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j Report #11 

Conditions and Needs of the str"™" 1 

Professional American Theatre 

Research Division 
May 1981 


Digitized by the Internet Archive 

in 2012 with funding from 

Boston Library Consortium Member Libraries 

Conditions and Needs of the 
Professional American Theatre 

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

This report is produced by the Publishing 
Center for Cultural Resources as part of a 
pilot project supported by the National En- 
dowment for the Arts demonstrating economy 
and efficiency in nonprofit publishing. 
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Library «f CMfrai Catalaf leg !■ PafeUcatfoo Data 

National Endowment for the Arts. Research 


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 


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 


PREFACE /page 2 

















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, 

. 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, 

. 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, 

. 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, 

_____^ . 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, 


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 


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 


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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•^"Donald TSrtxly. «> 

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- Th«^trical^and:3tage Employees v ; 

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i5- Stephen 5 ond he iff, 
'Dramatists -Guild 

EV.-.-1 ' " ~; .--* ._ — .■..■- --r 3 . - . • 

r> 7~ - El Teatro Canpesino 

^^arirard^OnlyerBi^Jv.;' ; ;- :,y^ 

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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- 

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- 

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 

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- 


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- 

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- 

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. 


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 


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 

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- 

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 

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 


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 


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. 


Tax policy should be modified to provide 

encouragement to the further development 
of professional theatreT 

Taxes are a burden to both commercial and 


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- 

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- 

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 


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 

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- 

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- 

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 


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 

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 

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 

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. 


Table 1 

Regional distribution of theatre faculties and companies 1977 

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











New Hampshire 

Rhode Island 
















w. North Central 






N. Dakota 

S. Dakota 










South Atlantic 


Washington, DC 




N. Carolina 

S. Carolina 


w. Virginia 



























E. north Central 


















W. South Central 

Arkansas - 


















Arizona - 





New Mexico 













E. South Central 

Alabama - 























Puerto Rico 

__ — 



— — — 


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

at .■-.. so* 


'■ ■' 

*1 . 

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

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

■ ' - ■/£■•£: ■•■■ "■*'> - 


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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- 

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. 


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 

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 


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 

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 

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 


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 

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 

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. 





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- 

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 

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 

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 


Table 2 

Attendance by theatre type 1976-77 

(seat 8) 


f Attendan 
I Jmillionst 




49,000 £^S^y£ 10,800 




Large musical 
arenas and hardtops 

te'y^MJ^ts 700,000 t^£z£££ 9 y 000 fS^M 



,£'■£.-%. ^>? 

ESSS^ 45,000 ki a 5gJSRftl8 32,000 {^3^^^ 

Small summer stock 





3gat|fl&4 22,000 t^«-»i^# 


2,000 i^l^'^'vUV 


r yg-.uzz 



^MU^. ""Vj 

Nonprofit touring 

fiH. - <• ■" <;"-■ - 4& 



Other small 


[:" ; ; -520 *& 

— - 



r" 1,541 ; 


l^r 3^.99"^ 


*-:.63»8.--:>v . ;« -j 


l: 2,500,^ 



*-7; .„ 



- — 



1" 9j0:,vJh^^ 

High school 

1% 3niooo:vf 

— - 

^:jo f T0Op;^ 


^5*0 :--: v 


f ^5,000~ *;< 



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 . 


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 ■ U l»^^»— ^g»^^^» 

f - 

r — ■ ■.•=-» =7 V--S--» -<r..-« ' 

* ~ -* - 

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

■*. . -i- - 

■ •<- »d -«*■* .; :r- ; 

*- . --" •■ . -£r« .-*-•>„ -.*-*- e«* 




»_. j v i. -J' •,- 

Truck and bus 

t"' | ' • .: -•*?•».-"•: ?J* 1 

~-S «2£ ,vf' -r«-"c5i- .* t-j 

?>v« ■' * ■?? *^ *> »-< 

J ^^^^| — -V ••-"wt -.— /' 

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


Large musical 

W H ... — - .•--_-' -.'■■'—.- - 

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

Small budget 
Nonprofit touring 

f . 

. -•. % * +■ 

^ - 

^* , »'' -i ■!,»£",. ■T'i-. - ... ^ v L 

J ;"*3 ^"» i .'-* 

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

3^3H — *~'- r - 
J8I ^ 

• .a-,- . • st- - ■... 

: -sc : >" 

| J 3% [ v* 



I "^ 9 

. * - . " ' ■>..-- 


■^" . .*■- 


1 fcl3%~-l- 

• v7J.rt-.ii ■--■ 

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

--'■-) ^ . " • 

• — ■■*"■ ■» 

^ .«_- yr 





■~A~. --..:;-» 


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. 


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. 


Figure II 

Annual Broadway productions 1900 to 1977 


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 

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. 


