Report #11 

National Endowment Conditions and Needs of the for the Arts 

Professional American Theatre 

Research Division 

May 1981 

NATIONAL’
 

ENDOWMENT
 

FOR THE
 

ARTS 
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 Endowment for the Arts demonstrating ecohomy
 

and efficiency in nonprofit publishing.
 

The Publishing Center’s planning, production,
 

and distribution services are available to
 

all cultural and educational groups and organizations. For further information, write
 

Publishing Center for Cultural Resources,
 

625 Broadway, New York City 10012 or telephone 212/260-2010.
 

Library ~4 Ces~ress Cataloging in Publication Data 

National Endowment for the Arts. Research
 

Division.
 

Conditions and needs of the professional
 

American theatre.
 

(National Endowment for the Arts Research
 

Division reports ; ii)
 

"A condensed version of the report and
 

exhibits prepared by Mathtech, Inc.
 

i. Theater--Economic aspects--United States.
 

I. Mathtech, Inc. II. Title. III. Series:
 

National Endowment for the Arts. Research
 

Division. Research Division report ; ii.
 

PN2293.E35N37 1981 338.4’7792’0973 80-12678
 

ISBN 0-89062-076-8
 

Manufactured in the United States of America
 
CONTENTS
 

PREFACE /page 2
 

LIST OF TABLES /page 4
 

LIST OF FIGURES /page 6
 

RECOMMENDATIONS OF ADVISORY GROUP /page 7
 

CHAPTER I
 

SUMMARY AND CONCLUSIONS /page 17
 

CHAPTER II
 

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

CHAPTER III
 

THEATRE FINANCES /page 48
 

CHAPTER IV
 

THEATRE LABOR FORCE AND EMPLOYMENT /page 98
 

CHAPTER V
 

THE THEATRE COMMUNITY VIEWS ITSELF /page 109
 

CHAPTER VI
 

THE CONTRIBUTION OF THEATRE TO THE NATIONAL ECONOMY /page 127
 

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

make recommendations on how to meet the-
 PREFACE
 atre needs. In both phases, the work was
 

responsive to the Congressional mandate to
 

investigate the needs of both nonprofit
 

and commercial theatre.
 This report originated in a request to
 

the National Endowment for the Arts during 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 accompany S.3440) included the following:
 

"The Committee notes favorably that the
 

Arts Endowment has increased its capability 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 theatre activities and as general needs relate 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 theatre community, but one particularly important 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, Theatre Communications Group, League of Resident Theatres, Off-Off-Broadway Alliance,
 

First American Congress of Theatre, Theatre Development Fund, Actors’ Equity Association, and the Council on Foundations.
 

Other meetings were organized independent-


A first step in the research project was
 

to advertise for proposals. This was done
 

by means of a program solicitation released from the Research Division on February i, 1977. The competitive proposals
 

were evaluated at a special meeting by
 

representatives of both the nonprofit and
 

commercial theatre communities and by professional researchers. Acting on the recommendation from the evaluation panel for
 

the proposals, a contract was entered into
 

by the Arts Endowment with the research
 

firm of Mathtech, 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 advisory group are named on page 7. Harold
 

Prince, as a member of the National Council 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 Robert Wuthnow.
 

Research Division Report #Ii is a condensed 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. material 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 presented with tables and figures when points
 

require visual elaboration, but such illustrations are omitted when concepts and
 

ly by various groups in the theatre commun- conclusions could be presented succinctly
 

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 organizations 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, analyze, 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
 

without them. However, the reader is reminded that this is a summary. For complete information--~upporting the more
 

complex material, the original Mathtech
 

reports (listed at the end of this preface) should be consulted. All of them


are available for study by those students
 

of professional American theatre who require 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 interlibrary loan. Arrangements to borrow the loan copies or to


work with the reference collection may
 

be made by contacting the Library, National
 
Endowment for the Arts, Room 1256, Washington, 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
 

Mathtech, Inc. Executive Summary, The
 

Condition and Needs of the Live Professional Theatre in America, Phase I Report:
 

Data Collection and Analysis. Princeton,


1978.
 

The Condition and Needs
 

of the Li~e Professional Theatre in America, Phase I Report: Data Collection and
 

Analysis. Princeton, 1978.
 

The Condition and Needs
 

of the Live Professional Theatre in America, Phase II Report: Recommendations.
 

Princeton, 1979.
 

The Condition and Needs
 

of the Live Professional Theatre in America, Exhibit Volume I (Statements by Theatre Organizations). Princeton, 1978.
 

The Condition and Needs of
 

the Live Professional Theatre in America,
 

Exhibit Volume II (Summary of Roundtable
 

Discussions). Princeton, 1978.
 

The Condition and Needs of
 

the Live Professional Theatre In America,
 

"Transcript of Theatre Research Project
 

Advisory Group Roundtable, New York City,
 

9:00 a.m., October 18, 1977." Princeton,
 

1978.
 

The Condition and Needs of
 

the Live Professional Theatre in America,
 

"Transcript of Theatre Research Project
 

Advisory Group Roundtable, New York City,
 

2:00 p.m., October 18, 1977." Princeton,
 

1978.
 

The Condition and Needs of
 

theLive Professional Theatre in America,
 

."Roundtable Discussion on Professional
 

Theatre in America Today, Los Angeles,
 

i0:00 a.m., October 20, 1977." Princeton,
 

1978.
 

The Condition and Needs of
 

the Live Professional Theatre in America,
 

"Roundtable Discussion on Professional
 

Theatre in America Today, Los Angeles,
 

2:25 p.m., October 20, 1977." Princeton,
 

1978.
 
LIST OF TABLES
 

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

2	 Attendance by theatre type 1976-77 /page 22
 

3	 Regional distribution of facilities suitable for Broadway tryouts
 

or touring 1976-77 /page 28
 

4	 Regional distribution of dinner theatres 1977 /page 31
 

5	 Regional distribution of summer stock companies 1977 /page 32
 

6	 Regional distribution of summer musical theatres 1977 /page 34
 

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

8	 Sources of theatre information /page 43
 

9	 Average production costs of Broadway plays and
 

musicals 1965-67 and 1975-77 /page 51
 

10	 Cast size of Broadway plays and musicals between
 

1964-65 and 1975-76 /page 54
 

ii	 Average weekly operating expenditures of Broadway


plays and musicals 1965-67 and 1975-77 /page 57
 

13 Average cash flows of Broadway plays and musicals
 

14 Annual rates of increase of Broadway financial indicators
 

15 Average Broadway profits and recoupment periods for successful
 

16 Income and expenditures of fifty-nine larger nonprofit
 

12 Average weekly box office receipts of Broadway plays
 

and musicals 1965-66 to 1976-77 /page 61
 

1965-66 to 1976-77 /page 64
 

1965 to 1977 /page 65
 

plays and musicals 1965-66 to 1976-77 /page 65
 

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
 

2O	 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
 

27 Average income and expenditures of fourteen larger developmental
 

28 Average income and expenditures of sixteen smaller developmental
 

33 Annual rates of increase in expenditures of five developmental
 

34 Average expenditures of New York City, regional, and ethnic
 

36 Actors’ Equity Association U.S. member work weeks by theatre
 

37 Growth rate of selected weekly salaries between
 

38 Growth rate of larger nonprofit theatre wage bill categories
 

developmental theatres between 1972 and 1977 /page 81
 

theatres between 1972-73 and 1976-77 /page 80
 

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-$80,000D1971 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
 

theatres 1971 to 1976 /page 90
 

developmental theatres 1976-77 /page 91
 

35 Union and association membership 1961 to 1976 /page 98
 

type 1967 to 1976 /page 103
 

1964 and 1977 /page 105
 

1965-66 to 1973-74 /page 108
 

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

40 1977 estimated expenditure base by theatre type
 

(millions of dollars) /page 129
 

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

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

I Attendance by theatre type 1976-77 /page 24
 

II Annual Broadway productions 1900 to 1977 /page 26
 

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

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

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

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

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

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

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

X Relative importance of "other income" for selected successful


Broadway plays and musicals 1965-66 to 1976-77 /page 62
 

XI	 Sources of private support for thirty larger nonprofit
 

theatres between 1965-66 and 1976-77 /page 74
 

XII	 Sources of public support for thirty larger nonprofit
 

theatres between 1965-66 and 1976-77 /page 75
 

XIII	 Public and private support for thirty larger nonprofit
 

theatres as a percent of operating expenditures between


1965-66 and 1976-77 /page 78
 

XIV Sources of public and private support for ten New York State


developmental theatres 1970 to 1976 /page 95
 

XV Sources of public support for fifty-four developmental.
 

XVI Sources of private support for fifty-four developmental
 

theatres 1976-77 /page 96
 

theatres 1976-77 /page 97
 

XVII Actors’ Equity Association and civilian employment


1961 to 1975 /page 100
 

XVIII Average work weeks of Actors’ Equity Association U.S. and
 

Canada members 1961 to 1975 /page 102
 

XIX The theatre’s relation to the economy /page 126
 
RECOMMENDATIONS OF ADVISORY GROUP
 

Back@round. Phase II of the study on conditions and needs of American professional
 

theatre called for recommendations by an
 

advisory group appointed by the National
 

Endowment for the Arts. These recommendations were to be based on statistical and
 

analytical data collected during Phase I
 

and the personal experiences, as theatre
 

professionals, of the advisory group members. Those serving on the advisory group,
 

representing a broad range of theatre constituencies, 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 research staff the progress of their study
 

and to suggest areas needing stronger focus or more detailed information during
 

the short time available under the contract
 

terms, and four meetings were held to formulate recommendations to the Congress on
 

behalf of the future of American professional 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 expressions of the advisory group members,
 

served as the base for the development of
 

the recommendations included in this report (Phase II of the study).
 

The scope of inquiry. For purposes of
 

this study, professional theatre was defined by the National Endowment for the
 

Arts as "the live professional presentation of plays, with or without music, before 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 recommendations, the advisory group studied in detail the statements prepared by the following theatre-interest organizations:
 

Actors’ Equity Association, Off-Off-Broadway Alliance, Alliance for American Street


Theatre, Dramatists Guild, The League of
 

Resident Theatres, American Theatre Association, 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. Transcripts of comments
 

made by 22 theatre professionals who participated 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-


Group
 

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 investigate 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, commercial 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 commercial 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 nonprofit sector includes institutional regional theatres, ethnic and community-oriented professional theatres, experimental
 

professional theatres working on the development 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 existence of the well-known commercial
 

Broadway theatre, because of the existence
 

of the commercial motioh picture and television industries, and because substantial
 

amounts of money may sometimes be’ made
 

from these media, the public generally


perceives theatre as a potential moneymaking operation which should pay for itself. A common belief is that if theatre
 

is good, it will not lose money. This attitude 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 cannot pay for themselves through earned income.
 

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 theatre’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 indicosts 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 percent 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 attendance 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 public’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 additional substantial new fiscal support. It
 

should take a lead through corrective federal legislation to provide direct and indirect increased public support to professional 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 legislation 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 professional 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 theatre professionals, in both the commercial
 

and nonprofit sectors, work for salaries


in no way commensurate with their training, talent, and experience. Many actors,
 

therefore, must supplement their professional earnings through other types of employment.
 

The Phase I study reports that although
 

there is now some kind of professional


theatre in every state, large sectors of
 

the public still have no access to live
 

professional theatre, either nonprofit or
 

commercial.
 

While the commercial and nonprofit theatres combine to make the performing art


known as professional theatre, a recognition 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 directions are not in conflict. Rather,
 

cates that many nonprofit theatres probably they are complementary. For example,
 

have done their best everywhere to control 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 answer to the fiscal needs of nonprofit theatre. 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 offered at a price high enough to defray all
 

production costs and to provide the prospect of a financial return to the investors.
 

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 number of dinner theatres.
 

Because of the necessity of returning a
 

profit to the investors, there is a natural ~eluctance on the part of many commercial 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 potential.
 

While the return of some profit to the investor is, of necessity, a prime motivation, 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 theatre trainees. Further, the commercial
 

theatre contributes to strengthening the
 

nonprofit theatre through grants from such
 

foundations as the Shubert Foundation.
 

The nonprofit professional theatre provides a multiplicity of theatre activity
 

with ticket prices scaled at levels to assure accessibility. It includes a wide
 

variety of institutional types: the regional professional theatres; professional
 

theatres which developed within, or for, a
 

specific ethnic community; and professional theatres dedicated to the development
 

of new plays or new forms of theatre direction and production.
 

Important to the existence of the regional
 

theatre are plays chosen specifically for
 

the community in which the theatre is located. Most theatre seasons include classics drawn from the world’s dramatic literature 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, second-stage experimental or developmental
 

work, the professional regional theatre
 

provides a variety of services to the immediate 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 moving from their original purpose of originating in and belonging to a specific ethnic community into broader-based urban
 

theatre institutions. These theatres now
 

are searching for ways to move more fully
 

into the economic mainstream of professional theatre while at the same time
 

maintaining low ticket prices. Currently,
 

up to two-thirds of their operating budgets 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 majority of those professional theatresm
 

often relatively small in budget and in
 

staffmdedicated to work on new plays and
 

new forms of theatre. In most cases, limited 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 nonprofit professional theatre provides the
 

environment and opportunity for experimentation for the ultimate benefit of all
 

theatre. This type of activity is equivalent to the research and development programs supported by industry in this country. Risks are inherent to creative development. 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 income. As a result, some theatre managements are subjected to increased pressure
 

to select seasons (particularly in the regional 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 government, should take the lead in support of
 

professional theatre. While perhaps maintaining its current position of junior
 

partner (in terms of total dollars contributed on a national scale), the federal
 

government should assume a leadership role
 

in encouraging financial support from other 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 membership, representing many different professional theatre constituencies, assured
 

strong difference of opinion. That there
 

has been a high degree of consensus in
 

formulating the recommendations which follow 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 instances, 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 government should establish some group, similar in composition to the present advisory
 

group, to continue investigation and study
 

of the needs of live professional theatre
 

and to make further recommendations to the
 

federal government.
 

RECOMMENDATIONS
 

Based on the information examined by the
 

advisory group, it is believed that substantial new federal funds are necessary
 

for the future health of professional theatre in this country. Recommendations for
 

such direct support are listed here. In
 

addition, the federal government is requested 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 theatre is an integral component of this nation’s cultural life. It can do so by implementing the following recommendations.
 

Professional Theatre Institutions
 

Increased federal funds should be provided
 

to enable artistically outstandin@ nonprofit professional theatre institutions
 

and or@anizations to achieve their artistic
 

The advisory group recognizes the vitally
 

important support accorded professional
 

nonprofit theatre by the National Endowment for the Arts. The group feels, however, that the amount of money currently


available for such support is too limited.
 

With inflation causing a substantial annual increase in basic operating and production 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 response 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 appeal and to raise ticket prices to levels
 

precluding a broad-based audience. Increased support will assure the fiscal
 

strength of artistically outstanding professional theatre institutions and groups.
 

This will enable them to continue producing 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 advisory group consideration, strong professional theatre, dedicated to high artistic
 

standards, spawns and encourages a wide
 

range of avocational theatre activity.
 

Increased federal support directed toward
 

artistically outstanding theatre institutions and organizations--regardless of
 

10
 
size or budgetbwil% encourage stronger


artistic goals on the part of nonprofessionals.
 

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 serious cash flow problems, particularly before 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 theatres also use advance subscription money.
 

For theatres without a subscription audience (many ethnic and experimental theatres), 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 additional contributed income.
 

The advisory group recommends establishing


federally funded cash flow loan funds, repayable without interest. Such funds
 

could preclude many current cash flow fiscal crises and could result in more realistic 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 Business Administration) for the commercial
 

professional theatre, either on an interest-free or low-interest basis. Such a
 

fund could assist greatly in reducing the
 

cost to the private investor of pre-opening expenses and could encourage the commercial theatre in risking production of
 

plays of particular artistic merit which
 

might not otherwise be undertaken.
 

Federal fundin~ cycles should reflect the
 

multiple-year needs of recipient professional theatre or@anizations.
 

At present, federal funds granted in support of theatre (e.g., those from the National Endowment for the Arts) are provided on a one-year basis.
 Under present leg- to stren@then and expand selected train­ 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 Endowment by Congress (on the pattern already
 

established for the Corporation for Public
 

Broadcasting) would enable the Arts Endowment to provide multiple-year grants to
 

ii
 

theatres. This would enable theatres to
 

plan more effectively than they now are
 

able to do.
 

Many professional theatres have developed
 

long-range multiple-year plans, but are unable to move ahead with them with assurance because it is not known from year to
 

year what level of funding they will receive.
 

Multiple-year funding would relieve pressure 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 managerial responsibilities.
 

Professional Theatre Personnel
 

Increased federal funds should be provided


to assure theatre professionals salaries
 

at levels commensurate with their trainin@
 

and experience in their professional


fields.
 

A constantly recurring theme heard by the
 

advisory group from virtually all theatre
 

personnel is that talented trained professionals earn relatively little in the pursuit of their craft. As a result, many
 

talented professionals leave theatre to
 

pursue more lucrative employment in television 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 experience.
 

A higher level of basic annual earnings
 

for the theatre professional must be
 

sought. The advisory group recommends new
 

increased levels of funding for theatre
 

institutions to enable them to achieve
 

this. Such funding will provide talented
 

theatre professionals with the opportunity
 

and the right to work in their chosen
 

profession.
 

Increased federal funds should be provided
 

ing pro@rams for professional theatre.
 

The advisory group believes that on a national basis there is not enough opportunity 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 programs by those who are not financially
 

well-off. The advisory group recommends
 

augmented federal funds to provide increased accessibility to existing professional 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 establishment of ongoing training opportunities 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 professionals keyed to the specific needs of the
 

professional theatre.
 

Federal funds could make federally subsidized employment available in professional theatre.
 

The Phase I report indicates that theatre
 

employment periods are often short, resulting in frequent spells of unemployment. The advisory group recommends that
 

appropriate federal manpower policy be developed to address this problem. The
 

group also recommends that those federal
 

agencies dealing with manpower and employment problems as well as with the stimulation of employment (e.g., the Departments
 

of Labor, Commerce, HEW, HUD) should direct part of their funding toward the employment of professionals in the professional theatre.
 

Increased Accessibility
 

Increased direct and indirect federal
 

support should be directed toward: l)
 

~reater accessibility to live professional theatre throu@h tourin~ to those @eo9raphic areas not now reached by professional theatre; 2) 9reater accessibility


for youn@ people to live professional theatre throu@h support of school tours and
 

student ticket subsid[ pro@rams; 3) @reater accessibilit[ by all sectors of the
 

population to professional theatre groups
 

reflecting our pluralistic society.
 

Despite touring by both nonprofit professional theatre companies and commercial
 

road companies, there still remain large
 

areas of the country where significant


numbers of the American people have no access to professional theatre. The National Endowment for the Arts has taken an important step in providing greater accessibility to live professional theatre
 

through its support of touring by some nonprofit professional theatres. Starting
 

with a pilot program involving two theatres 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 society. Further, the advisory group recommends that increased federal funds be
 

available to reimburse professional nonprofit theatres for the cost of touring
 

programs to schools as well as for the
 

cost of tickets made available at significantly reduced prices to students.
 

In recent years, touring by national companies from the for-profit professional
 

theatre has been reduced. This is due
 

primarily to the lack of appropriate performing 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 professional 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 encouraged in other sections of the country
 

to provide greater accessibility to a much


largersegment of the population to high
 

level artistic productions of the professional commercial theatre. In addition,
 

the advisory group recommends that the
 

federal government encourage the creation
 

of structures for tour sponsor development on the local level.
 

Taxation
 

Tax policy should be modified to provide
 

encoura@ement to the furtherdevelopment
 

of professional theatre.
 

Taxes are a burden to both commercial and
 

12
 
nonprofit theatres as well as to working
 

theatre professionals. While the theatre
 

community recognizes its responsibility to
 

bear its fair share of the burdens of public 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 rather different, they are considered separately.
 

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 partnerships. The detailed financial data
 

examined in the Phase I report for Broadway 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. According 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 investment.
 

At present, the tax structure discourages
 

investment in theatre in comparison with
 

other forms of commercial activity. Several 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 ineligible 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" provisions) are also not available on authorship rights, production rights, or
 

partnership rights.
 

Among actions recommended to the federal
 

government by the advisory group is legislation to provide: i) a new subchapter of
 

the Internal Revenue Code for theatrical
 

production companies similar to special
 

subchapters for banking, insurance companies, regulated investment companies,
 

and real estate investment trusts; 2)
 

clarification of existing law to allow
 

theatrical production companies to capitalize 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 c6mpanies by
 

providing for a limited exclusion from
 

income for profits from a theatrical production company; and 6) capital gains
 

treatment for royalties received by authors from theatrical production companies
 

solely for first production rights of
 

their work.
 

By acting positively on the above recommendations, 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 admission 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; Minnesota, 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,
 

L~.ncoln, Minneapolis, Norfolk, Oklahoma
 

City, Omaha, Phoenix, Pittsburgh, Richmond,
 

Spokane, Tacoma, Tulsa, and Tucson. Thus,
 

a nonprofit theatre in Minneapolis pays a
 

total of 7 percent admission tax on each
 

ticket sold (4 percent state plus 3 percent
 

city tax). Real estate taxes currently
 

ranging from $700 to $15,000 are also levied
 

on nonprofit theatres in many counties and
 

municipalities.
 

The data included in the Phase I report
 

indicate that $1.7 million was paid in
 

taxes in 1976-77 by the nonprofit theatre.
 

This represents approximately 2 percent of
 

the total operating expenditures of those
 

13
 
theatres as well as 20 percent of the direct 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 understands that the federal government cannot


force changes in state, county, or municipal 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 income 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 development 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 independent federal agency responsible for


leadership support to the professiona~
 

arts.
 

The advisory group recommends strongly
 

against the inclusion of the National Endowment 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 Education must. key its activities primarily to-.
 

ward the needs and goals of institutional
 

education: primary, secondary, post-secondary, and vocational. Theatre does have
 

value for, and a role in, broad educational policies and programs, but it must retain its own validity as an art form.
 

Since its establishment in 1965, the National Endowment for the Arts has had an
 

outstanding record of support for the encouragement of professional artistic standards 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 federal government’s role in devising means for


professional theatres to better aid themselves.
 

