levied
only on high priced tickets, those already
costing $8.00 to $10.00, the Washington
State survey found that people with high-
priced seats were less likely to say they
would not attend or would buy cheaper seats
if ticket prices were raised. And, in fact,
total income is slightly above the break-
even line for this policy. In other words,
the Washington State survey suggests that
if prices are raised they should not be
raised across the board but in such a way
that the range between the lowest-priced
seats and the highest-priced seats is in-
creased.

The results of a Ford Foundation study
which also asked what people would do if
prices were raised (but did not consider
the option of shifting to cheaper seats)
concluded that demand was relatively inelas-
tic in relation to price and that theatres
could increase revenues by raising prices.
The results of the Washington study, how-
ever, indicate that most of the expected
income increase would be negated by people
shifting to cheaper seats.

Since the relation between ticket price
and demand has been studied so little and
with techniques based on differing and some-
times incompatible assumptions, it is im-
possible to come to any definitive conclu-
sions from data now available. The results
just reviewed do give some pause to the as-
sumption that demand is unaffected by price.
It may be that theatres cannot increase rev-
enues simply by raising ticket prices across
the board but that an increase in only high-
priced tickets could yield additional in-
come. An untested suggestion is often made,
however, that a policy of raising only high-
priced tickets might have a negative effect
on philanthropy. Present data reviewed in
this project are based on hypothetical ques-
tions posed to theatre audiences , and it is
by no means clear that people would actually
behave in the way they indicated. Note al-
so that these results do not mean that prices
could not be increased in keeping with over-
all increases in personal incomes and costs
of living. Still, with these cautions the
burden of the argument is that demand may
be more elastic with respect to price than
other studies have suggested.

47

ings, because data are not available for
privately funded productions.

The estimated annual rates of increase of
investments (in current dollars) between
1965-66 and 1976-77 are 5.9 percent for
total investments, which is 6.4 percent for
plays and 4.1 percent for musicals. As-
suming that the rate of inflation in the
cost of Broadway productions has approxi-
mated the rate of the wholesale price in-
dex over the same period (5.9 percent per
year) , then in constant dollars average
investment in Broadway plays has increased
slightly while for musicals it has fallen
slightly. Although there has been a good
deal of short-term fluctuation in total
constant-dollar investment, there has been
no tendency for it to increase or decrease
over the period covered by the data.

Capitalization is growing more slowly than
production costs. This may occur for sev-
eral reasons: difficulty in raising the full
amount of anticipated costs, underestima-
tion of actual costs by the producer be-
cause of time intervals between raising
the funds and actual production (thus costs
reflect ongoing inflation), and losses dur-
ing out-of-town tryouts. There are a num-
ber of ways in which producers can close
the gap between the limited partners' in-
vestment and actual costs. They may exer-
cise the "overcall" clause (usually limited
partners are liable for an additional con-
tribution of 10 to 20 percent) , make or
procure a loan to the partnership, defer
payment of bills and payroll taxes, take
cash overdrafts , and so forth. All methods
of additional financing, except the over-
call, have priority of repayment over the
contributions by the limited partners.
Other things being equal, the higher the
overcall costs and debts of a production,
the longer it will take for the limited
partners to recoup their investment.

Production Costs

Production costs, which normally include
all expenses through opening night, dif-
fered for plays and musicals between 1965
and 1977. The average cost of producing a
musical is 3 times more than the cost of a
play. But the rate Of annual increase of
production costs for plays is much higher
than that of musicals . Also , for plays the
increase is not only due to price inflation
but to an increase in real costs.

Production costs have advanced signifi-
cantly within the last 12 years. For in-
dividual items of production, the rate of
annual cost of increase of nearly all has
been faster for plays than for musicals
(see Table 9). One explanation for the dif-
ference of the rate between plays and musi-

50

all deficit of 2 . 6 percent . In the sample,
61 percent had balanced budgets or surpluses.
There are wide fluctuations and high rates
of increase for both expenditures and rev-
enues in the smaller nonprofit theatres
(theatres with budgets under $250,000).
These are to be expected from young, grow-
ing enterprises in a period of inflation
and are not in themselves an indication of
financial mismanagement. Most theatres
avoided substantial deficits.

Among these smaller theatres it was dif-
ficult to find comparable budget-reporting
procedures and the samples did not allow
for any definite conclusions on particular
costs and revenues. Salaries seem to be
the largest expense and are rising. How-
ever, their share of total costs may have
gone down while the share of administrative
costs has gone up (this was true for the
larger nonprofit theatres as well) . Sub-
scription revenues are apparently less
than those for single tickets. Performing
fees (one payment for a set number of per-
formances) and services (such as workshops
and seminars) are a very important source
of earned income for a number of these
theatres, occasionally amounting to more
than ticket sales.

In comparison to the larger nonprofit the-
atres, the smaller developmental theatres
rely more heavily on contributions, par-
ticularly from the government. The objec-
tives of these developmental theatres-
encouraging new playwrights, experimenting
with new theatrical ideas , presenting plays
at low prices in order to be accessible to
the public — do not lend themselves to large
box office receipts.

In considering these data on theatre fi-
nances, it might also be useful to keep
in mind other factors which contribute in
an important way to the stability and growth
of theatre. One of these is the New York
State Council on the Arts, which plays a
significant role in the funding of many
nonprofit theatres. Indeed, state arts
councils throughout the country have in-
creased both in numbers and in their ap-
propriations for all the arts, from $2.6
million in 23 states in 1966 to a projec-
ted $62 million in all 50 states in 1978.
Also, United Arts Funds now exist in 34
cities and raised $14.5 million for the
arts in 1975. And local governments in
certain cities have enacted special taxes
earmarked for cultural funding.

Another factor is the Ford Foundations • s
Cash Reserve Program which includes 11 the-
atres among the 80 organizations it helps
through guidance on cash flow management
and liquidating current liabilities. The
Theatre Development Fund, through its cos-

tume rental collection, 'helped put expen-
sive costumes within the reach of most the-
atres' budgets. In 1975-76, 369 nonprofit
organizations used this service (the average
cost of a costume rental having been $9.84),

All these elements indicate a support for
the arts which , directly or indirectly, ben-
efits theatre finances. It is still clear,
however, that larger and smaller nonprofit
theatres have to live with accelerating
rates of inflation in the face of uncer-
tain support from some sectors of private
funding. This means that in all likeli-
hood the importance of government contri-
butions will be increasing. For a smooth
and uninterrupted development of the non-
profit theatre, the commitment of govern-
ment will have to be reliable and adjust
to general economic conditions.

BROADWAY

According to the New York State Attorney
General's Office and information from the
Shubert Organization, the finances of com-
mercial Broadway theatre are volatile.
This is confirmed, for example , by the wide
swings in the ratio of financial successes
to failures for the past dozen seasons as
reported in the May /June issues of Variety.
In 1976-77 there were 1.6 failures for each
success; in certain other seasons (1971-72,
1973-74, 1975-76) more than 5 failures to
each success. In no season have successes
been more prevalent than failures. Also,
the 1976-77 season showed record box office
receipts of $94 million; but if adjusted
for inflation, then revenues in constant
dollars are lower than they were a decade
ago. The following sections examine the
financial structure of Broadway in terms of
investment, production costs, operating ex-
penditures, other costs, and revenues and
calculates the return on investment for
Broadway productions.

Investment

One method by which Broadway productions
are funded is through a public offering of
securities, which results in a "limited
partnership" between the producer (general
partner) and the contributors (limited
partners) . Productions may also be funded
privately (no public offering is made) , and
the latter are on the increase according
to the New York State Attorney General's
Office. The discussion of Broadway finances
throughout this chapter is of productions
which have been funded through public of f er-

49

Figure VI

Production costs of Broadway plays 1965-67 and 1975-77

s@3

' i^^^MBBbniitjativar

ae

^ jfigtajaha nd a'-iand verew

*32&*fca3H

^Departmental

IK: ' '*•■!.•■ ■

tiTryouts

^

I fc ■> leaaj i

i i»^i >—■■■»■ » -»*

lltanaportation -*nd ---travel

A ftt * i |*i! i j4 j i» '» i — ^a ■

£££

^«vT" Taxes .and bene fit*

igpattgal iaaadanJacatll aneona-

Other. -axtda tic .personnel

trative-

^^^^^^^^^^fcajga^annV .and crear

!.»>"iH."J-.V-i- •'- ■i''-.^-_- "'-V — -

Tryouts

' 'Transportation and travel

r^^?--?*^.--?'^

^^S^S: V^CI^v^^ ^.

*

4.oi|

*^ *\^fi=hV; 3w* i^- ^^ .,r^- '— "., ■*•

^MMi 1 1 <i'«iaiH»-^'j?j-

■•'••"■•*S

- — « .*-

t^^^^^"^'^?^-'^^11*®8 "^ beneflta
e..: ~ -,-ri-^-i Legal and niacellaneoua

1 -.... \\r.^^«--~":Jkdvertdxin%?aiidVpraBOtlon]

r.»--i-_;„"^;es?»;.%« -.-rr-? -. -a^ -^ "* -»t ^^a'^ *>• -0tner3

t- - . . . ■ 1 - ,^- .--«-- ... <fc — .

"T" Til '— :~."'

130.5%

52

Tables

Average production costs of Broadway plays and musicals 1965-67 and 1975-77

■*mtgggEm Musicals

/$annuaX^
.♦sarate of ;

1965-67 1975-77

Annual
rate of
increase

istl«-. vrfutiA

plays «nd**
musicals ^

Performers '
salaries

Other artistic
personnel

•?fZ:~.—

- $ 34,756

$ 44,201 2.2%

Si2^H»

553 $ 30,411 5.5% g9ttjii2&|

>:**>:

Administrative JK^^^^^^^SSI^3*® $ 24'724

$ 66,686 9.0%

N#*£^f

Stagehands
and crew

128 $ 20,871 12.8%

Departmental ^32^«||?|^^9^^Bi2%^^ $186 , 856

$335,800 5.3% f*&JBi'&$*l£

Royalties
and fees

^"tIl^#^"r2B3^^;5%^| $ 18,168 $ 35,277 6.0% ^B;©%

-- :!■?*,«•-

Tryouts

^:/«M^;^pf^B3^ft.$i^ N . A .

N.A.

N.A.

1

Transportation
and travel

Legal and
miscellaneous

$ 16,936 7.7%

fc-' ^.rv *'■?::•'-£;•

5*29*

Rehearsal
expenses

$ 10,408 $ 19,513 5.7%

L "Xl»A»

Advertising
and promotion

S14^l73^J36^iB0«^S8iS%v^$ 31,293 $ 61,896 6.2% j, 7„0%

Orchestration

&m &££*&<mik/0k aiab?iS $ 33,408

$ 79,481

7.9%

f U.A. .

■ ,""*

Other

fc 3,^940 ga$ >*10 *«26 ««*& «2ft ^ $ 11,433

$ 11,534

0.1%

[3,4%

Total

^94/74 8 v:-aW59'^327r^fc3'%----*^ $398 ,276

$771,070

6.0%

t -6.7% :

cals is that producers of musicals may have
pursued cost-saving measures more vigorous-
ly than have producers of plays. In view
of the size of the investments involved, it
is easy to understand why this should be
the case.

Several important trends and conditions are
evidenced in Table 9 and Figures VI and VII
(following) .

Performers ' salaries . The rate of increase
of expenditures on performers ' salaries
has been on the average of 2.9 percent an-
nually, which is somewhat lower than the
general inflation rate (and lower than the
rate of increase in performers ' wage rates
which is discussed in Chapter IV) . The in-
crease has been higher for plays (5.1 per-
cent) than for musicals (2.0 percent) —
again lending support to the hypothesis

51

that cost-cutting measures have been great-
er for musicals than for plays.

Data on cast sizes in Table 10 help to ex-
plain this pattern. Cast sizes of plays
have grown slightly between 1964-65 and
1975-76 by about 1.3 percent a year. This,
together with the fact that expenditures
on performers' salaries have grown more
slowly than wage rates, may reflect a ten-
dency to use lower-paid personnel. This
argument is discussed further in Chapter IV.
For musicals, the cast sizes have grown
smaller. Although there has been some re-
covery in the most recent seasons, over
the whole period cast size fell at a rate
of 3.45 percent per year. This helps ex-
plain the low rate of growth of production
salary expenditures for musicals. Also,
given the growth in wage rates over the
period, there has probably been some sub-
stitution of lower-paid personnel in mus-
icals as well as in plays.

Salaries for performers take a smaller share
of the budget in the 1975-77 period than
they did in the 1965-67 period, and they
are certainly not the most important item
in production budgets. A detailed exami-
nation of performers' and other salaries
is deferred to Chapter IV.

Other artistic personnel. This category in-
eludes salaries paid to stage managers , mu-

sicians, musical directors, hairdressers,
dressmakers, and all other artistic person-
nel. Royalties and fees are treated under
a separate section. The annual rate of in-
crease for this category of salaries has
been 10.7 percent for plays and 5 . 1 percent
for musicals. However, their share of to-
tal production costs is modest. Their ac-
tual total share in total production costs
should be viewed in combination with "royal-
ties and fees," since a major part of their
compensation appears under the "fees" cate-
gory. An important gain achieved by unions
and associations on behalf of artistic
personnel is the spectacular increase in
minimum wages reported to be as much as 6
to 7 times more than the minimum levels of
a few years ago — and the increasing job se-
curity through the practice of advance pay-
ments required at the signing of contracts.

Administrative salaries and expenses. These
costs include salaries of general and com-
pany managers, production associates, pro-
duction secretaries, office charges, ac-
counting and auditing fees, ticket office
preliminary expenses, per diem allowances,
insurance , telephones , and preproduction
expenses incurred by the producer.

Administrative salaries and expenses are
relatively large costs. They remain among
the fastest rising (10.4 and 8.3 percent
for plays and musicals rates of increase,

Table 10

Cast size of Broadway plays and musicals between 1964-65 and 1975-76

Season

TCastT^of vi

M3^V*t

Cast of
6-9

Musi-
Plays cals

Cast of
20-29

Plays

Musi-
cals

1964-65 £i^i31*#i£3%

I

38.9%

^sSissSSSISm 5-6% 11-8%

1968-69

S/aP^t^^O^JO, 23.3% 12.5%

13.3% 18.8%

jfe33^%ffi^^^-|j: 36.4% 8.3% ^^^^133^%

1970-71

^»*ga

13.6% 16.7%

1971-72 |^3^%%^|573%J:^ 25.0% 25.0% p?3^%t^^^| 17.9% 10.0%

1972-73

|$2^*K^*^fcSi 21*9% 14-3% I^^H^O^^M 12-5% 19-0%

1973-74 8§M**yi?S^^II 9-7% 10-0% l^i^S^S#*^ 12*9% 30-0%

1974-75

22.2% 15.4%

16.7% 15.4%

1975-76

te^gg^

24.1% 11.8%

^affdM^

iMt£-£w r -, ■

13.8% 17.6%

54

Figure VI!

Production costs of Broadway musicals 1965-67 and 1975-77

a^s^^o^aamea:,«ia;^«oB

^^Transportation -and , travel

r. .^Rehearsal
l^m - :v -Advertising'and promotion .

*3*

2 ■»» ..

srf ormers * .salaries
[ir:S?:^bai«ar artistic personnel

:•;■<•

-^Stagehands and «rew

-;>;-^--- : 'flitiee and tfees-

^^^ransportation'^nd^txave^

I feffff^fpfe toes -.and foafrftoj

* ^egal and miscellaneous -■__■ 2 :i2%

-Advertising and promotion

[;•-££ Sf ?!^* *£: ^OrcnesfaSfcion

j^»yn5fc*>

«otaa^i:s .;jt^*
salaries

M%$ga - -.^*h^-'^^'

'^•^.

53

Royalties and fees. This includes fees paid
to designers , directors , choreographers ,
music arrangers, managers, and a host of
other professional categories. These pro-
fessionals are receiving higher fees, as
negotiated by their respective profession-
al associations. Also, advance fees are
being sought as security against the high
probability that a production might fail.
The same motive underlies arrangements for
advance royalty payments.

Royalties and fees have been increasing at
a rate of 10.5 percent annually for plays
and 5.5 percent for musicals, and the per-
cent of production costs allocated to roy-
alties and fees has increased for plays from
7.9 to 10.1 percent. For musicals it has
increased only slightly in importance. How-
ever, substantial hikes in remunerations
obtained since 1977 aren't reflected.

Trvouts. Losses during tryout performances
before the official opening on Broadway are
part of production costs and obviously a
considerable expense for plays with an an-
nual rate of increase at 11.2 percent.
(There was insufficient information avail-
able on this item for musicals to permit
an estimate to be made.) Such a rapid in-
crease in losses during tryouts is prompt-
ing various cost-control measures. More
and more productions are being tried out
in increasingly indirect manners, including
originating as productions at Off-Broadway
theatres or nonprofit resident theatres.

Transportation and travel. Transportation
and hauling costs include artistic and
managerial personnel and their personal
effects as well as scenery, props, and cos-
tumes. If there are out-of-town tryouts,
transportation and hauling costs tend to
be higher.

However, with scenery construction studios
moving out of New York City to avoid high
space rents, transportation and hauling
costs are bound to continue their high rate
of increase, which has been 12.1 percent
for plays and 7.3 percent for musicals.

Although such costs have only a modest
share of total production costs, the share
has increased since 1965 by approximately
38 percent for both plays and musicals.

Taxes and benefits. With a combined rate
of annual increase at 9.8 percent for all
productions and with a much greater share
of total production costs in recent years,
taxes and benefits clearly are making their
mark on total costs . Again , one may expect
these costs to continue at a high rate of
increase with better organization of unions
and associations and with higher tax rates.

Legal fees and miscellaneous items. Nor-
mally, these costs would be included in
the administrative expenses and in the
royalties and fees categories. But since
in Thomas Gale Moore's The Economics of
the American Theatre (Durham: Duke Univer-
sity Press, 1968) legal and audit fees were
singled out for their rapid rate of in-
crease, it seemed worthwhile to examine
legal fees and expenses closely. They have
been increasing at moderate rates of 4.8
percent for plays and 7.1 percent for mus-
icals, but their share of total production
costs has remained small and even declined.

Other small items in the total production
budget are rehearsal expenses (excluding
salaries which are included under the sal-
ary categories above) for rental of halls
and incidentals, scripts and parts, ex-
penses for opening nights, insurance, dues
to the League of New York Theatres and
Producers, and a host of other items that
individually hold minute shares and col-
lectively account, on the average, for
approximately 3 percent of total produc-
tion costs. Their combined rate of annual
increase has been 3.1 percent.

Advertising and promotion. Advertising
ar.r promotion expenditures have been in-
creasing faster for pl~/s, at 7.8 percent
per year, and relatively slower for mus-
icals, at 5.7 percent per year. Although
advertising expenditures have not been
growing any faster than several other ex-
penses, they account for the second largest
share of total production costs for plays
(14.2 percent of total costs) and an im-
portant but less prominent share for mus-
icals (8 percent of total costs) .

By far the most popular theatre advertising
medium is newspapers. Since 1965 the pro-
portion of expenditures allocated to news-
paper advertising has been decreasing for
plays and increasing for musicals. Bill-
boards, signs, photos, and promotion were
the second major outlets for musicals, al-
though they have since gradually declined
in importance. In addition, television
and radio advertising have been rising in
importance during the 1970s. Television
spots are increasingly used by Broadway
theatres, especially for musicals.

Finally, the expense for press agents has
remained a small item of advertising expen-
ditures and of total production costs; the
average rate of increase has been 5 percent
annually.

Orchestration . Orchestration is an impor-
tant expense for musicals, increasing by
7.2 percent annually and obtaining a greater
share of total production costs.

56

respectively) and they account for a con-
siderable and increasing part of the bud-
gets of both plays and musicals. (In 1975-
77", the proportion of the budgets is 11.4
percent and 8.7 percent, respectively.)

In addition to higher administrative sal-
aries and the relative difficulty in re-
ducing managerial personnel, other admin-
istrative expenses have proliferated in
the 1960s and 1970s.

This increase is part of the general cost
of inflation, the rising costs in services,
and increasing transactions spurred by new
marketing techniques affecting both produc-
tion and operating administrative costs
(mail orders, "charge-it," and other mar-
keting techniques requiring materials and
personnel) . The commitments of the artistic
and managerial personnel operating in more
than one location— of ten one commitment on
the West Coast and the other on Broadway-
have increased the cost of communications,
per diems, and transportation. Finally,
there is paperwork required for the admin-
istration of taxes and benefits.

Salaries of stagehands and crew. While
salaries for performers have increased
moderately, salaries for stagehands and
crews— personnel that set, operate, and
handle scenery, props, lights, costumes-
have been increasing on the average at 9

percent for plays and 11.7 percent for
musicals a year. This increase occurred
despite the institution of cost-control
measures, including automation. Reportedly,
in 1965 more stagehands were employed per
production than in the 1970s. In spite of
the relatively fast increase in the sala-
ries of stagehands , total payments to them
account for only 2 . 8 percent of production
costs for both plays and musicals.

Departmental costs . These include purchases
and preparations of electrical and sound
equipment, wardrobe, furniture, props, and
the building and painting of sceneries.

Designers' and assistants' fees and expen-
ses are not included; they appear under
"fees and royalties." Total departmental
costs now amount to 30.5 percent of pro-
duction costs for piays and 43.6 percent
for musicals — by far the largest item of
the budget. These shares in total produc-
tion costs are lower than they were in
1965-67. Approximately one-half of de-
partmental costs are taken up by payments
for the building and painting of sceneries,
with cost of costumes being the second most
expensive item.

The overall rate for departmental costs
seems to have been increasing at a rate
close to the wholesale price index for re-
lated materials and services.

Cast of -^-^
30 andjayer: J^

Average cast size
All

[i'-S^muai^^' produc-
Tlays Z';oilMv^^0 tions Plays

Musi-
cals

i2..S%::;^p.6%T.^C

17.7

8.8

36.8

19.4

13.4

31.0

^••5%;^.4i.7%yvg;

17.0

12.0

26.3

. ^K^^O^g

16.4

12.3

22.2

:*^~^8J6V£%|

14.8

11.2

20.3

■J 1)^ MOM^^f

14.9

11.0

27.0

15.0

11.4

24.9

bv4%^*lv2%^S

17.2

11.4

27.2

55

Figure VIII

Operating expenditures of Broadway plays 1965-67 and 1975-77

fcv . : - v * *Dtber*<art±a tic -per s oimel

!T5a=i»3JC

v^*r?->:

&^g^^tej^sw3Mattn i etmti^e

inistrative'
i^sastagehands cand ^crew*

?ij. ," .V■>S^^fcg8K^^tt^*^^■^'rt~~-~^^i*J>^^*r^^**J•-'' " <M*

i-C»---xJ-j,..;.'r^ ^fO^j- V -.i^ •- -" -«• t .-■• ■-• '^n-

L---X§S-i?^ Royalties and fees
%feraa«s and benefits

Advertising and promotion

i.

».- . ;. -..*-" "

1975-^77

Performers * -salaries

- Other artistic personnel

Administrative

Stagehands and crew

7 # - Departmental

J Royalties and fees

."-■ Taxes and .benefits

Advertising and promotion

_,« , ... — - - - . . . Other

..... fe-gLS^l

.*&*-,

■»- " *■«■■?• i^"l TTv. *■ -~»s*- "•- • V

fV^^X^Vjd

•;r-::;:-..^ vV£:£?^

pjS^iltlKS^P

t^uMX^w^"* — -.-"•^■t.J'W* .v^tri*

-"-■•-' • — ':•<<»

JJsa%i

iv5J'\i?'.

5s.

J 15.

7%

2%

3*.

2%

019.8%

-^it>-«*. »-»**!»^ ^v.r*£*i.-»»i-:

j;«*3f

£&£: .

'■■JS&s£s£

^* C» n

/^•^T

*.-.«•-»

—*«*■■ <**-t--™m

»w*r<

■^r-.^

•" -"-- \ -

' T< i.' " '" it

*". *•*"- ■«.

rSt

«--'»■ .-

- ■.

" r<5 ^

•* *■•"

««<<l«^

►^iamiB »>»wy-~

r. J«.--«w:;^.

-. ?;>'^&

yl£i»»*

^^

»— ^-s^g; w.>»-i ^^sjrJ^fii

*JT--. _•;

-'■*

¥*'*?'*$& "^-l:^

4|K

e»A-#=w**

»W«30W> ^

-_•——.

i.T-'

* -**i

,'-"•-.

.-

=;•*.■

.- ■ .

.

-••c-<

«'»••» ««r.V *x

Tbtal

salaries

47.3%

0
Percent

10

20

30

40

58

Table 11

Average weekly operating expenditures of Broadway plays and musicals 1965-67 to 1975-77

{Plays

t--..
ft- -

1965-67 1975-77

--. Musicals

Annual ;;.

rate of

increase 1965-67 1975-77

Average »>*
(annual .in-
Annual crease for
rate of ;plays and
increase .musicals

Performers •
salaries

i

$ 6,398

$11,789

5.6%

$13,323

$20,455

3.9%

' -4.5%

Other artistic
personnel

iS lr157

•■$ 1,758

3.3%

$ 4,762

$ 8,375

5.1%

4.9%

Administrative

i$ 1,764

$ 3,993

7.4%

$ 2,379

$14,160

16.2%

13.4%

Stagehands
and crew

$ 1,265 .

S 1,701

2.7%

$ 2,634

$ 4,977

5.8%

4.9%

Departmental

5 ,376

S 1,895

14.7%

$ 1,400

$ 2,347

4.7%

7.9%

Royalties
and fees

!$ 2,945

S 5,652

5.9%

$13,400

$17,607

2.5%

3.2%

Taxes and
benefits

IS 497

4 2,121

13*2%

$ 935

$ 4,003

13.2%

13.2%

Advertising
and promotion

!$ -2,201

S 7,322

10.9%

$ 4,135

$12,900

10.3%

10.6%

Other

$ 623

/$ ^833

^2.6%

$ 1,209

$ 1,224

0.1%

1.1%

Total

517,226

$37*064

7^0%

$44,177

$86,048

6.1%

6.3%

Operating Expenditures

Operating expenditures (or running costs)
normally include all expenses, charges,
and payments incurred in connection with
the operation of the show. The theatre
rental or "theatre share" is usually about
25 percent of the gross weekly box office
receipts with a weekly minimum amount set
in the contract. This aspect is not con-
sidered in the following discussion.

The annual rate of increase of current oper-
ating expenditures is 4.7 percent for plays
and 2.7 percent for musicals, a decline in
operating expenses in constant dollars.
Operating expenses in general have increased
much less than production costs, although
in the last 2 years those for musicals have
shot up conspicuously.

expenditures for plays and musicals between
1965-67 and 1975-77; Figures VIII and IX
(following) show the percent of total oper-
ating expenses for each item at the begin-
ning and end of the period. Although in
absolute terms total operating expenditures
for musicals are twice as much as the to-
tal for plays, the rate of annual increase
for plays is much higher than that of musi-
cals.

The following examination of individual ex-
penditure items reveals which increase the
fastest and whether their proportion of the
total has changed.