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: 





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 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, 


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 



... — t ■ .... ■-■_*■,.■ 

Gommer- Capacity 
cial (seats). ~ 





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




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



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





• -5 . ^*-«= ;. •;• -8 « JL18 -ft 



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




3 7,359 



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




3 _ 4,90oV 



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




. :.*•"• .~a4r»o'*i 



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





r«. .•■--. - - **^S* * , *-JV*m ^ 



Mountain t- 11 « j*-r .21»243,^ 




X* ... l,814>c 



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



*-• / : '; S *^1:.-S'"j- •;-*■: V.2£ 



Pacific £ 19" 49,541 ?v 




-10 «■■■/■ .rrr-18 *7fit>"~ 



Total F. H857>?cc 462 ,114 * 




•37- *f • *^-»^08 1 306 *t 



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- 

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- 


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 

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. 


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- 

The Indepe nd ent 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 


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 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- 

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 


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 '" u w uy-'v sqi; w 



Table 5 

Regional distribution of summer stock companies 1977 



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

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






28% P^sSiHn^ 1,236,970 



a§3Bars^^^»^v ; 11 





y .-\>22/8Z2'> 


West North jr. r£ 
Central hS2I- 

:^;«.V, : '::-::r,- ? :a|> . 2 

*-*/ 31 



f 12V7a3& 



r. - 
i ■•■■ '£*■ 

^V-V ..- - ...... ■_ 





East North I 
Central f 29 - 

.V^^TL*.- 5 


; +* . 





West South » "-'. 

Central fc 1 

i ■ 

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







r 12 


:\:^;--^~:^w:: v '. *-€■ 

^ -34 

*■ -^ 



f ^9,172^ 


East South' i 
Central | 4 

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


- V- 



L-.i?'? 25 ^-. 




.^^-: -1. 2* 

£ v" 20 

" rjjp 



; ^219^; 




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







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. 


Table 4 

Regional distribution of dinner theatres 1977 


jr ^Equity* 

Non- Perform- 
Equity - ances .- 


.^aoapaci-ty^f Estimated 


'; ; ^i«eats} ; 





190 fe^i#Jisip3l 




2,750 ] 

; '--,-- 


l ;;5**49 


West North 










[ r '5fi>i434': 

■ v 


East North 



- '-■'-' 


t._ ■'-". .'v"' ; '..-,. 



West South 

L >^7;r^. 





L ^ 3,223 • 




T '-2/750 





East South 

* * *M '.'-'-'■ i«V= 


* a,750: 


J*'-..-\. ''<*!, - --<■ . '7*... 




5 .i.^SS^W^ 





j;;^:-2 # 429. 

\ ■*■■■*£ **" 




r 32,000, 


T f 444V606; 

"'**"- y..";~" ' • 


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. 


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 


Table 6 

Regional distribution of summer musical theatres 1977 

Region V' 'itlea 

Middle Atlantic twR^^S^ 10 " 4 


•^^ :■- C 


West North Central *V;^£53f' 

South Atlantic 

East North Central 

West South Central 


East South Central 



in weeks 

f anoa»':£-u*' 













>»-'- ^BO SFrg 12,172 





»* 1* 









19,333 ^J-B##3^7£ 

h^r si7^4^ 

^; 254,480 



t ,,- 017,000 


Table 7 

Regional theatres with 1977 budgets over $250,000 





ities -.:•' 



•_ ^Perform- ^ 
? ~ fc -a«iee8"7:^ : -?: : :' 







Middle Atlantic 


-*~ 71^'".. : 









1.1 t 



~ 3.V802 ;* 




West North Central 



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




v921 ^r 




South Atlantic 









East North Central 









West South Central 


•^ -..3 ;- 




569 17 









"ao9 '--"" 




East South Central 


-r- 2 



412 ; - 









2, =421 v r 





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



13,245* ••- ->■ 





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 

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 


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; 


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. 


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 


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- 

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 
Actors 1 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- 


Figure V 

Sources of musicals produced on Broadway between 1964 and 1977 



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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 


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

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 

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 

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. 


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


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 


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 

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. 


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 

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 


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- 


Table 8 

Sources of theatre information 


Friends or 


Mail order 


Critics ' 

or TV 













New York 
City 1973 







New York 
State 1973 







State 1975 







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. 


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- 


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- 

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. 




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- 


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 

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- 

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. 


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- 


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. 


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. 


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 in cre ase 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- 


Figure VI 

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


' i^^^MBBbniitjativar 


^ jfigtajaha nd a'-iand verew 



IK: ' '*•■!.•■ ■ 



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 


^^^^^^^^^^ fc a j g a^an n V .and crear 

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


' 'Transportation and travel 


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



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

^MMi 1 1 < i '«i aiH»-^'j?j- 


- — « .*- 

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 '— : ~."' 