The federal @overnment should encourage


Increased internati6nal exchan@e of li~e
 

professional theatre.
 

The advisory group recommends substantially 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 participation in an expanded professional theatre
 

exchange program be determined by professionals.
 

Because live American professional theatre


is such a strong leader in world theatre


today, federal funds should be made available 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 quality 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 @overnment should provide for
 

the continued existence o’f an advisor~
 

~roup representative of all professional


theatre constituencies.
 

The deliberations of the present advisory


group demonstrate the deep interest on the
 

pa~. of all professional theatre constituencies 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 United States. The advisory group recommends
 

strongly that the federal government provide for the existence of an independent
 

advisory group comprised of representatives of diverse theatre interests. Such
 

14
 
a continuing advisory group would be
 

charged, for example, with supervising on


a continuing basis further studies, as
 

well as formulating specific recommendations to the government.
 

Further Studies
 

The advisory group recommends that studies
 

be made of the following areas of concern
 

so that a~ropriate recommendations can be


formulated.
 

i) Questions on the impact of labor/management relations: Does the current New
 

York Showcase Code inhibit the development
 

and potential success of new works? Is it
 

proper for theatre professionals to subsidize 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 purposes. The advisory group feels a careful
 

study of current tax laws should be made
 

as they affect the professional theatre
 

person.
 

3) The adequacy of performing spaces
 

throughout the country should be studied
 

in connection with the advisory group’s
 

strong recommendation for greater access
 

to professional theatre.
 

4) Employment possibilities for those


trained in the professional theatre: What
 

has happened to those who have majored in
 

college and university theatre programs?
 

What is the role of educational theatre in
 

this country? What needs does it fill?
 

In existing programs, what distinction is


made between programs using theatre as an
 

educational tool and programs using education as a means of training for theatre?
 

5) The question of "national" theatre:


Should there be an institutionalized national 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 avocational theatre organizations should be
 

made. What, for example, is their role in
 

the increased development of professional


theatre? Do such groups exist because of
 

a demand unmet by existing professional
 

theatres?
 

7) The question of union and ethnic membership on boards and panels dealing with
 

professional theatre, both inside and outside 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 professional theatre.
 

15
 
 

 

 

 

 

 

 

 

 

Table I Regional distribution of theatre facilities and companies 1977 

Middle Atlantic 

New Jersey 

New York State 

9 

18 

-­

5 

6 

2 

2 

9 

6 

25 

7 

21 

(excluding New 

York City) 

Pennsylvania 

New York City 

20 

39 .......... 

2 4 8 18 3 

27 14 

230 

Northeast 

Connecticut 

Maine 

Massachusetts 

New Hampshire 

Rhode Island 

Vermont 

6 

.... 

4 

...... 

2 

1 .... 

2 

3 

1 .... 

3 

1 

1 

5 

3 

6 

5 

1 

7 2 

2 .... 

15 4 

7 -­ 2 1 

6 ........ 

-­

-­

1 

-­

6 

1 

1 

2 

1 

5 

-­

2 

-­

-­

9 

4 

17 

1 

3 

W. North Central 

Iowa 

Kansas 

Minnesota 

Missouri 

Nebraska 

N. Dakota 

S. Dakota 

7 ...... 

7 ...... 

6 3 .... 

8 4 2 

3 2 .... 

1 ...... 

........ 

1 

4 ...... 

5 ...... 

7 -- 4 2 

2 ........ 

2 ........ 

6 -­

1 2 

1 2 

1 .... 

1 

1 

1 

1 

3 

2 

ii 

2 

4 

1 

1 

South Atlantic 

Delaware 

Washington, DC 

Florida 

Georgia 

Maryland 

N. Carolina 

S. Carolina 

Virginia 

W. Virginia 

1 ...... 

3 ...... 

15 6 

6 1 

2 4 

12 2 

3 ...... 

7 2 

4 -­

3 

1 

3 

3 

9 

1 

3 

-­

-­

2 

1 

-­

I ........ 

4 1 

3 1 

2 1 

3 1 

6 -­ 3 -­ 4 -­ 2 -­

-­

1 

-­

1 

10 

1 .... 

3 

1 .... 

2 

1 

1 

1 

2 

2 

7 

6 

4 

1 

3 

-­

3 

13 

12 

i0 

9 

8 

4 

3 

2 

E. North Central 

Illinois 

Indiana 

Michigan 

Ohio 

Wisconsin 

14 3 

ll 2 

9 .... 12 5 

13 .... 

-­3 

2 

8 

-­

3 

-­

2 

10 

Ii 

i0 

ii 

4 

-­

2 

1 

3 

7 

1 

-­

-­

4 

2 

3 

1 

1 

3 

1 

3 

1 

3 

1 

1 

51 

1 

7 

4 

6 

W. South Central 

Arkansas 

Louisiana 

Oklahoma 

Texas 

6 

5 

19 

1 

1 .... 

6 

1 

3 

-­

-­

1 

2 

4 

-­

-­

2 

3 

1 

3 

5 

1 

4 

3 

6 

5 

ii 

Mountain 

Colorado 

Idaho 

5 

6 

1 

1 

1 

...... 

4 

1 ........ 

1 ii ...... 

2 ...... 

1 8 

4 

3 

1 

Montana 

Nevada 

New Mexico 

Utah 

Wyoming 

3 2 .... 

4 2 .... ........ 

1 ...... 

1 -­ 2 ...... 

2 -­

9 

2 

E. South Central 

Alabama 

Kentucky 

Mississippi 

Tennessee 

5 

4 

2 

9 

--

1 

.... 

-­

1 

1 

3 

-­ 1 ...... -­ 5 -­ 1 ........ 

-­ 2 -­

5 

2 

1 

1 

1 

-­

1 

1 

4 

4 

2 

7 

Pacific 

California 

Hawaii 

Oregon

Washington 

............ 1 

27 4 2 

1 ...... 5 1 .... 

--

1 

15 1 

3 ...... 

1 -­

2 

1 

6 

3 

66 

6 

4 

i0 

Puerto Rico 

II I 

16 
CHAPTER I
 

SUMMARY AND CONCLUSIONS
 

Over a decade ago, in the first comprehensive investigations of the economic
 

conditions of American theatre, William
 

J. Baumol and William G. Bowen, authors
 

of Performihg 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 thecosts of producing a live performance to grow more rapidly than the
 

revenues obtained from it, and there were


few possibilities in live performances
 

for increasing productivity that characterizes 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 possible.
 

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 themselves 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 philanthro~-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 experimental 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 "professional" 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 granting institutions (e.g., the Arts Endowment,
 

a state arts council, Ford Foundation);
 

It had to be a member of the Theatre Communications Group;
 

It had to employ actors under Actors’ Equity Association contracts;
 

It had to employ paid actors or clearly
 

intend to pay actors.
 

Information was gathered on the live commercial and nonprofit professional theatre
 

in every state (see Table i). A limited
 

amount of information is also included on
 

amateur school and community theatre to provide 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 no~ a complete, logically


consistent collection of information on all
 

aspects of the theatre of the sort available 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 priorities for government policy. Special
 

attention is calle~ to Chapter V in which


theatre professionals discuss the condition of the theatre from perspectives of


committed, experienced artists and workers. Their insights give dimension to
 

the partial picture of economic data.


Economic facts are but one part of the
 

state of theatre in America.
 

17
 
The analysis in the following chapters
 

demonstrates that the theatre has adjusted well to the changing economic conditions 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 studies. 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 atprofessionaltheatre
 

(not including street theatre) and 60.7
 

million at amateur theatre. A conservative estimate is that i out of every 10
 

adults attende~ a live professional theatre 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 productions 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
 

ii million. Among a sample of 30 established 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
 

Ii.i 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 emergence 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 population centers possible; these have wide
 

support.
 

Nonprofit theatres, regional and otherwise, 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 activity in America today is nonprofit and
 

half is commercial. Moreover, these sectors 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 profile 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 persons; 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), i0
 

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 experimental theatres. Experience and opportunity 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,
 

D.C.: National~ Endowment for the Arts,
 

1977) indicate that the economic effects
 

18
 
from theatre are substantial. The Baumol
 

study estimated that the Broadway theatre
 

contributed about $160 million to the
 

economy of New York City during the 1974­

75 season, and a total of about $270
 

~million to the national economy. From the
 

Cwi and Lyall study it was shown that 8
 

cultural institutions (including 3 theatres) 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 Broadway 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 economy, the economy certainly influences the


theatre. The pressures of the cost-


revenue squeeze become apparent in looking


at the finances of the professional theatre. 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 i0 percent per year for


plays.
 

A similar situation exists for nonprofit
 

theatre. Operating budgets for the larger nonprofit theatres have increased
 

about 9 percent per year. Cost-saving
 

measures have brought these budgets into


balance for the most part; that is, unanticipated deficits are rarer than they
 

were in the 1960s, and earned income (box
 

office receipts, among other things) has
 

increased at the same rate as operating
 

expenses.
 

The American theatre appears financially
 

stable with costs, prices, and activities
 

higher. Investment on Broadway has increased 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 Broadway 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 i0 to 20 percent a year, a sign of considerable growth.
 

They are more dependent than the larger
 

nonprofit theatres on contributions, particularly government funds.
 

In addition to theatre finances, another
 

indicator of the economic health of the
 

theat~e~is facts about its labor force-­

unemployment, wage rates, and earnings.
 

The data show conflicting patterns. On
 

the one hand, the labor force of artists
 

has become larger as measured by the rate
 

of increase in union membership; for
 

example, during the period 1961-75,
 

Actors’ Equity Association’s membership
 

increased at a rate of 3 percent per year.
 

This indicates growth in the theatre when
 

compared to a population increase of 1.6
 

percent and a labor force increase of 2
 

percent.
 

Employment data on actors show a different
 

pattern. While total actor employment has
 

increased (the fastest rate is for dinner


theatres followed by nonprofit theatres),
 

it has not done so as quickly as union
 

membership. The result is that the average
 

union actor finds less theatre employment
 

each year. During the 1975-76 season,
 

only 60 percent of paid-up Actor’s Equity
 

members worked at least once under Equity
 

contract. And half of these worked less
 

than 15 weeks. Average work weeks per
 

member have fallen from 13 (in 1965-66)
 

to i0 (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 between 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 ~ual 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 occupation and a willingness to undergo economic hardship to engage in it. Many theatre workers supplement their incomes with
 

other jobs, earning as much from outside
 

sources as from the theatre. A number of
 

actors live in households with other sources
 

19
 
of income; only a fortunate few earn than the two named previously. Economic
 

enough in the theatre to provide for their history gives many examples of goods and
 

own needs and those of a family. services that are no longer readily available because the cost or producing them has
 

Employment and annual high incomes were outgrown a public willingness or ability
 

much more secure for nonartistic theatre to pay for them.
 

workers. Median income from all sources
 

for stagehands (New York City Local No. i) It is not certain which combination of
 

was over $12,000 per year, and for press these futures is most likely. Clearly,


agents and managers, median annual income many of the more obvious and easily impleunder union employment was $10,000-$15,000. mented measures for controlling costs and
 

increasing earnings are already being ex-


It should be noted that the data on theatre ploited, but they are limited in the extent
 

labor tend to reflect the larger and finan- to which they can continue to hold costs
 

cially better-off sectors of the theatre. and revenues in balance. The individuals
 

For example, earnings may be less in the most knowledgeable about the status and
 

smaller, developmental theatres. prospects of the theatreuprofessionals
 

in the theatre communitymare worried
 

During the difficult period of the 1970s, about the theatre’s ability to cope sucthe professional theatre made several cost- cessfully in the future.
 

saving and revenue-generating adjustments.
 

One such instance is in the cast size of The conclusions of this report are guarded.
 

Broadway shows, which has fallen in recent Many of the questions raised about the fu-


years. For musicals the average dropped ture of costs and revenues have not been
 

from 36.8 members to 27.2 (1964-65 to answered definitively. The results suggest
 

1975-76) and fornplays from 13.4 to 11.4 that the theatre may be in for a period of
 

(1968-69 to 1975-76). The nonprofit tnea~ retrenchment if substantial new sources of
 

tre has lengthened its seasons, cut the revenue are not found.
 

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 techniques to handle finances and new marketing
 

methods to attract and retain audiences.
 

There are limits to these measures, however: 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 produced? Has the theatre used up its ingenuity in increasing earnings and controlling
 

costs?
 

There are three possible futures for the
 

theatre. First, the theatre may continue
 

to find ways to control costs and increase


revenues. If so, there is every reason to
 

believe that the next decade will show continued increases in activity and financial
 

stability.
 

The second possibility is for the theatre
 

to become 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 theatre activity in the country to fall. This
 

alternative, although it may sound alarmist,
 

should be regarded as no less plausible
 

2O
 
CHAPTER II
 

THEATRE ACTIVITY :
 

ATTENDANCE, ORGANIZATION, AND AUDIENCES
 

This examination of the conditions and
 

needs of the professional theatre in
 

America begins with a description of
 

activity in three broad (and sometimes
 

overlapping) areas. The first area concentrates on attendance totals and the
 

number of tickets sold. Trends are identified when such data are available. The
 

second area looks at different types of
 

theatre sizes and number of facilities,
 

attendance figures, number of performances, productions, and playing weeks,
 

relationship between commercial and nonprofit 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 theatre in America are seriously incomplete.
 

Many of the figures reported in this chapter must be regarded as tentative estimates.
 

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 audience for live theatre is enormous, and
 

there are indications that it is increasing. Perhaps 16 to 20 million people attended 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 regional, stock, and dinner theatre, while
 

New York City accounts for less than one-


f~fth_Qf ~ot~l tick@t sales.
 

Regarding attendance by theatre type,
 

large regional theatres have doubled
 

their attendance between 1965 and 1977 to
 

ii million. This increase can be attributed to an increased number of performances for each show, which has gone up at
 

a yearly rate of 2.45 percent. During
 

thls period the number of productions has
 

been steady since the 1970s; the percentage of the house capacity filled has remained 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 andthe number of
 

playing-weeks is now the highest since


1948.
 

Road productions (tryouts, national companies, 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 theatre markets. While precise figures are
 

hard to come by, a conservative estimate
 

is that the 1976 dinner theatre attendance
 

was ii.i million. In the same year, summer 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 important to the theatre as a source of new
 

artistic and cultural expressions. It includes the 200 Off-Off-Broadway theatres
 

which are the core of the developmental
 

and ethnic theatre movements and which had
 

an estimated 1.7 million attendance in
 

1977-78.
 

Not only is attendance up in these theatre
 

forms but there is evidence that the number 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 professional theatre through the growth of
 

nonprofit theatre which began in the 1960s.
 

While most commercial activity is organized on a production-by-production basis,
 

many nonprofit theatres have sought to become permanent institutions in their communities. 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 theatre may provide a vehicle for national
 

21
 
Table 2 Attendance by theatre type 1976-77 

Broadway
 

Road
 

Dinner
 

Large musical
 

arenas and hardtops
 

Small summer stock
 

Outdoor
 

LORT
 

Nonprofit touring
 

Other small budget
 

Total
 

Community
 

College
 

High school
 

Total
 

Capacity
 

(seats)
 

49,000
 

700,000
 

45,000
 

99,000
 

i00,000
 

38,400
 

1,031,400
 

Performances
 

10,800
 

9,000
 

32,000
 

3,000
 

22,000
 

2,000
 

13,200
 

3,000
 

95,000
 

45,000
 

30,000
 

150,000
 

225,000
 

and international recognition of artistry
 

as well as attractive financial rewards.
 

The social characteristics of theatre audiences 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, female 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 different 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 different audience than the more established
 

theatres.
 

22
 
Also, the data show that theatre audiences
 

seem to feel very committed to the theatre, satisfied with their experiences,
 

and consider the experiences highly valuable. 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 going 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 widespread agreement on support for the theatre in particular. At the end of this
 

chapter is an argument that price increases 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-


in~ Arts and Museums: A Critical Review
 

(see list at the back of this report). The
 

authors graciously gave access to the studies they had gathered. Data were obtained
 

from a variety of sources, including theatre service organizations, commercial trade
 

publications, individual theatres, grant-


making institutions, community and state
 

arts councils, and government agencies.
 

THEATRE ATTENDANCE
 

There are several different approaches in
 

estimating total American theatre attendance. 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 wa~ undertaken in 1973.


Although several years 01d, its figures
 

probably do not differ greatly from current ones.
 

When 32 percent of the national adult population 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,
 

23
 

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 distinguish 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 survey 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 approximately ii percent of the nation, or 16
 

million adults, saw a professional play in
 

1973. If one then uses the national survey’s ratio of tickets to attenders, the
 

tickets sold to professional theatre would
 

be 54.4 million.
 

As a check on this figure, theatre attendance can be estimated by examining theatre" receipts. In 1972 the U.S. Census of
 

Business reported $277.2 million in receipts for "producers of legitimate theatre." 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 millionattendance.


If half the remaining $175.2 million in
 

receipts is attributed to the larger resident and st~ck companies (a~erage 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 professional 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 attendance 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.
 
The evidence of trends in attendance suggests 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 average ticket price can be calculated for
 

Broadway, the r6ad, and regional theatres.
 

Broadway attendance reached a high in
 

the period of nearly ii 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 figure for the 1967-68 season (9.5 million),


there is agreement that attendance declined from the mid-1960s through the early 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 instructive to consider the longer-range trends


for Broadway attendance. Figures indicate
 

that during the early 1970s slump, attendance was lower than anytime since the


Great Depression of the 1930s. Even after
 

Attendance by theatre type 1976-77 Figure I 
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 companies only) performances are available
 

only since 1970 and indicate that the road
 

follows Broadway with a lag of one or two
 

seasons.
 

In contrast to both Broadway and the road,
 

attendance at LORT (League of Resident
 

Theatres) and "other" regional theatres
 

has risen steadily over ii 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 dramatically. This is an important trend,
 

one that probably would be even more pronounced if attendance trends of dinner and
 

stock performances were available for the
 

same time period, since all indication~
 

are that these have grown, too. For whatever reasons, it appears that a significant degree of "regionalization" has taken
 

place in patterns of theatre attendance
 

over the past decade.
 

This increase in attendance is not the result of upward trends in average audience
 

size and in percent of theatre capacity
 

filled. These have remained almost constant during the past seven seasons of regional theatre. Instead, the increase has
 

to do with the number of performances given, which is discussed in the next section.
 

Finally, information is available for estimating 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 Broadway, 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 considered in more detail later in this chapter, but it is apparent that increased
 

ticket prices have not produced a corresponding decrease in attendance. Nor does
 

there seem to be any clear connection between 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 dampened potential attendance, that is, whether or not attendance may have been still
 

higher had ticket prices not been raised.
 

25
 

THEATRE ORGANIZATION AND ACTIVITY
 

The following section discusses basic statistical data on such matters as theatre
 

facilities, ticket sales, productions, and
 

performances for various types of theatre.
 

The data are primarily from theatre activity in the 1976-77 season but whenever possible 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 National Endowment for the Arts Theatre Program 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 relative quality or importance of the work of
 

such theatres, only that time constraints
 

and availability of information meant that
 

the coverage had to be less detailed.
 

The following types are considered:
 

Broadway Off-Broadway


Road Regional theatres
 

Dinner with budgets under
 

Summer $250,000 (inc. Off-


Regional theatres Off-Broadway)
 with budgets Black & Chicano
 

over $250,000 Other small theatres
 

The examination of theatre organization
 

and activity concludes with the relationship between commercial and nonprofit theatre and data on production of new plays.
 

Broadwa[
 

Broadway currently consists of 39 theatres
 

that operate under Actors’ Equity Association’s Production Contract. Most of the
 

productions in these theatres are presented on a commercial basis. In the 1976-77
 

season, these 39 Broadway theatres produced 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 interesting features. First, Variet[ records that the number of productions mounted on Broadway grew from 1900 until 1928,
 

declined b~tween 1928 and the early 1950s,
 
Figure II Annual Broadway productions 1900 to 1977 
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
 

sions. By comparison, the total sale of
 

theatre tickets in New York City--Broadway,
 

Off-Broadway, and Off-Off-Broadway combined-was about i0 million.
 

The modern commercial road touring system
 

is an~ingenious three-tiered network demount a production. The number of performs- signed to bring live theatre to large and
 

ances per year is probably the best ba- small population areas with suitable per-’
 

rometer of public interest. (Yearly gros- forming space. Theatre clubs which sponses, for example, are affected by infla- sor local performances of road productions
 

tion.) What the performance figures show
 

is that despite continued business stagnation, the ills of the inner city, the
 

flight of population, and the rising costs
 

of theatre attendance and associated services such as taxis and restaurants, the
 

public is returning to Broadway theatre.
 

The number of playing weeks (8 performances per week) has fluctuated sporadically between 1,325 in 1948 and 1,012 in
 

1953, until the catastrophic 1972-73 season 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 previous high points in the 1920s and performances are now given in the summer, thanks
 

to the installation of air conditioning,
 

so there is a potential for more performances and larger audiences than ever
 

before.
 

The pattern of fewer new productions (but
 

record audiences) seems to indicate that
 

Broadway financial backers are very careful about incurring risks, no doubt because of the high cost of mounting a production. They are investing in only a
 

few, promising ventures and they are using
 

more and more material that has been tested 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. In the 1976-77 season,
 

these combined road activities accounted
 

for approximately 14.7 million paid admisare common, and both professional managers
 

and unpaid volunteers book attractions into 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 original producers, often while the parent
 

show is still running on Broadway. They
 

are booked into "key cities" (Los Angeles,
 

Washington, D.C., Chicago, Boston, Detroit, San Francisco, Philadelphia, Baltimore, 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 guarantee of about 75 percent of capacity attendance.
 

The Independent Booking Office is the
 

chief distributor of the national tours.
 