Table 11 provides information on the annual
rates of increase of individual operating

57

Performers' salaries. The single most im-
portant expense in the total operating bud-
get is salaries (31.8 percent for plays and
25. 5 percent for musicals) but there has been
a decline of their proportion of total op-
erating cost from the mid-1960s. The annual
rate of increase has been 5.1 percent for
plays and 3.6 percent for musicals.

Advertising and promotion. Advertising
i expenditures are the second leading ex-
i pense item in plays and the third largest
I in musicals. Advertising has increased
for both plays and musicals since the mid-
1960s, growing at an annual combined rate
of 9.7 percent. The fast rise in adver-
tising expenditure can be attributed to at-
tempts to compensate for competition from
television and to take account of the greater
geographical dispersion of audiences. On
the average, a show that runs for a year
may spend about $380,000 on advertising
for plays and about $600,000 for musicals.
The increasing allocation of dollars toward
publicity suggests that producers believe
advertising is paying off in attracting
audiences.

Royalties and fees. Payments to directors,
designers, and playwrights amount to 15.3
percent for plays and 14.6 percent for mu-
sicals. The bulk of payments to designers
is made before the opening of the show and
to playwrights (except for the nonrefund-
able advance) after the opening. The aver-
age annual rate of increase of fees and
royalties is among the lowest of all com-
ponents of operating costs, and there is
a decline in their relative share of total
operating expenditures. However, the rel-
atively modest rate of annual increase
may reflect the fact that the 1970s has
been a period to consolidate earlier gains
by unions and associations and to opt for
even greater security in the form of larg-
er advance payments.

Administrative salaries and expenses and
other operating costsT As with similar
production costs, increasing activity in
marketing innovations and paperwork asso-
ciated with employees ' benefits has account-
ed for rapid increases in administrative
salaries and expenses for operating costs .
Of total operating expenditures, these ac-
count for 17.7 percent for musicals and
10.8 percent for plays. Their rate of an-
nual increase has been, on the average,
12.3 percent. Another fast-growing group
of operating costs are those for carpentry,
sound, lighting, and other departmental ex-
penditures. Although their share of the
total is approximately 4 percent, their
rate of annual increase has been 7.3 per-
cent over the last 12 years. Also, taxes
and personnel benefits have a fast rate of
increase (12.1 percent per year) and have
more than tripled since the mid-1960s, al-
though they occupy only a modest share of

total operating expenditures (5.3 percent) .
Salaries for technical artistic personnel
and those tor stagehands and crew have been
increasing at the modest annual rates of
4.4 and 4.5 percent, respectively. While
salaries for technical artistic personnel
are 7.6 percent of total operating expendi-
tures for both plays and musicals, stage-
hands and crew are 5.4 percent.

By and large, operating expenditures that
account for a greater share of the total
are increasing at a slower pace than most
of the relatively small expenditures. In
spite of increases for several items , oper-
ating expenditures as a whole have been in-
creasing at a slower pace than production
costs .

Other Costs

Included in this category are costs incurred
during the close of a show and during the
change of a theatre house or facility.

Closing. Closing expenses include adjust-
ments of payroll, transportation and haul-
ing, administrative salaries, accounting
and audit fees (closing the books and pre-
paring partnership tax returns) , restora-
tion of stage, "take out" stagehands costs,
unused ticket and theatre playing dates,
cancellation charges, insurance, payroll
taxes, additional vacation pay, union pen-
sions, and storage. During closing, a pro-
duction may be able to sell or rent scenery
or costumes, thus offsetting some of the
closing costs. The largest of these costs
is usually for restoration of the stage,
followed by salaries to stagehands. In a
sample of 100 shows between 1964 and 1977 , the
highest closing cost for plays was $23,000
and the lowest was $1,500. For musicals,
the highest closing cost was $60,000 and
the lowest was $3,500. Closing costs aver-
aged 7.8 percent of the size of production
costs for plays and 4.5 percent for musicals.

Moving . Sometimes a show may choose or be
forced to move from one theatre house to
another. Reasons for such moves are varied
—previous contractual arrangements of the
house, a move from Of f -Broadway to Broadway ,
need of a better stage. In a sample of 9
shows, these costs. ranged from $5,500 (in
1966) to $69,000 (in 1973). The. average
rate of increase follows closely the rate
of increase of production costs.

Revenues

Box office receipts. Average receipts per
show, per week, have improved since the
1960s, with spectacular increases in the
1974-75 to 1976-77 seasons in terms of cur-

60

Table 12

Average weekly box office receipts of Broadway plays and musicals 1965-66 to 1976-77

Season

s^dollax8y^-v^^>lS67 -dollars ::;-V,:t

Musicals

Current
dollars

Constant
1967 dollars

1965-66

?^9v*©€^^&^^

$62,000

$64,000

1966-67

$66,000

$66,000

1967-68

pSii^^^^^l^^^W^^^i

$69,000

$69,000

1968-69

^^^q^f^^^ii'md'HWiBP^

$69,000

$67,000

1969-70

*rmi&li^$?^^

$64,000

$60,000

1970-71

^M^D0^^^fet^3T^)bD ' '^;$:' p§. ^ $62,000

$56,000

1971-72

&29 /O00^?^^^^*^2SV*00

r ■-■ -- - - ' - "■■■■■£< -. •■■

&!£&* $57,000

$50,000

1972-73

pES^HW^^ $73,000

$61,000

1973-74

^^^W^8^^S^**D^-^^& $67,000

$50,000

1974-75

^^^(^^^^r^jyOOOM

$81,000

$51,000

1975-76

1

£$«BVi>D0 ^^«g^gf8Bn^B0p

■-1/'

$86,000

$49,000

1976-77

'^^fe^^a^oiop s£3^

$93,000

$51,000

rent dollars. However, in terms of constant
dollars, the pattern is less impressive and,
in large measure, box office receipts per
week have actually declined (see Table 12) .
Of these receipts, approximately 25 percent
is paid to the theatre owner and the rest
is the company's share. Although the total
revenue from all sources is the single most
important factor in assessing the financial
condition of a production, receipts are im-
portant in assessing the gains of the vari-
ous interests associated with a production.
For example, theatre owners share in the
box office gross but not in the selling of
subsidiary rights.

Other income; subsidiary rights and mis-
cellaneous income. The category of other
income includes earnings from the sale of
rights to produce the live show again either
domestically or abroad, earnings from the
sale of motion picture rights , and earnings
from television and recordings . Additional
income accrues to the production from the
sale of show albums and souvenir books , rent-
als of equipment, costumes, sales of sets
and props, advertising rebates, insurance
credits, interest from deposits, return of

bonds deposited with unions ana theatres,
and tax refunds.

This income category is an important one,
especially for successful productions as
defined by Variety ' s classifications of
"successful" and "undecided" or "failing."
Cumulative ancillary income for successful
plays covers, on the average, 160.7 percent
of the total production costs of these plays —
ranging from 10.37 percent to 784 percent,
with the median 97.46 percent. For plays
with undecided or failing status, the aver-
age was 5.45 percent, ranging from 0.01 per-
cent to 27.98 percent, with the median 5
percent.

Making similar estimates for successful
musicals, such income accounted on the aver-
age for 77 percent of total production costs —
ranging from 5.73 percent to 1,030.90 per-
cent, with the median 37 percent. For the
rest of the musicals (undecided and failures) ,
the average was 7.26 percent, the range be-
ing from 0.05 percent to 38 percent, and
the median 2.02 percent.

On the average, each musical (successful
and otherwise) received $183,847 and each
play $75,080 from other income — clearly

61

Table 13

Average cash flows of Broadway plays and musicals
1965-6610 1976-77

1

Plays

Production costs

$147,876

Weekly operating margin — successes

$ 8,397

Weekly operating margin — failures

0

Other income — successes

$237,637

Other income— failures

$ 8,059

Closing costs

$ 11,534

Musicals

Production costs

$493,528

Weekly operating margin— successes

$ 14,633

Weekly operating margin— failures

0

Other income — successes

$380,016

Other income— failures

$ 35,830

Closing costs

$ 22,209

It should be noted that this calculation,
iwhich shows that the limited partners may
I lose on their investments even though the
I entire partnership (including the producer)
gains, does not necessarily mean that the
iproducer is profiting at the expense of the
limited partners. Producers invest time
and resources in the search for properties
land the formation of partnerships that are
often not reflected in the production costs .
The income earned from management fees, of-
fice charges, and the 50 percent share of
any net profits must yield the producer a
return on these overhead costs. Without
further data, no conclusions can be reached
about whether the division of income custom-
arily provided in partnership agreements
results in extraordinary returns to produc-
ers. No information has been obtained on
whether investments in Broadway productions
have become more or less profitable over
the years although the following observa-
tions suggest that the return on investments
has fallen.

The fastest growing items for both musi-
cals and plays are production costs, as
Table 14 shows. The rate of increase in

investment in productions has lagged be-
hind that of production costs, a gap which
may be explained by the very low rate of
return to limited partners estimated above.
This gap means greater responsibility and
risk for the producer. Also, it is evi-
dent that production costs have grown more
rapidly than operating margins. This means,
other things being equal, that investment
recovery periods have lengthened. Since
1965, the annual rate of increase has been
4.5 percent for plays and 4.7 for musicals.
Table 15 shows average profit margins and
estimated recoupment periods of investors'
money. (The estimates assume that there
are no debts that have priority.) Operat-
ing margins for musicals seem to increase
less than those of plays. Recoupment peri-
ods for plays are shorter than for musicals.
However, plays and musicals that have net
revenues from subsidiary rights, national
companies, or other sources may have short-
er recoupment periods than the average.

Finally, another qualification that should
be made regarding the computation of rates
of return is that there are different losses
and gains for individual participants. For

64

significant figures . There did not seem to
be a trend in other income receipts, but
there is a correlation between the length
of run and cumulative other income. Fig-
ure X illustrates the relative importance
of "other income" sources for successful
plays and musicals.

Revenue from national companies. The pro-
ducer of a Broadway show may decide to mount
a second version for touring. The produc-
tion costs of such companies (usually called
"national") are paid out of the operating
surplus of the New York company and take
precedence over the repayment of the parent
production's limited partners. Moreover,
the producer makes the decision of addi-
tional touring productions unilaterally,
according to the limited partnership agree-
ment. By and large, touring companies have
endured the same vicissitudes as Broadway.

Production costs of national companies are
apt to be much less than the production costs
of the parent show — often as little as half.
The most prominent operating cost items
are typically transportation, hauling, and
per diems. The net profit from these com-
panies are recorded as net profits of the
parent company. On the average, for both
plays and musicals, profits exceed losses
and the estimated ratios of profits to
losses are 3.90 for plays and 2.55 for
musicals. However, since these results are
based on a limited number of study cases,
they are not conclusive, at best only an
indication of costs and revenues.

Although no attempt has been made to estimate
aggregate average revenues from all sources ,
Broadway losses are offset, on the average ,
at least 50 percent by net receipts from
subsidiary rights and the road.

Profits and Losses

The basic questions about cost and revenues
of Broadway theatre are these: Does Broad-
way theatre make a profit? If so, does it
earn enough to repay investors with a rea-
sonable return on their investments? To
answer these questions , the study included
an examination of the patterns and magni-
tudes of cash flows associated with pro-
duction and operation.

There are 4 main types of cash flows asso-
ciated with Broadway undertakings: first,
production costs incurred prior to opening;
second, weekly operating costs and weekly
operating revenues which determine the
weekly operating margin and may be positive
or negative (during the early period of the
run of a successful show, a positive margin
contributes to the recovery of the produc-
tion costs and, when these are paid back.

contributes to profit) ; third, income from
subsidiary rights; and fourth, income and
closing costs if the show tours (revenues
from national touring companies may be an
additional source of cash flow) .

In computing the profit rate for the period
1965-66 through 1976-77, estimates were
made of the size and timing of the cash flow
types by averaging selected data over the
period. Averaging was done to eliminate
cyclical variability. The averages that
were computed are presented in Table 13
(following) . Shows that failed were assumed
to have an operating margin of zero dollars .
An estimating procedure was then utilized
that related the estimated average cash
flows to the estimated timing at which they
occurred over the life of a show. With
other information collected in the study,
the assumption was made that musicals turn
out to be successful about 37 percent of
the time and plays are successful about 25
percent; and on the average, the success-
ful musical runs for 80.625 weeks while the
successful play runs for 48.25 weeks. The
calculations that were made employed a pre-
sent value model and gave a rate of return
of 16.39 percent a year for musicals and
7.66 percent a year for plays. A final
step in computing an overall rate of return
for both musicals and plays was to weight
the returns by their percentage shares of
total investment and add them. When this
was done, the estimated overall rate of
return is 13.18 percent per year excluding
the possible contribution from national
touring companies. Since national touring
companies tend to be more profitable than
shows on Broadway, the 13.18 percent of
return understates the overall profitabili-
ty of shows that combine both a Broadway
run with a national tour.

Some additional qualifications are worth
noting. First, the calculated return is
the total return on investment both to the
general partner (producer) and limited part-
ners . The limited partners , who frequently
put up most or all of the money, do not re-
ceive this rate of return. The partnership
agreement commonly awards all net revenue
to the limited partners until their invest-
ment is reimbursed and thereafter splits
income between the limited partners and the
general partners on a fifty-fifty basis.
For example, assuming that the limited part-
ners put up all of the money for a musical,
their average cash flow, combining both
successes and failures, may not recover
their investment. This explains why part-
nership agreements usually contain language
such as the following: "A purchaser of the
Limited Partnership Interest being offered
hereby should be prepared to lose his en-
tire investment because of the nature of
theatrical undertakings . "

63

LARGER NONPROFIT THEATRE

The larger nonprofit theatres are concen-
trated in the Northeast part of the nation,
in the Midwest, and on the West Coast.

Fifty-nine larger nonprofit theatres were
examined using data from the National En-
dowment for the Arts, Ford Foundation, and
Theatre Communications Group (see Table 16) .
Deficits were incurred by 25 theatres (42
percent of the sample) in amounts that
ranged from $180 to $244,235. The median
deficit was $51,070. Of the remaining 34
theatres, 23 (39 percent) had balanced bud-
gets and 11 (18.6 percent) had surpluses;
the surpluses ranged from $730 to $131,100
and totaled $165,014. Although the bulk of
revenues comes from ticket sales, an addi-
tional 38 percent has to be made up from
contributions in order to meet costs. (Here
and throughout this section, "earned income"
refers to revenues from ticket sales, pro-
grams , parking , movies and TV , and services ;
"unearned income" means contributions and
grants. Production and operating costs are
combined because of the nature of the oper-
ation of these theatres.)

Table 17 is based on the total operating
budgets of 30 theatres for selected years.
It was possible to go back as far as 1965
for this group. The increase of all compo-
nents of the budget between 1965-66 and
1976-77 was substantial no doubt because

Table 16

Income and expenditures
of fifty-nine larger nonprofit
theatres 1976-77

Earned income

$38,087,685

62%

Unearned income

$21,501,702

35%

Total income

$59,589,387

97%

Total
expenditures

$61,403,645

100%

Surplus or
(deficit)

($ 1,814,258)

(3%)

the 1960s and early 1970s were formative
years for the nonprofit theatre . The Guthrie
Theatre was founded in 1963, and with it
the whole regional nonprofit movement accel-
erated; just 2 years later the National En-
dowment for the Arts was established.

An examination of growth rates for these
30 theatres between 1965 and 1977 leads to
some interesting conclusions (see Table 18)
First, they all outstrip the rates of growth
for the wholesale and consumer price indexes
over a comparable period of time. Second,

Table 17

Income and expenditures of thirty larger nonprofit theatres between 1965-66 and 1976-77

■winMW.ai

Season

T3?otal -•

Learned -income-

Total

unearned income

Total
operating
expendi-
tures

1965-66

t&*r920 r997~^76 - 6% ~

$ 2,732,489

23.4%

U$ll,€53,486

-100%-

$11,955,735

1967-68

J&3, 193^9 85-^0^2% ~

$ 5,335,473

28.8%

£-$18,529,458

.100% —

$19,929,917

1970-71

L$14,110^£60-.. -67^3% —

$ 6,856,740

32.7%

^20, 967 ,400

100% -

$21,187,170

1971-72

\z$2A ,409*9£5 - -*4 .9% **•

$ 7,798,707

35.1%

J $22,208,672

-100% *

$22,133,318

1972-73

j^$16^953, 917—63. 5% .

$ 9,742,137

36.5%

£ $26>€95y954

^100% ~

$25,978,747

1973-74

L$17,423,341 — 63^21^

• -

$10,154,799

36.8%

r-$27*€30?D40

-100%~<~

$27,660,029

1976-77

f-$23*492* 928--.£&~l%^

$12,569,323

34.9%

M$36i052,251-

-<aoo%-^

$37,166,244

66

Table 14

Annual rates of increase of
Broadway financial indicators
1965 to 1977

example, performers, playwrights, and other
artistic personnel have made gains in income
security (increasing guaranteed minimum
compensation) . Increasing advance payments
to personnel have shifted the risk toward
the producer. The theatre owners' share
has remained stable for the last 10 years.
However, with successes running longer,
the turnover of shows may be less and re-
duce the theatre owners ' annual expenses in
bringing in new shows. Moreover, many the-
atre owners are now producers. This new
shift increases both risks and .profitability.

Plays

Musicals

Investment

6.4%

4.1%

Production costs

10.7%

4.7%

Operating
expenditure

4.7%

2.7%

Box office
receipts

5.6%

2.8%

Recovery period
for successes

4.5%

4.7%

Operating margin
for successes

6.8%

3.8%

Theatre share

5.6%

5.6%

Table 15

Average Broadway profits and recoupment periods
for successful plays and musicals 1965-66 to 1976-77

Season

Plays :

Weekly

operating g&£$&
profit .

;r- ^Recoupment .
weeks

Musicals

Weekly

operating

profit

Recoupment
weeks

1965-66

$ 5,783 12^2

$15,161

19.8

1966-67

^f^£^M^S9^^^^S^^^S^^4k^d^-^.

$17,638

26.0

1967-68

[, -$'5,868 • ;^': ;■:;;- 14.5 -:..-

$11,108

37.6

1968-69

1 "•'.$ 7/093 ?• ; 15.8

$10,146

52.7

1969-70

£ ->*$ 7,593 15.9

$14,187

32.9

1970-71

:. $ 6,445 ■- 18.3

t

$18,826

27.8

1971-72

p.,.v $8,699 17.4

$14,296

36.1

1972-73

r $ -9,190 18.2 ~

$14,458

32.8

1973-74

» — * 9,968 19.0

$10,505

48.1

1974-75

fc~ $10,120^ ~-^ 20.0

$22,000

30.2

1976-76

f- :$lia25 ^j r— ^~ 20 . 0 — » —6:

$14,516

43.6

1976-77

^••-~^x--j$12^692->-.~-^-''- ■ ■*»**-**. j — 21 «3--»v--' »**i<^j>

$12,762

47.9

65

Table 19

Average expenditures of thirty larger nonprofit theatres between 1965-66 and 1973-74

HI • ■■■

Salary

1965-66

1967-68

1970-71

Performers and
other artistic
personnel

f "
3124,296

.31.2%

$198,175

29.8%

>

5* -r

.$209 ,868

^ -29.7%

Administrative

i$

58,040

. . 14-6%

$104,836

15.8%

fr v.*

$119,845-

-i 17.0%

Stagehands
and crew

3

.32,408

8.1%

$ 69,518

10.5%

•"

-^8 82,323

8.8%

Fringe benefits

($

17,569

4.4%

$ 33,572

5.1%

•-.-

8 39*421

5.6%

Total salary

£232,313-

„ 58.3%

$406,101

61.1%

8431,457

81.1%

Nonsalary

i"~

— '

Departmental

'$

38,204

9.6%

$ 55,007

8.3%

• .

8 50,585

7.2%

Royalties and
fees

?$

9,780

2.5%

$ 16,854

2.5%

1-

$.17,760

2.5%

Transportation
and travel

$

5,189

1.3%

$ 11,137

1.7%

^ -

$12,922

1.8%

Advertising
and promotion

$

36,823

9.2%

$ 61,929

9.3%

'

8 71,025

10.1%

Facilities and
related costs

$

33,409

6.4%

$ 48,272

7.3%

- $ 49 ,935

7.1%

Fundraising

*

2,873

0.7%

$ 6,649

1.0%

$ 4,627

0.7%

Other

*

39,934

10.0%

$ 58,381

8.8%

■

8 67,927

9.6%

Total nonsalary

$166,212

41.7%

$258,229

38.9%

-

$274,781

38.9%

Grand total

$398,525

100.0%

$664,330

100.0%

$706,238

100.0%

Budget Shares

The analysis of budget shares is based on
two sets of data. One set (the Ford Foun-
dation Survey of Finances of Performing
Arts Organizations for 1965-66 through
1973-74) is used for computing the rates of
annual increase for individual cost items
up to 1974. The other set of data (finan-
cial statements of the same theatres for
fiscal 1976-77) is used for analyzing the
composition of more recent operating expen-
ditures. However, the two sets of data are
not really comparable because it was not
feasible to combine all budget items in a
consistent way.

Table 19 reports average expenditures for
30 theatres for selected years between
1965-66 and 1973-74. Annual rates of in-
crease for most of these are shown in Ta-
ble 20 (following) .

Salary costs take a larger portion of the
budget than nonsalary costs. Performing
and nonperforming artistic personnel is
the largest factor in the total budget but
shows a slight decrease in their share since
1965. Salaries of nonperformers have been
increasing faster than have salaries of
performers. Administrative salaries, the
next largest salary cost, have increased
their relative share of total expenditures

68

the growth rates of earned income and total
operating expenditures are roughly equal
(particularly over the 1970s) . In other
words , the proportion of the budget covered
by earned income has remained roughly con-
stant over the recent past.

Table 18

Rates of increase in Income
and expenditures of thirty
larger nonprofit theatres
1965 to 1977 and 1970 to 1977

Budgets

The records of 59 larger nonprofit theatres
examined in Table 16 show that no two bud-
gets are alike. Both the size and the rela-
tive composition of a budget may differ be-
cause of such factors as the number and
nature of typical productions, with their
different cast sizes and production demands ;
the repertory system of performance as com-
pared to the stock system; the degree to
which a company is permanently employed by
the theatre; the physical plant, including
theatre size, upkeep, availability of re-
hearsal space, and ownership of the build-
ing; geographical location, which means dif-
ferent local rules on safety and insurance
as well as the price and availability of
such materials; and the extent of experi-
mental work undertaken.

Theatres differ in their situations and
their identities, and their budget report-
ing differs not only from theatre to thea-
tre but often from year to year for the
same theatre. As a result, the following
assessment of such matters as the composi-
tion of production and operating expendi-
tures must be viewed in light of the diffi-
culty in finding budget consistency.

1965 to
1977

1970 to
1977

Earned income

7.8%

8.8%

Unearned income

13.2%

9.9%

Total income

9.4%

9.1%

Operating
expenditures

9.1%

9.6%

Surplus or
(deficit)

Earned
income
percent of
operating
expenditures

- Unearned
; income ' .*-
percent of -. :£~]
| operating >>•
■expenditures-

($ 302,249)

74.6%

■ 22.9% ;A

($1,400,459)

66.2%

,26.8% . . ._.

($ 219,770)

66.6%

1:32.4% ;.; ;T

$ 75,354

65.1%

\35.2%''-'T';;'\^

$ 717,207

65.3%

b*:-s%*r;v;:£-

($ 29,988)

63.2%

[36^7%^:;^

($1,113,993)

63.2%

^3^b%^;;:>-:^

67

Table 21

Average expenditures of fifty-eight larger nonprofit theatres by budget size 1976-77

theatres
^with .budgets *£

,000-3300,000 ^

10 theatres
with budgets of

$301,000-$500,000

,; :'ifi Jtheatres;,!-

k . with budgets ^of
Ut £501 ,000-3700,000

Salaries

^116?C11J1W^S1,5%^

$214,736

53.1%

U«3314^3«^./53-4%,

Administrative and

fundraising

$

17,618

4.4%

$ 9,814

-- ** n-~+ -"".'— •■-«Fr'

1.7%

Stagehands
and crew

\4 27^513 >r 02/2% ^

$

23,894

5.9%

f. $74,451

12.6%

Taxes

M 3,76or ^-ai7% ■■;;"

$

10,522

2.6%

I $ 18,581

3.2%

Fringe benefits

^-^A3^<:f:Si^a%:^

$

6,516

1.6%

1° ^'12,340 %"

'■* ?2.1%

Royalties and
fees

P$''v9/€lB«^*4i3% V^-

$

15,307

3.8%

M-$ 26,-652=

.-'-4.5%

Transportation
and travel

£$ '^5 ,-674 *stf -^^215% Z:s

$

12,282

3.0%

1 * '9,192

.^■•■•'•n»-6%

Advertising
and promotion

^$25^85^-111^4%^

$

49,364

12.2%

j $ 57,813

9.8%

Facilities and
related costs

$

22,456

5.6%

f -$ 30,288

5.1%

Telephone

N':^W22-*£*iio i9%>- r

$

.3,974

1.0%

f $ --5,570

0.9%

Other

fe .?iii38.^ffl- 2ss&i% SS

$

27,539

6.8%

t\ $ 29,938

5.1%

Total

[$225;321- 100.0% *c

$404,208

100.0%

| $589,406

100.0%

70

1971-72

1972-73

1973-74

$224,512
$121,442

30.4%

16.5%

^$255,762
$138,933

29.5%
16.0%

$266,213
$151,994

28.9%
16.5%

$ 72,254

9.8% f;M B0VB61

"3*3% •£

$ 89,499

9.7%

$ 42,251

5.7%

t -$ :54,725

6.3%

$ 59,099

6.4%

$460,459

62.4%

-$530,281

61.2%

$566,805

61.5%

$ 55,007

7.5%

* 75,114

8.7%

$ 71,468

7.8%

$ 18,389

2.5% j^3$^20;379^ v .^.3%^ $ 25,679

2.8%

$ 16,607

i

2.3% j^m^i^^^^M $ 24,191

2.6%

$ 66,295

9.0% jb$ ,77,929 ^: ^0%

$ 80,874

8.8%

$ 47,550

6.4%

^bssSp^

$ 62,274

6.8%

$ 4,827

0.7% i'$$ ^assna^M^m^w.

$ 5,487

0.6%

$ 68,642

9.3%

"*o;is4jt:-'~,3:~"*9..3%^

$ 85,223

9.2%

$277,317

37.6%

?" "-$335 7772 T 38XB*^

$355,196

38.5%

$737,776

100.0%

^866,053 %* 100.0%yS;

$922,001

100.0%

since 1965. Salaries for stagehands and
crew account only for 9.7 percent of total
expenditures during the 1973-74 period,
but their annual rate of increase since
1965 is 10.1 percent. The fastest-growing
item in the salaries category (also the
smallest) is employees1 fringe benefits,
which have increased by 69 percent since
1965.