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

■*mtgggEm Musicals 

.♦sarate of ; 

1965-67 1975-77 

rate of 

istl«-. vrfutiA 

plays «nd** 
musicals ^ 

Performers ' 

Other artistic 


- $ 34,756 

$ 44,201 2.2% 


553 $ 30,411 5.5% g9ttjii2&| 


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

$ 66,686 9.0% 


and crew 

128 $ 20,871 12.8% 

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

$335,800 5.3% f*&JBi'&$*l£ 

and fees 

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

-- :!■?*,«•- 


^:/«M^;^pf^B3^ft.$i^ N . A . 




and travel 

Legal and 

$ 16,936 7.7% 

fc -' ^.rv *'■?::•'-£;• 



$ 10,408 $ 19,513 5.7% 

L "Xl»A» 

and promotion 

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


&m &££*&<mik/0k aiab?iS $ 33,408 

$ 79,481 


f U.A. . 

■ ,""* 


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

$ 11,534 




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



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 


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 


TCastT^of vi 


Cast of 

Plays cals 

Cast of 



1964-65 £i^i31*#i£3% 



^sSissSSSISm 5 - 6% 11 - 8% 


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

13.3% 18.8% 

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



13.6% 16.7% 

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


|$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% 


22.2% 15.4% 

16.7% 15.4% 



24.1% 11.8% 


iMt£-£w r - , ■ 

13.8% 17.6% 


Figure VI! 

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


^^Transportation -and , travel 

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


2 ■»» .. 

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


-^Stagehands and «rew 

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


I feffff^fpfe toes -.and foafrftoj 

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

-Advertising and promotion 

[;•-££ Sf ?!^* *£ : ^OrcnesfaSfcion 


«otaa^i:s .;jt^* 

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



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 

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


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 

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


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











. ^K^^O^g 








■J 1)^ MOM^^f 












Figure VIII 

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

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



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

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 


».- . ;. -..*-" " 


Performers * -salaries 

- Other artistic personnel 


Stagehands and crew 

7 # - Departmental 

J Royalties and fees 

."-■ Taxes and .benefits 

Advertising and promotion 

_,« , ... — - - - . . . Other 

..... fe -gLS^l 


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


•;r-: : ;:-..^ vV£:£?^ 


t ^uM X^w^"* — -.-"•^■t.J'W* .v^tri* 

-"-■•-' • — ':•<<» 


iv5J'\i ? '. 


J 15. 






-^it>-«*. »-»**!»^ ^v.r*£*i. - »»i-: 


£&£: . 


^* C» n 



—*«*■■ <**-t--™m 



•" -"-- \ - 

' T< i.' " '" it 

*". *•*"- ■«. 


«--'»■ .- 

- ■. 

" r<5 ^ 

•* *■•" 


►^iamiB »>»wy-~ 

r. J«.--«w:;^. 

-. ?;>'^& 



»— ^-s^g; w.>»-i ^^sjrJ^fii 

*JT--. _•; 


¥*'*?'*$& "^-l:^ 



»W«30W> ^ 



* -**i 




.- ■ . 



«'»••» ««r.V *x 










Table 11 

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


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 • 


$ 6,398 






' -4.5% 

Other artistic 

iS l r 157 

•■$ 1,758 


$ 4,762 

$ 8,375 




i$ 1,764 

$ 3,993 


$ 2,379 




and crew 

$ 1,265 . 

S 1,701 


$ 2,634 

$ 4,977 




5 ,376 

S 1,895 


$ 1,400 

$ 2,347 



and fees 

!$ 2,945 

S 5,652 






Taxes and 

IS 497 

4 2,121 


$ 935 

$ 4,003 



and promotion 

!$ -2,201 

S 7,322 


$ 4,135 





$ 623 

/$ ^833 


$ 1,209 

$ 1,224 











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- 

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 


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 

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. 


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- 


Table 12 

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


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



1967 dollars 





















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



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

r ■-■ -- - - ' - "■■■■■£< -. •■■ 

&!£&* $57,000 



pES^HW^^ $73,000 



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








£$«BVi>D0 ^^«g^gf8Bn^B0p 





'^^fe^^a^oiop s£3^ 



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 

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 


Table 13 

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



Production costs 


Weekly operating margin — successes 

$ 8,397 

Weekly operating margin — failures 

Other income — successes 


Other income— failures 

$ 8,059 

Closing costs 

$ 11,534 


Production costs 


Weekly operating margin— successes 

$ 14,633 

Weekly operating margin— failures 

Other income — successes 


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 


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 . " 



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 



Unearned income 



Total income 






Surplus or 

($ 1,814,258) 


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 

■winM W . ai 


T3?otal -• 

Learned -income- 


unearned income 



t&* r 920 r 997~^76 - 6% ~ 

$ 2,732,489 






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

$ 5,335,473 



.100% — 



L$14,110^£60-.. -67^3% — 

$ 6,856,740 


^20, 967 ,400 

100% - 



\z$2A ,409*9£5 - -*4 .9% **• 

$ 7,798,707 


J $22,208,672 

-100% * 



j^$16^953, 917—63. 5% . 

$ 9,742,137 


£ $26>€95y954 

^100% ~ 



L$17,423,341 — 63^21^ 

• - 







f-$23*492* 928--.£&~l%^ 







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. 