In 1975-76 this office scheduled eight musicals which toured for 356 playing weeks
 

(2,848 performances) and nine plays which
 

toured for 292 playing weeks (2,335 performances). The Office estimates that
 

there are about 140 theatres in 34 states
 

and the District of Columbia that can handle productions of Broadway size and complexity. 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 operating on a split-week basis. During the


last 10 years or so, special mobile operations 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 theatrical facilities, will book a split-week
 

production. This is a full restaging of a
 

successful Broadway show. The producers
 

27
 
 

 

Table 3 Regional distribution of facilities suitable for Broadway tryouts or toudng 1976-77 

Total Total 

Region 

Colleges Capacity 

(seats) 

facilities 

capacity 

(seats) 

Middle 

Atlantic ii 15,950 47 104,324 

Northeast 4 6,525 13 23,743 

West North 

Central 13 21,056 32 70,799 

South 

Atlantic 15 27,821 53 ~i19,738 

East North 

Central 17 48,478 59 147,834 

West South 

Central 13 34,090 33 82,452 

Mountain 7 12,150 19 35,211 

East 

Central 3 7,575 20 51,655 

Pacific 4 9,621 33 77,930 

Total 87 183,266 309 713,686 

do their own booking, and have a guarantee nicipally renovated old theatres, are multi-


of 50 or 60 percent of capacity (which may purpose halls used for music, dance, rock
 

or may not include local expenses and ad- attractions, movies, conventions, meetings,
 

vertising). Operating costs are roughly and community activities; 87 are college or
 

similar to Broadway costs. There is some university-owned facilities and 185 are civ-


saving on designers’ fees, royalties, and ic centers (see Table 3). There are road
 

rent; but transportation costs must be houses in 43 states, a degree of dispersion
 

built into the packages and there are ho- surpassed only by the summer stock and small
 

tel and restaurant expenses for the per- theatres (see Table I).
 

sonnel.
 

Much of the data for estimating road acti-


The third tier in the road network is made vity comes from Variety reports of box of-


up of bus and truck companies performing fice grosses in the key cities which inone-night stands. Here the set is "soft- clude both tryouts and large touring proer" and can be struck in an hour or two. ductions. These two types of productions
 

The company can play in six different use the same theatres; together they had
 

places in one week, proceeding to the next an audience of 11.4 million in 1976-77.
 

stop after each show. The theatre pays Tryouts, however, are a small part of this
 

the producer a straight fee rather than a figure. They take place in a few well-


guarantee or a percentage. equipped theatres with established audiences. Also, they are being supplanted by
 

One of the important differences between less expensive ways of testing audience
 

the modern road tour and those of the past reaction before an official Broadway open-


is that of the facilities available to ing. Tryouts are in a decline while tour-


road tours, only 37 of the 309 theatres ing increases.
 

where they play remain privately owned.
 

The remaining houses, except for some mu- Bus and truck operations represent an ac28
 
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 approximately 1,600 performances. Attendance


was 3.3 million (assuming an average 80
 

percent of capacity). Combining this estimate with the figures for large productions and tryouts would mean that the total 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 reversed, and he foresaw "an unhealthy future for the Road." Broadway-type performing, 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 although 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 upswing in road activity. First, there is a
 

large market for plays that have had successful runs on Broadway, and the road
 

profits from Broadway success. Previously
 

a producer would wait until a Broadway
 

show was established before ~ounting 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 weeks in key cities 1948 to 1976 

1976
 

29
 
created a supply of large, modern theatres
 

and auditoriums where performances can
 

take place. These theatres have an average of 500 more seats than their earlier
 

counterparts. Also, they are considerably
 

larger than Broadway houses, which may explain their relatively high profitability.
 

A third reason road activities have expanded 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, possibly through the audience-building efforts of the nonprofit regional theatres.
 

The persons interviewed for this study
 

were unanimous in their belief that a market 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
 

cal fare is light, consisting almost entirely 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 flourished.
 

There are 67 Equity companies and 61 others 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 productions is i0 a year. For an operation
 

to remain in business, an average of 75
 

percent of capacity is necessary. Estimated yearly dinner theatre attendance is
 

based on 80 percent capacity in each theatre, 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
 

fill this need. Space in civic centers is attendance of almost ii.i million at


leased at prevailing market rates, inci- 32,000 performances. This is certainly
 

dentally, and such rentals can be a pro- underestimated, for there seem to be many
 

fitable operation for the municipality. local dinner theatres throughout the country which could not be identified.
 

It is not known what effect increasing the
 

number of Broadway shows and facilities
 

would have on tryouts and touring operations. According to theatre sources,
 

truck and bus tours are no longer growing
 

operations. They originally met theatre
 

requirements of the large, multi-use
 

buildings constructed in the 1960s.
 

Dinner
 

Dinner theatre, which started to expand in
 

the early 1970s, is one of the largest


sources of employment for actors, according to Actors’ Equity Association. These
 

theatres are run for profit, often by


small entrepreneurs with experience in the
 

food or theatre business, who are reluctant to disclose details of their operations. The study data are incomplete.
 

Apparently, dinner theatres have an extremely 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-


There is smme reason to suspect that dinner 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 Theatre in Lake Forest, Illinois, says, "As a


theatre that is attempting to do the classics 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 experience of going to the dinner theatre has


been a pleasurable one, they will try other theatres."
 

Table 4 gives the geographic breakdown of


dinner theatres according to Actors’ Equity 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 performances. 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
 

3O
 
 

Table 4 Regional distribution of dinner theatres 1977 

Region Equity 

NonEquity 

Performa/Ices o~-

Productions 

Estimated 

attendance 

Middle 

Atlantic 12 4,750 190 1,286,688 

Northeast 2,750 ii0 1,409,989 

West North 

Central 2,750 ii0 1,021,862 

South 

Atlantic 20 8,750 350 2,604,326 

East North 

Central 150 1,463,653 

West South 

Central 120 1,303,660 

Mountain ii0 887,826 

East South 

Central 70 549,369 

Pacific 70 606,278 

Total 61 1,280 11,133,651 

dinner theatres have Equity contracts. A Summer theatre is found in almost 400 lo-


large dinner theatre hires 50 to 60 part- cations in virtually every part of the


time people, many of them students, as country--on college campuses, in huge out-


actors, technicians, waiters, and other door facilities in large cities, at his-


helpers. In addition to the usual res- torical sites and religious centers, and


taurant staff, a dinner theatre generally serving summer resorts. The fare ranges


requires two to four additional full-time from classical and avant-garde drama (typ­ people at the box office. ically on college campuses), through yearly
 

Shakespeare festivals, to touring packaged
 

productions of older Broadway plays starring television personalities and movie
 

Summer
 stars. Musical productions represent a


popular form of summer theatre fare
 

around the country.
 

There are 63 theatres that have summer
 

A variety of purposes are served by summer stock contracts with Actors’ Equity Assotheatre. Aside from its function of sell- ciation. Apart from these, it is difficult
 

ing entertainment, it is traditionally the to find information on the number, geographarea in which neophyte actors and other ical distribution, size, professionalism,
 theatre professionals gain experience and and level of activity of such theatres.
 

credits. Some studies indicate that sum- There are, however, two handbooks that are
 

mer theatres contibute to the economies of published as guides for those seeking em-


surrounding areas; the large musical tents ployment, Leo Shull’s Summer Theatres (New
 

and other theatres in resort areas, many York: Leo Shull Publications, 1977) and
 

of them profitable enterprises, do a thriv- American Theatre Association’s Summer Theing business, atre Directory (Washington, D.C.: American
 

31
 
Table 5 Regional distribution of summer stock companies 1977 

Region
 

Middle
 

Atlantic
 

Northeast
 

West North
 

Central
 

South
 

Atlantic
 

East North
 

Central
 

West South
 

Central
 

Mountain
 

East South
 

Central
 

Pacific
 

Total
 

Theatre Association, 1977). The data summarized in Table 5 are based on these
 

sources, on information from Actors’ Equity Association, and on interviews conducted 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 ii 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 Association 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 professionals willing to work for nothing or
 

very little, because experience is required to join Actors’ Equity Association


and enter the profession.
 

Percent Estimated
 

Equity Equity attendance
 

1,236,970
 

798,770
 

447,405
 

760,410
 

876,680
 

99,750
 

321,020
 

130,375
 

252,665
 

4,924,045
 

Close to half of the summer theatres are
 

located on college and university campuses. 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 assortment of nonprofit theatres ranging
 

from highly professional, respected companies to teenage summer schools. And another 20 percent are commercial theatres,
 

many of which present a summer of i0 to 12


one-week runs of specially packaged traveling productions rather than producing
 

their own shows.
 

Table 5 gives geographical distribution
 

of summer theatres. College-affiliated


summer theatre is strong almost everywhere, and other summer theatres are concentrated in the resort areas of the East
 

Coast and the North Central states. There
 

are sur~ner theatres in 48 states.
 

32
 
Summer musical theatre. Thirty theatres
 

with more than 1,000 seats were found
 

which devote themselves to musical theatre. Estimated attendance for summer musical theatre in 1977 was 6.6 million.
 

The largest theatre is the St. Louis Municipal Opera which sells out its 11,475
 

seat outdoor proscenium theatre once or
 

twice a year. About ~ half dozen of these
 

theatres, notably the huge municipal theatres of the Midwest, are nonprofit operations backed by private citizens who act
 

as guarantors. Business is good, and the


guarantors are seldom called upon to contribute 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 Actors’ Equity Association employment.
 

Ticket prices are surprisingly low, ranging from $2 to $13. Most of the houses
 

keep under a $i0 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 $i
 

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 occasionally brought popular attractions to
 

Broadway.
 

There are several points to note about
 

summer musical theatres. They serve a
 

large audience in a short season. They
 

are likely to be profitable, no doubt because of the huge facilities in which performances 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, California, 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 information and interviews, of the size and distribution of musical theatres, which are located 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 approximately 53 large amphitheatres in which
 

great pageants on religious or historical
 

themes are performed during the summer.
 

The Institute of Outdoor Drama gives detailed information on 40 such theatres.
 

In 1976-77 these theatres presented an average of 51 performances each, and the
 

audience numbered a total of 1,714,963.
 

Re@ional Theatres with Bud@ets
 

Over $250,000
 

Much of the nonprofit regional resident theatre 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 actors are members of Equity to companies
 

that mix Equity with non-Equity actors.
 

The size and the nature of these operations vary; the average theatre has
 

about 560 seats. While some of the 65
 

theatres are extremely active in developing new talent and the work of new playwrights, others present the classics and
 

re-stage established Broadway plays.
 

Performances of subscription series productions and of total productions have
 

both moved upward over the 12-year period,
 

with subscription series performances increasing 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 productions together with a gradual increase in
 

the number of performances means that individual productions are being performed
 

a greater number of times. During the
 

1965-66 season, the average number of performances of a production was 20; the peak
 

was during the 1974-75 season with an average 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 production there are certain fixed costs, for
 

costumes, scenery, and the director’s and
 

designer’s fees, these can be spread over
 

33
 
Table 6 Regional distribution of summer musical theatres 1977 

Region
 

Middle Atlantic
 

Northeast
 

West North Central
 

South Atlantic
 

East North Central
 

West South Central
 

Mountain
 

East South Central
 

Pacific
 

Total
 

Total
 

Season capacity
 

in weeks (seats)
 

10-40 22,748
 

9 15,581
 

I0 19,333
 

4-40 12,172
 

ii 20,160
 

ii 5,216
 

13 3,000
 

98,210
 

Table 7 Regional theatres with 1977 budgets over $250,000 

Region
 

Middle Atlantic
 

Northeast
 

West North Central
 

South Atlantic
 

East North Central
 

West South Central
 

Mountain
 

East South Central
 

Pacific
 

Total
 

Total 

Produc­ capacity 

tions (seats) 

71 6,603 

81 8,978 

23 2,449 

52 4,187 

60 6,937 

19 1,565 

6 518 

15 1,406 

69 5,731 

396 38,374 

34
 
a larger base by increasing the number of
 

times each production is performed. However, 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 theatres is through box office receipts, other earnings, and municipal, state, and
 

federal subsidies along with contributions
 

from private foundations, businesses, and
 

individuals. These theatres have been developing new audiences, and they attempt
 

to be a community resource, bringing productions and services into schools, prisons, hospitals, and small, outlying communities. Their facilities are often used
 

by other local and amateur groups and community organizations.
 

Table 7 summarizes certain activities of
 

these theatres, based on information from
 

Theatre Communications Group, National Endowment for the Arts, and Actors’ Equity
 

Association. Although concentrated on the
 

two coasts, they are located in 29 states.
 

Their combined annual attendance is 6
 

million in house. In addition, they often
 

tour throughout their regions, playing to
 

an additional audience of approximately
 

1.5 million. No estimate has yet been
 

made of the number of institutional visits
 

they routinely provide.
 

Off-Broadway
 

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 ~igures, 46
 

productions were staged in 24 different


houses, but exactly half were from nonprofit resident theatres with main staqes
 

elsewhere in the city. Another 10 were
 

staged by commercial producers. In comparison 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 discussion of the reasons for the rise and precipitous decline of Off-Broadway. The
 

movement probably began, according to
 

Stuart W. Little, author of Off-Broadway,
 

The Prophetic Theatre" (New York: Coward-


McCann & Geoghegan, 1972) in 1952 when
 

The New York Times reviewed Circle in the
 

Square’s production of Summer and Smoke
 

at a small Off-Broadway theatre in Sheridan
 

Square, and focused public attention on
 

the exciting work being done away from
 

Broadway.
 

Stuart Little wrote, "Off-Broadway is defined 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 regular commercial theatre. It provides the
 

means of encouraging the growth of theatres that exist in time and so engage the
 

loyalties of talented professions- (so)
 

that they can develop continuity of production 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 $I,000 to
 

$3,200. The widely criticized Actors’ Equity 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 contract has now become a catch-all for theatres larger than showcase but smaller
 

than Broadway.
 

What about the functions outlined by Stuart Little? They have found a new home in
 

Off-Off Broadway where the same economic
 

battle is being waged.
 

Re@ional Theatres with Bud@ets
 

Under $250,000
 

This category of small-budget theatres is
 

the taproot of professional American theatre, providinq life, enerqy, and sustenance to the entire complex. It is the
 

arena where aspiring professionals are
 

trained and seasoned, a laboratory situahion for experimental and innovative theatre work, a place where minority cultures, women, and special interest groups
 

can dramatize their aspirations and develop 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 participation is seldom an avocation, but a
 

35
 
Figure IV Sources of plays produced on Broadway between 1964 and 1977 

major commitment in the lives of those who
 

pursue it. Neither does it have the transitory quality of summer stock, as it
 

struggles to be permanent.
 

The best work of these theatres is discussed in scholarly journals and represents 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 financial 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 assistance. Such theatres were identified using the records of Theatre Communications
 

Group, Alternative Theatre, Grassroots Alternate Roots Directory, the records of
 

the National Endowment for the Arts, New
 

York State Council on the Arts, Ford Foundation, and data from participants in the
 

New York Theatre Development Fund (TDF)
 

voucher program and its spin-offs in Buffalo, Boston, and Chicago. The small New
 

York theatres accepted for inclusion in the
 

TDF voucher program, which requires "professional aspiration," virtually define
 

Off-Off-Broadway.
 

The other two important concentrations of
 

about 50 theatres each are in California
 

(with centers of activity in Los Angeles


and the San Francisco Bay Area) and Chicago;
 

36
 
 

Figure V Sources of musicals produced on Broadway between 1964 and 1977 

all of these areas are of increasing impor- Off-Broadway Theatre and Its Fundin@. A


tance as casting and production centers, 


At least 620 small theatres are located in
 

50 states and Puerto Rico.
 

Off-Off-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 figures were qathered for about a quarter of
 

the Off-Off-Broadway, black and Hispanic


theatres then eligible for inclusion in
 

the TDF voucher program in an unpublished


1974 report by Mathematica, Inc., The Off-


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 required by Actors’ Equity Association on
 

the other. New theatres have sprung up
 

since and TDF listed 208 small theatres
 

eligible for voucher payments in 1977.
 

Based on the assumption that each theatre
 

still plays to the 1974 median audience
 

37
 
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 significant 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 percent.
 

Los An@eles. Professor Jon Cauble of the
 

University of California at Los Angeles,
 

in his unpublished report, Equity Waiver


Theatres (Los Angeles: University of California, 1976), reported on theatres with
 

seating capacity of less than 99 for which
 

ActorsI Equity Associatioh 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 theatres operated at 59 percent of capacity
 

in 1977 with an average audience of 47 per
 

night and a total audience of 190,000.
 

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, industry, and the New York State Council on the
 

Arts, and the emergence of several gifted
 

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.
 

The 1977 BTA directory listed 106 companies in 25 states and the District of Columbia, including The Negro Ensemble Company, 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 productions. Much amateur performance activity using Broadway plays with black
 

themes also takes place in predominantly
 

black schools.
 

Other Small Theatres
 

There are many small theatres with varying 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 possible to estimate this activity and these
 

audiences have not been counted in the
 

tables. There is a small association of
 

black playwrights. Dozens of training pro- major producers of children’s theatre.
 

grams, workshops, professional companies,


and community and street theatres came into 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, performers, musicians, and technicians who
 

work i~ 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 movement carried on a vigorous and novel audience development program, organizing the-


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 attrition 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 organizations generally--the reluctance of
 

funding agencies to support them even at
 

the level of other special interest
 

groups~ They are often collectives, produce a small number of plays, commonly develop their own material, and have a lifespan of three to four years. At the pres-


ant .time there are about i~ women’s the38
 
atres in New York City, including the Woman Rite Theatre in its sixth year, New
 

York Feminist Theatre Troupe, Women’s Theatre 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 performing dance-dramas, the total rises to


90, and wfth dance and music groups included, 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 American 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
 

Ni@ht’s Dream with the actors speaking elther Chinese or English dependin@ 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,
 

wo~ only in English.
 

At last report there were approximately
 

nine native American theatre groups concerned with Indian problems and culture.
 

They operate mostly in the Southwest (Arizona, California, New Mexico, and Oklahoma), 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 communities. Practitioners ranged from the internationally known Bread and Puppet Theatre, 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 presentations. 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 conventional theatres) and interested individuals as well.
 

Relationships Between Commercial and


~onprofit Theatre
 

The preceding discussion and analysis, based
 

as it is on specific types of theatre, may
 

unintentionally emphasize differences between commercial and nonprofit theatre.
 

This approach might leave the impression
 

that each type of theatre operates in isolation 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 estimated 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 Broadway 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. During 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 commonality 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 between the commercial and the nonprofit
 

theatre. Tax-exempt, nonprofit productions sometimes (this is the exception)
 

move to a Broadway stage and use the profits to subsidize their ongoing activities. Commercial road companies of Broadway 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 ventures 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 uncommon 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, directors, designers, and actors develop their
 

talents in the workshops of the nonprofit
 

39
 
sector, and then divide their activities
 

between the commercial and the nonprofit
 

theatre.
 

These facts indicate the degree of interdependence 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 theatrical activity serves the common good. He
 

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 FACTr A Report on the
 

First American Con@ress of Theatre, (New


York: Arno Press, 1975): "There is a misconception 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 survives in this country, it has to be a theatre 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 excitedand


threat~s to Walk out as ~o~d~ye~~erday
 

and again today, you do all of us a great


disservice, because there is a common approach 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


your kind of theatre, because theatre will
 

not otherwise survive in this country.
 

The real issue is do you want theatre to


survive, do you 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."
 

Not all segments of the theatre community
 

are enthusiastic about the apparently
 

growing interdependence. In particular,
 

many in the nonprofit conununity fear that
 

commercialization of work will, by accident or design, become the primary motive
 

of nonprofit theatre activity rather than
 

a serendipitous by-product of its artistic goals. If that happens, it is pointed
 

out, there will be a loss to both artistry
 

and to commerce. In any case, interdependence is a fact and the relationship between 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. Here there seems to
 

have been a veritable explosion of energy.
 

Donald Fowle of the New York Public Library has kept records of new plays produced over the past i0 years (including
 

productions by college and amateur theatre). His figures indicate that the number has more than doubled since 1969.
 

While such activity is increasing throughout the country, New York City continues
 

to be the main location where new material
 

is presented and represents more than half
 

the total. The theatres reporting to Fowle
 

produced an average of 2.75 new plays in
 

1977.
 

Other similar evidence comes from the National Endowment for the Arts, which reports that during the 1976-77 season the


large nonprofit theatres applying to the
 

Arts Endowment’s Theatre Program had done


an average of two new plays each and small
 

nonprofit theatres nearly three plays
 

each.
 

Catalysts for this growth have been such
 

organizations as the Office for Advanced


Drama Research of the University of Minnesota, Rockefeller Foundation, Eugene
 

O’Neill Theatre Center, and Ford Foundation. Also, developmental nonprofit theatres have proliferated and a number of
 

them are dedicated exclusively to the work
 

of new playwrights through staged readings, workshops, and showcase productions.


Increasingly, novice playwrights are able
 

to have their plays’read, criticized, and
 

performed by professionals.
 

THEATRE AUDIENCES
 

The data examined in the following sections
 

demonstrate that approximately 20 million


Americans over the aqe of 16 attended at
 

4O
 
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 tickets sold in this season. Well over half
 

of all theatre attendance consists of audiences 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 attending, beliefs about the degree to which


theatre should be supported, and the relationship between ticket price and demand.
 

Social Characteristics
 

Gender composition. Theatre audiences are


comprised almost equally of men and women.
 

However, there are interesting variations
 

among different types of theatre. Broadway 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 regional theatres and in a national survey
 

of attendance at both professional and amateur theatre. No research has been conducted to determine why these different
 

patterns exist. Evidence on the impact
 

that greater numbers of women in the professions may be having on theatre attendance is considered below.
 

Age. Studies of almost all types of theatre indicate that in comparison to the
 

general population, the young tend to be
 

represented in theatre audiences more often 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 theatre 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 population. 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 audiences seem to have become younger in the
 

past 10 to 15 years. For instance, the
 

median age of Broadway audiences has declined 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 Minneapolis declined from 36 in 1963 to 31 in
 

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 graduated 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 theatregoers only have grade school educations, whereas this group makes up 38
 

percent of the adult population. This
 

pattern seems to hold for all the different kinds of theatre on which there is
 

information. ̄
 

Comparisons between the Guthrie Theatre
 

and Broadway show no strong trend away
 

from this pattern. (There is some evidence 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 audiences 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 differences in the age groups that were included
 

or excluded in the various studies.
 