Among nonsalary costs , the largest category
is the miscellaneous one of "other" costs
(which includes depreciation and interest
on loans along with the usual incidental
costs). However, the fastest-increasing
nonsalary item is transportation, which is

only a small part of total expenditures.
Of all costs, then, salary costs are clear-
ly the largest component of the budget, with
61.5 percent in 1973-74. This is partly a
result of theatre being a labor-intensive
activity and partly because union contract
minimums set a floor on salaries . Of course,
an organization wishing to lower salary
costs could decide to use smaller casts,
but even for a play with two actors there
is still the need for such nonperforming
artistic personnel as a director or a sound
and light technician, and the annual rates
of salary increase for this category (and
for stagehands) are higher than those of
performers .

69

Revenues

Revenues are comprised of earnings of the
theatre and contributions from the public
and private sectors. The total does not
always balance with total expenditures.
For the larger nonprofit theatres in the
1976-77 sampler 62 percent of total expen-
ditures was covered by earned income and 35
percent by contributions, and a deficit of
almost 3 percent remained (see Table 16) .

Earned income. Theatres earn income in a
variety of ways although the bulk of their
earnings is from the box office. On the av-
erage, the larger nonprofit theatres earn
7 0 percent of their income.

The main sources of earned income of 30 larger
nonprofit theatres in selected years between
1965-66 and 1973-74 are shown in Table 22.

Rates of annual increase in sources of this
earned income are shown in Table 23. Income
from subscription tickets contributes the
greatest part of the 1973-74 total earned
income (39 percent) and it has grown at an
annual rate of 10.7 percent. In the 1965-66
period it accounted for only 29.9 percent
of all earnings while single and block tick-
et sales were 42.8 percent. Relative posi-

tions have been reversed since that time.
Furthermore , the selling of single and block
tickets for individual performances has
been increasing at a much lower rate (3.4
percent) than subscription income.

Income from services is growing as fast as
subscription income (at 10.7 percent).
This is a relatively new form of earned in-
come based on contracts with governmental
authorities or sponsoring organizations to
give a single or a series of performances,
often free of charge. An example of such
an arrangement is public summer performances
in parks.

The fastest-increasing sources of earned
income are those associated with TV and mov-
ie performances. Although still a very
small contribution to total earnings , these
sources have the potential of becoming
larger — especially if business decides to
sponsor media performances of American the-
atre in the way it does other forms of art.

The "other tickets" category is the third
most important source of earnings. It in-
cludes income from selling tickets to stu-
dent groups as well as income from perform-
ances of other groups , the proceeds of which
are usually split with the host theatre.

Table 22

Average earned income of thirty larger nonprofit theatres between 1965-66 and 1973-74

■■HnHHHBJBJBJBJMHHHHBMBJBJHajH^ 7 fj^jj^&ffj 'tjflHfir* ' ^^ "

Performance income

i 1965-66 . ._

,,- .._..,, .....

1967-68

(

1970-71

. -

Subscription tickets

$ 28,992

-29-9% ;-.-.

$150,384

34.2%

I

$168,554

35.8%

Single and block
tickets

I $127,238 ...

..-A2~S%.ZSi

$146,212

33.3%

K

5172,472 -.

36.7%

Other tickets

';•$ 45,698

.15.4% ;

$ 52,058

11.8%

* 76,089

J.6.2%

Services

$ 11,824

4.0%

$ 51,624

11.7%

1

$ 17,376

3.7%

Recordings, films,
and radio and TV

i

L $ 158

••*

$ 252

0.1%

1
r-

$ 118

*

Total

$213,910

92.1%

$400,530

91.1%

f
t.

$434,709

92.4%

t

i

- ■

\

Nonperformance
income

[.$ 23,456

- 7.9%

$ 39,270

8.9%

t

$ 35,646

7.6%

-.,-....- . — ,.<

•-._•.

. - :-

— ■■• -

>rand total

1 $237,366

100.0%

$439,800

100.0%

$470,355

100.0%

'Less than 0.1%

72

Up to this point, the analysis of costs has
been based on the combined average expendi-
tures of 30 theatres during 1965-74. An-
other, and more recent, perspective can be
seen from expenditures of 58 theatres for
1976-77 (see Table 21) .

There are differences between the budget
shares of 1965-74 data and those based upon
the more recent financial statements. The
most significant example is that the 1976-
77 data indicate 52 percent of the budget
is allocated to salaries. In the 1973-74
period the average allocation to salaries
was approximately 56 percent of total costs
when fringe benefits were similarly excluded.
Since no examination was made of the raw
data underlying the earlier figures and
since the 1976-77 sample included several
additional theatres , it is not clear whether
the differences implied by the two sets of
data represent real changes or whether they
simply represent differences in reporting.

Table 20

Annual rates of increase In
expenditures of thirty larger
nonprofit theatres between
1965-66 and 1973-74

Salary

Performing artistic
Nonperforming artistic
Production/ technical
Fringe benefits
Administrative

Total salary

Nonsalary

Departmental

Facilities and related costs

Transportation and travel

Subscription and promotion

Royalties

Fundraising

Total nonsalary

7.9%

9.2%

10.1%

13.5%

10.4%

9.6%

6.9%
6.1%
17.2%
8.4%
9.5%
5.2%

8.2%

| ■ " | i?%fo?c *-W.$*<&f 1 1 •'^*R&-r ^SHHHHBHBHH

14 theatres
with budgets
$701,000-$1

; of
million

J.5 theatres

, wi th budgets x>£

?$1. 001-52.2 million '

3 theatres
with budgets of
$2,201 million +

■ Total

$412,530

50.8%

$ 608,830

47.5%

$1

,511,610

53.8%

$3,178,484

51.85%

$ 27,413

3.4%

f$ 61,826 ^ 4.S%

$

157,373

5.6%

$ 278,485

4.54%

$ 76,551

9.4%

b 108,973

*.5%

$

249,953

8.9%

$ 561,335

9.16%

$ 20,719

2.5%

tS 32,067

2.5%

$

42,541

1.5%

$ 128,190

2.09%

$ 27,835

3.4%

1$ 28,244

2.2%

$

174,251

6.2%

$ 253,323

4.13%

$ 54,227

6.6%

;■$ 76,631

6.0%

$

151,954

5.4%

$ 334,389

5.45%

$ 25,880

3.2%

rs 36,100

2.8%

$

16,397

0.6%

$ 105,525

1.72%

$ 80,111

9.9%

r

?$ 131,709

10.3%

$

297,346

10.6%

$ 642,028

10.47%

$ 49,319

6.1%

!.$ 91,008

7.1%

$

173,324

6.2%

$ 381,368

6.22%

$ 6,553

0.8%

|$ 11 ; 962 ~

o;9%"

$

12,804

0.2%

IT'*""" 42,985

0.70%

$ 31,756

3.9%

jb$ ~95;352 '"

"'7.4%*

$

27,728

1.0%

fcT*TH3 ,700

^""3:65%

$812,894

100.0%

f$l, 282,702

aoo,o%

$2

,815,281

100.0%

$6,129,812

100.00

71

Figure XI

Sources of private support for thirty larger nonprofit theatres
between 1965-66 and 1976-77

'rrrr^mf • m .■ < j*mx< ■mu .mi ■■■! m . ' « •' "-■ • . •** f

Local foand»tion» V.^V**-;..:;

| Individual* ;:•. -:-;^-- - ^ ' -
Othar local

00^"*"T I .Jll.g ■»

-•".-» *-^— -^

- r ?s. r. -••-.

.w; . -*«•*-- ■*» .- *_-.J -.— -

*-■• —>.-»-». ■ ._•.- -■-,.: ,-»-■» ■•*■» . • -■ . .; »18£; __ - -_i' .»^' 7".-?— -"S

l-*0

1965-66

1967-68

1970-71

1971-72

u

Ms

1972-73

1973-74

1976-77

74

The "nonperformance income" category in-
cludes income from visiting individuals or
groups that use the theatre facilities and
pay a rental fee , receipts from the sale of
sets, miscellaneous interest and dividends,
concessions, program and advertising, and
coat-check income. This auxiliary income
has been growing faster than box office
sales of tickets and its contribution to
total earnings has been increasing.

Income from tickets has kept pace with in-
creasing costs. This was achieved by rais-
ing ticket prices and extending seasons.
During the 1970s, earned income has account-
ed for a nearly constant share of operating
expenditures. In other words, in spite of
the pressures of "cost disease," an impor-
tant segment of the nonprofit theatre has
managed the feat of increasing earned in-
come at the same rate as its rapidly rising
budgets .

Table 23

Annual rates off Increase in
earned income of thirty larger
nonprofit theatres 1965 to 1974

Subscription tickets

Single and block
tickets

Other tickets

Services

10.7%

3.4%

6.7%

10.7%

Recordings , films ,

and radio and TV 23.3%

Nonperformance income 9.9%

; " " SbVbVHHbVHHbVHHHHHI ^ ■§

1971-72

1972-73

1973-74

$180,220

37.5%

$229,781

40.7%

$226,912

39.0%

$145,239

30.3%

$169,540

30.0%

$172,341

29.6%

$ 66,749

13.9%

$ 73,197

12.9%

$ 77,568

13.3%

$ 42,281

8.8%

$ 38,839

6.9%

$ 43,949

7.5%

$ 1,097

0.2%

$ 639

0.1%

$ 1,122

0.2%

$435,586

90.7%

$551,996

90.6%

$521,892

89.6%

$ 44,745

9.3%

: $ 53,132

9.4%

$ 60,616

10.4%

f

$480,331

100.0%

$565,128

100.0%

$582,508

100.0%

73

Table 24

Sources of public and private support for thlrfty larger nonprofit theatres
between 1965-66 and 1976-77

■■■■■tttileVMHHH^M^'7 ■•"'rffilPBHMfif' " HH

1965-66

' - -• • .

1967-68

1970-71

Public

f-- ..•

• -

- . - . r •

tr

Federal

$

196,768

74.3%

$

941,791

85.1% -■

$ *58,223

59.6%

State

i$

65,608

24.8%

$

39,302

3.5%

$ 513,605

35.7%

Municipal

!$

2,500

0.9%

$

126,000

11.4%

$ 68,175

4.7%

Total

($

264,876

100.0%

$1

,107,093

100.0%

$1,440,003

100.0%

Percent of
grand total

9.7%

20.8%

21.0%

'. ■;

:

Private

*--

_-.. r

- — . -

Business

S

30,290

1.6%

$

226,932

8.7%

$ 4 0B, 540

10.6%

United Arts Fund

i$

7,000

0.4%

$

330,160

12.7%

$ 653,576

17.0%

Local

*

643,636

34.1%

$

528,288

20.3% \

$ 930,779

24.2%

Other local

w

201,607

io:7%~

$

325,793

12.5% X

- $ 290 ,143

7.6%

Individual

$1

,005,168

33.2%

$1

,194,904

45.8%

$1,563,007

40.6%

Total

SI

,887,701

100.0%

$2

,606,077

100.0%

$3,846,045

100.0%

Percent of
grand total

-

69.1%

48.8%

56.1%

-. -

National
foundations

?-

s

578,130

100.0%

$1

,599,753

100.0%

.$1*567,287

100.0%

Percent of
grand total

;

21.1%

'

30.0% ,"

•

22.9%

Corpus earnings

$

1,782

100.0%

$

22,550

100.0%

$ 3,405

100.0%

Percent of
grand total

-•«.

—

0.1%

0.4%

—

*

-

Grand total

$2,732,489 100.0%

$5,335,473

100.0% $6,856,740 100.0%

•Less than 0.1%

76

Figure XII

Sources of public support for thirty larger nonprofit theatres
between 1965-66 and 1976-77

fV|^^rv |nunicip«l

■ .' *irf« --*-""/. .^fcv

I-'.: --• 3**t?r

' ".VT; "?. .jV^'i

T *-**V '^V-'*-;^; . -"V"*'"

-.~w -i*#

k. . --■■-.

..*- » • r " -■" **\

[ -■:■:■ .y,-*

.--"^.^v-w-

/. ******•*;•:>»

b — "*'■" '"

;-■*• .'■**.(, *f ,*«

.';."' -..I-;*'

r

\ : • *S?~

\ " - "'

' '-"■'■':

■ ;. .. .«...,- £

•" Hf

->

, — .--. - ...--- ^'■*v*'-*-i

■■-A »

C 1965-66 1967-68 , 1970-71,-1971-72 ,,1972-7.3 1973-74 1976-77

r-

.-.-,«- > *.,-»■■.

Unearned income. Contributions to the larg-
er nonprofit theatres in the 1976-77 sample
amounted to approximately $21.5 million.
Between 1965 and 1977, total contributions
have been increasing at an annual rate of
13.4 percent, and in 1976-77 accounted for
5 to 80 percent of total income of these
theatres. The main sources of contributions
are private (business and individual) , pub-
lic (federal, state, and municipal) , and
such foundations as Ford and Rockefeller
(see Figures XI and XII) .

Table 24 (following) reports contributions
in dollars and as percent of total unearned
income for 30 theatres. Based on this data
the rates of annual increase of the total
contributions have been 13 . 8 percent for the
private sector, 24.6 percent for the public
sector, and 13.8 percent for the foundations
between 1965 and 1974. However, when data
on the 1976-77 period were included in the
calculation, annual rates of increase were
somewhat lower— 12.6 percent for the pri-
vate sector, 22.7 percent for the public
sector, and 4.7 percent for foundations.

Although public contributions are increas-
ing at a faster rate than private ones , the
latter still contribute the greater share
by far. In the 1973-74 fiscal year private
and foundation sources contributed $7.3 mil-
lion (72.2 percent of total grants) to these
30 theatres, while contributions amounted
to approximately $2. 8 million (27.1 percent).
In the 1976-77 fiscal year the private sec-
tor and foundation support were a combined
65.3 percent of total contributions but the
public sector increased its share of contri-
butions to 34.7 percent.

Foundations increased their contributions
by 44.2 percent between 1970 and 1974, but
24 percent of the increase since 1971 is
the Ford Foundation's cash reserve fund.
(This program provides money for the liqui-
dation of 50 percent of a theatre's net in-
curred liabilities after the other 50 per-
cent has been liquidated within a specified
period. Each fiscal year of the grant peri-
od, usually five years, must be completed
in a net current position. The money is
given on an installment basis for a revolv-

75

Hgure XIII

Public and private support for thirty larger nonprofit theatres as a
percent of operating expenditures between 1965-66 and 1976-77

-iwrmvmm*zm*^mt •,^•"1. ""1. ■■■■■ ' — !■>-- '".'

rntmt. mn^nf^^mm'^ymrm

— i ■immhu.i./i ., L>,.il.ii I ■...».' J

i^P^BV^?

-^TnTrivate - **?«?•* v w -.•:■ — . *
[Public'
national foundations

.-«•».'--;-»-«_-*» ^'t^.-:t^='=--«*c«.^.i.,'H^--»»,t_-^-.

i^^5»iis*Sv-^^

T.965-6*

1976-68 1970-71

1971-72 J.972-33

1973-74

1976-77

ill? *liir»Y—" !-■) .-■''I

ing cash fund from which operating expenses
must be paid until the earned income comes
in. In order to receive funds for the next
fiscal year, the theatre must replace all
withdrawn funds. If these terms are met,
the revolving fund may be kept by the thea-
tre as unrestricted capital reserve.) The
reported contributions of foundations have
declined by approximately 43 percent since
1973. Considering the rate of inflation
since then, foundations have not kept up
with their previous commitment to the thea-
tre. Reasons for diminishing support by
foundations since the 1970s are to be found
in their shrinking stock portfolios and,
perhaps, in a change of priorities.

Finally, it is clear that the larger non-
profit theatres have become increasingly
dependent upon public sources for their un-
earned income. Since 1965 this has risen
from less than 3 percent of total operating
expenditures to more than 10 percent. To-
tal private contributions, which rose in
the mid-1960s, then declined to about 20
percent. Figure XIII shows the relationship
between public and private support.

78

■ HHMHi^mi MHBI ■--.-. ^ja^^^^^gi

1971-72

p.972^73':-:;^

.:-.;« - • '-

--'■"

1973-74

\ 3976-77 y

. j:-}h}T% •*;

!-■ :- -•' ' -'"'-•-. ' '. -.

•..'••■ ■'■'

-

»•■»'*" : ;*V: '-: ~.

$

934,127

61.4%

\ $1,342 ,340

,r€5.8%

$

1

,763,704

64.0%

\ % 2^78y075-

^S7-"7%

$

424,364

27.9%

£$ 485,250

23.3%

$

682,410

24.8%

i$ 3,409^536

.33*6% ,

$

162,901

10.7%

i$ -2X2, 44 8

i^L0.4%

...v

$

308,450

11.2%

| ^$ ->"T478i«20-':

3.0,7*

$1

,521,392

100.0%

;i$2,039,838-

300.0%

' '-

$

2

,754,564

100.0%

i >$ 4,466,331

300.0%

19.5%

i ■ - . .j -.

.20.9%

'fij

27.1%

34/7%

1

.'.-..,:" - -

» -

1-: _.:'. ■'■'■'■ <■■■

-.'■ .,.;-- •;'■'.'

•- .. ■ • -..

$

551,288

12.4%

j* 'ASSIES!-

^f4»:

"1;

$

654,535

12.9%

^$,894,438

32.0%

$

715,021

16.0%

•:$1,08B,456

3.7.3%

: i

$

941,638

18.5%

, $ 3,186/729

16.0%

$

575,187

12.9%

•$ J816,470 .

33-4% ^

Zk-

$

730,109

14.4%

i $-3,307, 681

. 17.6%

$

429,503

9.6%

y$ 673,756-

33.3%

■■.*.

$

631,359

12.4%

1 $ a.,111,775

35.0%

$2

,194,130

49.1%

^$2,943,806

48.3%.

T1

$

2

r 126, 076

41.8%

[..-:$ 3,934,517

39.4%

$4

,465,129

100.0%

$6*074,239

3.00.0%

$

5

,083,717

100.0%

. $ 7,435,140

100.0%

57.3%

«

62.4%

50.0%

57.8%

r ;■..-.•..•■•. '.. --■■::■'•■- ■,.

■>-."■. ■■■--. •-;

$1

,808,668

100.0%

r$l,€02,378.

100^-0%^

%J+

$

2

,260,385

100.0%

$ 965,033

100.0%

23.2%

**../ = ' -w ■• — : <-;

-16^4%:

—\'

22.2%

r

7.5%

i -' - ,j . *■ »- .

.. ... .

$

3,518

100.0%

r$ 25,882

100.0%

$

74,133

100.0%

N.A.

N.A.

— -

*

E

B ' ■ ■ ■ ■

0.3%

:■-.

0.7%

.—

N.A.

$7,

798,707

100.0%

» $9,742,137

100.0%

$10

,172,799

100.0%

$12,866,404

100.0%

"Less than 0.1%

77

Budgets

The general conditions that influence the
budgets of smaller nonprofit theatres are
more or less the same as for larger nonpro-
fit theatres. There are, however, certain
features peculiar to the nature of the smal-
ler theatres which may affect their income
or expenditures.

One such feature is the Actors' Equity As-
sociation showcase code, previously mentioned,
which allows for special provisions for
theatres. The benefit and particular advan-
tage of this scheme is that smaller theatres
with minute budgets can keep costs down.
However, if a showcase production happens
to be very successful, the producing thea-
tre must always forego the opportunity to
take advantage of its success. Moreover,
limited performances for a given show may
result in boosting costs other than perform-
ers' salaries.

Another important feature of the develop-
mental theatre is that frequently there is
at least one playwright in residence. A
theatre with a resident playwright contrib-
utes greatly to the development of talent.
However, this involves additional costs for
these theatres, while the expected or de-
rived benefits are often shared by nonpro-
fit and commercial theatres and by the mo-
vies and TV.

A typical policy of the smaller theatres is
very low-priced tickets, wide discounts,
and occasional free admissions. This means
that the theatre is more accessible to the
public, but it also means the theatre must
rely even more heavily on contributions , or
unearned income, than the larger nonprofit
theatre (compare Table 16 and Table 25) .

Some smaller theatres cater to the tastes
and needs of special segments of the popu-
lation, such as industrial workers, women,
or certain ethnic groups. Although speci-

Table27

Average Income and expenditures of fourteen larger developmental theatres
between 1972-73 and 1976-77

Season

Earned income

Unearned income

Total income

Total
operating
expendi-
tures

1972-73

$45,927

53.1%

$40,555

46.9%

$ 86,482

100.0%

$ 80,173

1973-74

$23,699

35.3%

$43,474

64.7%

$ 67,173

100.0%

$ 80,592

1974-75

$40,925

40.8%

$59,297

59.2%

$100,222

100.0%

$105,209

1976-77

$62,259

50.9%

$60,007

49.1%

$122,266

100.0%

$129,943

Table 28

Average income and expenditures of sixteen smaller developmental theatres
1972-73 and 1976-77

Season

Earned income

Unearned income

Total income

1972-73

1976-77

$15,063

38.7%

$23,829 61.3%

$23,692

34.6%

$44,715 65.4%

$38,892

$68,407

100.0%

100.0%

Total
operating
expendi-
tures

$33,556

$70,113

80

SMALLER NONPROFIT THEATRE

Many of the smaller nonprofit theatres are
developmental theatres . They specialize in
producing new plays, in experimenting with
new ideas and approaches, and in offering
a testing ground for performers, writers,
directors, and designers. In the last few
years there has been an explosion in devel-
opmental activity all around the nation.

There are common themes expressed by the di-
rectors of developmental theatres : "support
and development of new playwriting talent,"
"audience development," and "promotion of
theatrical talent in general . " However ,
there is great diversity in their approach:
"re-interpretation of classics," "ethnic
or racial groups1 consciousness raising,"
"civil liberties advocacy," and "criticism
of economic and social norms." Whatever
the message, there is a desire for the new,
the unconventional, the experimental. In
one sense the developmental theatres are a
research laboratory from which ideas, tal-
ent, and plays find their way into commer-
cial theatres and other nonprofit theatres.
Because of the informality and the opportu-
nity for new ideas that many of these thea-
tres offer, some well-known artists seek
them out. If the developmental theatre is
under a showcase code, artists as well as
newcomers in the profession may perform
without receiving any remuneration. A
showcase arrangement with Actors ' Equity
Association allows theatres to have up to
12 performances without being obliged to
pay minimum salary requirements. These ar-
rangements are imposed and not negotiated,
and certain variations of this code may al-
low more performances under specified con-
ditions.

Approximately 620 smaller nonprofit thea-
tres were operating during 1976-77. Com-
plete budget information was obtained on a
sample of 113 theatres. (The data were ob-
tained from the Ford Foundation, National
Endowment for the Arts, and New York State
Council on the Arts.) The ma jority had bud-
gets in the vicinity of $100,000 during the
1976-77 fiscal year, with a handful exceed-
ing $300,000. Budgets over $250,000 were
included for theatres classified as "devel-
opmental" by the Arts Endowment. (The high-
est budget in the sample of developmental
theatres is $750,000, which is considered
a statistical outlier in this report.) On
the other hand, there were theatres with
budgets of less than $10,000, and one with
as little as $3,000, and these are treated
separately.

Income and expenditures of 113 developmen-
tal theatres are given in Table 25. In
terms of individual theatres, 44 (approxi-

Table 25

Income and expenditures of
113 developmental theatres
1976-77

Earned income

$ 5,264,313

45.8%

Unearned income

$ 5,934,258

51.6%

Total

$11,198,571

97.4%

Total
expenditures

$11,501,586

100.0%

Surplus or
(deficit)

($ 303,015)

(2.6%)

mately 39 percent of the sample) had defi-
cits in amounts ranging from $8 to $104,500
42 of these had deficits of less than $25,000
one had a deficit of $49,000 and another of
$104,500. As a percent of the total budget
of individual theatres , the deficits ranged
from 0.3 percent to 54 percent. The median
deficit is 6.7 percent. Of the remaining
theatres, 44 (39 percent) had balanced bud
gets and 25 theatres (or 22 percent of the
sample) had surpluses . The surpluses ranged
from $200 to $25,346 (0.2 percent to 81.5
percent of total expenditures) and totaled
$150,826 or 1.3 percent of total operating
expenditures .

79

Table 29

Average expenditures of three developmental theatres
with 1971-72 budgets under $10,000— 1971 to 1976

Salary costs

1971

-

1972

£.;.

:H973 '-■ '->-?-*?-*■& ;j?.«t -~4 £~

Artistic

$6,850

73.5%

$

5,762

43.1%

1

r.

^28,465-^55.8%

Production/ technical

;$ 500

3.4%

$

1,730

12.9%

i

$ -2,777 -5.4%

Fringe benefits

M „ M , t ,

•• -•..

— -

r

\tj* m m ■ ■* f;"' %,-;-/ b:«^aw i '.

Admini s tra tive

1

... .. ... .. .

$

264

2.0%

s~

^$ ^S^DOO^i ^9,r8%-

Nonsalary costs

:-■

.. :-/:--:; :f\: V -v— - -.--?-

Departmental

«S .-950-

-— 3.0.2% -

$

637

4.8%

b

$ 2,909 5.7%

Facilities and
related costs

$ 400

4.3%

$

2,170

16.2%

r ■

$3,181 6.2%

Transportation
and travel

i- • '-'"■ : -

-*

$

661

4.9%

•

$ 4,352 6.5%

Promotion

i:$ 150

...; i«6% ;.:.■*

$

738

5.5%

-

$ 1,474 2.9%

Royalties

} '.-

— . - ... .

- —

— -

V

Educational expenses

■. ~~ ■

'— ■' .

$

300

2.2%

fc*

-^ J.,688 . 3.3%

Fees

l :' i-

., :,': ' '

$

278

2.1%

t .

T$ -425 0.8%

Other

'.-$'-, 466

.5.0% .-

$

827

6.2%

t

$ 775 1.5%

Total

F-69,316

jioo.0%,, .,;;:?

$13,367

100.0%

r

$51,046 100.0%

82

fie audience development may be easier to
accomplish than more general development,
the lack of diversity inhibits the ultimate
size of the audience, and thus box-office
income prospects are reduced.

A factor that may affect the finances of
smaller theatres is the experimental, so-
cially challenging, and avant-garde mater-
ial that certain theatres present. Such
uncommon material often may not easily at-
tract funding sources , especially from the
private sector . The main source of funding
for developmental theatres is public support.

Because developmental theatres are born of
an artistic impulse, funds are usually
scarce and voluntary services are the main
resource. As artistic credentials are es-
tablished, earnings, contributions, and
costs increase. The scarcer the funds at
the start, the more erratic their rates of
increase. This causes further wariness on
the part of prospective institutional con-

Table 26

"•■"-<*.*-

■ -^i-T^, ~T *"*'-• «%*■"

Surplus or

(deficit)

Percent
of earned
income to
total
operating

Percent of
, unearned ... „
: _ income
r to total :~

operating

expenditures ..expenditures

$ 6,309

57.3%

50.6%

($13,419)

29.4%

53.9%

($ 4,987)

38.9%

56.4%

($ 7,677)

47.9%

46.2%

Percent
of earned
income to
total

Percent of
unearned
income
to total

Surplus or
(deficit)

operating
expenditures

operating
expenditures

: $5,336

44.9%

71.0%

($1,706)

33.8%

'■ 63.8%

Annual rates of increase in
Income and expenditures of
thirty developmental theatres
between 1972 and 1977

14 theatres
1972-77

16 theatres
1972-73 and
1976-77

Earned income

13.2%

11.3%

Unearned income

10.6%

15.7%

Total income

11.5%

14.1%

Operating
expenditures

13.2%

18.4%

tributors . When the developmental theatres
reach budget levels in the vicinity of
$100,000, the erratic movements of their
budgets seem to subside.

