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U.S. regional theater took a big hit from the pandemic, but also made some gains

Actors Theatre of Louisville performs THE EVERYBODY BLACK written by Dave Harris and directed by Awoye Timpo during the Humana Festival of New American Plays.
Jonathan Roberts
Actors Theatre of Louisville performs THE EVERYBODY BLACK written by Dave Harris and directed by Awoye Timpo during the Humana Festival of New American Plays.

United States regional theater took a hit from the COVID-19 pandemic, but it’s not all doom and gloom, according to a new survey of the industry.

The national service organization Theatre Communications Group released its most recent annual Theatre Facts report, which analyzes attendance, performance and the fiscal health of the nonprofit professional theater sector in the country. 

The report, based on information and data gathered from TCG’s annual Fiscal Survey and the Cultural Data Profile (CDP) from SMU DataArts at Southern Methodist University, included theaters with fiscal years ending between June and September 2020. 

The 2020 analysis includes three sections: 

  • A general overview of the more than 1,400 professional regional theaters across the U.S. 
  • A long view of the 152 regional theaters that have participated in TCG or CDP surveys since 2016 to understand shifts over that time period
  • And deep dives into the more than 200 theaters that did a CDP in 2020

TCG executive director and CEO Teresa Eyring told WFPL News they thought about taking a year off from the report due to COVID-19, “because we thought it would be so anomalous that it may not show us anything.”

But rather, Theatre Facts 2020 provides invaluable insight into how U.S. theaters fared during the early part of the pandemic, she said. 

With seasons cut short because of the virus, average single-ticket income decreased by 40% from the 2019 report after the industry had seen gradual gains over a five-year period. Subscription income also took a blow, falling by 29% after it hit a five-year high in 2019. As did the average theater budget, which fell by 12% in 2020 from the previous fiscal year. Some of that budget pain was felt in the workforce. 

Daniel Fonner, associate director for research at SMU DataArts, said, of the more than 200 theaters that completed a survey for the 2020 report, about 8% of employees at those organizations were laid off or furloughed “during the time period that we were analyzing.”

“Keeping in mind that most of these theaters ended those fiscal years in the early parts of the pandemic. So it's not a full accounting of what was caused by the pandemic,” said Fonner, adding that roughly 17% of those workers were brought back within the fiscal year. 

Gains in government funding & donations early in the pandemic

As ticket sales disappeared, the Theatre Facts 2020 report showed a five-year spike for government support, attributed partially to early rounds of federal stimulus funds, including the Paycheck Protection Program, or PPP loans. 

This data does not yet reflect the Shuttered Venue Operators Grant program from the U.S. Small Business Administration, whichopened up last spring and was plagued with technical and clerical problems early on — federal lawmakers have introduced legislation to extend the timeline of the program given its early troubles. But Eyring feels it’s still demonstrative of how important it is for the arts and culture sector to advocate on its behalf, and continue to do so when it’s on the other side of this pandemic. 

Theatre Facts 2020 also reported a 37% increase from 2019 in in-kind contributions, and 46% growth over the five-year period.

“That's telling the story of continued community support for these resident theaters and their commitment to making sure that they would be able to survive,” Eyring said. 

Another point of note in the data, Eyring said, was an improvement in working capital, which is a calculation that shows the difference between what resources and reserves an organization has and what its financial obligations are.

“Which has always been a weakness across the theatre field,” she said.

“When we're talking about working capital, we're thinking about unrestricted working capital, meaning funds that your organization has that you can use for general operating purposes,” Fonner added. 

“And one thing that we found that's interesting, within the nonprofit art sector at large, is that smaller organizations tend to have a higher level of working capital than larger organizations,” he said. “During COVID, organizations being a little smaller, perhaps they're more nimble because of that.”

Rethinking the business model

Eyring said, out of the more than 500 TCG member theater organizations, they did lose a handful from the hardships brought on by the pandemic.

While not wanting to minimize that loss, Eyring said there’s also been opportunity born out of these trying times.

“We are really looking at how this period of time has invited transformation,” she said. “Because theaters had to reduce the size of their operation, they have the opportunity to return differently.”

She said, “there was already some financial distress in the theater field” pre-pandemic and TCG had begun advising member theaters to prepare for a possible recession before the virus started shutting down theaters.

Fonner added that it’s not just the pandemic pushing theaters to re-evaluate how they do business, such as when it comes to the ticket subscription model.

“I think coming into the pandemic, you have sort of twin issues going on,” he said. “You have theaters closing, but then you also have racial equity issues... so there were more conversations going on saying, is our subscription model the most equitable for our theater or for our organization... perhaps leaving out portions of the community that could better enjoy or better connect with a theater if the subscription model were adjusted.”

Actors Theatre of Louisville recently shifted away from season subscriptions toward a new membership-based model.

“That subscription model has been failing… So this is a way to respond to something that has probably needed to be responded to for decades. And the pandemic has certainly amplified that,” executive artistic director Robert Barry Fleming told WFPL News in October.

Eyring added that shifting ticket-buyer habits is also having an impact on the subscription model, yet subscriptions remain, “a core part of a theaters’ attendance and audience engagement strategy.” 

“For many theaters, it still represents significant earned income... the idea of just continuing subscription, as it's always been, has been under examination,” she said, adding that the ongoing pandemic also contributes to these conversations. 

Actors Theatre has also undergone several rounds of staff restructuring since early 2020, and will continue to offer a hearty dose of virtual programming while gradually moving back toward in-person performances, Fleming said during the October interview. 

Eyring said, “there isn't a financial model yet” for digital art that would offset the cost of producing these online shows with ticket sales. 

“But I think it will be worked into the annual operating budgets and in the business models for many theaters,” she said. “And for the time being, it's also going to be a very important way for audience members who want to stay engaged in the theater, but don't want to be there live yet to continue to see the plays.”

She added that virtual shows were “also extremely valuable for many members of the disability community who were able to participate in ways that they had not previously.”

Venerated arts administrator Michael Kaiser, who is chairman of the DeVos Institute of Arts Management at the University of Maryland and has consulted with several Louisville-area arts nonprofits, told WFPL News in August 2020 that creating and presenting digital work will certainly bring in less money “than what one might have received when one was at a full house.”

“But the difference will be that your donor base will stick with you. Whereas if you just disappear, it may be harder to keep your donors,” he said, explaining that it helps organizations fulfill their mission while theaters had to be dark. 

Fonner said what’s known as the “Universe Section” of the Theatre Facts 2020 report included nearly three dozen nonprofit theaters throughout the state, including Commonwealth Theatre Center in Louisville and Lexington Children’s Theater.  

“It's very important for the theater ecology and arts and cultural ecology in general that you're able to connect with what is around you,” he said. “And in some areas of Kentucky, that means smaller organizations that have perhaps smaller budgets, but are making a great impact on their local communities. So I think going forward, ensuring those organizations can be sustainable in their own unique ecologies is crucially important for the sector and for the state.”