Income. As might be expected from the ev­

 ̄ d~ 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 theatre frequently. In comparison, only Ii
 

percent of those with incomes between
 

$i0,000 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 theatre attendance the most? Research has
 

not provided a conclusive answer to this
 

question, but an important clue is available 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 income. 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 produced differences in theatre attendance
 

41
 
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 lao~6"~ force, professional, executive, and
 

managerial occupations outnumber other occupations at a ratio of more than two to
 

one. These patterns are generally reflected in all the major theatre types. For
 

example, Broadway audiences in 1976 consisted almost two-thirds of people in such
 

occupations while only one-quarter of
 

these audiences were from other occupations; and among those in regional theatre, audiences are typically at least
 

two-thirds in professional, executive, and
 

managerial occupations. This is true despite 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 theatres, 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. Students also comprise between i0 and 20 percent 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
 

is that f~r professional theatre these attendance 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 number of actors in the city. It appears
 

that part of the variation in theatre attendance 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 someone will attend frequently. For example,
 

the young and the better educated are not
 

only more likely to attend, but to attend
 

frequently.
 

Considering only theatre attenders, there
 

are interesting differences that distinguish frequent from infrequent attenders.
 

In Broadway audiences, men are in the majority, 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 financialqy; 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 infrequent attenders; but among women it is
 

to the next. Low percentages in the South- much larger among frequent attenders.


west and in the South may have implications
 

for the future of theatre in light of recent 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
 

to attend theatre as suburban residents.
 

Finally, apart from other geographical
 

differences, theatre attendance also seems
 

to vary significantly from one metropolitan area to another. The interesting fact
 

What this suggests is that the increasing
 

numbers of women in professional occupations 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 frequent and infrequent attenders.
 

42
 
 

 

Table 8 Sources of theatre information 

Friends or Newspaper
 

relatives ads 

Broadway 

1964 28% 23% 

Off-Broadway 

1964 24% 30% 

New York 

City 1973 42% 38% 

New York 

State 1973 48% 32% 

Washington 

State 1975 33% 28% 

Information, Tickets, and Travel
 

As seen in Table 8, people generally rely
 

on friends and relatives, newspaper advertisements, and mail order notices for information on what theatre is available
 

and when. The exceptions are newspaper
 

stories, which play a larger role for
 

Broadway and OffLBroadway, and mail order
 

notices, which may be more important for
 

regional theatre. Less educated and less
 

affluent persons tend to rely on information from friends, while more educated
 

and more affluent persons rely to a great
 

extent on newspapers and mail order notices. These differences correspond with
 

the findings of more general research on
 

differences in communication and reading
 

habits between social classes. Not surprisingly, mail order notices are much
 

more important as sources of information
 

for subscribers than for nonsubscribers.
 

The sale and marketing of tickets is related to audience habits. For instance,
 

subscription sales have been an effective
 

way to attract audiences to theatres outside of New York City. Theatre Communications 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 office, 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
 

Mail order Newspaper Critics’ Radio
 

notices stories reviews or TV
 

2% 29% --- 7%
 

9% 23% --- 3%
 

17% 21% 19% 4%
 

24% 18% 10% 8%
 

30% 17% 10% 13%
 

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 innovations in ticket marketing in recent
 

years. There has been, for example, an
 

increasing use of credit cards, telephone
 

orders, and Ticketron for sales. Especially 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 underwritten during the initial portion of its
 

run). In another, the Times ~quare T~cket
 

Center (TKTS) markets unsold tlcKets at
 

discount prices on the day of the performance. 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 audience thus attracted turns out to be different 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 impulse. TKTS now accounts for approximately
 

5 to 6 percent of the Broadway gross receipts,
 

and money earned from a small surcharge
 

helps subsidize other TDF programs.
 

43
 
In the same year that TKTS began, TDF also
 

started its successful Off-Off-Broadway
 

voucher program. With TDF help, this program has been imitated in Buffalo, Minneapolis-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 admission to the theatre accepting it, which
 

then returns the voucher to TDF and receives $2.50.
 

The voucher program offers several advantages which have important implications in
 

understanding the future need for continuous 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 advance. 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 control. The level of subsidy depends completely on the number of voucher users
 

each theatre can attract, relieving the
 

funding agency of t~e burden of making a
 

long series of evaluations. Finally, it
 

helps to cut fundraising costs. There is
 

less need for theatres to engage in competitive 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 organizations with established audiences rather
 

than to the tiny but artistically important
 

experimental theatres as originally hoped.
 

An evaluation of a Buffalo, New York program points out that 20 percent of the people use vouchers to "try out different
 

kinds of events than they would normally
 

attend," which indicates some kind of broadening of the audience base. However, 30 percent 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 thosewho 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 Deople 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 48 percent who travel to Broadway 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 combination of these means of transportation.
 

Attitudes Toward the Theatre
 

Attitudes do not necessarily reflect the
 

ways in which people actually behave. People 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 alternativ~tax policies.
 

In general, attitudinal information is particularly 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 audi44
 
ences’ commitment to the theatre can be
 

pieced. Perhaps the clearest comes from
 

questiqns 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 today’s performance compare with what you expected?" 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 performances 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 theatre 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 important is it for young people to see live
 

acting, and is live performance more meaningful than TV or movies?). What these


data also reveal is that even in the general public there seems to be a high level
 

of commitment to the value of the theatre.
 

Between two-thirds and three-fourths responded positively to these questions.
 

Perhaps a somewhat more discriminating picture of audience commitment to the theatre is
 

that obtained from looking at the reasons
 

people give for attending theatre. The responses to a variety of reasons given by audiences 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 important factor in deciding to go to a play in
 

comparison with only 14 percent who said
 

they "just wanted to go out to some performance."
 

Reasons for not attending. Although those
 

who attend the ~heatre 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 attendin~ the theatre, the obstacles they
 

perceive as standing in their way? The
 

following discussion pays special attention to those reasons voiced frequently by
 

people already found to be underrepresented in theatre audiences--the less educated, 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, inaccessibility, 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 because 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 interested in the theatre than their parents,


while grade-school educated people are
 

considerably less likely to say so. Responses suggest that there may be a ~light
 

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 t~e theatre because they have
 

not been socialized to enjoy and appreciate 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 barrier for some, especially people from
 

lower income families. As might be expected, people with low incomes are more
 

likely to say that cost keeps them from
 

attendang the theatre than people with higher
 

incomes. Two things should be noted however. 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 inhibiting attendance.
 

45
 
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 considerable evidence’to support this explanation. For instahce, 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 community, 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
 

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 addition to lower levels of interest, for the
 

lower rates of attendance among older
 

people.
 

Finally, there is evidence for the argument 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 television 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 exposure to other media is limited.
 

But do movies and television actually compete with plays, or do people like both,
 

but for different reasons? When asked to
 

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 theatregoing, is also higher among the college-


educated than among the grade-school educated. 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 substitute for the theatre. Both direct and
 

indirect comparisons indicate that those
 

who watch television more attend the theatre 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 educated. The cost of attending cannot be totally ignored, but it is not as important
 

as might have been expected. For people
 

living away from large cities, inaccessibility is probably the most significant obstacle 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 productions. 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 favoring 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 support itself.
 

Another attitude which bears directly on
 

compare the theatre, television, and movies the public’s willingness to support the theawith specific reference to creative or ar- tre concerns the availability of theatre
 

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 audiences, as television is among the old.
 

Perhaps the crucial question, though, is
 

whether movies and television actually interfere with theatregoing. The best data
 

on this question come from a study conducted in California. Going to the movies,
 

it turns out, seems to be positively associated with going to the 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 educated, 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 ef46
 
fect of price on ticket demand is based on
 

methods or data that can be seriously faulted. One method of assessing the relation
 

between ticket price and demand has been to
 

examine changes from year to year. If demand decreases after prices increased, a
 

negative relation is assumed to exist between 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 suggested that, although there was some negative relation, the effects of price increases
 

were apparently temporary and could have
 

been caused by other factors. More recently, 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 data 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 significant relation. The tentative conclusion
 

that emerges from these studies is that attendance 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 results. In the absence of experimental information, several audience surveys have
 

attempted to determine the relation between
 

price and demand by posing hypothetical
 

price increases and asking theatregoers how
 

this would affect their attendance patterns.
 

The results from these surveys present quite
 

a different picture from the studies just
 

cited.
 

A summary of results from a Washington
 

State study demonstrates the effect of price
 

on ticket demand. Using a theoretical model, the actual amount of income that a theatre would earn based on an average ticket
 

price of $4.50 was calculated assuming a
 

baseline audience of i00. When a $2.00 increase was instituted, theatres would very
 

likely lose money for two reasons: a substantial number of the people to whom this
 

increase was proposed said they would simply no longer attend, and an additiona~ number skid they would shift to cheaper seats
 

(despite a $2.00 increase, the average ticket price would increase by only 91 cents,
 

from $4.50 to $5.41). In other words, demand~s 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 $i0.00, 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 increased.
 

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 inelastic in relation to price and that theatres
 

could increase revenues by raising prices.
 

The results of the Washington study, however, 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 sometimes incompatible assumptions, it is impossible to come to any definitive conclusions from data now available. The results
 

just reviewed do give some pause to the assumption that demand is unaffected by price.
 

It may be that theatres cannot increase revenues simply by raising ticket prices across
 

the b~ard but that an increase in only high-


priced tickets could yield additional income. 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 questions posed to theatre audiences, and it is
 

by no means clear that people would actually
 

behave in the way they indicated. Note also that these results do not mean that prices
 

could not be increased in keeping with overall increases in personal incomes and costs
 

of living. Still, with these cautions the
 

burden of the argument is that demand may
 

be more elastic with respect to price than
 

other studies have suggested.
 

47
 
CHAPTER III
 

THEATRE FINANCES
 

It is clear from the discussion in the previous chapter that there is a great deal
 

of variety and activity in the American
 

theatre~ and the signs are that theatre is
 

on the increase. The question addressed
 

in this chapter is: What does professional theatre cost and how has it been financed? In pursuing answers, data are examined
 

on revenues, costs, profit 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 resisting the "cost-revenue" squeeze described
 

by Baumol and Bowen. On Broadway, investment has remained roughly constantwhile
 

the average return on investment has been
 

about 13 percent since 1965. In the nonprofit theatres, the relation between earned
 

income and expenditures has been roughly
 

the same since the early 1970s. In both
 

sectorsofthetheatre, 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 increasing 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-investment musical (which, on the average, is
 

3 times more expensive to produce than a
 

play). One area which reflects these economies is that of cast sizes, which have increased 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 evidence 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 office 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-1970s
 

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 production 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 inconclusive evidence that the overall rate of 13
 

percent return on investment is lower than
 

in previous periods.
 

The general conclusion concerning the finances 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 expenditures 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 largest 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 nonprofit 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 sector (federal, state, and municipal government sources of support) is gaining. Public 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 contributions 51.6 percent, and there was an over48
 
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 revenues in the smaller nonprofit theatres
 

(theatres with budgets under $250,000).
 

These are to be expected from young, growing 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 difficult 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. However, 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). Subscription revenues are apparently less
 

than those for single tickets. Performing
 

fees (one payment for a set number of performances) 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 theatres, the smaller developmental theatres
 

rely more heavily on contributions, particularly from the government. The objectives 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 finances, 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 increased both in numbers and in their appropriations for all the arts, from $2.6
 

million in 23 states in 1966 to a projected $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
 

tume rental collection, "helped put expensive costumes within the reach of most theatres’ 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, benefits 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 uncertain support from some sectors of private
 

funding. This means that in all likelihood the importance of government contributions will be increasing. For a smooth
 

and uninterrupted development of the nonprofit theatre, the commitment of government will have to be reliable and adjust
 

to general economic conditions.
 

BROADWAY
 

According to the New York State Attorney
 

General’s Office and information from the
 

Shubert Organization, the finances of commercial 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 expenditures, other costs, and revenues and
 

calculates the return on investment for
 

Broadway productions.
 

Investment
 

One method by which Broadway productions


are funded is throughapublic 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
 

Cash Reserve Program which includes ii the- the latter are on the increase according
 to the New York State At£~ney General’s
 atres among the 80 organizations it helps
 Office. The discussion of Broadway finances
 through guidancewon cash flow management
 throughout this chapter is of productions
 and liquidating current liabilities. The
 which have been funded through public offer-
 Theatre Development Fund, through its cos49
 
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. Assuming that the rate of inflation in the
 

cost of Broadway productions has approximated the rate of the wholesale price index 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 decre@se
 

over the period covered by the data.
 

Capitalization is growing more slowly than
 

production costs. This may occur for several reasons: difficulty in raising the full
 

amount of anticipated costs, underestimation of actual costs by the producer because of time intervals between raising
 

the funds and actual production (thus costs
 

reflect ongoing inflation), and losses during out-of-town tryouts. There are a number of ways in which producers can close
 

the gap between the limited partners’ investment and actual costs. They may exercise the "overcall"clause (usually limited
 

partners are liable for an additional contribution 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 overcall, 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, differed 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 significantly within the last 12 years. For individual 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 difference of the rate between plays and musi50 
 

Table 9 Average production costs of Broadway plays and musicals 1965-67 and 1975.77 

Performers’
 

salaries
 

Other artistic
 

personnel
 

Administrative
 

Stagehands
 

and crew
 

Departmental
 

Royalties
 

and fees
 

Tryouts
 

Transportation
 

and travel
 

Taxes and
 

benefits
 

Legal and
 

miscellaneous
 

Rehearsal
 

expenses
 

Advertising
 

and promotion
 

Orchestration
 

Other
 

Total
 

cals is that producers of musicals may have
 

pursued cost-saving measures more vigorously 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).
 

Musicals 

Annual 

rate of 

1965-67 1975-77 increase 

$ 34,756 $ 44,201 2.2%
 

$ 16,553 $ 30,411 5.5%
 

$ 24,724 $ 66,686 9.0%
 

5,128 $ 20,871 12.8%
 

15186,856 $335,800 5.3%
 

$ 18,168 $ 35,277 6.0%
 

N.A. N.A. N.A.
 

$ 11,300 $ 27,020 7.9%
 

$ 6,988 $ 21,444 10.2%
 

$’ 7,261 $ 16,936 7.7%
 

$ 10,408 $ 19,513 5.7%
 

$ 31,293 $ 61,896 6.2% ....
 

$ 11,433 $ 11,534 0.1%
 

$398,276 $771,070 6.0%
 

Performers’ salaries. The rate of increase
 

of expenditures on performers’ salaries
 

has been on the average of 2.9 percent annually, which is somewhat lower than the
 

general ±nflation rate (and lower than the
 

rate of increase in performers’ wage rates
 

which is discussed in Chapter IV). The increase has been higher for plays (5.1 percent) than for musicals (2.0 percent)­

again lending support to the hypothesis
 

51
 
Figure Vl Production costs of Broadway plays 1965-67 and 1975-77
 

52
 
Figure Vll Production costs of Broadway musicals 1965-67 and 1975-77 
that cost-cutting measures have been greater for musicals than for plays.
 

Data on cast sizes in Table i0 help to explain 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 atendency 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 recovery in the most recent seasons, over
 

the whole period cast size fell at a rate
 

of 3.45 percent per year. This helps explain 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 substitution of lower-paid personnel in musicals 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 examination of performers’ and other salaries
 

is deferred to Chapter IV.
 

Other artistic personneL. This category includes salaries paid to stage managers, musicians, musical directors, hairdressers,
 

dressmakers, and all other artistic personnel. Royalties and fees are treated under
 

a separate section. The annual rate of increase for this category of salaries has
 

been 10.7 percent for plays and 5.1 percent
 

for musicals. However, their share of total production costs is modest. Their actual total share in total production costs
 

should be viewed in combination with "royalties and fees," since a major part of their
 

compensation appears under the "fees" category. 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 security through the practice of advance payments required at the signing of contracts.
 

Administrative salaries and expenses. These
 

costs include salaries of general and company managers, production associates, production secretaries, office charges, accounting and auditing fees, ticket office
 

preliminary expenses, per diem allowances,
 

~nsurance, 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,
 

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

Cast of 

6-9 

Cast of 

20-29 

Season Plays 

Musicals Plays 

Musicals 

1964-65 38.9% 0 5.6% 11.8% 

1968-69 23.3% 12.5% 13.3% 18.8% 

1970-71 36.4% 8.3% 13.6% 16.7% 

1971-72 25.0% 25.0% 17.9% 10.0% 

1972-73 21.9% 14.3% 12.5% 19.0% 

1973-74 9.7% 10.0% 12.9% 30.0% 

1974-75 22.2% 15.4% 16.7% 15.4% 

1975-76 24.1% 11.8% 13.8% 17.6% 

54
 
respectively) and they account for a considerable and increasing part of the budge~s 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 salaries and the relative difficulty in reducing managerial personnel, other administrative 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 production and operating administrative costs
 

(mail orders, "charge-it," and other marketing techniques requiring materials and
 

personnel). The commitments of the artistic
 

and managerial personnel operating in more
 

than one location--often 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 administration 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 salaries 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 expenses are not included; they appear under
 

"fees and royalties." Total departmental
 

costs now amount to 30.5 percent of production costs for plays and 43.6 percent
 

for musicals--by far the largest item of
 

the budget. These shares in total production costs are lower than they were in
 

1965-67. Approximately one-half of departmental 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 rela~ed materials and services.
 

Average cast size
 

All
 

productions Plays 

8.8 

19.4 13.4 

17.0 12.0 

16.4 12.3 

14.8 11.2 

14.9 ii.0 

15.0 11.4 

17.2 11.4 

Musicals
 

36.8
 

31.0
 

26.3
 

22.2
 

20.3
 

27.0
 

24.9
 

27.2
 

55
 
Royalties and fees. This includes fees paid


to designers, directors, choreographers,


music arrangers, managers, and a host of
 

other professional categories. These professionals are receiving higher fees, as
 

negotiated by their respective professional 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 percent of production costs allocated to royalties and fees has increased for plays from
 

7.9 to 10.1 percent. For musicals it has
 

increased only slightly in importance. However, substantial hikes in remunerations
 

obtained since 1977 aren’t reflected.
 

Tryouts. Losses during tryout performances


before the official opening on Broadway are
 

part of production costs and obviously a
 

considerable expense for plays with an annual rate of increase at 11.2 percent.
 

(There was insufficient information available on this item for musicals to permit
 

an estimate to be made.) Such a rapid increase in losses during tryouts is prompting 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 costumes. 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.
 

Le@al fees and miscellaneous items. Normally, 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 University Press, 1968) legal and audit fees were
 

singled out for their rapid rate of increase, 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 musicals, 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 salary categories above) for rental of halls
 

and incidentals, scripts and parts, expenses 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 collectively account, on the average, for
 

approximately 3 percent of total production costs. Their combined rate of annual
 

increase has been 3.1 percent.
 

Advertisin@ and promotion. Advertising
 

and promotion expenditures have been increasing faster for plays, at 7.8 percent
 

per year, and relatively slower for musicals, at 5.7 percent per year. Although
 

advertising expenditures have not been
 

growing any faster than several other expenses, they account for the second largest
 

share of total production costs for plays
 

(14.2 percent of total costs) and an important but less prominent share for musicals (8 percent of total costs).
 

By far the most popular theatre advertising
 

medium is newspapers. Since 1965 the proportion of expenditures allocated to newspaper advertising has been decreasing for
 

plays and increasing for musicals. Billboards, signs, photos, and promotion were
 

the second major outlets for musicals, although 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 expenditures and of total production costs; the
 

average rate of increase has been 5 percent
 

annually.
 

Orchestration. Orchestration is an important expense for musicals, increasing by
 

7.2 percent annually and obtaining a greater
 

share of total production costs.
 

56
 
 

 

 

 

 

 

 

Table 11 Average weekly operating expenditures of Broadway plays and musicals 1965-67 to 1975-77 

~Plays Musicals 

rate of 

1965-67 ~ 1975-77 increase 1965-67 

Performers’ 

salaries ~$ 6,398 $11,789 5.6% $13,323 

Other artistic 

personnel ~ 1,157 $~i,758 3.8% $ 4,762 

Administrative
 

Stagehands
 

and crew
 

Departmental
 

Royalties
 

and fees
 

Taxes and
 

1,764 $ 3,993 ~::" 7,-4%~ "~$ 2,379 

4OO 

~?_
 

benefits ~ .497 : $ 2,121 113.2% $ 935 

Advertising 

and promotion ~ 2,201 ~ ~,322 ~9% $ 4,135 

Total $3~064~ ,~7.0% $44,177 

Operatinq 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 considered in the following discussion.
 

The annual rate of increase of current operating 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.
 

Table ii provides information on the annual
 

rates of increase of individual operating
 

1975-77
 

$20,455
 

$ 8,375
 

$14,1~0
 

$ 4,977
 

$ 2,347
 

$17,607 


$ 4,003 


$12,900
 

$ 1,224
 

$86,048
 

i&verage 

~an~ual £n-


Annual icrease for
 

rate of plays and
 

increase ~siuals
 

3.9 % 4  ̄ 5%
 

5.1% 4,9% 

16.2% ~3.~4% .... 

5.8%
 

4.7%
 

2.5%
 

13.2%
 

1o. 3% 

0.1% 1.1%
 

6.1% 6,3%
 

expenditures for plays and musicals between
 

1965-67 and 1975-77; Figures VIII and IX
 

(following) show the percent of total operating expenses for each item at the beginning and end of the period. Although in
 

absolute terms total operating expenditures
 

for musicals are twice as much as the total for plays, the rate of annual increase
 

for plays is much higher than that of musicals.
 

The following examination of individual expenditure items reveals which increase the
 

fastest and whether their proportion of the
 

total has changed.
 

57
 
Figure VIII Operating expenditures of Broadway plays 1965-67 and 1975-77 
Figure IX Operating expenditures of Broadway musicals 1965-67 and 1975-77 
Performers’ salaries. The single most important expense in ’~he total operating budget is salaries (31.8" percent for plays and
 

25.5 percent for musicals) but there has been
 

a decline of their proportion of total operating 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
 

expenditures are the second leading expense item in plays and the third largest
 

in musicals. Advertising has increased
 

for both plays and musicals since the mid1960s, growing at an annual combined rate
 

of 9.7 percent. The fast rise in advertising expenditure can be attributed to attempts to compensate for competition from
 

television and to take account of the greater
 

geographical dispersion of audiences. On
 

the average, a show that runs for a year
 

may spend about $380,000 on advertising
 

for plays and about $600,000 for musicals.
 

The increasing allocation of dollars toward
 

publicity suggests that producers believe
 

advertising is paying off in attracting
 

audiences.
 