The sample group of 113 developmental thea-
tres is divided into the New York City group
(43 theatres) and the regional group (70
theatres) . The regional group had no defi-
cit, on the average, and a greater percent-
age of earned income to total expenditures.
The relatively heavy reliance by both groups
on contributions is one result of the devel-
opmental nature of their work, which usual-
ly means relatively low box-office earnings .

Table 26 shows the rates of annual increase
of income and operating expenditures for
developmental theatres, while Table 27 and
28 provide information on the relationship
between income and expenditures. An in-
crease in earned income can be seen for the
five-year period between 1972-73 and 1976-
77. Operating expenditures for the larger
developmental theatres have increased at
13.2 percent (as has earned income) while
unearned income (10.6 percent) and total
income (11.5 percent) have increased more
slowly. Expenditures for the 16 smaller
developmental theatres increased more rap-
idly than all forms of revenue.

There are two qualifications regarding these
rates of increase; the data extend over a
few years , and the theatres which have been
grouped together are not particularly homo-
geneous. When the two groups of develop-
mental theatres were disaggregated into
smaller budget ranges, substantial differ-
ences in growth rates were found. In gen-
eral, the smaller the budget the higher the
rates of increase for earned income, con-
tributions, and expenditures.

81

Table 30

Average expenditures of two developmental theatres
with 1971-72 budgets of $10,000-$25,000— 1971 to 1976

■■■■■■^^■■H

1971

.: , .

1972

r ~ ,

1973

' :--;

Salaries

$ 6,558

37.2%

$11,075

39.4%

r -

$13,3fll:

S1.3t.i

Fringe benefits

$ -477

2.1%

$ 476

1.7%

[

$ .573

^-0%;

Departmental

Facilities and
related costs

$ .2,282

9;9%

$ 1,270

4.5%

$ 1,926

$-2,673 12.5%

$ 4,910

17.5%

7,5%

$-.3*103,. 02.1*

Transportation
and travel

$ 3,403

14.8%

$

4,800

17.1%

$ 923

3,6%

Promotion

$ 1,291

5.6%

$

2,037

7.2%

$ 1,383

5.4%

Royalties

$ 110

0.5% -

$

152

0.5% k

$ . 72

0.3%

Educational
expenses

. . ., A

- * *

i

. • T— ' .' . ~"

Fees

$ 680

3.0%

$

750

2.7%

$ 490

1.9%

Other

$ 3,322

14.4%

$

2,645

9.4% I

.;... $ 3,880

15.1%

Total

$22,996

100.0%

$28,115

100.0% I

$25,651

100.0%

84

H ~ WKM ■■■■ HIHHi

1974

: 1975

1976

$31,787

44.6%

- 322,779

36.9%

$

41,522

40.4%

$ 4,940

6.9%

S $ 3,500

5.7%

$

6,500

6.3%

f.$ 3,688

6.0%

$

4,785

4.7%

$12,200

17.1%

$10,450

16.9%

$

17,150

16.7%

i - • —

$ 3,622

5.1%

$ 4,616

7.5%

$

6,190

6.0%

$ 4,124

5.8%

- $ 4,066 -

«.6%

$

9,000

8.8%

$ 5,916

8.3%

r " - • . -

I $ 5,174

8.4%

$

4,167

4.1%

$ 2,062

3.0%

! $ 3,414

5.5%

$

7,633

7.4%

r ■

$

1,200

1.2%

$ 3,750

5.3%

•

$ 930

1.3%

! -$ ?.645 '

-4.3%-- «■ $

3,417

3.3%

$ 1,910

2.7%

$ 1,423

2.3%

$

1,277

1.2%

$71,241

100.0%

i $61,755

100.0%

$102,841

100.0%

Budget Shares

As with the larger nonprofit theatres,
there was difficulty in deciphering the fi-
nancial statements of individual develop-
mental theatres with regard to specific ex-
penses. These limitations meant smaller
samples were necessary in order to report
individual cost items with consistency.
Smaller samples had the advantage of limit-
ed budget ranges which are important in an-
alyzing the data. The smaller the budget,
the greater the impact that even a few
thousand dollars can have in budget alloca-
tion. Table 29 and Tables 30, 31, 32, and
33 (following pages) illustrate the average
expenditures of 10 developmental theatres
according to budget size.

83

Table 31

Average expenditures off three developmental theatres
with 1971-72 budgets of $50(000-$80,000— 1971 to 1976

■■■■■■■■■■■

Salary costs

1971

1972

; 1973 _ n -

Artistic

$15,830

21.8%

$13,696

19.8%

[ $24,204 30.4%„

Production/
technical

$

5,611

7.7%

$ 5,919

8.6%

$ 4,010 ~ 5.0%~

Fringe benefits

$
$

5,177
6,897

7.1%

$ 4,910

7.1%

$ 5,892" "7.4%""

Administrative

9.5%

$ 7,713

11.2%

$ 7,570 9.5%

Nonsalarv costs

Departmental

$

7,730

10.7%

$ 6,352

9.2%

$ 5,596 7.0% "

Facilities and
related costs

$

9,343

12.9%

$ 9,386

13.6%

$10,320 13.0%^

Transportation
and travel

$

1,913

2.6%

$ 3,868

5.6%

$ 6,595 8.3%

Promotion

$

5,770

8.0%

$ 4,786

6.9%

$ 3,751 4.7%

Royalties

.""*.

• $ 2,250 _ 2.8%

Educational
expenses

i^r*" -

. j_ •» - --* 'li'..*

ftr •^.C^_..-r-^.---. — **T-:C«i**rt»i*-S. "» -*. -. '.- — ••>«-

Fees

$

1,178

1.6%

$ 1,935

2.8%

$ 2,920 3.7%

Other

$13,038

18.0%

$10,551

15.3%

$ 6,505 8.2%

Total

$72,487

100.0

$69,116

100.0%

$79,613 100.0%

86

1 ■■■■■■i^H ■■■■m

1974

r

JL975

1976

$14,342

39.1%

$237559

48.1%

$39,058

59.0%

$ 599

1.6%

r

"$2,150

4.4% ~

$

1,213

1.8%

$ 6,409

17.5%

r

.-$-6^149.

_^_J.2.6%_.„

$

5,250

7.9%

$ 5,391

14.7%

\ ■
f

r

$ 5,912

"12.1%

$

5,538

8.4%

$ 4,701

12.8%

*■ -

$3^,909

8,0%_ ...

$

6,250

9.4%

$ 1,245

3.4%

fe*

&-X,626„

._. 3.3%

$

3,380

5.0%

$ 119

0.3%

$

— -

9~-

I
i

— —

;.- v

$ 398

1.1%

;

$ 1,478

3-0%

$

1,500

2.3%

$ 3,436

9.4%

"

$ 4,148

8.5%

$

3,988

6.0%

$36,640

100.0%

i-

$48,931

100.0%

$66,177

100.0%

85

Table 32

Average expenditures of two developmental theatres
with 1971-72 budgets of $100,000-$150,000— 1971 to 1976

■

Salary costs

. 1971

r -

1972

w -

l

V

1973

■ ' "** f-

Artistic

$

61,334

51*2%: *?

$

61,365

49.1%

^88,105- T

"JsoiiMCs

Production/
technical

$

7,693

6.4%

$

8,536

6.8%

'?■'■-:

$ 11,012

6.3% ,

Fringe benefits

•$

7*244

6.0%

$

8,380

6.7%

1.'

4 -

^=$9,070

.5.2% J;

Administrative

S

7,957

6.6%

$

9,113

7.3%

f ■■-.

$ 15,251

*.7% ,'

Nonsalary costs

—

r

Departmental

$

8,062

6.7%

$

5,238

4.2%

>

$ 3,594

5.5%

Facilities and
related costs

$

3,741

3.1%

$

7,968

6.4%

:$ 7,961

4.5% r

Transportation
and travel

$

11,149

9?3%

$

9,763

7.8%

p$ 8/641 :

4*9%:-

Promotion

$

6,208

. 5 J%

$

6,274

5.0%

J"

$ 13, 515 ;

7.7%

Royalties

.

'.: -,;.•.

$

1,416

1.1%

*

:$ 3,540

2.0%

Educational
expenses

--

:. -

$

3,094

2.5%

1

Lvfi 2,528

1.4%

Fees

; $

5,243

-4^4% .;

$

2,954

2.4%

r

$ 2,786

1.6%

Other

1 *>

- 1,158

' a«o%

$

872

0.7%

*

■•:# 3,254

1.9%

Total

$119,789

100*0% >

$124,973

100.0%

k'~

$175,257.

.100.0%

88

1974
$21,563

25.8%

j? X975
$ 30,000

29.6%

1976

$ 36,800

28.2%

$ 4,638

5.6%

S 6,367

6.3%

$ 5,250

4.0%

$ 2,972

3.6%

\"J$ */B25

4.8%

$ 7,993

6.1%

$ 9,694

11.6%

\ ■$ 11,000

10.8%

$ 17,750

13.6%

.. -. .«

$ 9,762

11.7%

lf$ 7,000

.:b'9*~..'.l

$ 12,600

9.7%

$11,563

13.9%

r ,

b$ 13,200

13.0%*

$ 14,426

11.1%

$ 2,711

3.2%

^$>"8;900

':::MM'y:

$

9,563

7.3%

$ 6,861

8.2%

?f$ 7,667

"7.6%

$

11,559

8.9%

$ 1,047

1.3%

T4 1,000

1.0% j-

$

1,824

1.4%

$ 1,547

1.9%

s*i a, soo

1^5%

$ 2,347

2.8%

$ 2,800

2,r8%

$

2,703

2.1%

$ 8,765

10.5% 1

'■* ^7,150

^.1% V

$

9,959

7.6%

$83,470

100.0%

$101,409

100.0% ^V

$130,427

100.0%

87

Of the 5 theatres under $25,000 in 1971-72,
salaries comprise the largest item of the
budget and gain steadily between 1971 and
1976.

Of the 5 theatres with budgets over $50 ,000 ,
the annual rates of increase of individual
items seem to be substantially different
for the 2 budget ranges , although some items
(salaries, facilities, promotion) increase
faster than others in both ranges. The av-
erage increase for these 5 theatres is close
to 10 percent yearly.

In order to gain a more comprehensive view,
the expenditures of the 5 larger theatres
were combined for the years 1971-72 and
1976-77 and the budget shares of individual
items were estimated. One important shift
in the budget shares was seen. Although
the total salary share remained almost con-
stant (54.7 percent in 1971 versus 54.4 per-
cent in 1976), individual salary categories
changed. The proportion of artistic sal-
aries decreased to the same degree that
administrative salaries increased. Admin-
istrative salaries reported by the 5 the-
atres for 1971-72 were modest in both ab-

Table 33

Annual rates of increase in expenditures
of five developmental theatres 1971 to 1976

HHHHHBHHHBMM! "*"' HHHHHHHBHHHHi

Salary

<-. . - - =.---■ *— . .• -.

[£feg3 ;i-hna t raw r,u >'=«»
| with budgets of
I $50 ,000-$ 80, 000

2 theatres
with budgets of
$100,000-$150,000

Artistic

£ as^ot -;

3.1%

Production/ technical

i -09%

2.1%

Fringe benefits

f- i4.10%

10.6%

Administrative

17.30%

30.9%

Nonsalary

r

Departmental

9.40%

5.8%

Facilities and related

costs

9.50%

17.0%

Transportation and travel

27.60%

16.0%

Promotion

: 15.70T r

13.7%

Fees

-. 14.00%

11.0%

Other

i-\7-<*.30iV/, ' :_ ".%

9.0%

Total

k .xi.aotv , 0-,

9.7%

90

- _vT,. ^jjgifju^zfv nw

1974

. 1975

1976

$ 80,494

40.8%

$

81,182

40.1%

$

65,744

38.0%

$ 11,965

6.1%

$

7,182

3.6%

$

9,740

5.6%

$ 11,574

5.9%

$

12,203

6.0%

$

11,584

6.7%

$ 24,670

12.5%

$

31,421

15.5%

$

29,838

17.3%

$ 11,572

5.9%

$

10,813

5.3%

$

7,523

4.3%

$ 13,757

7.0%

$

10,242

5.1%

$

9,458

5.5%

$ 14,862

7.5%

[ 3-25,025

12.4%

$

17,610

10.2%

$ 11,793

6.0%

$

13,620

6.7%

$

10,421

6.0%

$ 5,200

2.6%

$

2,304

1.1%

$

2,941

1.7%

$ 3,600

1.8%

• --

— ' ;:"

" •• .:•" rti-iv'

$

210

0.1%

$ 5,850

3.0%

$

7,063

3.5%

$

5,795

3.4%

$ 1,738

0.9%

$

1,146

1.6%

$

2,104

1.2%

$197,075

100.0%

^202,201

100.^0%

$172,968

100.0%

89

Table 34 (continued)

Salary

[■ Regional

l ",-- 3 -theatres -

»- nrith budgets of

h $20,000-$60,000

Regional

7 theatres t
with budgets of \
$70,000-120,000

Regional

4 theatres
with budgets of
$2O0,O0O-$300,O00

Artistic

[

$ 7,730

17.4%

$

32,111

29.3%

*■ - - r

$ 87,596

34.0%

Production/
technical

}■

1

$2,990

6.7%

$

3,969

3.6%

<

"$ 19,684

"".'.3-6%

Fringe benefits

F

!$ 1,137

2.6%

$

2,821

2.6%

t*

$ 9 ,739 ?

3.8%

Administrative

'-

$ 4,732

10.7%

$

18,785

17.1%

:

$ 40,586

15.8%

Nonsalary

Departmental

L- -

$ 4,242

9.6%

$

9,845

9.0%

-

$ 12,606

4.9%

Facilities and
related costs

I

5 7,640

17.2%

$

11,211

10.2%

k ■

-$ 20,650

8.0%

Transportation
and travel

§1,886

4.3%

$

6,363

5.8%

r

$ 17,581

6.8%

Promotion

3 3,742

8.4%

$

5,840

5.3%

• .• •

$ 26,515

10.3%

Royalties

i

I

$ 4,160

9.4%

$

2,120

1.9%

t-

t$ 3,540

1.4%

Educational
expenses

r-

$ 395

0.9%

$

8,789

8.0%

« * — i-

? 450

0«2%

Fees

|

4 1. ,751

3.9%

$

1,088

1.0%

V ' _"■"

$ 11,457

4.5%

Other

r

$ 3,927

8.9%

$

6,714

6.1%

;-

$ 7,010

2.7%

Total

r

$44 ,332

100.0%

$109,656

100.0%

V.

$257,414

100.0%

92

Table 34

Average expenditures of New York City, regional and ethnic developmental theatres 1976-77

Salary

mmem aeork city ^ •?;

**?& ^theatres V -•->•■;

* *rith budgets of "

^$19T00O-$50,O00

,i *£&■

r**i-

New York City

13 theatres
with budgets of
$50,000-$110,000

i^V^Mow.-Xork.XityL;:;^
r^-yv^"^^. .' ■--: .:• .. ' ■: :i... ;•■ 'r^-
k-Sr#^3 -theatres y-/- ::"-^
|> ^ ^ with budgets of -»
fc^ ^-$240 ,000-$300 ,000^

Artistic

\ ^$13,128

»31.8% *

$25,720

30.9%

<&;£Z4 80,29Sl r n^iV

Production/
technical

£^4*326^;-

r^io.st^-

$ 7,630

9.2%

L-r^ ■-■-■•■' - ■ .-.-*.-•■ ■--. - v.r*

Fringe benefits

\ :$J2J214 *

> ■ 5.4%"-'-

$

3,538

4.2%

£^$-33 ,345 c-

-^s.a%.

Administrative

f ■'-$$ 4,464

ao.8%

$

9,056

10.9%

fr W$ 38V102

'^.w

Nonsalary

■■

}■?:'*» ' - ::"'^'

• ■ ■ :&'*

Departmental

[? ^2,901 -

7.0% v-

$

7,664

9.2%

£ ^;$ 21,850 ~

-7.4%

Facilities and
related costs

~iiT*%>*?.

$

9,902

11.9%

$•&£ •-.•■':"■"•' '>\-:*~. ■---.-
jp#£$ 39 ,133^~

33v3%

Transportation
and travel

■ !3M'&r

$

6,281

7.5%

£>£~3$ 12,318

4; 2%

Promotion

| ^^3^902 --- ;*■

9.4%

$

5,711

6.9%

^,>$;35,467

12.1%

Royalties

a.o% -

$

1,128

1.4%

L ^-^35 12,600

4.3%

Educational
expenses

—

-4,000 ;

1.4%

Fees

g^l^WO^ t£ ;-2v9t^M

$ 3,263

3.9%

^sar

v5,150

3-.8%

Other

(£*• ^l,i834'';;--' - -*v4% :-."-•

$ 3,473

4.2%

^

-$11,270

3.8%

Total

p: 541,303 - 300 .0% r v

$83,366

100.0%

■- ..-■

$293,568

100.0%

(table continued on following pages)

solute and in comparative terms. Whether
all administrative costs were reported as
such or incorporated into other categories
is open to further investigation.

In addition to the data on trends in budget
shares , budgets and individual expenditures
were averaged for 54 developmental theatres
in 1976-77. Table 34 depicts average expen-
ditures and budget shares of 3 major groups:
24 theatres from New York City, 20 from the
rest of the country (regional) , and 10 char-
acterized as "ethnic." Each group is divid-
ed by budget size.

Budget shares seem to be comparable among
the various groups. The predominant item
in all the budgets is artistic salaries,
followed by administrative salaries and fa-
cilities. On the average, combined salary

categories comprise over half the budget,
with salaries of individual subgroups rang-
ing from 34.8 to 57.4 percent of total ex-
penditures. In comparing types of salaries ,
New York City artistic salaries have a great-
er share of the budget than the other 2
groups. On the average, the regional and
ethnic theatres have higher administrative
salaries.

Fringe benefits are a greater budget item in
the New York City and the ethnic samples than
in the regional sample. New York theatres
also allocate a greater part of their budget
for facilities than the other theatres.
Promotion expenditures comprise similar
budget shares among the various subgroups,
with the exception of the ethnic group,
which allocates less of its resources for
this item.

91

Revenues

the country excluding New York City, and 10
ethnic theatres from all over the country.

The average revenues of smaller nonprofit
theatres are comprised of almost equal
shares of earned income and contributions.
In a 1976-77 sample of 115 theatres , earned
income ranged from 0 to 90 percent of total
income. Only two theatres were completely
dependent on contributions; their total ex-
penditures were $100,000 and contributions
covered only 70 percent of their budgets.
Twenty-six of the 115 theatres earned more
than 40 percent of their income. Only 8
theatres earned less than 10 percent.

Earned income. The major sources of earned
income for the smaller nonprofit theatres
are box office receipts, performing fees,
and touring fees. In addition, they report
payments received for services rendered to
the community in the form of tuition, work-
shop fees, and seminar revenues. Further,
there is income from royalties (usually a
very small percent of total earned income) ,
booksales, interest, space rentals , selling
advertising space , renting costumes , and
concessions. Often, performing fees (lump
sum payments for a specified number of per-
formances) are greater than box office re-
ceipts. For some theatres, seminar and
workshop income constitutes a large part of
total earned income and at times exceeds
box office receipts.

Subscriptions seem to be a rather small
source of income, especially for the smaller
of these theatres . The total earned income
of 24 theatres found to have subscription
or special admissions programs was reported
as $1,500,000 in 1976-77; the estimated com-
bined income from subscriptions and admis-
sions was $300,000, or 20 percent of their
earned income. Although income derived
from this source seems to be less than from
single ticket sales, it is a growing item
and several theatres are making efforts to-
ward a more comprehensive subscription and
admission policy.

Unearned income or contributions. Develop-
mental theatres receive the bulk of their
contributions from public sources, which
have been increasing at a much faster rate
than private sources, especially since 1970.
Of 10 New York State developmental theatres
the percent of private support has decreased
from 40 percent in 1970-71 to less than 30
percent in 1975-76. Durinq the same period
support increased from just under 60 percent
to 70 percent (Figure XIV) .

To estimate the percent contributions of
various government grants to total public
support, samples were taken from the New
York City area, the New York State area,

Figure XV (following) depicts the important
role of state government in smaller theatre
financing. Comparisons of 4 samples — New
York City, New York State, national, and
ethnic — show that in the national sample
(which excludes the New York City theatres)
the federal and state governments have al-
most equal shares. In the New York City
sample the state is the main source of con-
tributions. Still small but growing is the
municipal involvement, especially for areas
other than New York City. Of the groups
sampled, the New York State theatres, fol-
lowed by ethnic theatres , depend most heav-
ily on public funding for their unearned
income .

A similar analysis has been conducted for
contributions from private sources and is
illustrated in Figure XVI (following). Con-
tributions from these sources account for
approximately 50 percent of unearned income
for the New York City and national theatres ,
38 percent for ethnic theatres, and 30 per-
cent for New York State theatres. Ethnic
theatres seem to have the same range of
earned and unearned income relationships
as other developmental theatres . Government
apparently contributes a greater part of
their unearned income than it does for most
of the other developmental theatres. How-
ever, the size of the sample does not per-
mit drawing such definite conclusions.

94

Ethnic

Ethnic

4 theatres
with budgets of
$10,000-$70,0O0

*6 theatres - --.. -
with budgets of
$120,000-$300,000

Total of
54 theatres

$12 , 897

28.4%

$ 54,402

29.3%

$

313,879

29.6%

—

$ 13,740

-7.41

$

70,377

6.6%

$ 3,723

8.2%

$ 9 ,859

5.3%

$

48,376

4.5%

$12,497

27.5%

$ 30,421

16.4%

$

158,643

15.0%

:.' ..' . . ....

$ 2,667

5.9%

$ 9,379-

4.9%

$

70,854

6.7%

$ 3,983

8.8%

!$ 20;i66v 10.8%

$ 118,731

11.2%

$ 1,250

2.8%

$ 17,870

9.6%

$

64,432

6.1%

$ 1,725

3.8%

'■■* €,€55

3.6%

$

89,557

8.4%

$ 1,350

3.0%

$ 2,433-

^±1.3% -■■■

$

27,746

2.6%

$ 3,500

7.7%

$ 2,660*

1,^4% ~-sk

$

19,794

1.9%

$ 4,291

2.3%

$

28,190

2.7%

$ 1,832

4.0%

$ 14,334

7.7%

$

50,394

4.7%

$45,424

100.0%

$185,910

100.0%

$1

,060,973

100.0%

93

Figure XV

Sources of public support for fifty-four developmental theatres 1976-77

96

Figure XIV

Sources of public and private support for ten New York State
developmental theatres 1970 to 1976

p i iL..«rsw^,Al..-".y,!ffJ'*-*'"''r-!"^' "'"vTr"*?

'•V '"?.' • ■■ J.V *'i' '■' . ».'".'IU^7

5" . - i!*'";^;^.

Public
Private

1

I

,^?

;_"v..v».rT v., :' ".^5f"

.Peccant i~£':2"-$t"'

— » 3 0 " ■*iv■^'■>",^• '?

3-;, '. ,*:

fe**

1-30

-40:
-30
-20
'-J.0

0970-71

1971-72 1972-73 J.97 3-74 1.974-75 0.975-76

.*l£t**--i3-- >«a.-fa.

-— .-^-*** . ■-

95

CHAPTER IV

THEATRE LABOR FORCE AND EMPLOYMENT

This chapter examines the economic condi-
tions of the theatre labor force, which in-
cludes actors, ushers, doormen, stagehands,
musicians, press agents, and managers. Da-
ta on employment, unemployment, and compen-

sation are examined for only a few of many
occupations. However, the patterns found
in these occupations help in understanding
the trends and conditions of the theatre
labor force as a whole.

Perhaps the most striking trend is the in-
crease in theatre artist union membership
while membership in nonartist unions has re-
mained stable (see Table 35). Actors' Eq-
uity Association membership, for example,
increased at about 3 percent a year between
1961 and 1975. The civilian labor force

Table 35

Union and association membership 1961 to 1976

t- ; twf Aye * XWil'4^«T .

6

Actors ' EgultyJ-
Association

American
Federation
of Musicians

r ^American - ..-i-'-^
'?.. {Federation of
|- ?^Tel«vision . " . :._]■
r* and Radio
V Artists .-'-..

International
Alliance of
Theatrical
Stage Employees
and Motion
Picture Machine
Operators

1961

t-^li5B2:^^^0L

^ *; . .

- • ■- H

— -

1962

281,949

£&& ^ J00D ' '^T*- ■

61,037

1963

g;^2fS«rW^^

M^^^.J,:;-,

p-.-T'V.

1964

ff^!2.r740;.;^--^;^

275,254

y*~a&*7&0]

60,546

1965

| ^12 ,~902 >:- v^:'^

- —

j3T:-Jrr ■■'" •-.'::

.-• ~£

___

1966

K 3.1,511^: ;:;r.™

252,487

1' 18,250

. - -;

62,160

1967

%2A;139:_ v:^\

: — - '■■' '

■-

1968

I 14,504 -: :-- ^

283,155

V 23,000

60,000

1969

[14,608 ^- v

■"--; — ■ "."

. -'

1970

r 14,841

300,000

K. 24,000

-■ -

63,000

1971

15,098

1972

1 15,866

315,000

23,714

62,000

1973

I 1.6,366

1974

16,856

330,000

26,917

61,471

1975

| 19,304

1976

^*+m^>

Growth
rate

j 3.05%

1.63%

4.86%

0.15%

98

Figure XVI

Sources of private support for fifty-four developmental theatres 1976-77

97

Figure XVII

Actors' Equity Association and civilian employment 1961 to 1975

. mdlmi>wfc: —pluyeut -^ — ^a

z^**&£%&' '

a. ""•*•-•. ...

VA*3S -■■_ **

- -MS'^i^yS^^

.'"3 — • .-t-r t". <--.-^i j-.-.'fi'.-- "*■--'

100

increased by 2 percent and the general pop-
ulation by 1.6 percent in the same period.
However, employment has not followed the
same pattern as union membership. Between
1961 and 1975 Equity employment increased
at an annual rate of 1.2 percent while
United States employment increased at 1.9
percent. In short, the average member
finds less employment in 1976 than in 1961.

There seems to be little employment securi-
ty for theatre artists. In 1976 only 60 per-
cent of the paid-up members of Equity worked
under the Equity jurisdiction, and of these
about half worked for less than 15 weeks.

-Screen

'Actors'

Guild

Association
of Theatrical •
Press Agents
and Managers

Drama-
tists'

Guild

: — .

14,315

■j._

1 — rv_

0.5,302

*»,

„...,,.. ..— ., _.,_

*■

$"'.-

16,793

- •:■

- 1,760

■

1,765

21,000

1,845

".