Production costs 






Box office 



Recovery period 
for successes 



Operating margin 
for successes 



Theatre share 



Table 15 

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


Plays : 


operating g&£$& 
profit . 

;r- ^Recoupment . 







$ 5,783 12^2 








[, -$'5,868 • ;^' : ;■:;;- 14.5 -:..- 




1 "•'.$ 7/093 ?• ; 15.8 




£ ->*$ 7,593 15.9 




:. $ 6,445 ■- 18.3 





p.,.v $8,699 17.4 




r $ -9,190 18.2 ~ 




» — * 9,968 19.0 




fc~ $10,120^ ~-^ 20.0 




f- :$lia25 ^j r— ^~ 20 . — » —6: 




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




Table 19 

Average expenditures of thirty larger nonprofit theatres bet wee n 1965-66 and 1973-74 

HI • ■■■ 





Performers and 
other artistic 

f " 





5* -r 

.$209 ,868 

^ -29.7% 




. . 14-6% 



fr v.* 


-i 17.0% 

and crew 




$ 69,518 



-^8 82,323 


Fringe benefits 

( $ 



$ 33,572 



8 39*421 


Total salary 


„ 58.3% 







— ' 





$ 55,007 


• . 

8 50,585 


Royalties and 




$ 16,854 





and travel 




$ 11,137 


^ - 



and promotion 




$ 61,929 



8 71,025 


Facilities and 
related costs 




$ 48,272 


- $ 49 ,935 






$ 6,649 


$ 4,627 






$ 58,381 



8 67,927 


Total nonsalary 








Grand total 







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 


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 


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 

1970 to 

Earned income 



Unearned income 



Total income 






Surplus or 

percent of 

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

($ 302,249) 


■ 22.9% ; A 



,26.8% . . ._. 

($ 219,770) 


1:32.4% ;.; ;T 

$ 75,354 


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

$ 717,207 



($ 29,988) 





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


Table 21 

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

^with .budgets *£ 

,000-3300,000 ^ 

10 theatres 
with budgets of 


,; :'ifi Jtheatres;,!- 

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


^116 ? C11 J1W ^S1,5%^ 



U«3314^3«^. / 53-4%, 

Administrative and 





$ 9,814 

-- ** n-~+ -"".'— •■-«F r ' 


and crew 

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




f. $74,451 



M 3,76o r ^-ai7% ■■;;" 




I $ 18,581 


Fringe benefits 

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




1° ^'12,340 %" 

'■* ? 2.1% 

Royalties and 

P$''v9/€lB«^*4i3% V^- 




M-$ 26,-652= 


and travel 

£$ '^5 ,-674 *stf -^^215% Z : s 




1 * '9,192 


and promotion 





j $ 57,813 


Facilities and 
related costs 




f -$ 30,288 



N':^W22-*£*iio i9%>- r 




f $ --5,570 



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




t\ $ 29,938 



[$225;321- 100.0% *c 



| $589,406 













$ 72,254 

9.8% f;M B0VB61 

"3*3% •£ 

$ 89,499 


$ 42,251 


t -$ :54,725 


$ 59,099 








$ 55,007 


* 75,114 


$ 71,468 


$ 18,389 

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


$ 16,607 


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


$ 66,295 

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

$ 80,874 


$ 47,550 



$ 62,274 


$ 4,827 

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

$ 5,487 


$ 68,642 


"*o;is4 jt :-'~ ,3 :~"*9..3%^ 

$ 85,223 




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





^866,053 %* 100.0%yS ; 



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 employees 1 fringe benefits, 
which have increased by 69 percent since 

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 . 



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 sample r 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 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 . ._ 

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




. - 

Subscription tickets 

$ 28,992 

-29-9% ;-.-. 






Single and block 

I $127,238 ... 





5172,472 -. 


Other tickets 

';•$ 45,698 

.15.4% ; 

$ 52,058 


* 76,089 



$ 11,824 


$ 51,624 



$ 17,376 


Recordings, films, 
and radio and TV 


L $ 158 


$ 252 



$ 118 












- ■ 



[.$ 23,456 

- 7.9% 

$ 39,270 



$ 35,646 


-.,-....- . — ,.< 


. - :- 

— ■■• - 

>rand total 

1 $237,366 






'Less than 0.1% 


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 


Performing artistic 
Nonperforming artistic 
Production/ technical 
Fringe benefits 

Total salary 



Facilities and related costs 

Transportation and travel 

Subscription and promotion 



Total nonsalary 









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

14 theatres 
with budgets 

; of 

J.5 theatres 

, wi th budgets x>£ 

?$1. 001-52.2 million ' 

3 theatres 
with budgets of 
$2,201 million + 

■ Total 



$ 608,830 







$ 27,413 


f$ 61,826 ^ 4.S% 




$ 278,485 


$ 76,551 


b 108,973 





$ 561,335 


$ 20,719 


tS 32,067 





$ 128,190 


$ 27,835 


1$ 28,244 





$ 253,323 


$ 54,227 


;■$ 76,631 





$ 334,389 


$ 25,880 


rs 36,100 





$ 105,525 


$ 80,111 



?$ 131,709 





$ 642,028 


$ 49,319 


!.$ 91,008 





$ 381,368 


$ 6,553 


|$ 11 ; 962 ~ 





IT'*""" 42,985 


$ 31,756 


jb$ ~95;352 '" 





fcT*TH3 ,700 




f $l, 282,702 








Figure XI 

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

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

Local foand»tion» V.^V**-;..:; 

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

00^"*"T I .Jll.g ■» 

-•".-» *-^— -^ 

- r ?s. r. -••-. 