Royalties and fees. Payments to directors,
 

designers, .and playwrights amount to 15.3
 

percent for plays and 14.6 percent for mu-


Sicals. The bulk of payments to designers
 

is made before the opening of the show and
 

to playwrights (except for the nonrefundable advance) after the opening. The average annual rate of increase of fees and
 

royalties is among the lowest of all components of operating costs, and there is
 

a decline in their relative share of total
 

operating expenditures. However, the relatively 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 larger advance payments.
 

~ministrative salaries and expenses and
 

other o~eratin@ costs. As with similar
 

productlon costs, increasing activity in
 

marketing innovations and paperwork associated with employees’ benefits has accounted for rapid increases in administrative
 

salaries and expenses for operating costs.
 

Of total operating expenditures, these account for 17.7 percent for musicals and
 

10.8 percent for plays. Their rate of annual 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 expenditures. Although their share of the
 

total is approximately 4 percent, their
 

rate of annual increase has been 7.3 percent over the last i~ 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, although they occupy only a modest share of
 

total operating expenditures (5.3 percent).
 

Salaries for technical artistic personnel


and-~ho~e for 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 expenditures for both plays and musicals, stagehands 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, operating expenditures as a whole have been increasing 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.
 

Closin@. Closing expenses include adjustments of payroll, transportation and hauling, administrative salaries, accounting
 

and audit fees (closing the books and preparing partnership tax returns), restoration of stage, "take out"stagehands costs,
 

unused ticket and theatre playing dates,
 

cancellation charges, insurance, payroll
 

taxes, additional vacation pay, union pensions, and storage. During closing, a production 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 averaged 7.8 percent of the size of production
 

costs for plays and 4.5 percent for musicals.
 

. Sometimes a show may choose or be
 ~ to move from one theatre house to
 

another. Reasons for such moves are varied
 

mprevious contractual arrangements of the
 

house, a move from Off-Broadway to Broadway,


need of a better stage. In a sample of 9
 

shows, these costs, ranged from $5,500 (in
 

1966) to $69,000 (in 1973). The average


rate of increase follows closely the rate
 

of increase of production costs.
 

Revenues
 

Box office receipts. Average receipts per
 

show, per week, have improved since the
 

1960s, with spectacular increases in the
 

1974-75 to 1976-77 seasons in terms of cur6O
 
Table 12 Average weekly box office receipts of Broadway plays and musicals 1965-66 to 1976-77 

Season
 

1965-66
 

1966-67
 

1967-68
 

1968-69
 

1969-70
 

1970-71
 

1971-72
 

1972-73
 

1973-74
 

1974-75
 

1975-76
 

1976-77
 

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 important in assessing the gains of th~ various 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 ri@hts and miscellaneous 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, rentals of equipment, costumes, sales of sets
 

and props, advertising rebates, insurance
 

credits, interest from deposits, return of
 

Musicals 

Current Constant 

dollars 1967 dollars 

$62,000 $64,000 

$66,000 $66,000 

$69,000 $69,000 

$69,000 $67,000 

$64,000 $60,000 

$62,000 "$56,000 

$57,000 $50,000 

$73,000 $61,000 

$67,000 $50,000 

$81,000 $51,000 

$86,000 $49,000 

$93,000 $51,000 

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 average was 5.45 percent, ranging from 0.01 percent to 27.98 percent, with the median 5
 

percent.
 

Making similar estimates for successful
 

musicals, such income accounted on the average for 77 percent of total production costs-­

ranging from 5.73 percent to 1,030.90 percent, with the median 37 percent. For the
 

rest of the musicals (undecided and failures),
 

the average was 7.26 percent, the range being from 0.05 percent to 38 percent, and
 

the median 2.02 percent.
 

On the average, each musical (successful
 

and otherwise) received $183,847 and each
 

play $75,080 from other income--clearly
 

61
 
Flgum X Relative importance of "other Income" for selected successful 

Broadway plays and musicals 1965-66 to 1976.77 
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. Figure X illustrates the relative importance
 

of "other income" sources for successful
 

plays and musicals.
 

Revenue from national companies. The producer of a Broadway show may decide to mount
 

a second version for touring. The production 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 additional touring productions unilaterally,
 

according to the limited partnership agreement. By and large, touring companies have
 

endured the same vicissitudes as Broadway.
 

Production costs of national companies are
 

apt tobemuch less than the production costs
 

of the parent showmoften as little as half.
 

The most prominent operating cost items
 

are typically transportation, hauling, and
 

per diems. The net profit from these companies 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 Broadway theatre make a profit? If so, does it
 

earn enough to repay investors with a reasonable return on their investments? To
 

answer these questions, the study included
 

an examination of the patterns and magnitudes of cash flows associated with production and operation.
 

There are 4 main types of cash flows associated 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, apositive margin
 

contributes to the recovery of the production 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 successful musical runs for 80.625 weeks while the
 

successful play runs for 48.25 weeks. The
 

calculations that were made employed a present 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 profitability 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 partners. The limited partners, who frequently
 

put up most or all of the money, do not receive this rate of return. The partnership
 

agreement commoDly awards all net revenue
 

to the limited partners until their investment 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 partners 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 partnership agreements usually contain language
 

such as the following: "A purchaser of the
 

Limited Partnership Interest being offered
 

hereby should be prepared to lose his entire investment because of the nature of
 

theatrical undertakings."
 

63
 
Table 13 Average cash flows of Broadway plays and musicals 

1965-66 to 1976-77 

Plays 

Production costs $147,876 

Weekly operating marginmsuccesses $ 8,397 

Weekly operating marginmfailures 0 

Other income--successes $237,637 

Other income--failures $ 8,059 

Closing costs $ 11,534 

Musicals 

Production costs $493,528 

Weekly operating margin--successes $ 14,633 

Weekly operating margin--failures 0 

Other income--successes $380,016 

Other income--failures $ 35,830 

Closing costs
 

It should be noted that this calculation,
 

which shows that the limited partners may
 

lose on their investments even though the
 

entire partnership (including the producer)
 

gains, does not necessarily mean that the
 

producer is profiting at the expense of the
 

limited partners. Producers invest time
 

and resources in the search for properties
 

and the formation of partnerships that are
 

often not reflected in the production costs.
 

The income earned from management fees, office 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 customarily provided in partnership agreements
 

results in extraordinary returns to producers. No information has been obtained on
 

whether investments in Broadway productions
 

have become more or less profitable over
 

the years although the following observations suggest that the return on investments
 

has fallen.
 

The fastest growing items for both musicals and plays are production costs, as
 

Table 14 shows. The rate of increase in
 

$ 22,209
 

investment in productions has lagged behind 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 evident 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 musicaL.
 

Table 15 shows average profit margins and
 

estimated recoupment periods of investors’
 

money. (The estimates assume that there
 

are no debts that have priority.) Operating margins formusicals seem to increase
 

less than those of plays. Recoupment periods 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 shorter recoupment periods than the average.
 

Finally, another qualification that should
 

be made regarding the computation of rates
 

of return is that there are different losses
 

and gains for individual participants. For
 

64
 
Table 14	 Annual rates of increase of 

Broadway financial indicators 

1965 to 197~’ 

Investment
 

Production costs
 

Operating
 example, performers, playwrights, and other expenditure
 artistic personnel have made gains in income
 

security (increasing guaranteed minimum Box office
 

compensation). Increasing advance payments receipts
 to personnel have shifted the risk toward
 

the producer. The theatre owners’ share Recovery period
 has remained stable for the last i0 years.
 for successes
 

However, with successes running longer,
 

the turnover of shows may be less and re- Operating margin
 duce the theatre owners’ annual expenses in for successes
 

bringing in new shows. Moreover, many theatre owners are now producers. This new Theatre share
 

shift inareases both risks andprofitability.
 

 ̄

for successful plays and musicals 1965-66 to 1976-77 

Table 15	 Average Broadway profits and recoupment pedods 

Musicals
 

Season 

1965-66 $15,161 

1966-67 $17,638 

1967-68 $i1,i08 

1968-69 $10,146 

1969-70 $14,187 

1970-71 $18,826 

1971-72 $14,29"6 

1972-73 $14,458 

1973-74 ~$ 9,968 19.0 $10,505 

1974-75 $10,120 20.0 $22,000 

1976-76 $11,125 20.0 $14,516 

1976-77 $12,692 21.3 $12,762 

Plays Musicals
 

6.4% 4.1%
 

10.7% 4.7%
 

4.7% 2.7%
 

5.6% 2.8%
 

4.5% 4.7%
 

6.8% 3.8%
 

5.6% 5.6%
 

Recoupment
 

weeks
 

19.8
 

26.0
 

37.6
 

52.7
 

32.9
 

27.8
 

36.1
 

32.8
 

48.1
 

30.2
 

43.6
 

47.9
 

65
 
 

LARGER NONPROFIT THEATRE
 

The larger nonprofit theatres are concentrated 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 Endowment 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 budgets and Ii (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 additional 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, programs, parking, movies and TV, and services;
 

"unearned income" means contributions and
 

grants. Production and operating costs are
 

combined because of the nature of the operation 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 components of the budget between 1965-66 and
 

1976-77 was substantial no doubt because
 

Table 16	 Income and expenditures 

of fifty-nine larger nonprofit

theatres 1976-77 

Earned income $38,087,685 62% 

Unearned income $21,501,702 35% 

Total income $59,589,387 97% 

Total 

expenditures $61,403,645 100% 

Surplus or 

(deficit) ($ 1,814,258) (3%) 

the 1960s and early 1970s were formative
 

years for the nonprofit theatre. The Guthrie
 

Theatre was founded in 1963, and with it
 

the whole regional nonprofit movement accelerated; just 2 years later the National Endowment 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 

Total 

Season 

Total 

unearned income 

operating 

expenditures 

1965-66 $ 2,732,489 23.4% $11,955,735 

1967-68 $ 5,335,473 28.8% $19,929,917 

1970-71 $ 6,856,740 32.7% $21,187,170 

1971-72 $ 7,798,707 35.1% $22,133,318 

1972-73 $ 9,742,137 36.5% $25,978,747 

1973-74 $10,154,799 36.8% ~i~27~630~040 I00~ $27,660,029 

1976-77 $12,569,323 34.9% ! ~36,052i25~ :I00% $37,166,244 

66
 
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 constant over the recent past.
 

Budgets
 

The records of 59 larger nonprofit theatres
 

examined in Table 16 show that no two budgets are alike. Both the size and the relative composition of a budget may differ because 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 compared 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 rehearsal space, and ownership of the building; geographical location, which means different local rules on safety and insurance
 

as well as the price and availability of
 

such materials; and the extent of experimental work undertaken.
 

Theatres differ in their situations and
 

their identities, and their budget reporting differs not only from theatre to theatre but often from year to year for the
 

same theatre. As a result, the following
 

assessment of such matters as the composition of production and operating expenditures must be viewed in light of the difficulty in finding budget consistency.
 

Surplus or 

(deficit) 

percent of 

operating 

expenditures!~ex~t~re~i!i! 

($ 302,249) 74.6% 

($1,400,459) 66.2% 

($ 219,770) 66.6% 

$ 75,354 65.1% 

$ 717,207 65.3% 

($ 29,988) 63.2% 

($1,113,993) 63.2% 

67 

Table 18 Rates of increase in Income 

and expenditures of thirty 

larger nonprofit theatres 

1965 to 1977 and 1970 to 1977 

1965 to 1970 to 

1977 1977 

Earned income 7.8% 8.8% 

Unearned income 13.2% 9.9% 

Total income 9.4% 9.1% 

Operating 

expenditures 9.1% 9.6% 
Table 19 Average expenditures of thirty larger nonprofit theatres between 1965-66 and 1973-74 

Salary 1965-66 

Performers and 

other artistic 

personnel $124,296 31.2% 

Administrative $ 58,040 

Stagehands 

and crew 

Fringe benefits 17,569 

Total salary 

Nonsalary 

Departmental 

Royalties and 

fees 

Transportation 

and travel 

Advertising 

and promotion 

Facilities and 

related costs 

Fundraising 

Other 

Total nonsalary 

Grand total 

Budget Shares
 

The analysis of budget shares is based on
 

two sets of data. One set(the Ford Foundation 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 (financial statements of the same theatres for
 

fiscal 1976-77) is used for analyzing the
 

composition of more recent operating expenditures. However, the two sets of data are
 

not really comparable because it was not
 

feasible to combine all budget items in a
 

consistent way.
 

1967-68
 

$198,175 29.8%
 

$104,836 15.8%
 

$ 69,518 10.5%
 

$ 33,572 5.1%
 

$406,101 61.1%
 

$ 55,007 8.3%
 

$ 16,854 2.5%
 

$ ii,137 1.7%
 

$ 61,929 9.3%
 

$ 48,272 7.3% 

$ 6,649 1.0% 

$ 58,381 8.8% 

$258,229 38.9% 

$664,330 100.0% III 

Table 19 reports average expenditures for
 

30 theatres for selected years between
 

1965-66 and 1973-74. Annual rates of increase for most of these are shown in Table 20 (following).
 

Salary costs take a larger portion of the
 

budget than nonsalary costs. Performing
 

and nonperforming artistic personnel is
 

the largest factor in the total budget but


shows a slight decrease in their share since
 

1965. Salaries of nonperformers have been
 

increasing faster than have salaries of
 

performers. Administrative salaries, the
 

next largest salary cost, have increased


their relative share of total expenditures
 

68
 
1971-72 1972-73
 

$224,512 30.4% $255,762
 

$121,442 16.5% $138,933
 

$ 72,254 9.8%
 

$ 42,251 5.7%
 

$460,459 62.4%
 

7.5%
 

2.5%
 

2.3%
 

9.0%
 

6.4%
 

0.7%
 

9.3%
 

37.6%
 

100.0%
 

since 1965. Salaries for stagehands and
 

crew account only for 9.7 percent of total


expenditures during the 1973-74 period,
 

but their annual rate of increase since
 

1965 is i0.I percent. The fastest-growing
 

item in the salaries category (also the
 

smallest) is employees’ fringe benefits,
 

which have increased by 69 percent since


1965.
 

Among nonsalary costs, the largest category
 

is the miscellaneous one of "other" costs
 

(which includes depreciation and interest
 

on loans along with the usual incidental
 

costs). However, the fastest-increasing
 

nonsalary item is transportation, which is
 

1973-74
 

$266,213 28.9%
 

$151,994 16.5%
 

$ 89,499 9.7%
 

$ 59,099 6.4%
 

$566,805 61.5%
 

7.8%
 

2.8%
 

2.6%
 

8.8%
 

6.8%
 

0.6%
 

9.2%
 

38.5%
 

100.0%
 

only a small part of total expenditures.
 

Of all costs, then, salary costs are clearly the largest component of the budget, with
 

61.5 percent in 1973-74. This is partly a
 

result of theatre being a labor-intensive
 

activity and partly because union contract
 

minimums set a floor on salaries. Of course,
 

an organization wishing to lower salary
 

costs could decide to use smaller casts,
 

but even for a play with two actors there
 

is still the need for such nonperforming
 

artistic personnel as a director or a sound
 

and light technician, and the annual rates
 

of salary increase for this category (and
 

for stagehands) are higher than those of
 

performers.
 

69
 
Average expenditures of fifty-eight larger nonprofit theatres by budget size 1976-77 Table 21 

Salaries 

Administrative and 

fundraising 

Stagehands 

and crew 

Taxes 

Fringe benefits 6,516 

Royalties and 

fees 

Transportation 

and travel 

Advertising 

and promotion 12.2% 

Facilities and 

related costs 5.6% 

Telephone 

Other 

1.0% 

6.8% 

Total 100.0% 

7O
 
 

 

Up to this point, the analysis of costs has
 

been based on the combined average expenditures of 30 theatres during 1965-74. Another, 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.
 

14 theatres
 

with budgets of
 

$701,000-$i million
 

$412,530 50.8%
 

27,413 3.4%
 

$ 76,551 9.4% ~$ 108,973
 

$ 20,719
 

$ 27,835
 

54,227 6.6%
 

25,880 3.2%
 

80,111 9.9%
 

$ 49,319 6.1% 91,008 7.1%
 

$ 6,553 0.8%
 

$ 31,756 3.9%
 

$812,894 100.0% !$i, 2e2,702 : 100; 0% 

Table 20	 Annual rates of increase in 

expenditures of thirty larger 

nonprofit theatres between 

1965-66 and 1973-74 

Salary
 

Performing artistic 7.9%
 

Nonperforming artistic 9.2%
 

Production/technical 10.1%
 

Fringe benefits 13.5%
 

Administrative 10.4%
 

Total salary	 9.6%
 

Nonsalary
 

Departmental 6.9%
 

Facilities and related costs 6.1%
 

Transportation and travel 17.2%
 

Subscription and promotion 8.4%
 

Royalties 9.5%
 

Fundraising 5.2%
 

Total nonsalary	 8.2%
 

$ 2.201 mi 1 lion + Total
 

$1,511,610 53.8% $3,178,484 51.85%
 

$ 157,373 5.6% 278,485 4 .’54%
 

$ 249,953 8.9% $ 561,335 9.16%
 

1.5% $ 128,190 2.09%
 

6.2% $ 253,323. 4.13%
 

151,954 5.4% $ 334,389 5.45%
 

$ 16,397 0.6% $ 105,525 1.72% 

$ 297,346 10.6% $ 642,028 10.47%
 

$ 173,324 6.2% $ 381,368 6.22%
 

$ 12,804 0.2% $ 42,985 0.70%
 

$ 27,728 1.0% ~ $ 223,700 3.65%
 

$2,815,281 i00.0% $6,129,812 100.00
 

71
 
 

 

Revenues
 

Revenues are comprised of earnings of the
 

theatre and contributions from the public
 

and private sectors. The total does not
 

always balance with total expenditures.
 

For the larger nonprofit theatres in the
 

1976-77 sample, 62 percent of total expenditures was covered by earned income and 35
 

percent by contributions, and a deficit of
 

almost 3 percent remained (see Table16).
 

Earned income. Theatres earn income in a
 

variety of ways although the bulk of their
 

earnings is from the box office. On the average, the larger nonprofit theatres earn


70 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 ticket sales were 42.8 percent. Relative positions havebeen 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 income 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 movie 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 theatre in the way it does other forms of art.
 

The "other tickets" category is the third


most important source of earnings. It includes income from selling tickets to student groups as well as income from performances of other groups, the proceeds of which
 

are usually split with the host theatre.
 

Table 22 Average eamed income of thirty larger nonprofit theatres between 1965-66 and 1973-74 

Performance income
 

Subscription tickets
 

Single and block
 

tickets
 

Other tickets
 

Services
 

Recordings, films,
 

and radio and TV
 

Total
 

Nonperformance
 

income
 

Grand total
 

*Less than 0.1%
 

1967-68 

$150,384 34.2% 

$146,212 33.3% 

$ 52,058 11.8% 

$ 51,624 11.7% 

$ 252 0.1% 

$400,530 91.1% 92.4% 

$ 39,270 8.9% $ 35,646 7.6% 

$439,800 100.0% $470,355 100.0% 

72
 
 

The "nonperformance income" category includes 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 increasing costs. This was achieved by raising ticket prices and extending seasons.
 

During the 1970s, earned income has accounted for a nearly constant share of operating


expenditures. In other words, in spite of
 

the pressures of "cost disease," an important segment of the nonprofit theatre has
 

managed the feat of increasing earned income at the same rate as its rapidly rising
 

budgets.
 

1971-72 1972-73 

$180,220 37.5% ~ $229,781 

$145,239 30.3% 

$ 66,749 13.9% 

$ 42,281 8.8% $ 38,839, 

$ 1,097 0.2% 

$435,586 90.7% $551,996’ 90.6% 

$ 44,745 9.3% $ 53,132 9.4% 

$480,331 100.0% $565,128 100.0% 

Table 23 Annual rates of Increase in 

earned income of thirty larger 

nonprofit theatres 1965 to 1974 

Subscription tickets 10.7%
 

Single and block
 

tickets
 3.4%
 

Other tickets
 6.7%


Services
 10.7%


Recordings, films,
 

23.3%
 and radio and TV
 

Nonperformance income 9.9%
 

1973-74 

$226,912 39.0% 

$172,341 

$ 77,568 

$ 43,949 

29.6% 

13.3% 

7.5% 

$ 1,122 

$521,892 

0.2% 

89.6% 

$ 60,616 10.4%,, 

$582,508 100.0% 
Figure Xl Sources of private support for thirty larger nonprofit theetms 

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

between 1965-66 and 1976.77 

Unearned income. Contributions to the larg- Although public contributions are increaser 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), public (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
 

~ncome 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 ~he private sector, 22.7 percent for the public
 

sector, and 4.7 percent for foundations.
 