1,915

23,000

1,960

2,060

26,610

566

2,180

.

581

2,240

29,797

588

2,350

j

570

2,445

580

2,575

(6.47%

0.3%

3.96%

Theatre employment for nonartists is much
more secure. The average member of Stage-
hands Local No. 1 and the Association of
Theatrical Press Agents and Managers worked
more weeks than Equity members. These
unions typically contract with continuing
enterprises (theatre owners) rather than a
particular production. Analysis of the
amount of employment of Equity members by
theatre type shows some high increases for
dinner theatre and, far behind, large non-
profit theatre. Broadway and the road are
down sharply.

Minimum wage rates have kept pace with the
cost of living and in some cases surpassed
it between 1961 and 1975. It is possible
for actors working in the theatre to make
an adequate living. For example, an actor
earning the current minimum wage for a full
year would earn $18,460. This seldom hap-
pens. The annual incomes for theatre art-
ists are typically quite low. From the
1970-71 season through 1976-77, among Equi-
ty members who worked at least once during
the year , the median annual income was never
more than $5,000. This is sobering when
compared to the estimate that 40 percent of
Equity members did not work at all. There
is evidence, however, that some actors are
part of households with other sources of in-
come and that they themselves have addition-
al nontheatre jobs.

No data are presented in this report on em-
ployment and earnings in the smaller , devel-
opmental theatres or the ethnic theatres,
most of which do not operate under union
contracts and which seldom keep data in a
fashion convenient to reporting and analy-
sis. It seems very likely that employment
and earnings for these theatres are even
lower than union figures.

LABOR FORCE

Data on the theatre labor force are based on
union membership since this was the only
systematic data dating from the 1960s. Un-
ion membership is a very different concept
of the labor force than the Bureau of the
Census definition used to determine unem-
ployment rates. In the latter, the labor
force is the number of individuals employed
and actively seeking employment . Union mem-
bers may or may not be so engaged. Some
members of Actors' Equity Association work
almost full-time in television or film.
It seems reasonable to assume that most un-
ion members have vague aspirations or expec-
tations of working in the theatre at some
time. Union membership and employment pro-
vide rough indicators of trends and condi-
tions in the labor market.

99

different measures of Equity employment
can be made: median week employment and
total work weeks. Median week employment
is determined by counting total number of
members working during each week, arrang-
ing the weekly totals from highest to low-
est, and taking the middle value. A work
week represents one Actors ' Equity Associ-
ation member during any part of one week
under Equity contract.

Overall trends. From the 1961-62 season
through the 1975-76 season the median week
employment and the total work weeks have in-
creased more sporadically than the total
United States civilian employment. (This
is not in itself surprising since total ci-
vilian employment tends to average out cy-
clical swings that affect such individual
sectors as the theatre.) Overall, median
week employment has increased at 2.34 per-

cent a year, faster than total civilian em-
ployment at 1.92 percent a year. The dif-
ference of about 0.4 percent between these
two rates is somewhat smaller than the ap-
proximately 1.0 percent difference between
the rate of increase for Equity membership
and the total civilian labor force. Total
Equity work weeks have increased at a rate
of 1.22 percent a year, or more slowly than
civilian employment.

The conclusion is that employment of Equity
members has increased more slowly than both
membership growth and total civilian employ-
ment. The slow rate of increase in employ-
ment in comparison to membership means that
Equity members on the average find less em-
ployment in the theatre today than they did
in the 1960s under Equity jurisdiction (see
Figure XVIII) . Despite increases in certain
years , the general trend has been downward .

Figure XVIII

Average work weeks of Actor's Equity Association
U.S. and Canada members 1961 to 1975

****,*..- ^f-^j,

'12.5

102

Actors ' Equity Association

The most comprehensive labor force data
available are for members of Actors' Equity
Association (Equity) , which represents a
substantial portion of actors (and stage
managers, chorus, and extras) working or seek-
ing work in the professional theatre in Amer-
ica. The labor force data presented here
include Canadian Equity up to 1975 since only
the combined United States and Canada total is
available. A rough estimate would be that
Canada accounts for 10 percent of the total .
Also, it should be noted that the data are for
paid-up members; those who are not working
are often not paid up although they may be
seeking work.

Analysis of Equity's membership from 1961
to 1976 shows that paid-up membership has
risen since 1961 at an average rate of ap-
proximately 3 percent a year. The index of
the total United States civilian labor force,
plotted for purposes of comparison, shows
steady increases which are generally smal-
ler than those in the Equity membership.
The growth rate for the United States civil-
ian labor force over the period is approxi-
mately 2 percent per year.

This pattern of rapid increases in the la-
bor force of actors is certainly consistent
with the evidence that professional theatre
activity has increased in the country. On
the other hand, it is surprising in view of
the well-known, persistent insecurity of
actors' employment. Evidently, the labor
force of actors expands both rapidly and
readily in response to theatrical expansion.
It should be noted that Actors' Equity As-
sociation is a union open to anyone who ob-
tains employment in an Equity jurisdiction.

Membership in Other Unions

Data on theatre association membership are
shown in Table 35 and included are Actors'
Equity Association (AEA) , American Federa-
tion of Musicians (AFM) , American Federa-
tion of Television and Radio Artists (AFTRA) ,
International Alliance of Theatrical Stage
Employees and Moving Picture Machine Opera-
tors (IATSE) , Screen Actors' Guild (SAG),
Association of Theatrical Press Agents and
Managers (ATPAM) , and Dramatists' Guild (DG)
These data show a consistent pattern of in-
crease in membership of performing artists'
unions, with the highest rate of increase
for AFTRA and SAG; only AFM shows a low
rate due to a fall in reported membership
in the early 1960s. If, however, AFM's
growth since the mid-1960s is examined, a
substantial increase is seen at a rate of
over 3 percent per year.

The pattern for IATSE and ATPAM, unions of
nonperf ormers , is in marked contrast and

memberships remained roughly constant over
the entire period. This reflects the fact
that it is difficult to became a member of
IATSE and ATPAM. DG, which is not strictly
speaking a union, had a substantial increase
in membership.

People working in the theatre are frequently
members of more than one union. A study by
Ruttenberg, Friedman, Kilgallen, Gutchess
& Associates, Inc. (Survey of Employment,
Underemployment , and Unemployment in the
Performing Arts, Washington, D.C.; Ameri-
can Federation of Labor-Congress of Indus-
trial Organizations, 1977, revised 1978)
provides data on the degree of overlapping
membership of performing artists' unions.
These data come from a survey of members of
AEA, AFM, AFTRA, AGMA (American Guild of
Musical Artists) , and SAG.

The overlap between unions with jurisdic-
tions in the theatres, radio and TV, and
the movies is considerable. For members of
AEA, 53.2 percent belong to AFTRA and 60.2
percent belong to SAG; for members of AFTRA,
32 percent belong to AEA and 53.9 percent
belong to SAG; for SAG, 39 percent belong
to AEA and 56.6 percent belong to AFTRA.
This overlap means a great deal of inter-
change of personnel among these fields of
employment .

The Ruttenberg study asked which was the
principal union of employment for members
belonging to more than one union and they
found that AFM and AGMA had markedly higher
frequency of positive response than did AEA,
AFTRA, and SAG. This is additional indirect
evidence that members of the latter unions
expect to move and do move between theatre,
the media, and motion pictures.

The Ruttenberg data shed some light on the
relationship between union membership and
the performing arts labor force. The per-
cent of respondents considering the perform-
ing arts as their principal profession and
who may be presumed to be seriously inter-
ested in employment in the performing arts
is 80.5 percent for AEA members, 76.8 per-
cent for AFTRA, 68.3 percent for SAG, 62.5
percent for AGMA, and 46.5 percent for AFM.

EMPLOYMENT

Actors

Most of the data presented in this section
on employment in the theatre are from
Equity members under Actors' Equity Asso-
ciation contracts. In addition, some data
showing employment of members of other
theatrical unions are presented. Two

101

culations show that the figure is about 60
percent for 1975-76.

This figure, along with the others which
have been presented, strongly supports the
conclusion that actors face substantial un-
certainty in theatre employment. Actors
may find other employment during times they
are not working in the theatre and there is
considerable evidence that some do. But
there is a 40 percent chance that a paid-up
Equity member will not work at all under
Equity jurisdiction during any year; and if
an actor does work, the average annual em-
ployment is about 15 work weeks.

Other information also shows little employ-
ment security in the acting profession.
For example, the U.S. Bureau of Labor Sta-
tistics data on unemployment among actors
regularly give annual rates ranging from 30
to 50 percent, which is consistent with the
Equity unemployment estimate. And data from
the Ruttenberg study corroborate the esti-
mates of employment distribution — employ-
ment patterns of Equity members working un-
der other performing arts unions not great-
ly different from employment of Equity mem-
bers under Equity jurisdiction. In both
cases, members typically work for only part
of a year.

The employment situation appears less stark
if the Ruttenberg data on all paid employ-
ment of Equity members are examined. These
findings show that when all paid employment
(employment in teaching, theatre, non thea-
tre, etc.) is taken into account, the medi-
an number of weeks of employment is about
37 and 28.8 percent of Equity members were
employed full time. While there is a cer-
tain comfort in these figures, over 80 per-
cent of Equity members said that they con-
sidered the performing arts to be their
primary occupation.

elude that the Broadway theatre is not a
very steady source of employment for indi-
vidual musicians whether by choice or neces-
sity. Because ATM members work in a variety
of union employments other than theatre
(clubs, recordings, radio and television,
private parties) there is no meaningful way
of using this data to estimate employment
rates or percentages of those working at
least once in the theatre.

Press Agents and Managers

The total work weeks and the distribution
of work weeks for members of the Association
of Theatre Press Agents and Managers (ATPAM) ,
No. 18032 for the period 1970-71 through
1974-75 show that individual employment is
relatively stable though not greatly so in
comparison with occupations outside the the-
atre. Approximately 70 percent of ATPAM
members worked at least once in 1974-75 and
over one-fifth of these worked 50-52 weeks
during the year. Median employment for
ATPAM members was about 32.5 weeks.

COMPENSATION

Union minimum wage rates , annual theatre in-
come, and annual income from all employment
are indicators of theatre workers ' earnings .
Data on wage rates come directly from union
contracts . Data on annual income come from
wage bills from samples of Broadway and non-
profit theatres and from pension and wel-
fare funds. The annual figures are governed
by period of employment as well as wage rate .
If weekly wage rates increase but weeks of em-
ployment decrease by the same proportion , the
annual income figures should remain constant.

Musicians

For this information a sample was taken
from the files of the American Federation
of Musicians (AFM) and Employers' Pension
and Welfare Fund for individual members of
Local 802. Monthly earnings from both
Broadway and out-of-town employment were an-
alyzed to show the distribution for 1976
and to compute such monthly data as total
employment by work weeks.

It is important to understand that a work
month is one member working at any time dur-
ing a month. (A member playing at all per-
formances of a show during a month is one
work month, the same as for a member play-
ing only once in the month.) The median
distribution of AFM-member work months for
1976 is about 4.0 and the mean is 5.9. Al-
though the work month measure is a very un-
homogeneous one, it does seem fair to con-

Wage Rates in Theatre Occupations

Two main conclusions emerge from an examin-
ation of union minimum wage rates in Table
37. First, wage rates have increased more
rapidly than the consumer price index,
which has gone up at an average annual rate
of approximately 5.15 percent— so that pur-
chasing power has increased for most occu-
pations listed.

Second, while a weekly minimum of $250 for
52 weeks would theoretically produce an an-
nual salary of $13,000, actual theatre earn-
ings fall well below the minimum that could
be obtained annually from steady employment.

Another perspective on weekly wage rates
can be obtained by examining average week-
ly earnings computed by dividing annual
earnings by annual work weeks. In 1976,
40 percent of Equity members in a sample of

104

Table 36

Actors' Equity Association U.S. member work weeks by theatre type

Season

Road j^Diinner^ Stock te*&6RTr&£% All areas*

-•-->s»F

-y

1967-68

27,076

i^^

*•*?*?■ ?*;*»«

165,197

1968-69

^39;-502r*| 26,586

162,283

1969-70

^aystfeMI 31,352 pE^pf

Ijgffi*

fci.

168,473

1970-71

M

'm4&&%& 29,393 ^2Xi^S2l:^ 20,662 piSS€^93t^ 146,876

1971-72

HlSif 25,839 t^aS^SZ^ 25,409 P^W^SB^^ 157,707

1972-73 f^^Myi^ 23,279 ^^23^058^ 28,850 ^gj^jgj^gg 155,099

1973-74 fe^a»5fWfi* 24,052 ^^28>-85B^ 27,630 £&KjfSH*l£ 161,490

1974-75 ^JSr^Ilt^ 17,802 P^HH^ 26,574 fe^BttfMM? 164,041

1975-76 ^^f^ltO^g 18,464 ^SSS^KBS^ 25,231 ^^5^651^f 160,828

Growth rate

1967-68,

1975-76

-5.83%

-0.18%

Growth rate

1970-71,

1975-76

tZ&*&r^S&

■Jo;-. ;"

% ssaeEwrafi 3.11% p*3S»n*#

1.75%

* Includes children's theatre, industrial shows, personal appearances, etc.

The Equity member may be working in tele-
vision or in motion pictures or in nonacting
jobs. Indeed, the average Equity member
needs other employment or other household
members' earnings if an income above the
poverty level is to be maintained.

Employment by theatre type. The data on
work weeks in different types of theatres
reveal two important patterns (see Table 36).
First, there are cyclical swings in employ-
ment. Between 1961 and 1976 employment in-
creased at a rate of 1.2 percent a year.
Within that period there are variations—
from 1967-68 to 1976-77 employment decreased
by 0.18 percent a year; but from the 1970-71
season on, it increased by 1.75 percent a
year. These patterns corroborate the find-
ings in Chapter II on changes in theatre
activity.

The second pattern has to do with the im-
portance of theatre outside New York in
maintaining employment levels. From the
1961-62 season on, Broadway and the road
have provided less and less employment for
Equity members, whereas dinner theatre,
stock, and LORT (since 1970-71) have been
increasing their employment. This is more

evidence for the "regionalization" of thea-
tre discussed in Chapter II.

Employment of individual Actors ' Equity As-
sociation members. Another rough measure
of Equity members' employment can be made
using the records of the Equity-League Wel-
fare and Pension Fund (an organization es-
tablished initially by Actors ' Equity Asso-
ciation and the League of New York Theatres
and Producers, which has since become the
independent agency to which all theatres
contribute) of pension-covered work weeks.
(Pension coverage has been extended progres-
sively to Equity contracts since 1960 and
virtually all have been covered since 1967.)

The median number of weeks worked by members
who worked at all was about 15 and the mean was
15.5 for covered employment. Samples taken
for each year from 1970 through 1975 reveal
a similar pattern. In any year employed Eq-
uity members are typically employed under Eq-
uity jurisdiction for only part of a year.

Another measure of employment can be made
by estimating the percentage of paid-up Eq-
uity members who worked under Equity juris*
diction. Using the data available, the cal-

103

those who had worked at least once during
the year had average weekly earnings of
less than $250, while the mean was about
$305. From 1970 to 1975, the percentage
of Equity members with average weekly
earnings of less than $250 is much larger,
and the mean for 1970 is only $170. While
the data are based upon a very small sam-
ple and therefore subject to substantial
error, they show that mean weekly earnings
remained in the vicinity of $200 per week
worked until the recent upswing in Broad-
way and the road.

Union members' annual income. Contractual
wage r,ates alone do not determine how much
an individual working in the theatre will
make in any given year. There is also the
question of the individual's success in
finding such work. Very few theatre employ-
ees actually earn the theoretical annual
minimum. Rather, data from pension and wel-
fare funds reported below show that median
incomes are well below $10,000 per year.

Actors' Equity Association. The data on
annual earnings of members of Actors' Equi-
ty Association are taken from a small sam-
ple of the Equity-League Pension and Wel-
fare Fund. Although virtually all Equity
employment is covered by the fund today,
there are two exclusions: wage income over
$1,500 per week and actors' percentages of
box office gross or shares of profits.
The 1976-77 sampling shows that average cov-
ered income in 1976 was quite low; the me-
dian was less than $5,000 and the mean was
about $4,443. By way of reference, the U.S.
Bureau of the Census official 1976 poverty
level income was approximately $5,815 for a
family of four not living on a farm. There-
fore, if the actor with Equity earnings was
a member of a four-person, nonfarm house-
hold, additional household income would be
needed to get above the official poverty
level.

Data on the covered income from 1970-71
through 1975-76 show that the median income
of those who were employed was consistently
less than $5,000 and the mean never exceed-
ed $4,500. The conclusion that the vast
majority of actors working in the theatre
do not earn good incomes from this source
alone is inescapable.

Additional perspective on the income of Eq-
uity members is provided by the survey data
collected in the Ruttenberg study. This
showed the 1976 Equity members median in-
come from all sources to be a little over
$7,000 or about 75 percent greater than in-
come earned in Equity jurisdictions alone.
Also, computations based on the Ruttenberg
data show that only about 60 percent of the
average Equity member ' s total income comes
from employment in the performing arts . It
is apparent, then, that Equity members do

rely on employment other than that under
Equity jurisdiction for a substantial part
of their income.

American Federation of Musicians, Local 802.
The data on annual covered income of mem-
bers of AFM Local 802 was taken from 1976
pension fund records and pertain only to
members who worked at least once on Broad-
way or out-of-town and only to income de-
rived from this work. The median income of
these members was below $5,000; the mean in-
come was about $8,485.

Approximately 25 percent of those working
on Broadway or the road had an annual in-
come from this source of over $12,500. This
is in marked contrast to Equity members , of
whom no more than 10 percent had income from
employment in covered Equity jurisdictions
exceeding $12,500 from 1970 to 1976.

Information for musicians probably tends to
understate their income. Low incomes prob-
ably result from temporary employment when a
regular member of an orchestra is sick or goes
on vacation. Among actors, such substitu-
tions typically come from the existing cast
through the use of an understudy and there is
no temporary replacement. Most musicians
working in the theatre earn reasonably ad-
equate incomes.

Press agents and managers. Data on annual
income of press agents and managers covers
all member earnings under the jurisdiction
of Association of Theatrical Press Agents
and Managers (ATPAM) in 1974-75. The medi-
an income was between $10,000 and $15,000
and the mean was approximately $12,675.
Over 30 percent of the membership had incomes
of $15,000 or more from ATPAM employment.

An examination of similar data for earlier
years (1970-71 through 1973-74) shows rough-
ly the same income distribution. Relative
to the incomes that members of other unions
earn in theatre jurisdictions, ATPAM mem-
bers seem to fare reasonably well. None-
theless, a significant number (about 18 per-
cent) earn incomes of less than $5,000.

Stagehands . Data on stagehands come from
a sample of members of International Alli-
ance of Theatrical Stage Employees and Moving
Picture Machine Operators (IATSE) Local 1 in
New York and covers those working at least once
in 1976 under the local's jurisdiction in
the Broadway theatre or other Local 1 juris-
dictions (television and shops) . The medi-
an income from Broadway employment was less
than $4,000. The mean income was about
$7,110, and over 20 percent of the sample
had incomes in excess of $12,000 a year.
As with musicians, many IATSE Local 1 mem-
bers earn incomes from covered employment
in areas other than the Broadway theatre.
The median 1976 income from employment un-

106

Table 37

Growth rate of selected weekly salaries between 1964 and 1977

I ^f^SHBIKS^il^

! Rate ot "
growth of ,

• weekly
salary

Years used
to compute'/;
growth f
rate

Minimum ..
weekly ''':_
salary

Year of

weekly

salary

Broadway

... , - . -

Actors (nonroad)

8.02%

1964-77

$355.00

1977-78

Actors (road)

\ 9.05%

1964-77

$547.00"

1977-78

Stage manager (musical)

I 6.34%

1964-77

$600.00

1977-78

Stage manager (drama)

„ 6.65%

1964-77

$505.00

1977-78

Press agent

, 4.91%

1964-76

$502.00

1976-77

Manager

5.79%

1964-76

$400.00

1976-77

Stagehand (department head)

r 6.78%

1964-77

$409.13 v

1977-78

Stagehand (asst. dept. head)

[; *r71%

1964-77 £

$360.97

1977-78

Stagehand (flyman)

} -6.76% ^

1964-77

$340.92

1977-78

Stagehand (portable board)

" 6.53%

1964-77

$312.90

1977-78

Musicians (musical)

•6.02% ;-':.; :•*;,

1964-77 s

3380. oo :;■

1977-78

Musicians (drama)

; 5.90% :

1964-77 T

$290.00

1977-78

Musicians (out-of-town)

['" *."9Sf-U- •";;

1964-77 I

$580.00

1977-78

Ushers

j 6.76%

1964-74 [

$ 78.91

1974-75

Chief usher

r 6.40%

1964-77 I

$ 94.60

1974-75

Treasurer

I 6.63% " -.

1964-76

$395.00

1976-77

Head porter

6 .15%

1964-77

$179.50

1977-78

Wardrobe supervisor

f 6.43% >

1964-76

$267.00

1976-77

Engineer

t 6.34%

1964-77

$343.20

1977-78

Regional theatre •"

Actors (LORT A)

; 5.15%

1966-77

$242.25

1977-78

Actors (LORT B)

r 5725%

1966-77

$216.25

1977-78

Actors (LORT C)

; 6.14%

1966-77

$203.50

1977-78

Actors (LORT D)

6.60%

1966-77

$182.30

1977-78

Stage manager (LORT A)

3.68%

1966-77

$378.35

1977-78

Stage manager (LORT B)

; 4.09%

1966-77 :

$265.00

1977-78

Stage manager (LORT C)

I 4.98%

1966-77

$228.55

1977-78

Stage manager (LORT D)

' 5.38%

1966-77

$209.20

1977-78

105

ent from those for the nonprofit theatres
examined in the preceding paragraphs. For
example, cast salary expenditures (both
during production and operating) have grown
relatively slowly. Since the basic minimum
salary for actors under Equity jurisdiction
(all shows in the sample) has increased by
over 7.5 percent a year, there is compel-
ling evidence that the commercial Broadway
theatre has taken strong economy measures
in employment. If it had not, the wage
bill for casts would probably have increased
on the order of 7.5 percent or more.

Another pattern that emerges for the data
is the marked increase in other artistic
and crew costs during production. During
the operating period, however, these costs
increased quite moderately and are well be-
low the range of increases in wages.

Table 38

Growth rate of larger nonprofit theatre wage bill categories
1965-66 to 1973-74

1 \S ■

Wage bill category

Growth rate

Performing artists on stage

6.31%

Performing artists in the pit

46.38%

Guest artists

33.41%

Total performing artistic personnel

7.42%

Regular and guest directors and conductors

5.85%

Stage managers and instructors

8.35%

Creative designers and technical

13.08%

Other nonperforming artistic

-1.19%

Total nonperforming artistic personnel

8.33%

Total artistic personnel

7.71%

Stagehand and crew shop

7.92%

Total artistic and production personnel

7.71%

Executive

11.44%

Supervisory

5.10%

Clerical, box office, and front-of-house

12.09%

Maintenance

11.12%

Total nonartistic personnel

9.99%

Total personnel

8.35%

Employee fringe benefits

13.18%

Total salaries, fees, fringe benefits

8.79%

108

der all Local 1 jurisdiction was above
$12,000 and the mean $14,212. Approximate-
ly 30 percent of the sample had annual in-
comes from employment under Local 1 juris-
diction of more than $20 , 000 . On the average ,
members derived about 50 percent of their
mean income from Broadway theatre employment.

Ushers and doormen. Data on annual income
of ushers and doormen come from a sample of
members of IATSE Local B 183 working in the
Broadway theatre at least once during 1976.
The median income was less than $1,250 and
over 80 percent made less than $5,000. The
mean income was $2,198.

Data on total income from all employment
under Local B 183 jurisdiction reflect ap-
proximately the same picture: in other words,
members who work in the theatre typically
do not have much income from other Local
B 183 jurisdictions.

Wage bills in the theatre

Perhaps the most interesting perspective
on labor compensation in the theatre is pro-
vided by data on wage bills — total expendi-
tures for such labor categories as actors,
stagehands, musicians, and administrative
staff. These expenditures are intimately
associated with the "cost disease" diagnosed
by Baumol and Bowen. ' There is relatively
little prospect of increasing labor produc-
tivity in live theatrical performances.
Therefore, wage bills may be expected to in-
crease in about the same proportion as wage
rates (if the latter are going up at a rate
similar to the general price level) if the
size of the workforce is unchanged. If the
wage bill increases at less than the rate
of increase of wage rates, it is evident
that the theatre has adopted cost-saving
measures: reduction in average cast size,
reduction in the number of productions or
performances, or a shift away from highly
paid personnel.

The main source of data on wage bills of
nonprofit theatres is the Ford Foundation
survey of performing arts institutions.
Expenditure growth rates have been estimated
for various labor categories for a period
of 9~seasons; see Table 38 (following).
Comparing these rates with growth of the
average wage rate for corresponding cate-
gories would indicate whether or not em-
ployment has increased or decreased. Again,
employment has increased if wage rates have
gone up more slowly than expenditures; em-
ployment has decreased if wage rates have
gone up more quickly.

Wage rates for artistic personnel in near-
ly all categories have grown more slowly
than expenditures, indicating that more ar-
tistic personnel are being employed. For

most of the categories the increase is
slight, probably in the neighborhood of 1 . 0
to 1.5 percent per year. The few larger
increases in employment of artistic person-
nel (regular performing artists in the pit,
guest artists) are in categories which ac-
count for only a very small proportion of
total expenditures.

For nonper forming artists, the categories
with the largest total expenditures (stage
managers and instructors, creative design-
ers and technical personnel) have increased
expenditures more quickly than wage rates.
This probably reflects both increasing em-
ployment and some substitution of paid for
unpaid personnel.

By far the highest rates of increase in to-
tal expenditure for personnel are for non-
artistic personnel. Unfortunately, no com-
parable data on wage rates were available
and so there was no ready way of determin-
ing how much of this growth may be due to
increase in wage rates and how much to in-
crease in employment.

Additional evidence on employment is pro-
vided by examining the relationship be-
tween salary and fee expenses and total
operating expenditures. There has been a
slight tendency for the portion of the bud-
get devoted to nonartistic salaries to in-
crease . Apart from these almost impercept-
ible shifts, the salary and fee composition
of the budget has remained virtually un-
changed over the years. In other words,
it has increased at about the same rate as
the' total budget.

This is an extremely interesting finding
because it provides additional evidence
that employment in the theatre has increased .
It means that the rate of growth of average
wage rates plus the rate of growth of aver-
age employment has been about equal to the
rate of growth of total operating expendi-
tures. Since expenditures have increased
at about 8.3 percent a year, and since wage
rate increases generally have been in the
range of 6 to 7 percent a year, there ap-
pears to have been a modest overall increase
in employment (perhaps on the order of
about 1 to 2 percent or less a year) over
the period examined.

Wage bills in commercial Broadway productions
are based on a sample of shows for which in-
vestment was offered publicly from 1965-66
to 1976-77. Because the data cover only a
small fraction of the shows produced in any
year (about 10 percent) , the sampling error
in the estimates is relatively large, but the
pattern of findings is consistent with other
data.