.w; . -*«•*-- ■*» .- *_-.J -.— - 

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












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 

Other tickets 






Recordings , films , 

and radio and TV 23.3% 

Nonperformance income 9.9% 

; " " SbVbVHHbVHHbVHHHHHI ^ ■§ 
















$ 66,749 


$ 73,197 


$ 77,568 


$ 42,281 


$ 38,839 


$ 43,949 


$ 1,097 


$ 639 


$ 1,122 








$ 44,745 


: $ 53,132 


$ 60,616 










Table 24 

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

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


' - -• • . 




f-- ..• 

• - 

- . - . r • 








85.1% -■ 

$ *58,223 









$ 513,605 









$ 68,175 











Percent of 
grand total 




'. ■; 




_-.. r 

- — . - 








$ 4 0B, 540 


United Arts Fund 







$ 653,576 








20.3% \ 

$ 930,779 


Other local 






12.5% X 

- $ 290 ,143 




















Percent of 
grand total 





-. - 











Percent of 
grand total 




30.0% ," 



Corpus earnings 







$ 3,405 


Percent of 
grand total 








Grand total 

$2,732,489 100.0% 


100.0% $6,856,740 100.0% 

•Less than 0.1% 


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 

' ". V T; "?. .jV^'i 

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

-.~w -i*# 

k. . --■■-. 

..*- » • r " -■" **\ 

[ -■:■:■ .y,-* 


/. ******•*;•:>» 

b — "*'■" '" 

;-■*• .'■**.(, *f ,*« 

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


\ : • *S?~ 

\ " - "' 

' '-"■'■': 

■ ;. .. .«...,- £ 

•" Hf 


, — .--. - ...--- ^'■* v *'-* -i 

■■-A » 

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


.-.-,«- > *.,-»■■. 

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- 


Hgure XIII 

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

- iw r m vmm*zm*^mt • ,^ • "1. ""1. ■ ■ ■■■ ' — !■>-- '".' 

rntmt. mn^nf^^mm'^ymrm 

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


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

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



1976-68 1970-71 

1971-72 J.972-33 



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. 


■ HHMHi^mi MHBI ■--.-. ^ja^^^^^gi 



.:-.;« - • '- 



\ 3976-77 y 

. j:-}h}T% •*; 

!-■ : - -•' ' -'"'-•-. ' '. -. 

•..'••■ ■'■' 


»•■»'*" : ; *V: '-: ~. 




\ $1,342 ,340 






\ % 2^78y075- 





£$ 485,250 





i$ 3,409^536 

.33*6% , 




i$ -2X2, 44 8 






| ^$ ->"T478i«20-' : 







' '- 





i >$ 4,466,331 



i ■ - . .j -. 






.'.-..,:" - - 

» - 

1-: _.:'. ■'■'■'■ <■■■ 

-.'■ .,.;-- •;'■'.' 

•- .. ■ • -.. 




j* 'ASSIES!- 













: i 




, $ 3,186/729 





•$ J816,470 . 

33-4% ^ 





i $-3,307, 681 

. 17.6% 




y$ 673,756- 






1 $ a.,111,775 







T 1 



r 126, 076 


[..-:$ 3,934,517 











. $ 7,435,140 







r ;■..-.•..•■•. '.. --■■::■'•■- ■,. 

■>-."■. ■■■--. •-; 











$ 965,033 



**../ = ' -w ■• — : <-; 






i -' - ,j . *■ »- . 

.. ... . 




r$ 25,882 







— - 



B ' ■ ■ ■ ■ 









» $9,742,137 







"Less than 0.1% 



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- 


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


Earned income 

Unearned income 

Total income 







$ 86,482 


$ 80,173 






$ 67,173 


$ 80,592 

















Table 28 

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


Earned income 

Unearned income 

Total income 





$23,829 61.3% 



$44,715 65.4% 










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 groups 1 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- 

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 

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 

Earned income 

$ 5,264,313 


Unearned income 

$ 5,934,258 








Surplus or 

($ 303,015) 


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 . 


Table 29 

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

Salary costs 





:H973 '-■ '->-?-*?-*■& ;j?.«t -~4 £~ 










Production/ technical 

;$ 500 






$ -2,777 -5.4% 

Fringe benefits 

M „ M , t , 

•• -•.. 

— - 


\tj* m m ■ ■* f;"' %,-;-/ b :«^aw i '. 

Admini s tra tive 


... .. ... .. . 