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 million (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 sector and foundation support were a combined
 

65.3 percent of total contributions but the
 

public sector increased its share of contributions 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 liquidation of 50 percent of a theatre’s net incurred liabilities after the other 50 percent has been liquidated within a specified
 

period. Each fiscal year of the grant period, usually five years, must be completed
 

in a net current position. The money is
 

given on an installment basis for a revolv75
 
Table 24 Sources of public and private support for thi~y larger nonprofit theatres 

between 1965-66 and 1976-77 

Public
 

Federal
 

State
 

Municipal
 

Total
 

Percent of
 

grand total
 

Private
 

Business
 

United Arts Fund
 

Local
 

Other local
 

Individual
 

Total
 

Percent of
 

grand total
 

National
 

foundations
 

Percent of
 

grand total
 

I
 

Corpus earnings
 

Percent of
 

grand total
 

*Less than 0.1%
 

1967-68
 

$ 941,791
 

$ 39,302
 

$ 126,000
 

$i,i07,093
 

$ 226,932
 

$ 330,160
 

$ 528,288
 

$ 325,793
 

$1,194,904
 

$2,606,077
 

$1,599,753
 

85.1% 

3.5% 

11.4% 

i00.0% 

20.8% 

8.7% 

12.7% 

20.3% 

12.5% 

45.8% 

100.0% 

100.0% $1,567 

30.0% 22.9% 

100.0% 

100.0% $6,856~740 100.0% 

76
 
 

 

 

 

 

 

 

1971-72 1972~73 1973-74 

$ 934,127 61.4% $ 1,763,704 64.0% 

$ 424,364 27.9% $ 682,410 24.8% 

$ 162,901 10.7% $ 308,450 11.2% 

$1,521,392 100.0% $ 2,754,564 100.0% 

19.5% 27.1% 

$ 551,288 i2.4% 654,535 12.9% 

$ 715,021 16.0% $ 941,638 18.5% 

$ 575,187 12.9% $ 730,109 14.4% 

9.6% $ 631,359 12.4% 

$2,194,130 49.1% $ 2,126,076 41.8% 

$4,465,129 100.0% "$6,074,239 100.0% $ 5,083,717 100.0% 

57.3% 62.4% 50.0% 57.8% 

III 

$1,808,668 100.0% $ 2,260,385 100.0% $ 965,033 10o.o% 

23.2% ,-,~.. .16~4% 22.2% 7.5% 

3,518 100.0% $ 25,882 ~ :~i00-;0%~o 74,133 100.0% 

0.3% 0.7% N.Ao 

$7,798,707 100.0% $9.742,137~ 100.0% $10,172,799 100.0% $12,866~404 100.0% 

*Less than 0.1% 

77
 
Figure Xlll Public and pdvate support for thirty larger nonprofit theatres as a 

percent of operating expenditures between 1965-66 and 1976-77 

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 theatre 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 theatre. 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 nonprofit theatres have become increasingly
 

dependent upon public sources for their unearned income. Since 1965 this has risen
 

from less than 3 percent of total operating
 

expenditures to more than 10 percent. Total private contributions, which rose in
 

the mid-1960s, then declined to about 20


percent. Figure XIII shows the relationship
 

between public and private support.
 

78
 
SMALLER NONPROFIT THEATRE
 

Many of the smaller nonprofit theatres are
 

developmental theatres. They specialize in
 

producing new plays, in experimenting with
 

new ideas and approaches, and in offering
 

a testing ground for performers, writers,
 

directors, and designers. In the last few
 

years there has been an explosion in developmental activity all around the nation.
 

There are common themes expressed by the directors 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’ consciousness raising,"
 

"civil liberties advocacy," and "crlticism
 

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, talent, and plays find their way into commercial theatres and other nonprofit theatres.
 

Because of the informality and the opportunity for new ideas that many of these theatres 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 arrangements are imposed and not negotiated,
 

and certain variations of this code may allow more performances under specified conditions.
 

Approximately 620 smaller nonprofit theatres were operating during 1976-77. Complete budget information was obtained on a
 

sample of 113 theatres. (The data were obtained from the Ford Foundation, National
 

Endowment for the Arts, and New York State
 

Council on the Arts.) The majority had budgets in the vicinity of $100,000 during the
 

1976-77 fiscal year, with a handful exceeding $300,000. Budgets over $250,000 were
 

included for theatres classified as "developmental" by the Arts Endowment. (The highest budget in the sample of developmental
 

theatres is $750,000, which is considered
 

a statistical outlier in this report.) On
 

the other hand, there were theatres with
 

budgets of less than $10,000, and one with
 

as little as $3,000, and these are treated
 

separately.
 

Income and expenditures of 113 developmental theatres are given in Table 25. In
 

terms of individual theatres, 44 (approxi79
 

Table 25	 Income and expenditures of

113 developmental theatres 

1976-77 

Earned income $ 5,264,313 45.8% 

Unearned income $ 5,934,258 51.6% 

Total $11,198,571 97.4% 

Total 

expenditures $11,501,586 100.0% 

Surplus or 

(deficit) ($ 303,015) (2.6%) 

mately 39 percent of the sample) had deficits 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 budgets 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.
 
 

 

 

Budgets
 

The general conditions that influence the


budgets of smaller nonprofit theatres are
 

more or less the same as for larger nonprofit theatres. There are, however, certain


features peculiar to the nature of the smaller 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 advantage 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 theatre 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 performers’ salaries.
 

Another important feature of the developmental theatre is that frequently there is
 

at least one playwright in residence. A


theatre with a resident playwright contributes greatly to the development of talent.
 

However, this involves additional costs for


these theatres, while the expected or derived benefits are often shared by nonprofit and commercial theatres and by the movies 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 population, such as industrial workers, women,
 

or certain ethnic groups. Although speci-


Table 27	 Average income and expenditures of fourteen larger developmental theatres 

between 1972-73 and 1976-77 

Total
 

operating
 

expendi-


Season Unearned income	 tures
 

1972-73 $40,555 46.9%	 $ 80,173
 

1973-74 $43,474 64.7%	 $ 80,592
 

1974-75	 $59~297
 59.2%	 $105,209


1976-77 $60,007 49.1%	 $129,943
 

Table 28	 Averegeincome and expenditures ofsixteen smallerdevelopmentaltheatres 

1972-73and 1976-77 

Total
 

operating


expendi-


Season Earned income Unearned income Total income tures
 

1972-73 $15,063 38.7% $23,829 61.3% $38,892 100.0% $33,556
 

1976-77 $23,692 34.6% $44,715 65.4% $68,407 100.0% $70,113
 

8O
 
fic 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, socially challenging, and avant-garde material that certain theatres present. Such
 

uncommon material often may not easily attract 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 established, 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

($ 4,987) 38.9% 56.4%
 

($ 7,677) 47.9% 46.2%
 

Percent 

of earned 

income to 

total tO totall 

Surplus or 

(deficit) 

operating

expenditures 

operating~ 

expenditures 

$5,336 44.9% 71.0% 

($1,706) 33.8% 63.8% 

Table 26	 Annual rates of increase in 

income and expenditures of 

thirty developmental theatres 

between 1972 and 1977 

16 theatres 

14 theatres 1972-73 and 

1972-77 1976-77 

Earned income 13.2% 11.3% 

Unearned income 10.6% 15.7% 

Total income 11.5% 14.1% 

Operating 

expenditures 13.2% 18.4% 

tributors. When the developmental theatres
 

reach budget levels in the vicinity of
 

$100,000, the erratic movements of their
 

budgets seem to subside.
 

The sample group of 113 developmental theatres is divided into the New York City group


(43 theatres) and the regional group (70
 

theatres). The regional group had no deficit, on the average, and a greater percentage of earned income to total expenditures.
 

The relatively heavy reliance by both groups
 

on contributions is one result of the developmental nature of their work, which usually 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 increase 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 rapidly 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 homogeneous. When the two groups of developmental theatres were disaggregated into
 

smaller budget ranges, substantial differences in growth rates were found. In general, the smaller the budget the higher the
 

rates of increase for earned income, contributions, and expenditures.
 

81
 
 

 

 

 

 

Table 29 Average expenditures of three developmental theatres

with 1971-72 budgets under $10,000-- 1971 to 1976 

Salary costs 1971 1972
 

Artistic $6,850 73.5% $ 5,762 43.1%
 

Production/technical $ $ 1,730 12.9%
 

Fringe benefits
 

Administrative $ 264 2.0%
 

Nonsalary costs
 

Departmental $  ̄ 950 $ 637 4.8%
 

Facilities and
 

related costs $ 2,170 16.2%
 

Transportation
 

and travel $ 661 4.9%
 

Promotion $ 738 5.5%
 

Royalties
 

Educational expenses $ 300 2.2%
 

Fees $ 278 2.1%
 

Other $ 466 : 5~0% $ 827 6.2%
 

Total $9,316 $13,367 lOO.O%
 

82
 
 

1974 1975 

$31,787 44.6% ~$22,779 36.9% 

$ 4,940 6.9% $.3,500 5.7% 

...... $ 3,688 6~0% 

$12,200 17.1% $10,450 16.9% 

$ 3,622 5.1% $ 4,616 7.5%
 

$ 4,124 5.8% ~- $ "4,066 ....... 6.6%
 

$ 5,916 8.3% i.$ 5,17~4_ " 8.4%
 

$ 2,062 3.0% 5~5% ......
 

$ 3,750 5.3%
 

$ 930 1.3%
 

$ 1,910 2.7% $ i~,423 2.3%
 

$71,241 100.0% $61,755
 

Bud@et Shares
 

As with the larger nonprofit theatres,
 

there was difficulty in deciphering the financial statements of individual developmental theatres with regard to specific expenses. These limitations meant smaller
 

samples were necessary in order to report
 

individual cost items with consistency.
 

Smaller samples had the advantage of limited budget ranges which are important in analyzing the data. The smaller the budget,
 

the greater the impact that even a few


thousand dollars can have in budget allocation. Table 29 and Tables 30, 31, 32, and
 

33 (following pages) illustrate the average
 

expenditures of i0 developmental theatres
 

according to budget size.
 

83
 

1976
 

$ 41,522
 

$ 6,500
 

$ 4,785
 

$ 17,150
 

$ 6,190
 

$ 9,000
 

$ 4,167
 

$ 7,633
 

$ 1,200
 

$ 3,417
 

$ 1,277
 

$102,841
 

40.4%
 

6.3%
 

4.7%
 

16.7%
 

6.0%
 

8.8%
 

4.1%
 

7.4%
 

1.2%
 

3.3%
 

1.2%
 

100.0%
 
 

 

Table 30 Average expenditures of two developmental theatres 

with 1971-72 budgets of $10,000-$25,000--1971 to 1976 

1972 

Salaries $11,075 39.4% 

Fringe benefits $ 476 1.7% 

Departmental $ 1,270 4.5% 

Facilities and 

related costs $ 4,910 17.5% 

Transportation 

and travel 17.1% 

~romotion 7.2% 

Royalties 0.5% 

Educational 

expenses 

Fees 2.7% 

Other 9.4% 

Total 100.0% 

84
 
 

 

 

1974 1975 1976 

$14,342 39.1% $23,559 48.1% $39,058 59.0% 

$ 599 1.6% $ 2,150  ̄ $ 1,213 1.8% 

$ 6,409 17.5% $ 6,149 12~6% ~ $ 5,250 7.9% 

$ 5,391 14.7% 5’912 12.1% $ 5,538 8.4% 

$ 4,701 12.8% $ 3.,909 ~ _~ 8.0~ ~ $ 6,250 9.4% 

$ 1,245 3.4% $ 3,380 5.0% 

$ 119 0.3% $ ~ .... --~ o:­ - ..... 

...... , 

$ 398 1.1% $ i~478..~ ~D% $ 1,500 2.3% 

$ 3,436 9.4% 8~5% $ 3,988 6.0% 

$36,640 100.0% $48,931 ~i00~0% $66,177 100.0% 

85
 
 

 

Table 31 Average expenditures of three developmental theatres 

with 1971-72 budgets of $50,000-$80,000--1971 to 1976 

Salary costs
 

Artistic
 

Production/
 

technical
 

Fringe benefits
 

Administrative
 

Nonsalarv costs
 

Departmental
 

Facilities and
 

related costs
 

Transportation
 

and travel
 

Promotion
 

Royalties
 

Educational
 

expenses
 

Fees
 

Other
 

Total
 

1971
 

$ 5,611
 

$ 5,177
 

$ 6,897
 

$ 7,730 


$ 9,343 


$ i~913
 

$ 5,770
 

$ 1,178
 

$13~038
 

$72,487
 

7.7%
 

7.1%
 

9.5%
 

10.7%
 

12.9%
 

2.6%
 

8.0%
 

1.6%
 

18.0%
 

I00.0 

1972
 

$ 5,919
 

$ 4,910
 

$ 7,713
 

$ 6,352
 

$ 9,386
 

$ 3,868
 

$ 4,786
 

$ 1,935
 

$10,551
 

$69,116
 

i 24;204 

8.6%
 

7.1%
 

11.2%
 

9.2%
 

13.6%
 

5.6%
 

6.9%
 

2.8%
 

15.3%
 

100.0%
 

86
 
 

1974 

$21,563
 

$ 4,638
 

$ 2,972
 

$ 9,694
 

$ 9,762
 

$11,563
 

$ 2,711
 

$ 6,861
 

1,047
 

$ 1,547
 

$ 2,347
 

$ 8,765
 

$83,470
 

1975 1976 

25.8% $ 30,000 29.6% $ 36,800 28.2% 

5.6% $ 6,367 6.3% $ 5,250 4.0% 

3.6% $ 4,825 4.8% $ 7,993 6.1% 

11.6% I1,000 10.8% $ 17,750 13.6% 

11.7% $ 12,600 9.7% 

13.9% $ 14,426 11.1% 

3.2% $ 7.3% 

8.2% $ 8.9% 

1.3% $ 1.4% 

1.9% 

2.8% 2.1% 

10.5% 7.6% 

100.0% 100.0% 

87
 
 

Table 32 

Salary costs
 

Artistic
 

Production/
 

technical
 

Fringe benefits
 

Administrative
 

Nonsalary costs
 

Departmental
 

Facilities and
 

related costs
 

Transportation
 

and travel
 

Promotion
 

Royalties
 

Educational
 

expenses
 

Fees
 

Other
 

Total
 

Average exoenditums of two developmental theatres

with 1971-72 budgets of $100,000-$150,000-- 1971 to 1976 

1972
 

$ 61,365 49.1%
 

$ 6.8%
 

$ 6.7%
 

$ 7.3%
 

4.2%
 

6.4%
 

$ 7.8%
 

$ 5.0%
 

1.1%
 

2.5%
 

2.4%
 

0.7%
 

$124,973 100.0%
 

88
 
 

1974 1975 1976 

$ 80,494 40.8% 81,182 40.1% $ 65,744 38.0% 

$ 11,965 6.1% 7,182 3.6% $ 9,740 5.6% 

$ 11,574 5.9% 12,203 6.0% $ 11,584 6.7% 

$ 24,670 12.5% 31,421 $ 29,838 17.3% 

$ 11,572 5.9% $ 7,523 4.3% 

$ 13,757 7.0% $ 9,458 5.5% 

$ 14,862 7.5% $ 17,610 10.2% 

$ 11,793 6.0% $ 10,421 6.0% 

$ 5,200 2.6% 2,304 ~1.1%t- .~ $ 2,941 1.7% 

$ 3,600 1.8% $ 210 0.1% 

$ 5,850 3.0% 7,063 $ 5,795 3.4% 

$ 1,738 0.9% 

$197,075 100.0% 

89
 
Of the 5 theatres under $25,000 in 1971-72,
 

salaries comprise the largest item of the
 

budget and gain steadily between 1971 and
 

1976.
 

Of the 5 theatres with budgets over $50,000,
 

the annual rates of increase of individual
 

items seem to be substantially different
 

for the 2 budget ranges, although some items


(salaries, facilities, promotion) increase
 

faster than others in both ranges. The average 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 constant (54.7 percent in 1971 versus 54.4 percent in 1976), individual salary categories
 

changed. The proportion of artistic salaries decreased to the same degree that
 

administrative salaries increased. Administrative salaries reported by the 5 theatres for 1971-72 were modest in both ab-


Table 33	 Annual rates of increase in expenditures 

of five developmental theatres 1971 to 1976 

2 theatres
 

with budgets of
 Salary $100,000-$150,000
 

Artistic
 3.1%
 

Production/technical	 2.1%
 

Fringe benefits	 10.6%
 

Administrative
 30.9%
 

Nonsalary
 

Departmental	 5.8%
 

Facilities and related costs
 17.0%
 

Transportation and travel	 16.0%
 

Promotion
 13.7%
 

Fees
 14 ~00% 11.0%
 

Other
 9.0%
 

Total	 9.7%
 

9O
 
 

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

Salary
 

Artistic
 

Production/
 

technical
 

Fringe benefits
 

Administrative
 

Nonsalary
 

Departmental
 

Facilities and
 

related costs
 

Transportation
 

and travel
 

Promotion
 

Royalties
 

Educational
 

expenses
 

Fees
 

Other
 

Total
 

solute and in comparative terms. Whether
 

all administrative costs were reported as


such or incorporated into other categories
 

is open to furthe~ 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 expenditures and budget shares of 3 major groups:
 

24 theatres from New York City, 20 from the
 

rest of the country (regional), and i0 characterized as "ethnic." Each group is divided 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
 

New York City
 

13 theatres
 

with budgets of
 

$50,000-$110,000
 

$25,720 30.9%
 

$ 7,630 9.2%
 

$ 3,538 4.2%
 

$ 9,056 10.9%
 

$ 7,664 9.2%
 

$ 9,902 11.9%
 

6,281 7.5%
 

5,711 6.9%
 

1,128 1.4%
 

$ 3,263 3.9%
 

$ 3,473 4.2%
 

$83,366 100.0%
 

(table continued on following pages)
 

categories comprise over half the budget,
 

with salaries of individual subgroups ranging from 34.8 to 57.4 percent of total expenditures. In comparing types of salaries,
 

New York City artistic salaries have a greater share of the budget than the other 2
 

groups. On the average, the regional and
 

ethnic theatres have higher administrative
 

salaries.
 

Fringe benefits are a greater budget item in
 

the New York City and the ethnic samples than
 

in the regional sample. New York theatres
 

also allocate a greater part of their budget
 

for facilities than the other theatres.
 

Promotion expenditures comprise similar
 

budget shares among the various subgroups,
 

with the exception of the ethnic group,
 

which allocates less of its resources for
 

this item.
 

91
 
 

Table 34 (continued)
 

Regional 

Salary 

7 theatres 

with budgets of 

$70,000-120,000 

Artistic 29.3% 

Production/

technical 6.7% $ 3.6% 

Fringe benefits $ 2.6% 

Administrative $ 17.1% 

Nonsalary 

Departmental 9.0% 

Facilities and 

related costs $ ii,211 10.2% 

Transportation 

and travel $ 5.8% 

Promotion $ 5.3% 

Royalties $ 1.9% 

Educational 

expenses $ 8,789 8.0% 

Fees $ 1,088 1.0% 

Other $ 6,714 6.1% 

Total $109,656 100.0% 

92
 
 

 

 

Ethnic 

4 theatres 

with budgets of Total of 

$10,000-$70,000 54 theatres 

$12,897 28.4% $ 313,879 29.6% 

$ 70,377 6.6% 

$ 3,723 8.2% $ 48,376 4.5% 

$12,497 27.5% $ 30,421 16.4% $ 158,643 15.0% 

2,667 5.9% 70,854 6.7% 

3,983 8.8% 118,731 11.2% 

$ 1,250 2.8% $ 64,432 6.1% 

$ 1,725 3.8% $ 89,557 8.4% 

$ 1,350 3.0% $ 27,746 2.6% 

$ 3,500 7.7% $ 19,794 1.9% 

$ 28,190 2.7% 

$ 1,832 4.0% $ 50,394 4.7% 

$45,424 100.0% $i,060,973 100.0% 

93
 
Revenues
 

The average revenues of smaller nonprofit
 

theatres are comprised of almost equal
 

shares of earned income and contributions,
 

In a 1976-77 sample of 115 theatres, earned
 

income ranged from 0 to 90 percent of total
 

income. Only t~Q theatres were completely
 

dependent on contributions; their total expenditures were $i00,000 and contributions
 

covered only 70 percent of their budgets.
 

Twenty-six of the i15 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, workshop 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- theatres seem to have the same range of
 

formances) are greater than box office receipts. 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 combined income from subscriptions and admissions 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 toward a more comprehensive subscription and
 

admission policy.
 

Unearned income or contributions. Developmental 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 i0 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,
 

the country excluding New York City, and 10
 

ethnic theatres from all over the country.
 

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 almost equal shares. In the New York City
 

sample the state is the main source of contributions. 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, followed by ethnic theatres, depend most heavily 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). Contributions 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 percent for New York State theatres. Ethnic
 

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. However, the size of the sample does not permit drawing such definite conclusions.
 

94
 
FigumXlV Sources of public and pdvate support for ten New York State 

developmental theatres 1970 to 1976
 

95
 
Figure XV Sources of public support for fifty-four developmental theatres 1976-77 
Figure XVl Sources of pdvate support for fifty-four developmental theatres 1976-77 
sation are examined for only a few of many
 CHAPTER IV
 occupations. However, the patterns found
 

in these occupations help in understanding
 

the trends and conditions of the theatre
 

labor force as a whole.
 THEATRE LABOR FORCE AND EMPLOYMENT
 

Perhaps the most striking trend is the increase in theatre artist union membership
 

while membership in nonartist unions has re-~
 This chapter examines the economic condi­ mained stable (see Table 35). Actors’ Eq­ tions of the theatre labor force, which in­ uity Association membership, for example,
 cludes actors, ushers, doormen, stagehands,
 increased at about 3 percent a year between
 musicians, press agents, and managers. Da­ 1961 and 1975. The civilian labor force
 ta on employment, unemployment, and compen-


Union and association membership 1961 to 1976 Table 35 

International
 

Alliance of
 

Theatrical
 

Stage Employees
 

American
 and Motion


Federation
 Picture Machine


Operators
 of Musicians
 

1961
 

61,037
 1962 281,949
 

1963
 

60,546
 1964 275,254
 

1965
 

62,160
 1966
 252,487


1967
 

60,000
 1968
 283,155


1969
 

63,000
 1970
 300,000


1971
 

62,000
 315,000
 1972
 

1973
 

61,471
 1974
 330,000


1975
 

1976
 

Growth
 4.86% 0.15%
 1.63%
 rate
 

98
 
---

---

---

---

increased by 2 percent and the general pop- Theatre employment for nonartists is much


ulation by 1.6 percent in the same period. more secure. The average member of Stage-


However, employment has not followed the hands Local No. 1 and the Association of
 

same pattern as union membership. Between Theatrical Press Agents and Managers worked
 1961 and 1975 Equity employment increased more weeks than Equity members. These
 at an annual rate of 1.2 percent while unions typically contract with continuing


United States employment increased at 1.9 enterprises (theatre owners) rather than a


percent. In short, the average member particular production. Analysis of the
 finds less employment in 1976 than in 1961.	 amount of employment of Equity members by
 

theatre type shows some high increases for
 There seems to be little employment securi- dinner theatre and, far behind, large nonty for theatre artists. In 1976 only 60 per- profit theatre. Broadway and the road are
 

cent of the paid-up members of Equity worked
 

under the Equity jurisdiction, and of these
 

about half worked for less than 15 weeks.
 

 ̄ ~
 

-S~re~
 

~ActOrS’
 

G~ild-~ ~.~,
 

21,000
 

23,000 ....
 

......
 