In general, growth rates for selected sal-
ary and fee expenditures are quite dif fer-

107

expressed a strong concern for the future,
a feeling that fundamental problems are be-
ing ignored and that the theatre is in some
sense headed for, or is actually in, a time
of crisis.

Emanuel Azenberg remarks: "Nobody wants
to deal with these coming realities because
they are saying 'I have to get mine now.
This is my year for a hit and I don't want
to change anything. Two years when my hit
closes, then we will talk revolution. But
that cliff that we're going to fall off is
not too far away, because with a little
luck I will have my hit this year, and you
can call me in Connecticut and I'll be
planting onions and potatoes and things
like that because I believe in my theatri-
ical lifetime that crises will happen. ' I
think that when we sit and face a normal
musical at over a million dollars, some-
thing has to be dealt with here. And the
only reason they look good up there is be-
cause we're charging, instead of $10 a
ticket, $20 a ticket. So he says, 'My God,
we grossed $640,000,000 last year. * Nell,
that's terrific if you only deal with
that. The amount of losses is as great as
they ever were, maybe even greater. There
are less efforts being made in the exper-
imental area. There are no efforts being
made on Broadway experimentally at all.
They are cropping up in other little
places and all of those places are under
duress financially. They all come begging
to the same 12,000 foundations and the
government. And people are screaming to
the national, to the federal government
now. And saying, 'Hey, what about— hey,
wait a minute ....•"

Earle Gister comments: "When your best
artists are leaving the theatre for other
art forms, it cannot be a very healthy
situation. I just don't understand how
it can be described as healthy. And we
have heard comments earlier that... a lot
of the good actors in this country are not
working in the theatre. Then that has to
say something about the state of the the-
atre.... It is not providing them with a
sufficient living. It is not attractive
enough to them. It is not compelling
enough in terms of their lives. The same
can be said of other artists in the the-
atre, including writers. And that to my
mind bodes bad things down tne road."

The Of f-Off-Broadway Alliance (OOBA) suggests
that the smaller nonprofit theatre is at a
crucial point in its history, "a point of
transition that throws emphasis on the pains
of growing larger and more complex, while
maintaining a commitment to the ideals and
an identity from an earlier, simpler time."

And the League of Resident Theatres (LORT)
says: "So the nonprofit theatre is caught

in a perpetual squeeze play. On the one
hand, it has an expensive obligation to
works that are costly to produce, though
good for the soul, and are sometimes
bitter medicine. On the other hand, since
it cannot pay for itself, it has to please
its funding sources—wealthy individuals,
private foundations, corporations, local
governments — and, in an inflationary econ-
omy, it has to please them more every year.
These philanthropic sources, while they in-
clude many serious , generous , and good-heart-
ed people, by their nature are capricious.
They may or may not be interested in art,
the truth, and the theatre ' s responsibility
to civilization and culture. They may be
more interested in social prestige, good
image-making advertisement, or a large tax
deduction than in the continuity and health
of the American theatre . As a result , even
the largest and most prestigious resident
theatres become donkeys , always chasing the
carrot of next year's funding dangled on a
stick before them. Dragging the whole bur-
den of culture behind them, while they
struggle to satisfy the growing needs of
larger and larger audiences in a more and
more expensive world.

"At this point in the history of the na-
tion's theatre, one of two things happens.
Either the theatre, searching for a way to
pay for itself, lets the profit motive
seep in, starts to choose its repertoire
and its actors with both eyes fixed on the
box -office; it lets the long run and the
potential star supersede its devotion to
the development of artists and their organic
relation to their community; it becomes a
commercial enterprise, briefly outlives its
commercial uses, and dies an unlamented
death, to be replaced by some adventurous
new theatre that starts the struggle all
over again. Or, one of the dominant forces
that supply capital to the performing arts,
usually, the government, recognizes its
obligation to the arts and takes steps to
make the institutional theatres permanent,
trusting that once their survival is guar-
anteed, the artists who operate them will
keep them alive and responsive to the
public, growing and changing."

The Alliance for American Street Theatre
say 8 that "this vibrant, volatile form
which flourished during the turbulent 1960s
and the earlier part of this decade... is
in jeopardy because public and private
funding sources are not convinced that the
Street Theatre is, in fact, alive and kicking!"

And Douglas Turner Ward notes the contrast
between his discussing high level arts
policy and the everyday reality of work
in his theatre: "I find that I'm a parti-
cipating member of most of the top think
sessions about the theatre, and I find a
great contradiction because I have to be

110

CHAPTER V

THE THEATRE COMMUNITY VIEWS ITSELF

The statistics in the preceding chapters
describe in quantitative terms certain as-
pects of the condition of the American the-
atre between 1965 and 1977: extraordinary
and diverse theatre activity around the
country, the large audience for this activ-
ity, problems posed by the "cost disease"
and the strong measures taken by both the
commercial and the nonprofit theatre, and
serious unemployment and low income of the-
atre artists. Those committed profession-
als who work in the theatre and who daily
encounter its problems and needs speak to a
parallel set of facts perhaps less quanti-
fiable but equally as important and perti-
nent. Many individuals and organizations
in the theatre community were asked for
their views. Formal statements were re-
ceived from a number of organizations and
from 4 roundtable discussions comprised of
individuals representing various constituen-
cies in the theatre community. The organ-
izations submitting statements were
Actors' Equity Association, Off -Off-Broad-
way Alliance, Alliance for American Street
Theatre, Dramatists' Guild, League of
Resident Theatres, American Theatre Asso-
ciation, League of New York Theatres and
Producers, American Community Theatre
Association, Performing Arts Repertory
Theatre Foundation, Theatre Development
Fund, Theatre Communications Group, and
Black Theatre Alliance. The roundtable
discussions were organized as follows:

October 18, 1977, 9:00 a.m. - noon,
New York City

Richard Barr, President, League of New

York Theatres and Producers
John Bos, Director of Performing Arts,

New York State Council on the Arts
Michael Feingold, Critic
Bernard Gersten, Co- Producer, New York

Shakespeare Festival
David LeVine, Executive Director,

Dramatists ' Guild
Stephen Schwartz, Composer
Douglas Turner Ward, Artistic Director,

Negro Ensemble Company
Thomas Fichandler, Managing Director,

Arena Stage

October 18, 1977, 2:00 p.m. - 5:00 p.m.,
New York City

Emanuel Azenberg, Producer

Earle Gister, Director, Leonard Davis

Center for the Performing Arts
Stuart Ostrow, Producer
Jane Alexander, Actress

October 20, 1977, 9:00 a.m. - noon,
Los Angeles

Alvin Epstein, Artistic Director, Guthrie

Theatre
Robert Goldsby, Artistic Director,

Berkeley Stage
Mako Iwamatsu, Director, East/West Theatre
Dan Sullivan, Critic
Marl Young, American Federation of

Musicians

October 20, 1977, 2:00 p.m. - 5:00 p.m,
Los Angeles

Arthur Ballet, Office for Advanced Drama
Research, University of Minnesota

Pat Don Aroma, International Alliance of
Theatrical and Stage Employees

Stanley Eichelbaum, Critic

Jorge Huarte, Director

W. Duncan Ross, Artistic Director, Seattle
Repertory Theatre

Complete transcripts of the organization
statements and roundtable discussions are
available through the National Endowment
for the Arts library.

The attitudes and analyses expressed were
as varied, conflicting, energetic, and in-
spired as the theatre activity on which
they commented. Each of the small round-
table discussions had a dynamic of its own
and the debate and discussion created an
ebb and. flow of ideas and opinions . This
chapter attempts, through liberal summar-
ization and quotation, to give the high-
lights of these statements and discussions.
It does not present all of the attitudes
which were expressed. (Nor are these atti-
tudes a representative cross-section of
those held by the theatre community.) An
exact summary is not practical for such a
wide-ranging, over-lapping, and individu-
ally expressed series of statements and re-
marks. The following is a selection of the
important themes running through these par-
ticular expressions of the theatre communi-
ty, along with the disagreements, the dif-
ferent priorities, and the variety of solu-
tions offered . The original statements and
full transcripts comprise a considerable
amount of material. In reducing them to
the following pages , no injustice is intend-
ed to those who have been so kind in pro-
viding help.

A persistent idea in the roundtable dis-
cussions and, especially, in the formal
statements is that deep-seated problems
exist beneath the surface of the burgeon-
ing theatre activity in the country. While
the current level of activity is applauded
as a source of great hope, some (Arthur
Ballet and Dan Sullivan, for example) are
quick to point out that more theatre does
not necessarily mean better theatre. In
various ways, organizations and individuals

109

the failure of society sufficiently to ap-
preciate, materially and esthetically, his
contribution .

"Materially, the society, read: legisla-
ture, in a most niggardly fashion dispenses
its largesse to the theatre. With a budget
of half a trillion dollars— that's 5 fol-
lowed by 11 zeroes — 6 million dollars
for the theatre hardly seems sufficient.
In terms that might be understood, that
means about one/one- thousandth of
the total U.S. budget. If the Congress
feels we are worth that little, why should
the public feel otherwise? Yet the fail-
ure of the federal government as well as
the multitude of state and municipal gov-
ernment to acknowledge the theatre's con-
tribution to the American scene in purely
economic terms need not be laid entirely
at the legislators' door. The theatre
has failed institutionally to assert the
dependency of other industries upon the
theatre's success. As the theatre remains
a cottage industry as well as a collabor-
i ative art form, it requires the employment
i of a host of other workers with diverse
i skills. Moreover, the theatre does not
exist in a vacuum but must rely on or en-
large employment in such diverse systems
and industries as transportation, retail-
ing, restaurants, hotels, to name but a
few. But a decent symbiosis has not yet
been created between the purveyors of
theatre and the bureaucrats in government.
Where are the studies of the Department of
Labor as to employment patterns and earn-
ings in the theatre? Where are the data
of the Commerce Department to detail the
interrelationships among the many dispar-
ate employing entities within the theatre
without which the theatre (in this coun-
try) does not exist? Why, in the two hun-
dredth year of our independence, is there
no defined policy, executively or congres-
sionally-proclaimed, which charts a course
for the theatre and mandates massive govern-
mental support.

"Esthetically there is only silence. Re-
grettably, the theatre is still a play-
thing, a frill in the minds of most. To
the terrible detriment of our nation, tens
of millions are denied the opportunity to
be made alive to the beauty of our lan-
guage and to the challenge of ideas. Is
it not time for the redemption of Adams'
pledge that: 'I must study politics and
war so that my sons may have liberty-
liberty to study mathematics and philoso-
phy, geography, natural history, naval
architecture, navigation, commerce and
agriculture; in order to give their chil-
dren a right to study painting, poetry,
music , architecture ....'■

of the federal government: "I think that
the federal government, and of course this
applies to all of us, but I think espe-
cially the federal government should take
the lead in setting the tone for the ac-
ceptance of the arts all over the country,
so that we can someday have the same situ-
ation as we do in Europe where a child has
grown up being able to see Shakespeare,
being able to hear Beethoven, American
composers, plays written by American writ-
ers. If the federal government sets the
tone and assists and encourages the states,
cities, and counties to participate in
this, I think we are going to be better
off. We need dollars. We need dollars
from everywhere but I think the federal
government has to be right out there
and saying, 'This is the way it should be.
Our administration is for this. We want
this type of thing to happen, ' and this
way it will do one thing, it will keep
the actor employed, keep him off the un-
employment rolls, restore his dignity,
give the actor who has a profession or
the musician or other artist who has a
profession an opportunity to ply his trade
at a decent living and to support his
family and walk with his head high. We
do it for the farmer, we do it for the air-
line industry. . .and about every aspect of
American business, but we do not do it for
the artists.

"I think we should look upon the arts as
something that is just as necessary as
General Motors or the farmer because they
are feeding the body; we need to feed the
spirit, you know. You cannot live by
bread alone. You have got to have some-
thing to feed their spirit on or you are
not going to have any kind of people but a
lot of zombies in this country. I think
it is necessary for the government to step
right in there and take an active role and
give us people in this artistic role a
chance to ply our trade at a decent liv-
ing and to hold our heads high. It will
be good for the country, it will be good
for us, and it will be good for everybody.''

Since the theatre is both an art form and,
in many instances, a profit-seeking enter-
prise, there is a confusion in the minds
of the public, say many participants.
Remarks Richard Barr: "The difference be-
tween theatre and other performing arts
is that the theatre is the only one that
is not subsidized totally. Every other
form of performing art is subsidized. The
theatre, because it had its beginnings in
a commercial sense, way, way back, even in
1730, 1750, when we first began doing
plays in the United States, it was always
a commercial situation.

And Marl Young also makes the point that "Many, many years later, without trying to
recognition must come from the leadership go into the history of it, the other arts

112

very statesmanlike in giving my theoreti-
cal analysis and all of that. Yet the
contradiction is that at the moment I go
back to the theatre, which has been deemed
by all of the powers that be— internally
and externally— to be of great importance
to the state and to the nation... I am
literally going back to both Bit at the
typewriter and get on the phone to fight
for the survival of an institution that
has been deemed important."

Many in the theatre community feel the
theatre is in a special situtation as an
art form and, as a result, the public is
often confused with regard to the the-
atre's place in the cultural life of the
nation.

Earle Gister speaks of a number of func-
tions which the theatre has and his list
includes many of the topics touched on by
other participants: "Today, obviously,
the theatre plays an important role as the
source of entertainment except that it's
entertainment for, for lack of a better
word, the elite as opposed to the mass be-
cause the mass audiences find entertain-
ment through television and film. It
takes a bit more effort and everything
else to go to a play than it does to turn
on the television set and sit at home and
watch it. Consequently, theatre sorts out
its audiences one way or the other: sorts
it out by price; sorts it out by location;
sorts it out by accessibility or avail-
ability.

"Nevertheless, one of its functions is to
entertain. And by entertain, it's not
necessarily something that is not substan-
tial or significant or deep. It can be.
I mean entertainment in the sense of in-
volvement. The role of the theatre in
school obviously is educational. Theatre
can perform an educational function in
schools at all grade levels. Theatre is
also avocational. It has that role to
play in society. There are many avoca-
tional theatres that do indeed present
plays .... for a ticket price .

"The theatre has the role of providing
jobs. It's a business. That can't be
overlooked at all. It's a source of em-
ployment for a considerable number of
people of many different levels , both artis-
tic and otherwise.

"Then, there is that other thing called
culture. The theatre indeed has a cultur-
al role to play in our society and it
stands alongside the other arts in that
respect. Perhaps it doesn't stand in the
eyes of the public today as culturally
significant as museums or symphonies or
ballets because there is this mixture in
the theatre of roles that doesn't occur to

the same degrees in other art forms. I
think that can confuse the uninitiated
among the public. I think it causes
problems .

"I think the profit or commercial theatre
plays a cultural role in our society no
more and no less than the not-for-profit
theatre. Indeed, much of the impetus, the
cultural impetus, as Manny (Azenberg) sug-
gested earlier, still emanates from New
York City and from Broadway. There is, I
think, perhaps a greater degree of sharing
now. That is, something being done else-
where in the country being brought into
New York City than happened before; but
it's a two-way street. I don't put cul-
ture only on the side of the not-for-profit
group . "

The general cultural importance of the
theatre is implicit in all the statements
and discussions, but a number of partici-
pants make it explicit also. The American
Theatre Association says that a major
long-term problem of the theatre is "to
become one with the community at local,
state and federal levels; to become as
integral a part of the community as in the
classic Greek times when Aristophanes,
Aeschylus, and Sophocles were writing."

Dan Sullivan puts it more personally:
"Well, a specific example is I was feeling
very blue and low and terrible, down on
myself and the human race in general. I
had to go up to Santa Barbara, and it
turned out to be the Royal Shakespeare
Company, four of them, doing Anthology to
Shakespeare , and I went out so illuminated
and so enlightened and so glad to be part
of this race, because this man had written
these beautiful words, and these men and
women up there had read so beautifully,
not just beautifully in that sense, but
given them so much life. I was glad I had
the gift of language. I wanted to go back
and write something, and luckily I couldn't.
And that is what theatre is about. Those
were real people who had showed me what
this other real man way back then had done
with his real pen. I think that is why
theatre is good. That's what I want to
see happen everywhere. . .in every city in
this country."

Don Grody, writing for Actors' Equity As-
sociation, argues the central importance
of recognition of the theatre's cultural
importance: "The major problem confront-
ing the theatre artist today, as described
by his union. Equity, as well as by the
actor himself, is unemployment. I would
venture the heresy that this description
results from looking through the wrong end
of the telescope, describing the symptom
of the disease, and not the disease it-
self. The chief problem of the actor is

111

And the Theatre Development Fund notes:
"To the best of our knowledge, there has
been only one organization in the past
devoted to the kind of concerns that are
here expressed. This was the ill-fated
First American Congress of Theatre, which
began its activities very promisingly in
1974 with a conference at Princeton, and
included, for the first time, virtually
every element of the American professional
theatre. It will be necessary to re-invent
it, or some substitute, in the near future,
in order to provide the avenue for the kind
of discussions that must take place."

The cycles of theatre activity observed in
the economic data and the continuing pres-
sure of the cost squeeze are reflected in
the theatre community's concern about the
precariousness of the condition of the
theatre. Instability is perceived as a
serious problem, and a major issue raised
is the need for continuity and permanence
in theatre institutions.

Michael Feingold: "And I think the major
'should' in the American theatre— the
major lack right now is the institutions
should have some way of being permanent
so that it doesn't happen every forty or
sixty years that we destroy our own his-
tory and have to start over with no base
to start from and no understanding of our
past and our culture."

Such a point of view is not without its
critics.

Bernard Gersten asserts: "I'm for the
death of institutions. I would like to
speak fervently for it, to allow them to
pass away. That is particularly true of
my view in the theatre, because I think
the theatre is still very, very much an
individual or a tiny collective impulse.
I'm glad that the Group does not exist
today, that the Group Theatre has not
survived. And I'm glad that Eva LaGal-
lienne's theatre has not been retained in
an artificial way so that the name, Civic
Rep, is still waved in the breeze whereas
the original impulse that motivated the
formation of that theatre has long since
been lost. And I tell you that I regular-
ly consider, discuss in certain areas the
death of the, the passing of the New York
Shakespeare Festival when it's the correct
time for passing to take place."

In the case of nonprofit theatres, the
concensus seems to be that the concern for
staleness is premature.

Michael Feingold: "It's the difference,
Bernie, between a natural death and murder.

"Institutions by their nature are going to
get stale and die, and another generation

of artists is going to come along and
either work against them or revitalize
them from the inside, which, by the way,
I think is much better.

"You have the institution. It stays perma-
nent. It takes in new artistic foci that
energize it."

Although there were a large number of spe-
cific suggestions as to different ways to
promote stability and continuity— many of
which are quoted below— the common denom-
inator among them is for funding continuity.
The feeling is that only government can
provide the requisite guarantees of funding
in sufficient amounts and stability. The
private sector of foundations and business
support is not reliable, many feel.

Robert Goldsby says, "What I think we are
discovering. . .is the problem of the
short-term grant support by private foun-
dations, where the private foundation
wishes to tell you they will support you,
but they want to limit this in time, be-
cause presumably you are supposed to get
on your own feet. In other words, it is
an idea that is connected to the fact that
what you are really trying to do is to be-
come a commercial theatre.

"Now, government does not do that with sci-
entists, they know much better than that
in the sciences. They don't expect the
private laboratory studying basic stuff to
turn out toothpaste. They understand in
science, and the government is very so-
phisticated in science. Now why can't the
government become as sophisticated in its
approach to the arts, which is the quality
of life in the whole society. And all
that means is what theatre needs is some
degree of continuity in time, so that each
year you don't have to beg the board of
a foundation. . .to please give you the
money for the next year and then wait on
a cash flow problem for six months until
they tell you, yes, we will give it to you.
Meanwhile you have to borrow against it,
and so forth and so on. What we need is
continuity, and that can be provided only
by the people's representatives, which is
the Congress ; in other words, the whole
point of doing theatre is for the people.
We don't function without audiences. That
is the whole idea, that is to be the mir-
ror of our society, and so what we need is
the government moving in place of the pri-
vate foundations, which are only giving us
a carrot once every year, and then saying.
Well, maybe if you are good, we will give
it to you for one more year, but remember
the axe will fall next year unless you get
some others . "

Thomas Fichandler expresses a widely held
view on corporate support of theatre: "To

114

begem to come up, the other performing
arte, that is, the symphonies and the
dance and the concert attractions and
other performing areas. The only one that
remained commercial and still is commer-
cial to a great extent is the theatre.
And this is its essential problem, as I
see it."

John Bos says: "The very problem Richard
cites is also the problem of the nonprofit
theatre. Nonprofit theatres have a diffi-
cult time raising money from a noninf ormed
public because of the confusion that exists
that Broadway makes money. Lincoln Center's
problem is that — no one questions the need
of the Metropolitan Opera or the New York
City Ballet or the New York City Opera for
needing subsidy, but they obviously ques-
tion it for the theatre, the Beaumont."

Michael Feingold adds certain qualifica-
tions: "I find a certain number of half-
truths sliding in here which I would like
to clarify if I can.

"First of all, I don't think it is com-
pletely true that the theatre is the only
art that is not totally subsidized. He
have something in this country called com-
mercial music, popular music, rock music,
Muzak, it pays its own way; whereas clas-
sical music, which many millions of people
like, would disappear if it weren't subsi-
dized. I think that should be underlined.

sidized by the nonprofit resident theatres
which are supplying all of the material
and doing all of the pre-Broadway work
that used to be done by Broadway producers
and out-of-town tryouts."

David LeVine says in another context:
"It's one thing that we all understand,
that the public at large does not. I had
a call from a very bright lawyer from a
very good law firm in New York who repre-
sents a client who is an author, and she
said to me for various reasons which are
not important to us, she said, could you
please evaluate this play? And I said, 'I
beg your pardon?' She said, 'Could you
please tell me what you think the earnings
will be?' I said, 'I really don't under-
stand your question. The play, as I un-
derstand it, is not completed yet.' She
said, 'Yes, that's right.' It was not a
playwright who had written 14 plays like
an Arthur Miller where you might think—
you know, when Arthur Miller writes a play
there are 14 theatres in Europe that want
to option it, period."

"This lawyer would not believe me when I
told her that I didn't know anybody— and
I really don't— who could say, yes, that
play is worth X dollars. And she went
and asked 7 other people. And that's one
of our problems. The people in general
don't perceive the theatre the way we know
it to be."

"There are such things as film and televi-
sion. It's possible— Dick works in the
theatre and does not consider them art
forms."

Mr. Barr: "Correct."

Mr. Feingold: "They are certainly mainly
commercial. I can't answer for televi-
sion, but film has produced a few good
things. They pay their own way.

"There are also certain relationships to
the theatre of those two art forms that
affect the financial picture and the
artistic opportunities of the theatre. We
might talk about that later on. So again,
Bernie (Gersten) repeated that the theatre
is the only art capable of operating with-
out subsidy. This is also something I
question. .. .I'm not sure that Broadway in
its present state is a demonstration that
the theatre is capable of operating with-
out subsidy. Broadway is subsidized by
TDF at this point, by the half-price
ticket booth— and, incidentally, there has
always been some arrangement of that kind
in the history of Broadway for unloading
slow-moving tickets.

"Secondly, we are now at a point in history
where Broadway is to a certain extent sub-

This confusion affects the support given
to the theatre by private foundations,
corporations, and the public at large.
W. Duncan Ross speaks about the problem
in relation to ticket pricing: "We have
just been talking to my board about this
. . . that the money . . . they come up with as
a ball to fill part of our income gap...
must not be regarded as a fact that
management can't pay its way.... What it is
...really doing (is) exactly the same as
when you give money to the Orthopedic
Hospital for the children. What you do
is permit us to keep our top at $7.50."

Several organizations called for the es-
tablishment of some common forum for all
segments of the theatre community, both
as a meeting ground and as a means by
which the theatre could speak with a sin-
gle voice in advocacy. The American Com-
munity Theatre Association suggests: "If
the leadership of all theatre organiza-
tions in the country . . . could be drawn
together into a National Integrated The-
atre Organization to serve as a council
for legislators and agencies, all intra-
theatre liaison would be improved, and
ours would be a united national voice 1
We could by our very numbers and variety,
influence funding for and quality of the-
atre in America."

113

and says, 'Now it's ready to be seen,' the
question is where and under what conditions . "

Mr. Ostrow: "My feeling is that it is not
a problem because the more art you create,
the more people are going to want to see
it. I think commerce always follows art
and always will. I've never worried
about that.v That's something for the
government to worry about,, but I don't
think we should be worrying about it. I
really don't. I think our job is to try
and create and stimulate art."

Mr. Azenberg: "Broadway is not a philoso-
phy and it does not necessarily have to
have a philosophical position. It's a
location. The art can exist anywhere. If
you want to start your experimental the-
atre or the workshop anywhere it doesn't
matter .

"The minute you come out of that area—
that's one problem. Let's try and promote
and stimulate as much art as we possibly
can with as many artists and back them
and give them the opportunity to work.

"Once they have finished that work, it has
to be seen by an audience. And when you
take it out of that insulated environment
and put it in another environment, call it
whatever you want, that other environment
exists in a population area so that that
population can go. There must be some
economic viability to it so that it is not
all loss."

The Theatre Development Fund asserts the
mutual need and interdependence of both
sectors of the professional theatre: "Un-
til it is understood by the not-for-profit
theatre community that Broadway's issues
are in many respects identical with their
own, no mutual effort can be established.
If the commercial theatre needs tax ameli-
orations and incentives to attract new
capital and investment, it may well re-
quire the understanding of the not-for-
profit sector that this is in their own
isest interest, too. For their part., the
commercial producers must understand that
5ven the most arcane not-for-profit the-
atre activity contributes to their economic
velfare. Actors' Equity and the other
-heatre unions must a-.sc be educated to
continue to provide the leeway in which
ion-union activity can develop and promul-
gate new works and artists at low levels
>f compensation and reward. At present,
:he separate universes are discussing
:heir concerns at relatively low levels of
elf -interest. Their mutual education and
edification Is a primary task in the future. "

he support of many sorts of institutions
s a major concern. Stephen Schwartz as-

serts: "You can't just throw money up in
the air and whoever is underneath just
happens to catch it.

"I think that we are not going to answer
this question today, but there are ways
of approaching it.

"There should be institutions available so
that the following things can be accomplished.

"So, specific — let's start with Doug's
(Ward) case — specific minority or ethnic
groups or whatever you want to call them
who do not have the ability to begin to
express themselves in the theatre should
have a way to do this; and not just the
black theatre, but the Spanish theatre,
what started to happen with Shordiz and
things like that. Those are very hard
things to get going. I think certainly
the specific things for minorities to be-
gin to have a way to develop projects
should be made possible.

"Certainly there should be some geographi-
cal consideration; that is, it's wonderful
to have the New York Shakespeare Festival,
which is one of the only places that has
been able to accomplish what we have been
talking about, but it would be nice if
either the Goodman Theatre or some similar
institution in Chicago could be able to do
for playwrights in that area what the
Shakespeare Festival is doing here. Simi-
larly on the Coast, or in Washington.