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

Nonsalary costs 


.. :-/:--:; : f \: V -v— - -.--?- 


«S .-950- 

-— 3.0.2% - 





$ 2,909 5.7% 

Facilities and 
related costs 

$ 400 





r ■ 

$3,181 6.2% 

and travel 

i- • '-'"■ : - 






$ 4,352 6.5% 


i:$ 150 

...; i«6% ;.:.■* 





$ 1,474 2.9% 


} '.- 

— . - ... . 

- — 

— - 


Educational expenses 

■. ~~ ■ 

'— ■' . 





-^ J.,688 . 3.3% 


l :' i- 

., :,': ' ' 




t . 

T $ -425 0.8% 


'.-$'-, 466 

.5.0% .- 





$ 775 1.5% 



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




$51,046 100.0% 


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 


of earned 
income to 

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


expenditures ..expenditures 

$ 6,309 






($ 4,987) 



($ 7,677) 



of earned 
income to 

Percent of 
to total 

Surplus or 



: $5,336 





'■ 63.8% 

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

14 theatres 

16 theatres 
1972-73 and 

Earned income 



Unearned income 



Total income 






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. 


Table 30 

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



.: , . 


r ~ , 


' :-- ; 


$ 6,558 




r - 

$13,3fll : 


Fringe benefits 

$ -477 


$ 476 



$ .573 



Facilities and 
related costs 

$ .2,282 


$ 1,270 


$ 1,926 

$-2,673 12.5% 

$ 4,910 



$-.3*103,. 02.1* 

and travel 

$ 3,403 





$ 923 



$ 1,291 





$ 1,383 



$ 110 

0.5% - 



0.5% k 

$ . 72 



. . ., A 

- * * 


. • T— ' .' . ~" 


$ 680 





$ 490 



$ 3,322 




9.4% I 

.;... $ 3,880 






100.0% I 




H ~ WKM ■■■■ HIHHi 


: 1975 




- 322,779 





$ 4,940 


S $ 3,500 





f.$ 3,688 












i - • — 

$ 3,622 


$ 4,616 





$ 4,124 


- $ 4,066 - 





$ 5,916 


r " - • . - 

I $ 5,174 





$ 2,062 


! $ 3,414 





r ■ 




$ 3,750 



$ 930 


! -$ ?.645 ' 

-4.3%-- «■ $ 



$ 1,910 


$ 1,423 







i $61,755 




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. 


Table 31 

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


Salary costs 



; 1973 _ n - 






[ $24,204 30.4%„ 





$ 5,919 


$ 4,010 ~ 5.0%~ 

Fringe benefits 




$ 4,910 


$ 5,892" "7.4%"" 



$ 7,713 


$ 7,570 9.5% 

Nonsalarv costs 





$ 6,352 


$ 5,596 7.0% " 

Facilities and 
related costs 




$ 9,386 


$10,320 13.0%^ 

and travel 




$ 3,868 


$ 6,595 8.3% 





$ 4,786 


$ 3,751 4.7% 



• $ 2,250 _ 2.8% 


i^r*" - 

. j_ •» - --* 'li'..* 

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





$ 1,935 


$ 2,920 3.7% 






$ 6,505 8.2% 






$79,613 100.0% 


1 ■■■■■■i^H ■■■■m 











$ 599 




4.4% ~ 




$ 6,409 








$ 5,391 


\ ■ 


$ 5,912 





$ 4,701 


*■ - 


8,0%_ ... 




$ 1,245 




._. 3.3% 




$ 119 



— - 



— — 

;.- v 

$ 398 



$ 1,478 





$ 3,436 



$ 4,148 













Table 32 

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


Salary costs 

. 1971 

r - 


w - 




■ ' "** f- 




51*2%: *? 




^88,105- T 










$ 11,012 

6.3% , 

Fringe benefits 








4 - 


.5.2% J; 








f ■■-. 

$ 15,251 

*.7% ,' 

Nonsalary costs 











$ 3,594 


Facilities and 
related costs 







:$ 7,961 

4.5% r 

and travel 



9 ? 3% 




p$ 8/641 : 





. 5 J% 





$ 13, 515 ; 




'.: -,;.•. 





:$ 3,540 




:. - 





Lvfi 2,528 



; $ 


-4^4% .; 





$ 2,786 



1 *> 

- 1,158 

' a«o% 





■•:# 3,254 




100*0% > 









j? X975 
$ 30,000 



$ 36,800 


$ 4,638 


S 6,367 


$ 5,250 


$ 2,972 


\"J$ */B25 


$ 7,993 


$ 9,694 


\ ■$ 11,000 


$ 17,750 


.. -. .« 

$ 9,762 


lf$ 7,000 

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

$ 12,600 




r , 

b$ 13,200 


$ 14,426 


$ 2,711 



' ::: MM'y : 




$ 6,861 


?f$ 7,667 





$ 1,047 


T4 1,000 

1.0% j- 




$ 1,547 


s*i a, soo 


$ 2,347 


$ 2,800 





$ 8,765 

10.5% 1 

'■* ^7,150 

^.1% V 







100.0% ^V 




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

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 



<-. . - - =.---■ *— . .• -. 