26,610
 

29,797
 

6.47%
 

Association
 

of Theatrical~
 

Press Agents
 

~ and Managers
 

566
 

581
 

588
 

570
 

580
 

0.3%
 

1,845
 

1,9~0
 

2,060
 

2,180
 

2,240
 

2,350
 

2,445
 

2,575
 

3.96%
 

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 happens. The annual incomes for theatre artists are typically quite low. From the
 

1970-71 season through 1976-77, among Equity 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 income and that they themselves have additional nontheatre jobs.
 

No data are presented in this report on employment and earnings in the smaller, developmental 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 analysis. It seems very likely that employment
 

and earnings for these theatres are even
 

lower than union figures.
 

LABOR FORCE
 

Data on the theatre labor force are based on
 

union membership since this was the only
 

systematic data dating from the 1960s. Union membership is a very different concept
 

of the labor force than the Bureau of the
 

Census definition used to determine unemployment rates. In the latter, the labor
 

force is the number of individuals employed
 

and actively seekingemployment. Union members 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 union members have vague aspirations or expectations of working in the theatre at some
 

time. Union membership and employment provide rough indicators of trends and conditions in the labor market.
 

99
 
Figure XVII Actors’ Equity Association end civilian employment 1961 to 1975
 

i00
 
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 seeking work in the professional theatre in America. 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 approximately 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 smaller than those in the Equity membership.
 

The growth rate for the United States civilian labor force over the period is approximately 2 percent per year.
 

This pattern of rapid increases in the labor 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 Association is a union open to anyone who obtains 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 Federation of Musicians (AFM), American Federation of Television and Radio Artists (AFTRA),
 

International Alliance of Theatrical Stage
 

Employees and Moving Picture Machine Operators (IATSE), Screen Actors’ Guild (SAG),
 

Association of Theatrical Press Agents and
 

Managers (ATPAM), and Dramatists’ Guild (DG).
 

These data show a consistent pattern of increase 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
 

nonperformers, is in marked contrast and
 

memberships remained roughly constant over


the entire period. This reflects the fact
 

that it is difficult to become 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,
 

Underem~loyment, and Unemplo~ment in the
 

Performln~ Arts, Washington, D.C.: American Federation of Labor-Congress of Industrial 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 jurisdictions 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 interchange 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 percent of respondents considering the performing arts as their principal profession and
 

who may be presumed to be seriously interested in employment in the performing arts


is 80.5 percent for AEA members, 76.8 percent for AFTRA, 68.3 percent for SAG, 62.5
 

percent for AGMA, and 46.5 percent for AFM.
 

EMPLOYMENT
 

Actors
 

Most of the data presented in this section
 

on employment in the theatre are from
 

Equity members under Actors’ Equity Association contracts. In addition, some data
 

showing employment of members of other
 

theatrical unions are presented. Two
 

I01
 
 

 

cent a year, faster than total civilian em-
 different measures of Equity employment


can be made: median week employment and
 ployment at 1.92 percent a year. The difference of about 0.4 percent between these
 total work weeks. Median week employment


is determined by counting total number of
 two rates is somewhat smaller than the apmembers working during each week, arrang­ proximately 1.0 percent difference between


the rate of increase for Equity membership
 ing the weekly totals from highest to low-


est, and taking the middle value. A work
 and the total civilian labor force. Total


Equity work weeks have increased at a rate
 week represents one Actors’ Equity Association member during any part of one week of 1.22 percent a year, or more slowly than
 

under Equity contract.
 civilian employment.


Overall trends. From the 1961-62 season The conclusion is that employment of Equity
 

through the 1975-76 season the median week .,members has increased more slowly than both
 

employment and the total work weeks have in- membership growth and total civilian employ-


creased more sporadically than the total ment. The slow rate of increase in employ­ ment in comparison to membership means that
 United States civilian employment. (This
 

is not in itself surprising since total ci- Equity members on the average find less emvilian employment tends to average out cy- ployment in the theatre today than they di~
 

clical swings that affect such individual in the 1960s under Equity jurisdiction (see
 

sectors as the theatre.) Overall, median Figure XVIII). Despite increases in certain
 

years, the general trend has been downward.
 week employment has increased at 2.34 per-


Figure XVIII Average work weeks of Actor’s Equity Association

U.S. and Canada members 1961 to 1975 

102
 
Table 36 Actors’ Equity Association U.S. member work weeks by theatre type 

Season Road Stock All areas* 

1967-68 27,076 165,197 

1968-69 26,586 162,283 

1969-70 31,352 168,473 

1970-71 29,393 20,662 146,876 

1971-72 25,839 25,409 157,707 

1972-73 23,279 28,850 155,099 

1973-74 24,052 27,630 161,490 

1974-75 17,802 26,574 164,041 

1975-76 18,464 25,231 160,828 

Growth rate 

1967-68, 

1975-76 -5.83% 

Growth rate 

1970-71, 

1975-76 -9.74% 3.11% 1.75% 

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

The Equity member may be working in television 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 b[ theatre t[pe. The data on
 

work weeks in different types of theatres
 

reveal two important patterns (see Table 36).
 

First, there are cyclical swings in employment. Between 1961 and 1976 employment increased 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 ayear; but from the 1970-71


season on, it increased by 1.75 percent a
 

year. These patterns corroborate the findings in Chapter II on changes in theatre
 

activity.
 

The second pattern has to do with the importance 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 theatre discussed in Chapter II.
 

Employment of individual Actors’ Equit[ Association members. Another rough measure
 

of Equity members’ employment can be made
 

using the records of the Equity-League Welfare and Pension Fund (an organization established initially by Actors’ Equity Association 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 progressively 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 Equity members are typically employed under Equity jurisdiction for only part of a year.
 

Another measure of employment can be made
 

by estimating the percentage of paid-up Equity members who worked under Equity jurisdiction. Using the data available, the cal103
 
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 uncertainty 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 chancethat apaid-up
 

Equity member will not work at all under
 

Equity jurisdiction during any year; and if
 

an actor does work, the average annual employment is about 15 work weeks.
 

Other information also shows little employment security in the acting profession.
 

For example, the U.S. Bureau of Labor Statistics 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 estimates of employment distribution--employment patterns of Equity members working under other performing arts unions not greatly different from employment of Equity members 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 employment of Equity members are examined. These
 

findings show that when.all paid employment
 

(employment in teaching, theatre, nontheatre, etc.) is taken into account, the median number of weeks of employment is about
 

37 and 28.8 percent of Equity members were
 

employed full time. While there is a certain comfort in these figures, over 80 percent of Equity members said that they considered the performing arts to be their
 

primary occupation.
 

Musicians
 

For this information a sample was taken
 

from the files of the American Federation
 

of Musicians (AFM) and Employers’ Pension
 

and Welfare Fund for individual members of
 

Local 802. Monthly earnings from both
 

Broadway and out-of-town employment were analyzed 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 during a month. (A member playing at all performances of a show during a month is one
 

work month, the same as for a member playing 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. Although the work month measure is a very unhomogeneous one, it does seem fair to conclude that the Broadway theatre is not a
 

very steady source of employment for individual musicians whether by choice or necessity. Because AFM 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 A@ents and Mana@ers
 

The total work weeks and the distribution
 

of work weeks for members of the Association
 

of Theatre Press Agents andManagers(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 theatre. Approximately 70 percent of ATPAM
 

members worked at least once in 1974-75 and
 

over one-fifth of these worked 50-52 weeks
 

during the year. Median employment for
 

ATPAM members was about 32.5 weeks.
 

COMPENSATION
 

Union minimum wage rates, annual theatre income, 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 nonprofit theatres and from pension and welfare funds. The annual figures are governed
 

by period of employment as welIl as wage rate.


If weekly wage rates increase but weeks ofemployment decrease by the same proportion, the
 

annual income figures should remain constant.
 

Wa@e Rates in Theatre Occupations
 

Two main conclusions emerge from an examination 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 percentmso that purchasing power has increased for most occupations listed.
 

Second, while a weekly minimum of $250 for
 

52 weeks would theoretically produce an annual salary of $13,000, actual theatre earnings fall well below the minimum that could
 

be obtained annually from steady employment.
 

Another perspective on weekly wage ~ates
 

can be obtained by examining average weekly earnings computed by dividing annual
 

earnings by annual work weeks. In 1976,
 

40 percent of Equity members in a sample of
 

104
 
Table 37 Growth rate of selected weekly salaries between 1964 and 1977 

Broadway
 

Actors (nonroad)
 

Actors (road)
 

Stage manager (musical)
 

Stage manager (drama)
 

Press agent
 

Manager
 

Stagehand (department head)
 

Stagehand (asst. dept. head)
 

Stagehand (flyman)
 

Stagehand (portable board)
 

Musicians (musical)
 

Musicians (drama)
 

Musicians (out-of-town)
 

Ushers
 

Chief usher
 

Treasurer
 

Head porter
 

Wardrobe supervisor
 

Engineer
 

Regional theatre
 

Actors (LORT A)
 

Actors (LORT B)
 

Actors (LORT C)
 

Actors (LORT D)
 

Stage manager (LORT A)
 

Stage manager (LORT B)
 

Stage manager (LORT C)
 

Stage manager (LORT D)
 

6.14%
 

6.60% 

3.68~ 

4.09%
 

4.98%
 

5.38%
 

1964-77
 

1964-77
 

1964-77
 

1964-77
 

1964-77
 

1964-76
 

1964-77
 

1964-76
 

1964-77
 

1966-77
 

1966-77
 

1966-77
 

1966-77
 

1966-77
 

1966-77
 

1966-77
 

1966-77
 

$378,35 

$265.00
 

$228.55
 

~209.20
 

Year of
 

weekly
 

salary
 

1977-78
 

1977-78
 

1977-78
 

1977-78
 

1976-77
 

1976-77
 

1977-78
 

1977-78
 

1977-78
 

1977-78
 

1977-78
 

1977-78
 

1977-78
 

1974-75
 

1974-75
 

1976-77
 

1977-78
 

1976-77
 

1977-78
 

1977-78
 

1977-78
 

1977-78
 

1977-78
 

1977-78
 

1977-78
 

1977-78
 

1977-78
 

105
 
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 sample 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 Broadway and the road.
 

Union members’ annual income. Contractual
 

wage Kates 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 employees actually earn the theoretical annual
 

minimum. Rather, data from pension and welfare funds reported below show that median
 

incomes are well below $i0,000 per year.
 

Actors’ E~uit[ Association. The data on


annual earnings of members of Actors’ Equity Association are taken from a small sample of the Equity-League Pension and Welfare 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 covered income in 1976 was quite low; the median was less than $5,000 and the mean was
 

about $4,443. By way of reference, theU.S.
 

Bureau of the Census official 1976 poverty
 

level income was approximately $5,815 for a
 

family of four not living on a farm. Therefore, if the actor with Equity earnings was
 

a member of a four-person, nonfarm household, additional household income would be
 

needed to get above the official poverty
 

level.
 

Data on the covered income from 1970-71
 

through 1975-76 show that the median income
 

of those who were employed was consistently
 

less than $5,000 and the~mean never exceeded $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 Equity members is provided by the survey data
 

collected in the Ruttenberg study. This
 

showed the 1976 Equity members median income from all sources to be a little over
 

$7,000 or about 75 percent greater than income 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 ancome of members of AFM Local 802 was taken from 1976
 

pension fund records and pertain only to
 

members who worked at least once on Broadway or out-of-town and only to income derived from this work. The median income of
 

these members was below $5,000; the mean income was about $8,485.
 

Approximately 25 percent of those working
 

on Broadway or the road had an annual income 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 probably result from temporary employment when a


regular member of an orchestra is sick or goes
 

on vacation. Among actors, such substitutibns typically come from the existing cast
 

through the use of an understudy and there is
 

no temporary replacement. Most musician~


working in the theatre earn reasonably adequate incomes.
 

Press a@ents and mana@ers. 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 median 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 roughly the same income distribution. Relative
 

to the incomes that members of other unions
 

earn in theatre jurisdictions, ATPAM members seem to fare reasonably well. Nonetheless, a significant number (about 18 percent) earn incomes of less than $5,000.
 

Sta@ehands. Data on stagehands come from
 

a sample of members of International Alliance of Theatrical Stage Emplo~ee~ 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 jurisdictions (television and shops). The median 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 members earn incomes from covered employment
 

in areas other than the Broadway theatre.
 

The median 1976 income from employment un106
 
der all Local 1 jurisdiction was above
 

$12,000 and the mean $14,212. Approximately 30 percent of the sample had annual incomes from employment under Local 1 jurisdiction 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 annu~l inc~m~
 

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 approximately the same picture: in other words,
 

members who work in the theatre typically
 

do not have much income from other Local
 

B 183 jurisdictions.
 

Wa@e bills in the theatre
 

Perhaps the most interesting perspective
 

on labor compensation in the theatre is provided by data on wage bills--total expenditures 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 productivity in live theatrical performances.


Therefore, wage bills may be expected to in- changed over the years. In other words,
 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 performinq arts institutions.
 

Expenditure growth rates have been estimated
 

for various labor categories for a period
 

6f 9-seasons; see Table 38 (following).
 

Comparing these rates with growth of the
 

average wage rate for corresponding categories would indicate whether or not employment has increased or decreased. Again,
 

employment has increased if wage rates have
 

gone up more slowly than expenditures; employment has decreased if wage rates have
 

gone up more quickly.
 

Wage rates for artistic personnel in nearly all categories have grown more slowly
 

than expenditures, indicating that more artistic personnel are being employed. For
 

most of the categories the increase is
 

slight, probably in the neighborhood of 1.0
 

to 1.5 percent per year. The few larger
 

increases in employment of artistic personnel (regular performing artists in the pit,


guest artists) are in categories which account for only a very small proportion of
 

total expenditures.
 

For nonperforming artists, the categories
 

with the largest total expenditures (stage
 

managers and instructors, creative designers and technical personnel) have increased
 

expenditures more quickly than wage rates.
 

This probably reflects both increasing employment and some substitution of paid for
 

unpaid personnel.
 

By far the highest rates of increase in total expenditure for personnel are for non-


artistic personnel. Unfortunately, no comparable data on wage rates were available
 

and so there was no ready way of determining how much of this growth may be due to
 

increase in wage rates and how much to increase in employment.
 

Additional evidence on employment is provided by examining the relationshiP between salary and fee expenses and total
 

operating expenditures. There has been a
 

slight tendency for the portion of the~budget devoted to nonartistic salaries to increase. Apart from these almost impercept"
 

ible shifts, the salary and fee composition
 

of the budget has remained virtually unit 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 average employment has been about equal to the
 

rate of growth of total operating expenditures. 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 appears 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 investment 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 I0 percent), the sampling error


in the estimates is relatively large, but the
 

pattern of findings is consistent with other
 

data.
 

In general, growth rates for selected salary and fee expenditures are quite differ107
 
ent from those for the nonprofit theatres Another pattern that emerges for the data


examined in the preceding paragraphs. For is the marked increase in other artistic
 

example, cast salary expenditures (both and crew costs during production. During
 during production and operating) have grown the operating period, however, these costs


relatively slowly. Since the basic minimum increased quite moderately and are well be-
 salary for actors under Equity jurisdiction low the range of increases in wages.
 (all shows in the sample) has increased by


over 7.5 percent a year, there is compelling 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.
 

Table 38	 Growth rate of larger nonprofit theatre wage bill categories

1965-66 to 1973-74 

Wage bill category Growth rate
 

Performing artists on stage 6.31%
 

Performing artists in the pit 46.38%
 

Guest artists 33.41%
 

Total performing artistic personnel 7.42%
 

Regular and guest directors and conductors 5.85%
 

Stage managers and instructors 8.35%
 

Creative designers and technical 13.08%
 

Other nonperforming artistic -1.19%
 

Total nonperforming artistic personnel 8.33%
 

Total artistic personnel
 7.71%
 

Stagehand and crew shop 7.92%
 

Total artistic and production personnel
 7.71%
 

Executive 11.44%
 

Supervisory 5.10%
 

Clerical, box office, and front-of-house 12.09%
 

Maintenance
 11.12%
 

Total nonartistic personnel 9.99%
 

Total personnel 8.35%
 

Employee fringe benefits 13.18%
 

Total salaries, fees, fringe benefits 8.79%
 

108
 
CHAPTER V
 

THE THEATRE COMMUNITY VIEWS ITSELF
 

The statistics in the preceding chapters
 

describe in quantitative terms certain aspects of the condition of the American theatre between 1965 and 1977: extraordinary
 

and diverse theatre activity around the
 

country, the large audience for this activity, 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 theatre artists. Those committed professionals who work in the theatre and who daily
 

encounter its problems and needs speak to a
 

parallel set of facts perhaps less quantifiable but equally as important and pertinent. Many individuals and organizations
 

in the theatre community were asked for
 

their views. Formal statements were received from a number of organizations and
 

from 4 roundtable discussions comprised of
 

individuals representing various constituencies in the theatre community. The organizations submitting statements were
 

Actors’ Equity Association, Off-Off-Broadway Alliance, Alliance for American Street
 

Theatre, Dramatists’ -Guild, League of
 

Resident Theatres, American Theatre Association, League of New York Theatres and
 

Producers, American Community Theatre
 

Association, Performing Arts Repertory
 

Theatre Foundation, Theatre Development
 

Fund, Theatre Communications Group, and
 

Black Theatre Alliance. The roundtable
 

discussions were organized as follows:
 

October 18, 1977, 9:00 a.m. - noon,
 

New York City
 

Richard Barr, President, League of New
 

York Theatres and Producers
 

John Bos, Director of Performing Arts,
 

New York State Council on the Arts
 

Michael Feingold, Critic
 

Bernard Gersten, Co-Producer, New York
 

Shakespeare Festival
 

David LeVine, Executive Director,
 

Dramatists’ Guild
 

Stephen Schwartz, Composer
 

Douglas Turner Ward, Artistic Director,
 

Negro Ensemble Company
 

Thomas Fichandler, Managing Director,
 

Arena Stage
 

October 18, 1977, 2:00 p.m. - 5:00 p.m.,
 

New York City
 

Emanuel Azenberg, Producer
 

Earle Gister, Director, Leonard Davis
 

Center for the Performing Arts
 

Stuart Ostrow, Producer
 

Jane Alexander, Actress
 

October 20, 1977, 9:00 a.m. - noon,
 

Los Angeles
 

Alvin Epstein, Artistic Director, Guthrie
 

Theatre
 

Robert Goldsby, Artistic Director,
 

Berkeley Stage
 

Mako Iwamatsu, Director, East/West Theatre
 

Dan Sullivan, Critic
 

Marl Young, American Federation of
 

Musicians
 

October 20, 1977, 2:00 p.m. - 5:00 p.m,
 

Los Angeles
 

Arthur Ballet, Office for Advanced Drama
 

Research, University of Minnesota
 

Pat Don Aroma, International Alliance of
 

Theatrical and Stage Employees
 

Stanley Eichelbaum, Critic
 

Jorge Huarte, Director
 

W. Duncan Ross, Artistic Director, Seattle
 

Repertory Theatre
 

Complete transcripts of the organization
 

statements and roundtable discussions are
 

available through the National Endowment
 

for the Arts library.
 

The attitudes and analyses expressed were
 

as varied, conflicting, energetic, and inspired as the theatre activity on which
 

they commented. Each of the small roundtable 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 summarization and quotation, to give the highlights of these statements and discussions.
 

It does not present all of the attitudes
 

which were expressed. (Nor are these attitudes 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 individually expressed series of statements and remarks. The following is a selection of the
 

important themes running through these particular expressions of the theatre community, along with the disagreements, the different priorities, and the variety of solutions offered. The original statements and
 

full transcripts comprise a considerable
 

amount of material. In reducing them to
 

the following pages, no injustice is intended to those who have been so kind in providing help.
 

A persistent idea in the roundtable discussions and, especially, in the formal
 

statements is that deep-seated problems
 

exist beneath the surface of the burgeoning theatre activity in the country. While
 

the current level of activity is applauded
 

as a source of great hope, some (Arthur
 

Ballet and Dan Sullivan, for example) are
 

quick to point out that more theatre does
 

not necessarily mean better theatre. In
 

various ways, organizations and individuals
 

109
 
 

expressed a strong concern for the future, in a perpetual squeeze play. On the one
 a feeling that fundamental problems are be- hand, it has an expensive obligation to
 

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 fQr 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 theatriical lifetime that crises will happen.’ I


think that when we sit and face a normal
 

musical at over a million dollars, something has to be dealt with here. And the
 

only reason they look good up there is because we’re charging, instead of $i0 a


ticket, $20 a ticket. So he says, ’My God,
 

we grossed $640,000,000 last year.’ Well,
 

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 experimental 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 theatre .... 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 theatre, including writers. And that to my
 

mind bodes bad things down the road."
 

The Off-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) 


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 economy, it has to please them more every year.
 

These philanthropic sources, while they include many serious, generous, and good-hearted 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 burden 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 nation’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 guaranteed, the artists who operate them will
 

keep them alive and responsive to the
 

public, growing and changing."
 

The Alliance for American Street Theatre
 

says 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 kickin~"
 

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 participating member of most of the top think
 sessions about the theatre, and I find a
 

says: "So the nonprofit theatre is caught great contradiction because I have to be
 

ii0
 
very statesmanlike in giving my theoretical 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 sit 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 theatre’s place in the cultural life of the
 

nation.
 

Earle Gister speaks of a number of functions 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 because the mass audiences find entertainment 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 availability.
 

"Nevertheless, one of its funculons is to
 

entertain. And by entertain, it’s not
 

necessarily something that is not substantial or significant or deep. It can be.
 

I mean entertainment in the sense of involvement. 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 avocational 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 employment for a considerable number of
 

people of many different levels, both artistic and otherwise.
 