"Certainly I think there should be a geo-
graphical consideration, too, so that
people can get to where they have to be
in order to be able to function.

"What you're trying to do is make it pos-
sible for the talented people in the
country to find a home where they can
develop these talents without going to
and hoping to make it immediately in the
commercial theatre . "

Mr. Barr: "Well, whether we like it or
not, New York City is the capital of the
United States. It is the major city and
always has been. That is usually where
the major theatre flourishes. It's cer-
tainly been true in Europe.

"My point is, I think the biggest institu-
tion we have is the one we are neglecting
to discuss, which is the Broadway theatre
...this is not to suggest that we shouldn't
continually subsidize the regional theatre
. . . the experimenting and most of the ex-
citement that comes from the theatre comes
from Broadway eventually, irrespective of
the second-rate stuff which. ..."

Mr. Feingold: "To Broadway."

116

'develop further what Doug said, a comment
of one corporate man to me when I asked
for money, he said: 'Well I'm sorry, we
give our money to the Kennedy Center. We
can get more bang for our buck there . '

"In other words, if you go to the commer-
cial, the corporate, for support, they are
interested in what it is going to do for
their corporation not what it is going to
do for the art of theatre ....

"As a matter of fact, one guy, who was a
potential donor, said, 'Oh, God, the play
I just saw, I can't-v-I'm going to give
mine to music where the ideas won't be so
disastrous. ' "

Several participants say that in certain
local instances business support has been
very good in the past but that even here
not enough certainty exists, as Alvin
Epstein explains: "I think it has been
increasing throughout the years in the
Guthrie. I think it is very responsible
for the existence of the Guthrie. They
are trying to build an endowment now and
I think most of the money is coming from
the corporate structure. However, I think
that each place is going to be developing
at a different rhythm, and because the
corporate structure has been so involved
in Minneapolis, it is probably now going
to have to move into the government area
and relieve the corporate structure from
the responsibility that it has taken."

Developing institutions may get caught in
between eligibility for "seed" money and
recognition as a major, established insti-
tution. In tracing the growth of the
small, developmental theatres of the Off-
Off -Broadway movement, OOBA says: "This
is where the real problem arises: the
bigger a theatre in the Off-Off-Broadway
movement grows, the more time the artistic
director has to spend away from the theatre.
One-third of his/her time can be spent try-
ing to raise money— not always successfully.
Since the need for grant money so far ex-
ceeds the amount of money available, the
competition for funding dollars is fierce.
Huge chunks of time must be spent writing
proposals, going to meetings, and explain-
ing over and over— and most often getting
rejections. The artistic leadership of the
theatre belongs in the theatre, supervising
the production oF~play s .... Several very fine
artistic directors are considering leaving
the theatre because of this increasingly
consuming part of their job."

Other problems are cited as well. The
ordinary processes by which government
funds are appropriated and awarded causes
difficulties, according to same. Douglas
Turner Ward suggests a system divorced
from the ordinary budgeting cycle: "The

other thing, I think, is that in some way
the appropriations eventually— I'm talking
about Congress— it has to be taken out of
the hands of the Congressional— the poli-
ticians in voting and attached in some way
to something that has an ongoing permanence
outside of yearly votes or what have you.

"What I am talking about here is- if, for
instance, the amount of money appropriated
to arts came from a one cent tax on gas or
something...."

The emphasis placed on matching funds is
criticized. Thomas Fichandler, after de-
scribing his experiences at Arena Stage,
says: "Personally I think the three-to-
one challenge grant is an abomination."

Allocation formulas, such as those in some
states which are based on population, are
also opposed, and there is some fear ex-
pressed that a general movement toward
"populism" in the support of the arts
could be detrimental to the professional
theatre .

When it comes to the question of what sort
of institutions should receive government
support, suggestions and disagreements
abound. There is, first of all, objection
on the part of some in the nonprofit the-
atre to different support of commercial
theatre by the government.

Duncan Ross: "I have developed my sub-
scription from 7,500 seven years ago to
25,000, purely basically on word of
mouth, because the critics have been just
as tough with me as they are with anybody
else. I don't see why theatres, commer-
cial theatres, can't band together and
create a series and do things for them-
selves that way. I don't see why— I may
be getting on to rough ground— why it is
necessary for a musical in which we parti-
cipated and which went to New York, which
folded, but that is neither here nor
there, why nearly twice as many musicians
are required in that theatre than were
actually playing. I mean, there are all
kinds of things that I think you've got to
look at first before you start talking
about providing public money to offset
investors ' risks . "

In a roundtable discussion, Stuart Ostrow
and Emanual Azenberg explore the question
of art and commerce:

Mr. Ostrow: "The one thing I know will
work, if you give a dollar to Richard
Foreman, he'll show you something that
you have never seen before. I know that
is true. I know it's true."

Mr. Azenberg:
and important.

'That is absolutely crucial
And after he finishes that

115

always dreamed of for people in the the-
atre. Someplace where you could go and
find the best possible collaboration in
the world."

Richard Barr has reservations: "The big
question to me it seems is not so much
worrying about forming a permanent com-
pany. It seems to me we have permanent
companies. We have the greatest actors
in the world in the United States. There
is no question about it. And the per-
manent company is there.

"I don't think that actors have to get
together in order to be able to work
together. Under the aegis of a very good
director, you can make a company in a
very short time for a particular pro-
duction. I'm not a supporter of the
idea.

"I think the idea of supporting the
regional theatre in the way that has been
suggested here with maybe pushing money
into four or five of the major ones that
have proven they can sustain themselves
is a very good one.

"But to suggest that out of that is going
to grow a national theatre, I don't think
there is any possibility of that. I think
a national theatre will grow when we have
a director possibly of the caliber of
Welles."

In general, expanding support for a limited
number of institutions was well received
but there also was a consensus that such
efforts should not come at the expense
of existing programs , particularly those
for smaller and minority theatres.

Michael Feingold: "If I can add to that,
I don't think anybody is saying we should
cut off funding to the smaller theatres
simply because there are five or ten big
ones.

"The big ones depend on the small ones for
reactions, for challenge, for competition
artistically."

Douglas Turner Ward: "But talking about
the ethnic theatre, of course there are
major urban centers, there are major popu-
lation segments all around the country...
that desire and attempt to create black
theatre. They exist from amateur to
semi-professional .

"I think that that's a special question
that has to be addressed just like we were
talking about the multiplicity of every-
thing else, starting from, unfortunate for
black theatre, starting from us who final-
ly, you know, have survived up to this
point.

"There can be the same— we can go to
Atlanta to help serve the needs of the
black community there if the black com-
munity considers that it's impossible
for the existing theatres in that area to
really serve it adequately.

"There can be the creation or the support
on various levels for theatre institutions
there. I mean, I would not include just
what exists as being the only, as being
the end point. I think that those needs
can be addressed and taken care of and
special approaches also . "

In regard to its problems the Black The-
atre Alliance notes: "Significantly
enough, many of the companies who have
joined BTA subsequent to 1968 were moti-
vated by the same factors that confronted
the original seven founders back in 1968.
Over the years, funds for black arts
groups have become, if anything, harder to
get than they were ten years ago as the
private foundations and corporate donors
greatly reduced their arts donations.
Thus, the black arts groups have become
very dependent on funding from governrr*»nt-
al sources such as state arts councils
and the National Endowment for the Arts.
A few foundations remain sympathetic to
our cause; however, since none of these
monies are infinite, competition becomes
more and more fierce. Sufficient funding,
therefore, remains the most serious prob-
lem which confronts the Black Theatre
Alliance and its member companies."

A major concern with regard to funding
continuity for the theatre is support and
nurture of experimental work. Clearly the
nonprofit theatre sees this as a very im-
portant function, a crucial contribution
to the future of theatre in America.

Off -Off Broadway Alliance: "The future
National Theatre lies in the not-for-
profit network of theatres across the
country, and Off -Off Broadway is not only
part of that network, but is the seedbed
for much of the work that the entire net-
work is doing or will eventually do. Be-
cause of Off -Off Broadway's primary com-
mitment to the work of the living artist,
to an extent greater than within any other
theatre constituency, and because of the
influence of New York City in the nation's
arts activities, these theatres are in a
position to profoundly affect the future
course of the American Theatre. Off-Off
Broadway ideas are now filtering into the
mainstream of new ideas, new forms, new
styles. On any given day now, at least
one-third of the New York Times ABC com-
mercial theatre listings have originated
in our developmental theatres. The devel-
opmental theatre community is beginning
to realize that it has great strength col-

118

Mr. Barr: "No. From. I said 'from' and
I meant 'from.' That is where the impor-
tant writers want to be seen and that is
where their roost important works are done . "

One basic proposal for institutional fund-
ing to assure continuity and stability is
for greatly expanded support to selected
regional theatres. The suggestion, which
took various forms, amounts to a call for
a network of multiple national theatres.
Such a scheme, according to its advocates,
would build on available institutions,
cultivate diversity, and greatly enhance
artistic standards throughout the theatre
community .

Actors ' Equity Association sees a plan
whereby there would be a national theatre
in each state in the union: "Grand
schemes and generalizations aside, what
can be done now, momentarily, to assist
the theatre artists — and the audience:
For one thing, Actors' Equity Association,
a union of actors 23,000 strong, has a
plan for a National Theatre which can be
bought for a pittance— in terms of our
national budget. For the paltry sum of
$50 million, we can provide a theatre in
every state. And when we say $50 million,
we are being conservative, because at that
price you could give the tickets away
(which may not be a bad idea, since librar-
ies and public schools are free). This
idea, supported by the data accumulated
from the operation of theatres throughout
the nation which function under union con-
tracts, has so far stimulated no one to
great activity. Perhaps it should suggest
a feasibility study to be followed by a
panel of experts who will bring to bear all
the expertise of their various disciplines.
But the idea is sound, it doesn't cost
very much, and it can work."

Thomas Fi chandler: "I stood next to Joe
Papp when we were both testifying before
Brademas' subcommittee. And Joe said,
'Look, why don't you tell the Endowment
that they should pick a half dozen or so
theatres around the country and be sure
those theatres are supported and developed,
become a basis for a national theatre. '

"And that really has been supplemented by
the Equity concept of a national theatre,
not a single, one theatre which may be
possible in Britain which is so small but
which is impossible in this country and
would be ridiculous; but to develop a
group of theatres that really can become
the basis for what we would like to think
of as a multi-form national theatre. 1
think that ' s an important ' should be . ' "

Dan Sullivan agreed, "I want a strong,
serious publicly supported theatre of the

quality of the Guthrie, or better, in
every major city in the United States."

Stuart Ostrow, Emanual Azenberg, and Jane
Alexander examined the notion of a single
theatre or a multiple one:

Mr Ostrow: "There should be, you know,
an institute of high accomplishment. Call
it what you will. A place— in England
they call it the National Theatre. There
should be a place where excellence is pos-
sible without compromise. Yes, a place-
well, many places is too much. A place
I'll be happy with. It isn't just for the
actors. I know I made a mistake when I
said national theatre. I meant for the-
atre in general, for the live performing
arts in front of a live audience. The
ability for playwrights to see how far
they can take their work as opposed to
what they can get out of it."

Mr. Azenberg: "Let's not make it 'a
place' because that would limit every-
thing . "

Mr. Ostrow: "I don't know. I'm not sure
if there weren't some great Valhalla,
everybody would want to get into it and
that wouldn't be a bad thing."

Mr. Azenberg: "And that would diminish
every other one."

Mr. Ostrow: "No. Just encourage other
people to grow because there would be
something to aim for. We don't have that
here. We don't have that temple of the
gods, you know, where you went up and
found out about the secrets of life."

Mr. Azenberg: "I would love to see about
fourteen companies."

Ms. Alexander: "I agree with that."

Mr. Ostrow: "But, let's get one. Let's
get one. You can have fourteen after you
get one . . . . "

Ms. Alexander: "I just feel our country
is so vast that to make it comparable in
any way to one of the European national
theatres just doesn't add up in my mind.
I feel if you had one national theatre,
where are you going to place it? Are you
going to put it in New York, Washington,
L.A.? You're going to lose artists all
over the place because of the place.... I
see what you're saying. You are talking
about a conservatory of some sort."

Mr. Ostrow: "Yes. Almost like the Ad-
vanced Institute of the Arts .... Remember
the Institute for Advanced Studies in
Princeton? That's exactly what I've

117

Richard Barr feels that commercial theatre
needs: "Either tremendous tax relief from
every aspect so that risks— so that tick-
ets can come down and the whole situation,
the whole economic picture will change, or
the other alternative is a nonprofit fund
so certain special kinds of work which may
not be necessarily Getting Gertie's Garter
or equivalent can be put on a Broadway ~
stage without risk on a nonprofit basis.

"The British system at the moment, I
haven't checked recently, a double system,
they have a profit, and a nonprofit
corporation which has intermixed boards of
directors so that when they wish to move a
show or take a show of some risk, it can
move either into the profit section or
into the nonprofit section. It's a very
complicated system. I don't know whether
it would work here because of our laws but
there is a method of setting up such a
fund if one wishes to do so.

"That would reduce risks on things like
The Shadow Box, The Night of the Tribades ,
and so forth. A fund would be there and
you would just move it.

"The regional theatre naturally or the the-
atre from which it came would share in the
gross , so tftat the money was being ted back
to them on a very healthy level , one hopes . "

Those in the nonprofit theatre express
some concern that moving plays into the
commercial arena might dilute the artistic
goals of their work. OOBA quotes Phil
Blumberg, the literary manager at Perform-
ing Arts Foundation (PAF) Playhouse on
Long Island: "We must continue to af-
firm the differences between commercial
and noncommercial art. Unfortunately,
the current financial crisis in the arts
has driven these different theatres closer
and closer together and this new alliance
may prove a dangerous one. Regional
theatres are now providing cheap testing
grounds for commercially based work.
These groups look to Broadway as a means
of earning needed cash and attracting the
attention of funding sources. Yet produc-
ing plays solely because of their commer-
cial viability or, even worse, serving as
try-out centers for. Broadway-bound plays,
be they Brecht musicals or Alan Alckroyd
farces, can only dilute the particular
identity of a theatre. Broadway has a
responsibility to its investors, non-
commercial groups have a responsibility to
the development of theatre arts, and these
two duties cannot always be reconciled.
If resident theatres begin to see their
work in terms of individual hits and
flops, this new alliance between Broadway
and non-commercial theatre will have
destroyed the very movement it was trying
to save."

Perhaps the area of needed support men-
tioned most often is for a living wage for
theatre artists. The general feeling is
that the artists themselves are, in effect,
subsidizing the theatre.

Thomas Fichandler: "He should be able to
put together and develop and keep a bunch
of actors economically viable so they can
raise their kids and send them to college;
so they can work in an area and not have
to go hustling around the country every
time .

"I was talking to a director yesterday.
He said, 'I'm exhausted. I've been in six
different cities in the last year direct-
ing here, there, and everywhere. I want a
home where I can work and not have to
worry about it constantly. '

"The actors are the same. We have one ac-
tor that has been with us twenty years,
and he's an exception. Most of them come
and go, and we are now down at the present
moment to a company of six. We would like
to have eighteen. They have gone off.
They have to go elsewhere. We can't af-
ford to keep them and treat them as decent
human beings as well as actors.

"This is a 'should be' that is very impor-
tant if we are ever going to develop the
kind of institutions that will give us a
tradition in this country . "

Jane Alexander speaks of this problem,
especially the need to keep the top actors
working in the theatre: "So, I would like
to see nonprofit or regional theatre able
to pay actors something in the caliber of
between thirty-five thousand and fifty-
thousand a year— for a major actor— so
that you have a nucleus of ten in any com-
pany so you can get back to the company
situation in these nonprofit theatres.
There is no way it can happen now. I mean
you can get actors; I'm not saying you
can't. But, there are a lot of very tal-
ented actors who have deserted the the-
atre, because they can't afford it. I
hear it all the time. I hear it from the
people in Hollywood. They are bored out
there. It's very hard to do film and tel-
evision. It is not personally fulfill-
ing. That is why almost every actor you
talk to who started in the theatre will
always want to go back to it in their
heart. They talk about it a lot. That
doesn't mean they'll make the move or that
they'll move their families. Because that
is really what it comes down to— the
family problem."

Alvin Epstein looks at the needs of the
middle-level actor: "I have to be able to
first of all hire more actors than I am
able to hire now, and I have to be able to

120

lectively, and that if used properly, a
national theatre can arise in America."

Theatre Communications Group makes a sim-
ilar point with regard to the entire
nonprofit sector: "After several poor
years, the commercial theatre is again
flourishing, and the entertainment trade
journal, Variety, has consistently pub-
lished reports xn the past year of record-
breaking profits. However, as in any
commercial enterprise, the motivation to
produce is based on the perception of mass
appeal, hence profit. The time has long
since passed when commercial theatre pro-
ductions could venture into experimentation
or productions of limited appeal. Today
the economic realities make the risks too
great. This change in the commercial sec-
tor's ability to foster new creative work
would have seriously jeopardized the de-
velopment of a rich indigenous American
dramatic heritage were it not for the
evolution of the nonprofit theatre. Per-
haps more important, New York is, and
always has been, the originating point
for the commercial theatre, the same role
Hollywood has served for the film business.
The nonprofit theatre, however, aware of
the disparate and varied needs of a conti-
nent, has no center. Vital and original
theatre organizations can now be found
throughout the country and, indeed, have
reversed the historic pattern by increas-
ingly supplying both new plays and produc-
tions to the New York commercial theatre,
as well as a steady flow of actors, de-
signers and other theatre artists."

Robert Goldsby: "I would argue that they
(the government) should take a look at
their support of science, the National
Science Foundation, and as a model for the
relation between research and turning out
weapons, and that they have a model there
that would probably be equal on a legisla-
tive way with the force for the major the-
atres that Dan (Sullivan) talked about,
as well as have a selected number of high
quality, small institutions that are doing
this kind of seminal work in discovering
new truths, that want to discover new
truths, such as the O'Neill, and discover
why we have never developed anything on
the West Coast, you know, other centers
like the O'Neill, not just the O'Neill,
and have a small selected number of these
seminal theatres that are doing work in
finding the new writer, and support them
so that they don't have to face every day
the sacrifices that everybody makes in
order to keep them going— actors with no
money for kids, they are hitchhiking in
order to do a play. Why can't they get at
least the minimum wage out of it?"

Arthur Ballet feels the pressures on the

nonprofit theatres are not so very differ-
ent from those on the commercial theatres:
"The other thing is I would assume that
both of these kinds of theatres, at their
healthiest, both commercial and not-for-
profit theatre, would be very, very con-
cerned with exploring the outermost
reaches of experimentation, not simply
repeating the cultural heritages —I
said not simply repeating the cultural
heritages, because I think the cultural
heritage is obviously important, but they
should be doing the very newest things,
the things that are not going to get done
in films.

"What I am saying is they can't... do that,
because they are constantly being restrained
at the box office — will it succeed, will
enough people come, what percentage of
capacity are you playing to— as if that
were relevant to the resources of the art
itself . I don ' t mean to sound like a hope-
less idealist, but that is a little cocka-
mamie from my point of view.

"It works everywhere. I go across the
board, the Lorick, ACT, wherever there are
theatres, they all do their very best to
get the hugest audience possible, and I am
questioning that as a goal of the present-
day theatre. I am not sure that is what
theatre can do. The theatre may have other
functions that are equally valid or perhaps
even more valid. I think it goes all the
way down to the little storefront theatres
that are trying to get little tiny grants
of $1,000 or $2,000, and they are desper-
ately trying to sell their tickets."

The lack of experimentation on Broadway
prompts some to suggest that this might be
one area of the commercial theatre for
which government funding would be accept-
able.

Stephen Schwartz: "But, you see, Dick
(Barr) has raised an interesting point,
and we are— if you step back for a minute
—we are at a variance and a decision has
to be made. Do you say, all right, what's
going to happen for the Broadway theatre
is, out of all these other things which
are funded, the best things and the most
commercial things will go to the Broadway
theatre and presumably make money or not,
but be in a commercial setting, meanwhile
art can go on elsewhere and commercial art
will happen to Broadway; or are we saying
that it is also possible to create for the
Broadway theatre, which does not now exist
in any way, the ability to afford to do
risky, developmental things which we think
may eventually prove to be both artistical-
ly and commercially viable? And that's a
separate question. It would be lovely to
be able to do both."

119

I would almost be — almost be ready to
suggest that.

"It seems to me that we ought to have on a
national level anything from 5 to 30 liv-
ing wage awards every year to playwrights
to be able to pursue in whatever way they
want to their craft , and that would be
guaranteed that their plays would be cir-
culated to all the theatres that are
receiving subsidies by the foundations and
the endowments. We can't force theatres
to do it, but at least if they would read
it, they would consider it. I don't think
that is asking too much of the American
theatre ....

"A minimum of $20,000, just off the top of
my head. We pay other people, lesser art-
ists, that, and I think if he is a good
playwright he gets $20,000 a year. That
doens't seem to me excessive at all. May-
be it does to everybody else."

On this point the Dramatists' Guild has
several suggestions for the support of
playwrights: "Some of the answer to the
playwrights' problem lies in subsidized
repertory; some of it, surprising as it
may sound, could lie in the subsidization
of the commercial theatre, too. There are
many dark empty stages on Broadway waiting
to be filled. For example, it would take
very little money to produce serious or
experimental plays at roadway theatres on
those single nights when they are ordinar-
ily closed, as is done at the Royal Court
Theatre in London. The advantage of a
Broadway stage for such productions is
that it offers the playwright a freedom
and a technical range that is more often
than not denied him in the more restricted
environs of Off- and Off -Off -Broadway. It
also offers the audience of serious plays
the opportunity to return to a scene, once
culturally rich, that should and must be
revived.

"Furthermore, many plays will not be picked
up by regional and community theatres un-
less they've had a production in New York.
Yet a playwright cannot exist by taking
six months to a year in order to write a
play and then having it close after a few
performances. He neither gains enough
money or enough satisfaction.

"Even now, the Dramatists' Guild is formu-
lating a new contract with the League of
New York Theatres and Producers whereby a
playwright will get a substantial amount
of money on completion of a play when it's
optioned for production, in return for
accepting reduced royalties when the play
is running. If such a formula should be-
come the basis for new contracts, a play-
wright would be paid for his time and work
whether his play becomes a success or not

— and he could afford to remain a play-
wright. As for government funding, direct
grants to playwrights would be of great
help in establishing the principle that
playwrights, like other workers, deserve a
certain base pay for their work . "

The theatre community sees the need for
support in a number of other areas, too.
In fact, a listing of all of these would
be quite extensive. Following are several
different sorts of problem areas which
indicate the range and diversity of needs
identified by theatre professionals.

Emanuel Azenberg speaks about the need for
new facilities: "I'd like to say some-
thing about the entire country. I think
somebody should do something, whether it
be municipal or federal government, con-
cerning the lack of facilities to play
major cities all over the country....
Yes, there are municipal auditoriums, but
Van Cliburn is playing on a Tuesday and
Lor in Maazel is playing on a Friday, and
that ends that. You can't go in there.
There are very few places that you can do
plays in that make sense because they are
either 800 or 4,000 seats."

Others disagree on facilities as a priori-
ty; remarks Arthur Ballet: "I never
noticed any great need for space. I may
be one of those people, forgive me, that
really doesn't think you need a theatre to
make theatre. You can do it anywhere, if
it's good. It is nice to have good space,
you know, nice flies and all of that, we
appreciate it. I guess I just don't pay
any attention to that. It seems to me on
my priority list quite a ways down, to be
truthful. I would go along with the sala-
ries of the artists way ahead of that.

"Then I do think what Harold Clurman said
to me many years ago, when he described in
this country an edifice complex, we build
buildings and don't have anything to put
in them, and that has been the case; less
so recently."

Mako Iwamatsu recommends that the govern-
ment should establish a revolving fund
which would provide low- or no-interest
loans against future assured revenues:
"It seems to me there is a need for a kind
of regional revolving type of situation
where when we know we are being funded,
but the check doesn't arrive, you know,
for six months, nine months, we can borrow
against it."

Several persons want changes in local laws
and tax structures, for example, Dan
Sullivan: "I know that there are laws
that can be made, tax laws can be made. I
know on the city level one thing we des-
perately need is some kind of easy way to

122

hire them at better salaries than I an
able to pay them now, because the really
talented ones who feel their strength and
their value as a commodity are grabbed by
the people who can afford to pay more
money, and the theatre at the moment is in
no position to compete with the television
and movies.

"Now, I am not suggesting that the theatre
should be subsidized by the government to
the point where they can pay equal sala-
ries... a million-dollar contract. That
is nonsense. That is not what I am sug-
gesting, but the actor has to be given the
opportunity to earn over a year's employ-
ment a salary that he realizes will keep
him decent, able to clothe, feed, house
himself, get married, have children, maybe
send them to college when they grow up.
You cannot ask a 45 or 50 year-old actor,
who has a family to work for $350 top.
That is not our top now, but I know there
are theatres that cannot afford to pay
more than $300 or $350 a week, and our top
is not much more than that ....

"Well, I think there is somebody I am very
anxious to get, and he or she is not an
already well-established actor who feels
he can take a vacation from a thousand
dollar-a-week movie contract and go off
and do a season of repertory. There are
many people like that who do and will come
for $350 or $400. But then there is the
young actor still on the way up who
doesn't have an established position, and
I think that if I can say, 'Come to the
Guthrie and stay here for $500 or $550 a
week for 40 or 45 weeks,' they will come.
They will not come for $300 or $350."

And Robert Goldsby addresses himself to
the plight of artists and other workers
in the smaller theatres: . "The problem is,
it seems to me, unrealistic to assume
that a professional actor should be like a
corporate lawyer .... I don ' t know how many
theatres that might be in this category
where the actors ought to be paid $20,000
and earn it. But there wouldn't be a "
large number of those institutions, surely.
They probably should be selected in the
major cities, if you are going to have one
in New York and Washington and Chicago and
the Guthrie and San Francisco and Los An-
geles, and maybe one or two other, I don't
know, so that you could identify these
slots that you are talking about.... I'd
think you would have to put limits on that,
and not say 'All professional actors should
be paid what lawyers are paid . ' I don ' t
think that would make any sense.

"Secondly, my position in this, coming from
the other, I have worked in these big thea-
tres, and I have also worked now in the
other end. I am going back in my life to

the beginning in a garage. Okay. Now the
problem there is not of $20,000 a year,
the problem is that all the artists work
for nothing, and some of the artists are
every bit as talented as the people work-
ing across the bay in ACT for $600 a week.
Those people are working for absolutely
zero, they are working out of love of per-
formance, and because they believe in the
mission of finding writers. And younger
actors, at least, are staying around— I
don't know how long they will stay around
— they will eventually have to leave.
They are now making their money in a poe-
try program supported by the Office of Edu-
cation. In other words, they all have
some other way of making a living. People
who are making money in the theatre, sur-
vival money, are not the artists. They
are the company managers, and what we need
is somebody to make money as a technical
director, somebody to make money as a
janitor, somebody to make money as an of-
fice worker, somebody to make money as a
public relations person — those jobs we
can't get volunteers for. We can, fortu-
nately, get the actor who is the center
of the theatre. The most important artist
in the theatre is always the one who ends
up not being paid, because there are more
actors than there are people who run
trucks.