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

2 theatres 
with budgets of 


£ as^ot -; 


Production/ technical 

i -09% 


Fringe benefits 

f- i4.10% 










Facilities and related 




Transportation and travel 




: 15.70T r 



-. 14.00% 



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



k .xi.aotv , 0-, 



- _vT,. ^jjgifju^zfv nw 


. 1975 


$ 80,494 








$ 11,965 








$ 11,574 








$ 24,670 








$ 11,572 








$ 13,757 








$ 14,862 


[ 3-25,025 





$ 11,793 








$ 5,200 








$ 3,600 


• -- 

— ' ;:" 

" •• .:•" rti-iv' 




$ 5,850 








$ 1,738 















Table 34 (continued) 


[■ Regional 

l ",-- 3 -theatres - 

»- nrith budgets of 

h $20,000-$60,000 


7 theatres t 
with budgets of \ 


4 theatres 
with budgets of 



$ 7,730 





*■ - - r 

$ 87,596 











"$ 19,684 


Fringe benefits 


!$ 1,137 






$ 9 ,739 ? 




$ 4,732 






$ 40,586 




L- - 

$ 4,242 






$ 12,606 


Facilities and 
related costs 


5 7,640 





k ■ 

-$ 20,650 


and travel 







$ 17,581 



3 3,742 





• .• • 

$ 26,515 





$ 4,160 






t$ 3,540 




$ 395 





« * — i- 

? 450 




4 1. ,751 





V ' _"■" 

$ 11,457 




$ 3,927 






$ 7,010 




$44 ,332 








Table 34 

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


mmem aeork city ^ •?; 

**?& ^theatres V -•->•■; 

* *rith budgets of " 

^$19 T 00O-$50,O00 

,i *£&■ 


New York City 

13 theatres 
with budgets of 

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


\ ^$13,128 

»31.8% * 



<&;£Z4 80,29Sl r n^iV 




$ 7,630 


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

Fringe benefits 

\ :$J2J214 * 

> ■ 5.4%"-'- 




£^$-33 ,345 c- 



f ■'-$$ 4,464 





fr W$ 38V102 




}■?:'*» ' - :: "'^' 

• ■ ■ :&'* 


[? ^2,901 - 

7.0% v- 




£ ^;$ 21,850 ~ 


Facilities and 
related costs 





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


and travel 

■ !3M'&r 




£>£~3$ 12,318 

4; 2% 


| ^^3^902 --- ;*■ 








a.o% - 




L ^-^35 12,600 




-4,000 ; 



g^l^WO^ t£ ;-2v9t^M 

$ 3,263 






(£*• ^l, i 834'' ; ; --' - -*v4% :-."-• 

$ 3,473 






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



■- ..-■ 



(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 

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. 



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 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. 




4 theatres 
with budgets of 

*6 theatres - --.. - 
with budgets of 

Total of 
54 theatres 

$12 , 897 


$ 54,402 






$ 13,740 





$ 3,723 


$ 9 ,859 







$ 30,421 





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

$ 2,667 


$ 9,379- 





$ 3,983 


!$ 20;i66v 10.8% 

$ 118,731 


$ 1,250 


$ 17,870 





$ 1,725 


'■■* €,€55 





$ 1,350 


$ 2,433- 

^±1.3% -■■■ 




$ 3,500 


$ 2,660* 

1,^4% ~-sk 




$ 4,291 





$ 1,832 


$ 14,334 













Figure XV 

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


Figure XIV 

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

p i i L..« r sw^ , A l ..-".y,!ffJ ' *- *' "'' r - ! " ^' "'"vTr"*? 

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

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





;_"v..v».rT v., : ' ".^5f" 

.Peccant i~£':2"-$t"' 

— » 3 " ■*iv■^'■>" , ^• '? 

3-;, '. ,*: 





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

.*l£t**--i3-- >«a.-fa. 

-— .-^-*** . ■- 




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- ; t wf Aye * XWil'4^«T . 


Actors ' EgultyJ- 

of Musicians 

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

Alliance of 
Stage Employees 
and Motion 
Picture Machine 



^ *; . . 

- • ■- H 

— - 



£&& ^ J00D ' '^T*- ■ 




M^^^.J,: ; -, 








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

- — 

j3T:-Jrr ■■'" •-.':: 

.-• ~£ 



K 3.1,511^: ;:;r.™ 


1' 18,250 

. - - ; 



%2A;139 : _ v : ^\ 

: — - '■■' ' 



I 14,504 - : :-- ^ 


V 23,000 



[14,608 ^- v 

■"--; — ■ "." 

. -' 


r 14,841 


K. 24,000 

-■ - 





1 15,866 





I 1.6,366 







| 19,304 




j 3.05% 





Figure XVI 

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


Figure XVII 

Actors' Equity Association and civilian employment 1961 to 1975 

. mdlm i>wfc : —pl uyeut -^ — ^ a 

z^**&£%&' ' 

a. ""•*•-•. ... 

