Wednesday, December 3, 2008

Theatre in San Jose in trouble.

For the second time in two years a major theatre in San Jose California is in trouble. Unlike the situation two years ago, this time there is no saving the company.

First, take a moment to read this article from the San Jose Mercury Star here. To give a basic summary, the American Musical Theatre of San Jose has announced an immediate closure of the company. They blame a theatre in Atlanta, Georgia (Theatre of the Stars) for their troubles. Theatre of the Stars, American Musical Theatre of San Jose and Dallas Summer Musicals were to be co-producers of a production of Disney's Tarzan. The show was to open in Atlanta in January, transfer to San Jose in February, and Dallas later in the spring. The companies also hoped that Disney would purchase the production and make it the national tour of the show. Both San Jose and Dallas companies paid Theatre of the Stars $225,000 towards the production. According to news reports Theatre of the Starts pulled the plug on Tarzan and spent the money instead on another production (rumor has it a production of High School Musical 2) that lost a lot of money. The lose of $225,000, not to mention the lose of $800,000 in pre-sold tickets to Tarzan are the reasons sited for the closure.

The problem is that the theatre had been in trouble before.

Two years ago, San Jose Rep., a very prominent Regional Theatre in San Jose announced that they were in trouble. Deficits of several million dollars, decreased ticket sales and a major downturn in giving had nearly brought this cultural icon to its knees. The city of San Jose decided to save the important institution by giving a large low interest loan, and some grants to infuse cash into the organization and give it a cushion while restructuring occured. All indicators seem to point towards some success in the plan. However while the talks were going on in the city council, it came to light that several of the area arts organizations were in trouble as well, including American Musical Theatre of San Jose. The city opened up the credit to several of the groups, again with the idea of boosting their cash to allow a basic re-structuring, thus saving the arts and cultural sector.

All the articles I have come across on the closure of American Musical Theatre of San Jose, mention two things, that while not the focus of the articles, need to be highlighted I think. One, that the theatre was carrying a deficit of $2.5 million on a budget of roughly $9 million. And that $1 million of their debt was a tapped out line of credit from the city. A lot of reporting will happen in the coming weeks on this closure, and I am sure that more details will come out.

Two theatres were bailed out, one took advantage and seems to be rebounding, the other just closed its doors. More disturbing is that this is not the first large theatre to close its doors in recent memory. Milwaukee Shakespeare just announce closing its doors because it lost a single donor. Charlotte Rep (in North Carolina) closed its doors a few years ago due to large deficits, TheatreVirginina (in Richmond) closed its doors a few years earlier due to a whole slew of issues, poor budgeting being a big factor (a retiring Artistic Director left the theatre having forgotten to budget for one entire show) and several other less spectacular, although just as devastating closures have happened as well.

What does all this mean? How does it affect Civic? Are we in trouble? are just some of the questions you may have.

Civic Theatre has run in the black for two years in a row and after a record breaking summer, we are running in the black this year as well. We have a line of credit that we have not had to use in recent memory. We hold NO debt. Season ticket sales are up this year. Donations, while a little lower in some areas, are steady or growing in other areas. All in all we are in good fiscal shape. That all being said though, we are still vigilant with our finances. Several years ago the Board of Directors wisely appointed a permanent finance committee. The hard working members of Civic Theatre's finance committee closely follow and oversee all financial activities of Civic Theatre. Thankfully though we are in good shape, they are helping to make sure that we remain that way. We also have a generous and loyal base of supporters, many individuals that have been giving to Civic Theatre since the days we were still known as Lafayette Little Theatre (pre-1965), and we continue to produce quality theatre.

So although Civic Theatre is currently sheltered and safe from the financial difficulties that other companies are facing, it is important that we are aware of the fact. As I am writing this I am also hearing about the latest on the Auto Industry Bail out, let's face it, times are tough. The Arts and Culture Industry as a whole is not safe, we depend on the rest of the economy doing well. If companies are losing money, they will not donate, as people fear for their own jobs they may minimize or even eliminate giving, and people out of work do not generally go to the theatre. Not to fear though, the staff and Board are well aware of the current fiscal situations, and are watching everything to assure that what has happened in San Jose, will not happen here.

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