"To turn to what I was speaking of, with
the new fund support. We are talking
about having good people who can do their
job well at any level. Your level is
$25,000, you get your actor to make your
theatre. For me, if I had $150, I could
hold the young actor in the area for a
while. The older people — that is a whole
different area."

Arthur Ballet speaks for the needs of the
playwright: "I will now take the thing I
am most interested in, obviously, the
playwright. I say one of the things that
should happen is that we should have some
kind of a system, I would hope flexible,
that provides the playwright with a living
wage as soon as we recognize him as a
playwright. I don't know how that is to
be done. I think it can be done. It is
done in other places. And that he get a
living wage in connection with the the-
atre. I am at the point where I am almost
ready to recommend one of the things we
should think about is that any theatre,
receiving any kind of subsidy in any kind,
that one of the stipulations be that it
have attached to it a playwright. They
have stagehands, they have managers, they
have directors, all of them are paid, and
the playwright, who seems to me to be
central. .. .He isn't central to it at all.
Or if you are going to get subsidies, you
are going to have to have a playwright.
I know that is a Draconian measure, but

121

"The society doesn't recognize the impor-
tance of theatre as they do the importance
of the World Series. You don't have a
world theatre, either."

Mr. Ballet: "Would you extend that to the
talent not just in the theatre , but the
talent of people going to the theatre, so
that the whole system has to start a lot
earlier than it is now started. Minneso-
ta, if I may just continue, Minnesota has
always given us a good example why they
have so much theatre in Minneapolis or
Minnesota. Why is it? Well, the reason
is that the high schools there are very,
very good at it. Some of them have magni-
ficent auditoriums and do a big program
of very, very good theatre, and then that
goes on one hopes at the college level as
well. But that is where the audiences are
also being built, not just the talent that
appears on stage. Remember the theatre is
a tacit agreement between the people on
the stage and the people in the auditorium
that they are going to have a theatre."

In its formal statement, the Performing
Arts Repertory Theatre Foundation's manag-
ing director, Charles Hull, speaks of the
high professional level which has devel-
oped in children's theatre companies and
of the possibilities this offers for a
vital conjunction between art and educa-
tion: "The major problem (need I say) is
money. A school, with its budget subject
to annual scrutiny and paring by its
board, possibly in a position of having
to lay off teachers due to shrinking en-
rollment and/or reduced municipal budgets,
finds it difficult to allocate $500 (prob-
ably an average price) for a performance.
True, the performance may be of very high
quality, performed by professionals and
actually costing only 50 C per student
(based on a 1,000 seat auditorium). But
the school looks upon it as a one-shot
expenditure, and as such, the fee looms
large.

"The secondary problem lies with those
school administrators who not only object
to the cost of performing arts programs
but who say, 'What does it have to do with
education; let them go with their parents
on the weekend.' Needless to say, the
terrific impact of arts in the schools is
that it reaches all children, cutting
across all strata. It is the only way to
reach all segments of young people in sig-
nificant numbers."

Other specific proposals include continu-
ing and expanding of Comprehensive Employ-
ment and Training Act (CETA) , especially in
place of unemployment compensation , raising
the ceiling on theatre grants from the Arts
Endowment, more programs along the line of
the TDF voucher system funds for subscrip-

tion development for small theatres , a na-
tional theatre magazine, a cabinet post for
cultural affairs, forgiveness of taxes for
artists as in Ireland, and a systematized
collection of economic data on theatre.

The question of support of the theatre is
closely linked to that of accessibility
in the minds of several participants.
Jorge Huarte believes: "I think flatly
and frankly the present role of profes-
sional theatre, both for-profit and not-
for-profit, is to serve a particular elite
of society, those people who can afford it
whether it be the Shubert Theatre in Cen-
tury City that is charging $15 for Chorus
Line or the Mark Taper Forum, which
charges $5.50, and at best attempting to
reach, you know, a more popular sector,
but not really achieving that goal.

"It seems that today the theatre is simply
a means of making money on the commercial
level. On the not-for-profit, I see very
honest attempts to do good theatre, to
nurture playwrights, to nurture designers
and actors and directors and what have you,
but a very limited ability. They need sub-
sidy by the millions, and they don't get
it— the ACT and the various not-for-profit
and professional theatres across the country.

Earle Gister thinks: "The theatre has to
become more accessible. It has to be more
accessible to the people and it has to be
more accessible to the artists. It's one
of those terrible situations that you
can't provide it for the people until you
can make it happen. You can't treat the
theatre as a business which it must be treat-
ed as and ignore all of the problems involved.
Somehow or another things have to be worked
out where those problems can be resolved
or they can be made less difficult.

"One of the problems is where do we play?
You can't pursue a business if you don't
have a place to sell it. You can't do it
out on the street, not all theatre at
least, just some of them.

"So it has to be made more accessible be-
cause it is a huge business. And it must
provide opportunities for those people who
wish to make that business their lives,
the wherewithal to develop and grow and to
make the theatre better. An actor can't
just move in and out of it. An actor has
to have the opportunity to grow and devel-
op, and that can only happen in a stabi-
lized situation. And right now the
theatre is not stable not even in the not-
for-profit world.

"Now it's simply meeting one problem after
another day by day and, consequently very
frequently long range planning has to be
set aside."

124

start up a small -theatre. I know the
thicket of fire regulations, safety codes,
all of that you have to go through, it is
discouraging. If there could be a uniform
safety act for theatres that could apply
to small theatres under 50 seats or over
100 seats, between 150 to 500, 500 to
1,000 and then up, that would apply in
every community very easily, that would be
fairly easy to live up to, something like
that would make the lives of many small
theatre people a lot easier, and wouldn't
cost anything . "

Earle Gister believes: "But what is a
worrisome thing to me is the infinitesimal
amount of money going into the theatres
from local governments. They are not mak-
ing even simple efforts like relieving
them of certain kinds of taxation. That
to my mind is boggling. How do you tax
something right up front you know is not
for profit and is an organization that's
getting major sources of its funding from
state government, federal government, and
then you lop a tax on it. I don't under-
stand that."

Thomas Fichandler and John Bos had the
following exchange:

Mr. Fichandler: "Oh, yes. Many theatres
are still paying property taxes, amuse-
ment taxes; nonprofit theatres. We got
rid of ours with Congressional help chang-
ing the District law. But until then — I
know that Minneapolis still has theirs."

Mr. Bos: "Pittsburgh and Philadelphia for
years paid ten percent amusement tax on
all tickets over ninety-nine cents. It
was only recently that they knocked those
off. But those are local jurisdictional
issues."

Mr. Fichandler: "Well, you know, the
federal Congress can say we will give sup-
port to this area if they don't have this.
They can put conditions on the granting.
Also real estate taxes. They're talking
now in the District of Columbia of trying
to tax churches and nonprofit organizations
for their real estate."

Mr. Bos: "Tom, aren't there a mounting
number of challenges from IRS as to the
propriety of activity under 501(c) 3 from
everything from selling champagne to run-
ning a parking lot."

Mr. Fichandler: "Exactly. If you make a
profit on your program advertising, they
want to take it away from you."

Mr. Bos: "That's right. So that's an
issue which obviously the Endowment should
lead in guiding the IRS to a more speci-
fic... ."

Mr. Fichandler: "The postal rates with which
they are threatening us could kill us."

Another problem is the difficulty of moving
from movies and TV employment to theatre
employment, and several participants cite
the advantage British actors and writers
have in this regard.

Stuart Ostrow: "I had spent some time
with Mayor Lindsay on the concept of
establishing, tnrough subsidy or through
intelligent inspiration, a film sound
stage in New York where the actors would
be allowed, where it would be possible to
work like they work in London. They work
in the theatre at night and work in films
during the day. So there is an income
that they can rely upon. God knows we
have the communities, the surrounding
communities to live in and the opportunity
to enrich the theatre seems to me to be
enormous under that possibility."

The long-range question of theatre educa-
tion is touched on by a number of persons
in different ways. The prof essional train-
ing of technicians , artistic directors , lit-
erary managers r or critics is variously
cited as a need along with more exposure to
and experience of theatre in the public
schools .

Jorge Huarte and Arthur Ballet discussed
the situation in these words:

Mr. Huarte: "I think it is one of the
disgraces of this society, when we call
ourselves an educated literate society,
when in high school we are graduating
students who cannot read and write. Fur-
thermore, who cannot identify talent—
they are not allowed to develop their
talents. You know, everybody keeps throw-
ing it back to one grade below; they can't
read because the third grade teacher didn ' t
teach them how to, and we all heave a sigh
of relief. It is not my fault, it was the
kindergarten teacher. It is not true. We
have no real support at that level, at the
kinder-secondary level of the arts.

"We build football stadiums right and left,
but we don't build theatres, and I think
that those formative years are crucial in
the training of a good theatre student. I
think you may find your students who have
had an active participation in drama in
high school are far ahead of those who come
to the university or the college and then
discover they have something, some kind of
an interest in the theatre, and begin to
pursue it. They are behind, just as a piano
player is not expected at age 15 or 16 to
become a concert pianist. Who is to say
that somebody can arrive at the university
as a freshman and say I want to be a great
actor on the training that he can get?

123

of the game? I an saying what we should
have is a relationship whereby those mono-
liths, and that is exactly what they are,
(so they) realize where the experiments
are coining from that they are going to be
using in five years from now and they have
to support that directly."

It is clear from the preceding excerpts
that the theatre community is deeply con-
cerned about the future of the theatre re-
garding general conditions and particular
problems. The theatre community's self-
analysis, which particularly emphasizes
the effect of problems on the quality of

theatre, seems to parallel the data pre-
sented in earlier chapters. The theatre
community does not speak with one voice or
with even several voices. This is particu-
larly true when it comes to solving prob-
lems, even those which are recognized as
cutting across various constituencies.
But there is— and the purpose of this chap-
ter is to give some flavor of it— a common
sense of dedication to the cause of theatre
arts , an energetic pursuit of opportunities
for its nurture and growth, and a belief
that, in Earle Gister's words, American
theatre "should be the finest theatre in
the world . "

Figure XIX

The theatre's relation to tho economy

126

Dan Sullivan, Marl Young, and Robert
Goldsby put it in these words:

Mr. Sullivan: "You cannot ask the govern-
ment for money to support theatre, unless
the theatre can then say that with the
money one of the things we are doing is
making theatre more available to our com-
munities. You cannot ask the government
to subsidize an elitist activity, unfortu-
nately, maybe it is a spiritually elitist
one, but not an economically elitist one."

Mr. Young: "One thing we do in music here
in Lob Angeles, our recording industry,
they do have to pay so much because they
make records which displaces musicians , so
they have to pay money into a fund that
will provide live music free to people all
over the country. Now, in conjunction
with that, we ask the city to contribute
so much, the country to contribute so
much, and we provide free concerts, jazz,
western music, symphony music, all over
the city, all over Los Angeles County.
I'm sure this happens in other areas where
there are locals , free music for the people . "

Mr. Goldsby: "Wouldn't that be marvelous
for theatre?"

Mr. Young: "I think it is this type of
thing we need in all of the arts."

Mr. Sullivan: "This could be done, and
one way it could be done, if the Screen
Actors ' Guild and Actors ' Equity merge
into one big union, and then the televi-
sion and movie industry, would have to
pay a percentage of the money of the box
office gross, to provide free or reduced
rate attendance of live performances of
drama, which means stage."

Mr. Goldsby: "That is true. For example
a million dollar contract that one actor
gets for making a film that goes around
the world; somehow, what about the actors
that are probably equal just in the terms
of talent.?"

Mr. Sullivan: "We have some guilt money
from big oil now, and I want to see guilt
money from big movies. It is so obvious
why they should pay it, and they know it
themselves , look at Jaws. "

Mr. Goldsby: "Look at Jaws, millions and
millions of dollars."

Mr. Sullivan: "I don't expect the commer-
cial theatre would do that. I don't think
the profits are anywhere near that size."

Mr. Young: "But the electronics industry
can afford it. It would take such a small
percentage of their profits . "

The point Dan Sullivan makes concerning
funds from film and television to provide
support for the professional theatre is
one raised by others in several different
contexts. There is a strong feeling that
the theatre acts as a training ground and
supplies the fundamental artistic re-
sources for the electronic media. Simi-
larly the nonprofit theatre makes a case
for more support from the commercial
theatre .

Bernard Gersten, Richard Barr, and Thomas
Fichandler remarked:

Mr. Gersten: "I don't know what is the
number of dollars of profit the commercial
theatre generates in a given year. But I
wish that a portion of that profit, what-
ever it is, were reinvested by the commer-
cial theatre so that Stephen's (Schwartz)
work could be done as an experimental
work in that theatre."

Mr. Barr: "That is precisely what I'm
suggesting but nobody ever . . . . "

Mr. Fichandler: "I think that has to be
extended beyond theatre to movies and
television. We are the training ground
for those . "

Mr. Gersten: "You mean to get a feedback
from those others?"

Mr. Fichandler: "Absolutely."

Mr. Gersten: "Well, but that's an idea
that has really recurred through the years
but never with any success, to get a nick-
el out of television, to get a nickel out
of records. I always thought that the
Philharmonic should have bought The
Beatles. If they had The Beatles they
would have been home free . "

In another context, Arthur Ballet re-
marked: "It goes all the way from the big
time, the really big time out here, par-
ticularly to a little storefront theatre.

"They're all professionals. It is one in-
dustry. It's the only industry in which
the research and development end of it is
not supported by the commercial end of it,
and I find the Shubert dribble, not dri-
vel, just a penny compared to the millions
that were made. I find it outrageous that
these monolithic, conglomerate, corpora-
tions control these studios and, not that
they pay the stars the money they pay,
that is fine, that's their business, the
star is worth it, I assume, but they will
not put out money for the research and
development of their own industry, which
is what we are doing. Am I getting ahead

125

Table 38

The multiplier process
applied to a theatre dollar

Receives

Spends

Theatre
Recipient 1
Recipient 2
Recipient 3
Recipient 4
Recipient 5

► $1.00

► $0.60

► $0.36

► $0.22

► $0.13

► $0.08

Total (rounded)

$2.50

was undertaken by William Baumol, who in-
vestigated the contribution of the Broad-
way theatre to the economy of New York City
and the nation .(The Impact of the Broadway
Theatre on the Economy of Mew York City,
Princeton: Math tech , Inc . , 1977). In this
investigation, which obtained estimates by
comparing data from a period when a por-
tion of the Broadway theatre was closed due
to a strike with similar data for non-
strike periods, it was estimated that the
Broadway theatre alone contributed a con-
servative $275 million during fiscal 1975
to the nation's economy. Approximately
$165 million of this accrues to the Mew
York City economy, and $57 million accrues
to economies outside New York City. Given
that ticket sales during the 1974-75 sea-
son amounted to approximately $57 million,
this estimate implies that total impact is
approximately a 5 times multiple of ticket
sales.

In another study conducted by the National
Research Center of the Arts , Inc . , survey
results showed that the operating budgets
of arts organizations in Washington State
were approximately $12 million in fiscal
1974. It was estimated that attendance at
arts events generated an additional $20
million in related expenditures (expendi-
tures for restaurants , transportation , lodg-
ing , etc . ) . No full analysis of the mul-
tiplier effects of these expenditures was
undertaken. While this study demonstrates
the principle that arts organizations con-
tribute to the economy , it does not provide
a specific estimate of the economic effects
of theatre organizations (as distinguished
from other arts organizations) in the state.

Another study of the effects of arts organ-
izations on the economy was completed by
David Cwi and Ratherine Lyall, Research
Division Report #6, Economic Impacts of
Arts and Cultural Institutions: A Model

for Assessment and a Case Stud
more (Washington:

^ in Balti-

National Endowment for

the Arts, 1977; see list at the back of
this report) . Cwi and Lyall modified the
well-known Caffrey and Isaacs study, Esti-
mating the Impact of a College or Univer-
sity on the Local Economy. The subsequent
econometric model for measuring the ef-
fects of arts organization on the economy
was applied to 8 cultural institutions in
the Baltimore, Maryland Standard Metropo-
litan Statistical Area: the Baltimore Op-
era, Walters Arts Gallery , Baltimore Sympho-
ny, Morris A. Mechanic Theatre, Baltimore
City Ballet, Baltimore Museum of Art, Cen-
ter Stage, and Arena Players.

The operating budgets of these 8 institu-
tions in fiscal 1976 were approximately
$9.4 million. Cwi and Lyall estimated that
the direct and indirect effect of this ex-
penditure was to generate a total of $29.6
million in additional income in the Balti-

128

82ES?„:

CHAPTER VI

THE CONTRIBUTION OF THE THEATRE TO THE
NATIONAL INCOME

An aspect of American theatre is its rela-
tionship to the economy. The theatre gen-
erates jobs and income like steel indus-
tries and other businesses.

There are many reasons this contribution is
overlooked. A substantial portion of the-
atrical activity is organized on a nonprofit
institutional basis. The avowed purposes
of these institutions usually have nothing
to do with economics. Unemployment of the-
atre professionals is high and the incomes
of most theatre professionals are low. It
is easy to forget that the theatre functions
as an economic institution as well as a
cultural institution. It is possible to
estimate that the economic effects related
to the theatre are at least $2.1 billion.
While the primary purpose of the theatre
is not to create jobs and income, resources
spent on the theatre impact and move through
the economy to produce additional income.
Theatre creates jobs and incomes in other
sectors of the economy. The explanation
for this is the same as it is for any other
sector of the economy— resources spent in
the theatre are respent elsewhere, generat-
ing additional jobs and income. Three stud-
ies of the effect of the theatre on the
economy have been examined in the prepara-
tion of this report to estimate the contri-
bution of the theatre.

THEATRE AS AN INDUSTRY

Theatre activity influences national income
both directly and indirectly. The direct
contribution of the theatre is simply the
expenditure of the theatre for all theatre
goods and services (actors' and other thea-
tre personnel services, scenery, capital,
etc . ) . The indirect contribution includes
audience expenditures for goods and services
that are relevant to theatre attendance
(taxicabs, hotels, restaurants, etc.), and
additional income generated when these ex-
penditures are in turn respent.

This process (represented in Figure XIX)
starts with expenditures for theatre and
theatre-related activities as is shown in
the left of Figure XIX. These funds are
then respent, as theatres purchase artists'
services and other labor , and goods and ser-
vices required in carrying out its various

roles . The theatre-related expenditures of
theatre patrons (restaurants, transporta-
tion , lodging , etc . ) are also respent for
goods and services used in the production
of these services. This spending is shown
in the middle portion of Figure XIX. These
funds continue to circulate in the economy,
passing from individual to individual. A
single dollar entering the system at the
top of the figure may be eventually associ-
ated with between 4 and 6 dollars in nation-
al income.

To analyze the flow of theatre dollars
through the economy and their consequent ef-
fects on economic activity in other sectors
requires considerable detailed data (see
Research Division Report #6, Economic Im-
pact of Arts and Cultural Institutions; A
Model for Assessment and a Case Study in
Baltimore and Report #15, Economic Impact
of Arts~and Cultural Institutions— Case
Studies in Columbus, Minneapolis/St. Paul,
St. Louis, Salt Lake City, San Antonio , and
Springfield, listed at the back of this re-
port) . In the absence of such information,
it is possible to use a shortcut called
multiplier analysis. This is the technique
used in many studies of the effects of gov-
ernment policies. A complete description
of the multiplier technique is available
in textbooks on macroeconomics.

The basic idea behind multiplier analysis
is that each dollar spent by an industry is
a receipt to some other individual or firm.
The recipient then respends some portion of
the receipts on domestically produced
goods and services; the remainder is either
saved or spent on goods and services pro-
duced in other countries. The assumption
is made that about 60 percent of receipts
are respent on produced goods and services.
The next recipient (the recipient of the
original recipient's expenditures) like-
wise respends 60 percent of his or her re-
ceipts .

In terms of arithmetic, the process is il-
lustrated in Table 39 (following) . When
all is added up, a multiplier effect (which
is rounded as a matter of convention) of
$2.50 results for each dollar spent initial-
ly. (As pointed out in Research Division
Reports #6 and #15, this method disregards
the many individual differences between
theatres and communities . )

STUDIES OF THE EFFECT OF THEATRE ON
INCOME AND EMPLOYMENT

The only published investigation of the ef-
fect of the theatre (as distinguished from
other arts organizations) on the economy

127

Table 42

1977 estimated theatre economic Impact (millions of dollars)

Theatre and

consequent

expenditures

Related activities

and consequent Economic

expenditures impact

Broadway

$

286.8

$247.5

$

534.3

Road

$

300.0

$304.8

$

604.8

Dinner

$

357.8

$

357.8

Regional

$

206.5

$126.0

$

332.5

Other

$

150.0

$111.2

$

261.2

Total

$1

,285.3

$789.5

$2

,090.6

Figure XIX as the inflow to "Business pur-
chases of goods and services." Baumol
recommends, in The Impact of the Broadway
Theatre on the Economy of New York City,
that these expenditures on related goods
and services can be estimated at 1.06
times ticket expenditures (because of the
absence of specific survey data) . When
this is done, the estimates obtained of ex-
penditures on related goods and services
are shown in Table 42.

Note that no expenditures are shown for din-
ner theatre audiences. (Estimated bar re-
ceipts are included, however, in the esti-
mated expenditure base reported in Table 40.
This reflects the fact that the price of a
dinner theatre ticket covers many of the
services for which theatre patrons ordinar-
ily would incur extra expenditures (food,
parking, etc.). Clearly, treating related
expenditures as though they were zero tends
to understate related expenditures of din-
ner theatre patrons since there still are
transportation costs to be covered and per-
haps other costs as well. The last step in
estimating total direct and indirect expen-
ditures related to theatre activity is to
estimate the multiplier effects of the ex-
penditures shown in Table 40 and Table 41.
In the absence of specific data, Baumol' s
report used a multiplier value of 2.5.
Following this example, every dollar shown
in the tables is estimated to account ul-
timately for $2.50 of economic effect.
Using 2.5 as a multiplier gives the esti-
mate of approximately $2.1 billion, as
shown in Table 42.

130

Table 40

1977 estimated expenditure base by theatre type
(millions of dollars)

■ V-fr&t&W* ' 'MttMi

Ticket
income

Other
income

Total
income

Broadway

$ 93.7

$ 21.0

$114.7

Road

$115.0

$ 5.0

$120.0

Dinner (including
estimated bar
receipts)

$110.1

$ 33.0

$143.1

Regional (Theatre
Communications
Group survey 1976)

$ 47.5

$ 35.1

$ 82.6

Other (summer
stock, etc.)

$ 42.0

$ 18.0

$ 60.0

Total

$408.0

$106.1

$514.1

more area. They did not estimate the con-
tribution of arts organizations to income
outside Baltimore. Assuming that about
one-half of every dollar spent initially in
Baltimore is respent outside Baltimore
(this appears to be a reasonable assump-
tion from survey findings reported by Cwi
and Lyall) , then it seems reasonable to
conclude that somewhat more than $10 mil-
lion in additional income may be generat-
ed outside of Baltimore, leading to a con-
servative estimate that the 8 Baltimore
institutions contributed directly and in-
directly approximately $40 million.

In spite of the varying approaches and cases
examined in these studies, the conclu-
sion that emerges is that arts organiza-
tions in general and the theatre in parti-
cular are connected to other sectors of
the economy . The result of these linkages
is that dollars spent for theatre have
multiplier effects throughout the economy.

AN ESTIMATE: THE ECONOMIC IMPACT
OF AMERICAN THEATRE

Table 41

1977 estimated audience
expenditures (millions of
dollars)

Broadway

$ 99.0

Road

$121.9

Dinner

Regional

$ 50.4

Other

$ 44.5

Total

$315.8

The starting point for this estimate is an
approximation of the total expenditure base
(shown as the inflows to the theatre in Fig-
ure XIX) of the theatre in the United States
during fiscal 1977. This estimate is shown
by type of theatre in Table 40 , which shows
an estimated total expenditure base of
$514.1 million. Expenditure base estimates
are divided by ticket income and by other
revenues and expenditures. This is. done
to facilitate computation of theatregoers'
expenditures on ancillary goods and ser-
vices (restaurants, transportation, etc.),
which previous studies have related to ex-
penditures on theatre tickets.

The next step in estimating direct and in-
direct expenditures related to theatre ac-
tivities is to estimate theatregoers' ex-
penditures that are theatre-related, as
shown in Table 41. These are shown in

129

REPORTS IN THE NATIONAL ENDOWMENT FOR
THE ARTS RESEARCH DIVISION SERIES

Since 1976 the Research Division of the
National Endowment for the Arts has been
studying matters of interest to the arts
community and issuing reports based on its
findings. Copies of the reports may be or-
dered from the Publishing Center for Cul-
tural Resources, 625 Broadway, New York
City 10012 at the prices noted below.

Checks should be made payable to "Publish-
ing Center." Prices include postage and
handling; no state or local sales tax is
applicable.

#14 Audience Development: An Examination
of Selected Analysis and Prediction Tech-
niques Applied to Symphony and Theatre
Attendance in Four Southern Cities. 48
pages. January 1981. ISBN 0-89062-097-0
$2.50

#15 Economic Impact of Arts and Cultural
Institutions: Case Studies in Columbus,
Minneapolis/St. Paul, St. Louis, Salt Lake
City, San Antonio, and Springfield. 102
pages. January 1981. ISBN 0-89062-106-3
$3.50

#1 Employment and Unemployment of Artists:
1970-1975. 32 pages. April 1976. $2.50

#2 To Survey American Crafts: A Planning
Study. 32 pages. July 1977. $2.50

#3 Understanding the Employment of Actors.
36 pages. September 1977. $2.00

#4 Arts and Cultural Programs on Radio and
Television. 92 pages. September 1977. $3.50

#5 Where Artists Live: 1970. 80 pages.
October 1977. $3.00

#6 Economic Impact of Arts and Cultural
Institutions: A Model for Assessment and
a Case Study in Baltimore. 96 pages.
November 1977. $3.50

#7 Minorities and Women in the Arts : 1970 .
32 pages. January 1978. $2.50

#8 The State Arts Agencies in 1974: All
Present and Accounted For. 160 pages.
April 1978. $4.50

#9 Audience Studies of the Performing
Arts and Museums: A Critical Review. 106
pages. November 1978. $3.00

#10 Self-Employment, Migration, and House-
hold and Family Characteristics of Artists :
1970. 32 pages. November 1978. $2.00

#11 Conditions and Needs of the Profes-
sional American Theatre. 132 pages. May
1981. ISBN 0-89062-076-8 $4.50

#12 Artists Compared by Age, Sex, and
Earnings in 1970 and 1976. 54 pages.
January 1980. ISBN 0-89062-077-6 $2.50

#13 Craft Artist Membership Organizations
1978. 48 pages. January 1981. ISBN
0-89062-089-X $2.50

131