VA*3S -■■_ * * 

- -MS'^i^yS^^ 

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


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. 




of Theatrical • 
Press Agents 
and Managers 



: — . 



1 — r v _ 



„...,,.. ..— ., _.,_ 




- •:■ 

- 1,760 



























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. 


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. 


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 
m emb ers 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 , 



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. 



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 


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. 


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. 


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 


Table 36 

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


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






*•*?*?■ ?*;*»« 



^39;-502r*| 26,586 



^aystfeMI 31,352 pE^pf 






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


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 





Growth rate 




■Jo;-. ; " 

% ssaeEwrafi 3.11% p*3S»n*# 


* 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 

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- 


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 

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- 


Table 37 

Growth rate of selected weekly salaries between 1964 and 1977 

I ^f^SHBIKS^il^ 

! Rate ot " 
growth of , 

• weekly 

Years used 
to compute'/; 
growth f 

Minimum .. 
weekly ''':_ 

Year of 




... , - . - 

Actors (nonroad) 





Actors (road) 

\ 9.05% 




Stage manager (musical) 

I 6.34% 




Stage manager (drama) 

„ 6.65% 




Press agent 

, 4.91% 









Stagehand (department head) 

r 6.78% 


$409.13 v 


Stagehand (asst. dept. head) 

[; *r71% 

1964-77 £ 



Stagehand (flyman) 

} -6.76% ^ 




Stagehand (portable board) 

" 6.53% 




Musicians (musical) 

•6.02% ;-':.; :•*;, 

1964-77 s 

3380. oo :;■ 


Musicians (drama) 

; 5.90% : 

1964-77 T 



Musicians (out-of-town) 

['" *."9Sf-U- •";; 

1964-77 I 




j 6.76% 

1964-74 [ 

$ 78.91 


Chief usher 

r 6.40% 

1964-77 I 

$ 94.60 



I 6.63% " -. 




Head porter 

6 .15% 




Wardrobe supervisor 

f 6.43% > 





t 6.34% 




Regional theatre •" 

Actors (LORT A) 

; 5.15% 




Actors (LORT B) 

r 5725% 




Actors (LORT C) 

; 6.14% 




Actors (LORT D) 





Stage manager (LORT A) 





Stage manager (LORT B) 

; 4.09% 

1966-77 : 



Stage manager (LORT C) 

I 4.98% 




Stage manager (LORT D) 

' 5.38% 





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 


Performing artists in the pit 


Guest artists 


Total performing artistic personnel 


Regular and guest directors and conductors 


Stage managers and instructors 


Creative designers and technical 


Other nonperforming artistic 


Total nonperforming artistic personnel 


Total artistic personnel 


Stagehand and crew shop 


Total artistic and production personnel 






Clerical, box office, and front-of-house 




Total nonartistic personnel 


Total personnel 


Employee fringe benefits 


Total salaries, fees, fringe benefits 



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 . 
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 

In general, growth rates for selected sal- 
ary and fee expenditures are quite dif fer- 


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 




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 

Robert Goldsby, Artistic Director, 

Berkeley Stage 
Mako Iwamatsu, Director, East/West Theatre 
Dan Sullivan, Critic 
Marl Young, American Federation of 


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 


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 


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 

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- 

"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 


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 

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 Cong ress ; 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 


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 

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." 


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 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." 


'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 

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 


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 

"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 

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 

"The big ones depend on the small ones for 
reactions, for challenge, for competition 

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 

"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- 


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 


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 


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- 

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." 


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 

"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 


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 

"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 


"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 j ust 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 

"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." 


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 

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? 


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 


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 


Table 38 

The multiplier process 
applied to a theatre dollar 



Recipient 1 
Recipient 2 
Recipient 3 
Recipient 4 
Recipient 5 

► $1.00 

► $0.60 

► $0.36 

► $0.22 

► $0.13 

► $0.08 

Total (rounded) 


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 

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 an d 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- 





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 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 . ) 


The only published investigation of the ef- 
fect of the theatre (as distinguished from 
other arts organizations) on the economy 


Table 42 

1977 estimated theatre economic Impact (millions of dollars) 

Theatre and 



Related activities 

and consequent Economic 

expenditures impact 




































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. 


Table 40 

1977 estimated expenditure base by theatre type 
(millions of dollars) 

■ V-fr&t&W* ' 'MttMi 





$ 93.7 

$ 21.0 




$ 5.0 


Dinner (including 
estimated bar 


$ 33.0 


Regional (Theatre 
Group survey 1976) 

$ 47.5 

$ 35.1 

$ 82.6 

Other (summer 
stock, etc.) 

$ 42.0 

$ 18.0 

$ 60.0 





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. 


Table 41 

1977 estimated audience 
expenditures (millions of 


$ 99.0 





$ 50.4 


$ 44.5 



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 



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 

#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 

#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 

#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