"Then, there is that other thing called
 

culture. The theatre indeed has a cultural 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) suggested 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 elsewhere in the country being brought into
 

New York City than happened before; but
 

it’s a two-way street. I don’t put culture 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 participants 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 Association, argues the central importance
 

of recognition of the theatre’s cultural
 

importance: "The major problem confronting 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 itself. The chief problem of the actor is
 

iii
 
the failure of society sufficiently to ap- of the federal government: "I think that
 

the federal government, and of course this
 preciate, materially and esthetically, his
 

contribution, applies to all of us, but I think especially the federal government should take
 

"Materially, the society, read: legisla- the lead in setting the tone for the acture, in a most niggardly fashion dispenses ceptance of the arts all over the country,
 

its largesse to the theatre. With a budget so that we can someday have the same situ-


of half a trillion dollars--that’s 5 followed by ii 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 failure of the federal government as well as
 

the multitude of state and municipal government to acknowledge the theatre’s contribution 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 collaborative art form, it requires the employment
 

of a host of other workers with diverse
 

skills. Moreover, the theatre does not
 

exist in a vacuum but must rely on or enlarge employment in such diverse systems
 

and industries as transportation, retailing, 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 earnings in the theatre? Where are the data
 

of the Commerce Department to detail the
 

interrelationships among the many disparate employing entities within the theatre
 

without which the theatre (in this country) does not exist? Why, in the two hundredth year of our independence, is there
 

no defined policy, executively or congresmental support.
 

"Esthetically there is only silence. Regrettably, the theatre is still a plaything, 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 language 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 philosophy, geography, natural history, naval
 

architecture, navigation, commerce and


agriculture; in order to give their children a right to study painting, poetry,
 

music, architecture .... ’"
 

And Marl Young also makes the point that
 

recognition must come from the leadership
 

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 writers. 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 unemployment 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 airline 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 something 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
 

sionally-proclaimed, which charts a course give us people in this artistic role a
 

for the theatre and mandates massive govern- 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 enterprise, there is a confusion in the minds
 

of the public, say many participants.
 

Remarks Richard Barr: "The difference between 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.
 

"Many, many years later, without trying to
 

go into the history of it, the other arts
 

112
 
 

began to come up, the other performing
 

arts, that is, the symphonies and the
 

dance and the concert attractions and
 

other performing areas. The only one that
 

remained commercial and still is commercial 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 difficult time raising money from a noninformed
 

public because of the confusion that exists
 

that Broadway makes money. Lincoln Center’s
 

problem is thatnno 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 question it for the theatre, the Beaumont."
 

Michael Feingold adds certain qualifications: "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 completely true that the theatre is the only
 

art that is not totally subsidized. We
 

have something in this country called commercial music, popular music, rock music,
 

Muzak, it pays its own way; whereas classical music, which many millions of people
 

like, would disappear if it weren’t subsidized. I think that should be underlined.
 

"There are such things as film and television. It’s possible--Dick works in the
 

theatre and does not consider them art
 

forms."
 

Mr. Barr: "Correct."
 

Mr. Feingold: "They are certainly mainly
 

commercial. I can’t answer for television, 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 without 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 without 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 subsidized 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 represents 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 understand your question. The play, as I understand 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 thinkn
 

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’tmwho 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."
 

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 establishment 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 single voice in advocacy. The American Community Theatre Association suggests: "If
 

the leadership of all theatre organizations in the country...could be drawn
 

together into a National Integrated Theatre 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!
 

We could by our very numbers and variety,
 

influence funding for and quality of theatre in America."
 

113
 
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 pressure 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 history and have to start over with no base
 

to start from and no understanding of our
 

past and our culture."
 

Such a point of view is not without its
 

critics.
 

Bernard Gersten asserts: "I’m for the
 

death of institutions. I would like to
 

speak fervently for it, to allow them to
 

pass away. That is particularly true of
 

my vlew 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 LaGallienne’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 regularly 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 permanent. It takes in new artistic foci that
 

energize it."
 

Although there were a large number of specific suggestions as to different ways to
 

promote stability and continuity--many of
 

which are quoted below--the common denominator 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 foundations, where the private foundation
 

wishes to tell you they will support you,
 

but they want to limit this in time, because 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 become a commercial theatre.
 

"Now, government does not do that with scientists, 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 sophisticated in science. Now why can’t the


government become as sophisticated in its
 

approach to the arts, which is the quality
 

of life in the whole society. And all
 

that means is what theatre needs is some
 

degree of continuity in time, so that each


year you don’t have to beg the board of
 

a foundation...to please give you the
 

money for the next year and then wait on


a cash flow problem for six months until
 

they tell you, yes, we will give it to you.
 

Meanwhile you have to borrow against it,
 

and so forth and so on. What we need is
 

continuity, and that can be provided only


by the people’s representatives, which is
 

the Congress; in other words, the whole
 

point of doing theatre is for the people.
 

We don’t function without audiences. That
 

is the whole idea, that is to be the mirror of our society, and so what we need is
 

the government moving in place of the private foundations, which are only giving us
 

a carrot once every year, and then saying,
 

Well, maybe if you are good, we will give
 

it to you for one more year, but remember
 

the axe will fall next year unless you get
 

some others."
 

Thomas Fichandler expresses a widely held


view on corporate support of theatre: "To
 

114
 
 

 

~evelop 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 commercial, 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-~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 9et caught in


between eligibility for "seed" money and
 

recognition as a major, established institution. 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
 

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 politicians in voting and attached in some way
 

to something that has an ongoing permanence
 

outside of yearly votes or what have you.
 

"What I am talking about here is--if, for
 

instance, the amount of money appropriated
 

to arts came from a one cent tax on gas or


something .... "
 

The emphasis placed on matching funds is
 

criticized. Thomas Fichandler, after describing his experiences at Arena Stage,
 

says: "Personally I think the three-toone 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 expressed 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 a11, objection
 

on the part of some in the nonprofit theatre to different support of commercial
 

theatre by the government.
 

Duncan Ross: "I have developed my subscription 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, commercial theatres, can’t band together and
 

create a series and do things for themselves 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 pattidirector has to spend away from the theatre, cipated and which went to New York, which


One-third of his/her time can be spent try- folded, but that is neither here nor
 

ing to raise money--not always .successfully. there, why nearly twice as many musicians


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 explaining over and over--and most often getting


rejections. The artistic leadership of the
 

theatre belongs in the theatre, supervising
 

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
 

the production of---plays .... Several very fine and Emanual Azenberg explore the question


artistic directors are considering leaving of art and commerce:
 

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 some. Douglas
 

Turner Ward suggests a system divorced
 

from the ordinary budgeting cycle: "The
 

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: "That is absolutely crucial
 

and important. And after he finishes that
 

115
 
and says, ’Now it’s ready t~ 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.~ 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 philosophy 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 theatre 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: "Until 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 ameliorations and incentives to attract new
 

capital and" investment, it may well require the understanding of the not-forprofit sector that this is in their own
 

best interest, too. For their part., the
 

commercial producers must understand that
 

even the most arcane not-for-profit theatre activity contributes to their economic
 

welfare. Actors’ Equity and the other
 

theatre unions must also be educated to
 

continue to provide the leeway in which
 

non-union activity can develop and promulgate new works and artists at low levels
 

of compensation and reward. At present,
 

the separate universes are discussing
 

their concerns at relatively low levels of
 

self-interest. Their mutual education and
 

edification is a primary task in the future."
 

The support of many sorts of institutions
 

is a major concern. Stephen Schwartz asserts: "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, specificBlet’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 begin to have a way to develop projects
 

should be made possible.
 

"Certainly there should be some geographical 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. Similarly on the Coast, or in Washington.
 

"Certainly I think there should be a geographical 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 possible 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 certainly been true in Europe.
 

"My point is, I think the biggest institution 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 excitement that comes from the theatre comes
 

from Broadway eventually, irrespective of
 

the second-rate stuff which .... "
 

Mr. Feingold: "To Broadway."
 

116
 
 

Mr. Barr: "No. From. I said ’from’ and
 

I meant ’from.’ That is where the important writers want to be seen and that is
 

where their most important works are done."
 

One basic proposal for institutional funding 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 ar~istsman~ 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 pittancemin 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 libraries and public schools are free). This
 

idea, supported by the data accumulated
 

from the operation of theatres throughout
 

the nation which function under union contracts, 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 Fichandler: "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. I
 

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 possible 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 theatre 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 everything."
 

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 comparablein
 

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 Advanced Institute of the Arts .... Remember
 

the Institute for Advanced Studies in
 

Princeton? That’s exactly what I’ve
 

117
 
always dreamed of for people in the theatre. 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 company. 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 permanent 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 production. I’m not a supporter of the
 

idea.
 

"I think the idea of supporting the


regional theatre in the way that has been
 

suggested here with maybe pushing money


into four or five of the major ones that
 

have proven they can sustain themselves
 

is a very good one.
 

"But to suggest that out of that is going
 

to grow a national theatre, I don’t think
 

there is any possibility of that. I think
 

a national theatre will grow when we have
 

a director possibly of the caliber of
 

Welles."
 

In general, expanding support for a limited
 

number of institutions was well received
 

but there also was a consensus that such
 

efforts should not come at the expense
 

of existing programs, particularly those
 

for smaller and minority theatres.
 

Michael Feingold: "If I can add to that,
 

I don’t think anybody is saying we should
 

cut off funding to the smaller theatres
 

simply because there are five or ten big
 

ones.
 

"The big ones depend on the small ones for
 

reactions, for challenge, for competition


artistically."
 

Douglas Turner Ward: "But talking about
 

the ethnic theatre, of course there are
 

major urban centers, there are major population 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 finally, you know, have survived up to this
 

point.
 

"There can be the same--we can go to
 

Atlanta to ~help serve the needs of the
 

black con~munity there if the black community 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 Theatre Alliance notes: "Significantly
 

enough, many of the companies who have
 

joined BTA subsequent to 1968 were motivated 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 governmental 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 problem 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 important function, a crucial contribution
 

to the future of theatre in America.
 

Off-Off Broadway Alliance: "The future
 

National Theatre lies in the not-forprofit 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 network is doing or will eventually do. Because of Off-Off Broadway’s primary commitment 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 commercial theatre listings have originated
 

in our developmental theatres. The developmental theatre community is beginning
 

to realize that it has great strength col118
 
lectively, and that if used properly, a nonprofit theatres are not so very differ-


national theatre can arise in America." ent from those on the commercial theatres:
 

"The other thing is I would assume that
 

Theatre Communications Group makes a similar 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 published reports in 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 productions could venture into experimentation
 

or productions of limited appeal. Today
 

the economic realities make the risks too
 

great. This change in the commercial sector’s ability to foster new creative work
 

would have seriously jeopardized the development of a rich indigenous American
 

dramatic heritage were it not for the
 

evolution of the nonprofit theatre. Perhaps 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 continent, has no center. Vital and original
 

theatre organizations can now be found
 

throughout the country and, indeed, have
 

reversed the historic pattern by increasingly supplying both new plays and productions to the New York commercial theatre,
 

as well as a steady flow of actors, designers 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 legislative way with the force for the major theatres 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
 

both of these kinds of theatres, at their
 

healthiest, both commercial and not-forprofit theatre, would be very, very concerned 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 likeahopeless idealist, but that is a little cockamamie 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 $i,000 or $2,000, and they are desperately 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 acceptable.
 

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 artistically and commercially viable? And that’s a
 

separate question. It would be lovely to
 

be able to do both."
 

119
 
Richard Barr feels that commercial theatre
 

needs: "Either tremendous tax relief from
 

every aspect so that risks--so that tickets 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 Gettin@ 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.
 

Perhaps the area of needed support mentioned 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: "We 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 directing 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 actor 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 afford to keep them and treat them as decent
 

"The regional theatre naturally or the the- human beings as well as actors.
 

atr~ from which it came would share in the
 

gross, so that the money was b~ing 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 Performing Arts Foundation (PAF) Playhouse on


Long Island: "We must continue to affirm 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 producing plays solely because of their commercial 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, noncommercial 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."
 

"This is a ’should be’ that is very important if we are ever going to develop the
 

~ind 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 yearNfor a major actor--so
 

that you have a nucleus of ten in any company 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 talented actors who have deserted the theatre, 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 television. It is not personally fulfilling. That is why almost every actor you
 

talk to who started ~n the theatre will
 

always want to go back to it in their
 

heart. They talk about it a lot. That
 

doesn’t mean they’ll make the move or that
 

they’ll move their families. Because that
 

is really what it comes down to--the
 

family problem."
 

Alvin Epstein looks at the needs of the
 

middle-level actor: "I have to be able to
 

first of all hire more actors than I am
 

able to hire now, and I have to be able to
 

120
 
hire them at better salaries than I am
 

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 salaries...a million-dollar contract. That
 

is nonsense. That is not what I am suggesting, but the actor has to be given the
 

opportunity to earn over a year’s employment 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 arhists 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
 

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 working across the bay in ACT for $600 a week.
 

Those people are working for absolutely
 

zero, they are working out of love of performance, 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 poetry program supported by the Office of Education. In other words, they all have
 

some other way of making a living. People
 

who are making money in the theatre, survival 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 office worker, somebody to make money as a
 

public relations person--those jobs we
 

can’t get volunteers for. We can, fortunately, get the actor who is the center
 

of the theatre. The most important artist
 

in the theatre is always the one who ends
 

up not being paid, because there are more
 

actors than there are people who run
 

trucks.
 

"To turn to what I was speaking of, with
 

the new fund support. We are talking
 

about having good people who can do their
 

job well at any level. Your level is
 

$25,000, you get your actor to make your
 

theatre. For me, if I had $150, I could
 

hold the young actor in the area for a
 

while. The older people--that is a whole
 

different area."
 

Arthur Ballet speaks for the needs of the
 

playwright: "I will now take the thing I
 

am most interested in, obviously, the
 

playwright. I say one of the things that
 

should happen is that we should have some
 

kind of a system, I would hope flexible,
 

that provides the playwright with a living
 

wage as soon as we recognize him as a
 

large number of those institutions, surely, playwright. I don’t know how that is to
 

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 Angeles, and maybe one or two other, I don’t
 

know, so that you could identify these
 

slots that you are talking about .... I’d
 

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 theatre. 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,
 

think you would have to put limits on that, that one of the stipulations be that it
 

and not say ’All professional actors should have attached to it a playwright. They
 

be paid what lawyers are paid.’ I don’t have stagehands, they have managers, they
 

think that would make any sense, have directors, all of them are paid, and
 

the playwright, who seems to me to be
 

"Secondly, my position in this, coming from central .... He isn’t central to it at all.
 

the other, I have worked in these big thea- Or if you are going to get subsidies, you
 

tres, and I have also worked now in the are going to have to have a playwright.
 

other end. I am going back in my life to I know that is a Draconian measure, but
 

121
 
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 living 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 circulated 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 artists, 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. Maybe it does to everybody else."
 

On this point the Dramatists’ Guild has
 

several suggestions for the support of
 

playwrights: "Some of the answer to the
 

playwrights’ problem lies in subsidized
 

repertory; some of it, surprising as it


may sound, could lie in the subsidization
 

of the commercial theatre, too. There are
 

many dark empty stages on Broadway waiting
 

to be filled. For example, it would take
 

very little money to produce serious or


experimental plays at roadway theatres on
 

those single nights when they are ordinar~
 

ily closed, as is done at the Royal Court


Theatre in London. The advantage of a
 

Broadway stage for such productions is
 

that it offers the playwright a freedom


and a technical range that is more often
 

than not denied him in the more restricted
 

environs of Off- and Off-Off-Broadway. It
 

also offers the audience of serious plays


the opportunity to return to a scene, once


culturally rich, that should and must be
 

revived.
 

"Furthermore, many plays will not be picked
 

up by regional and community theatres unless 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 havingit close after a few
 

performances. He neither gains enough


money or enough satisfaction.
 

"Even now, the Dramatists’ Guild is formulating 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 become the basis for new contracts, a playwright would be paid for his time and work


whether his play becomes a success or not
 

--and he could afford to remain a playwright. 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 something about the entire country. I think
 

somebody should do something, whether it
 

be municipal or federal government, concerning 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


Lorin 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 priority; 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 salaries 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 government 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 desperately need is some kind of easy way to
 

122
 
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 commdnity 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 making 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 understand that."
 

Thomas Fichandler and John Bos had the
 

following exchange:
 

Mr. Fichandler: "Oh, yes. Many theatres
 

are still paying property taxes, amusement taxes; nonprofit theatres. We got
 

rid of ours with Congressional help changing the District law. But until then--I
 

know that Minneapolis still has theirs."
 

Mr. Bos: "Pittsburgh and Philadelphia for
 

years paid ten percent amusement tax on
 

all tickets over ninety-nine cents. It
 

was only recently that they knocked those
 

off. But those are local jurisdictional
 

issues."
 

Mr. Fichandler: "Well, you know, the
 

federal Congress can say we will give support 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 running 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 specific .... "
 

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, through 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 education is touched on by a number of persons
 

in different ways. The professional training of technicians, artistic directors, literary managers~ 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. Furthermore, who cannot identify talent-­

they are not allowed to develop their
 

talents. You know, everybody keeps throwing it back to one grade below; they can’t
 

read because the third grade teacher didn’t
 

teach them how to, and we all heave a sigh
 

of relief. It is not my fault, it was the
 

kindergarten teacher. It is not true. We
 

have no real support at that level, at the
 

kinder-secondary level of the arts.
 

"We build football stadiums right and left,
 

but we don’t build theatres, and I think
 

that those formative years are crucial in
 

the training of a good theatre student. I
 

think you may find your students who have
 

had an active participation in drama in
 

high school are far ahead of those who come
 

to the university or the college and then
 

discover they have something, some kind of
 

an interest in the theatre, and begin to
 

pursue it. They are behind, just as a piano
 

player is not expected at age 15 or 16 to
 

become a concert pianist. Who is to say
 

that somebody can arrive at the university
 

as a freshman and say I want to be a great
 

actor on the training that he can get?
 

123
 
"The society doesn’t recognize the importance bf 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 qot just in the theatre, but the
 

talent of people going to the theatre, so
 

that the whole system has to start a lot
 

earlier than it is now started. Minnesota, 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 magnificent 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 managing director, Charles Hull, speaks of the
 

high professional level which has developed in children’s theatre companies and
 

of the possibilities this offers for a
 

vital conjunction between art and education: "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 enrollment and/or reduced municipal budgets,
 

finds it difficult to allocate $500 (probably an average price) for a performance.
 

True, the performance may be of very high
 

quality, performed by professionals and
 

actually costing only 50¢ per student
 

(based on a 1,000 seat auditorium). But
 

the school looks upon it as a one-shot
 

expenditure, and as such, the fee looms
 

large.
 

"The secondary problem lies with those


school administrators who not only object
 

to the cost of performing arts programs


but who say, ’What does it have to do with
 

education; let them go with their parents
 

on the weekend.’ Needless to say, the


terrific impact of arts in the schools is
 

that it reaches all children, cutting
 

across all strata. It is the only way to
 

reach all segments of young people in significant numbers."
 

Other specific proposals include continuing and expanding of Comprehensive Employment and Training Act (CETA), especially in
 

place of unemployment compensation, raisinq
 

the ceiling on theatre grants from the Arts
 

Endowment, more programs along the line of
 

the TDF voucher system funds for subscription 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 professional 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 Century 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 subsidy 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 treated 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 because 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 develop, and that can only happen in a stabilized situation. And right now the
 

theatre is not stable not even in the not-


for-profit world.
 

"NOw it’s simply meeting one problem after
 

another day by day and, consequently very
 

frequently long range planning has to be
 

set aside."
 

124
 
Dan Sullivan, Marl Young, and Robert
 

Goldsby put it in these words:
 

Mr. Sullivan: "You cannot ask the government 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 communities. You cannot ask the government


to subsidize an elitist activity, unfortunately, maybe it is a spiritually elitist


ore, but not an economically elitist one."
 

Mr. Young: "One thing we do in music here
 

in Los 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 television 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 6f dollars."
 

Mr. Sullivan: "I don’t expect the commercial 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 resources for the electronic media. Similarly 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, whatever it is, were reinvested by the commercial 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 nickel 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 remarked: "It goes all the way from the big
 

time, the really big time out here, particularly to a little storefront theatre.
 

"They’re all professionals. It is one industry. 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 drivel, just a penny compared to the millions
 

that were made. I find it outrageous that
 

these monolithic, conglomerate, corporations control these studios and, not that
 

they pay the stars the money they pay,
 

that is fine, that’s their business, the
 

star is worth it, I assume, but they will
 

not put out money for the research and


development of their own industry, which
 

is what we are doing. Am I getting ahead
 

125
 
of the game? I am saying what we should
 

have is a relationship whereby those monoliths, and that is exactly what they are,
 

(so they) realize where the experiments
 

are coming 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 concerned about the future of the theatre regarding 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 presented in earlier chapters. The theatre


community does not speak with one voice or
 

with even several voices. This is particularly true when it comes to solving problems, even those which ar.e recognized as
 

cutting across Various constituencies.
 

But there is--and the purpose of this chapter 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 XlX The theatre’s relation to the economy 

Audiences’ expenditures for meals,
 

lodging, transportation
 

Audiences’
 

ticket expenditures
 

Audiences’
 

other expenditures
 

Business purchases
 

of goods and
 

services
 

The economy
 

Theatre purchases
 

of goods and
 

services
 

126
 
CHAPTER VI
 

THE CONTRIBUTION OF THE THEATRE TO THE
 

NATIONAL INCOME
 

An aspect of American theatre is its relationship to the economy. The theatre generates jobs and income like steel industries and other businesses.
 

There are many reasons this contribution is
 

overlooked. A substantial portion of theatrical activity is organizedon a nonprofit
 

institutional basis. The avowed purposes
 

of these institutions usually have nothing
 

to do with economics. Unemployment of the- Model for Assessment and a Case Stud[ in
 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 economymresources spent in
 

the theatre are respent elsewhere, generating additional jobs and income. Three studies of the effect of the theatre on the
 

economy have been examined in the preparation of this report to estimate the contribution of the theatre,
 

THEATRE AS AN INDUSTRY
 

Theatre activity influences national income
 

both directly and indirectly. The direct


contribution of the theatre is simply the
 

expenditure of the theatre for all theatre
 

goods and services (actors’ and other theatre 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 expenditures 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 services required in carrying out its various
 

roles. The theatre-related expenditures of
 

theatre patrons (restaurants, transportation, 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 associated with between 4 and 6 dollars in national income.
 

To analyze the flow of theatre dollars
 

through the economy and their consequent effects on economic activity in other sectors
 

requires considerable detailed data (see
 

Research Division Report #6, Economic Impact of Arts and Cultural Institutions: A
 

Baltimore and Report #15, Economic Impact
 

of Arts and Cultural InstitutionsmCase
 

Studies in Columbus, Minneapolis/St. Paul,
 

St. Louis, Salt Lake Cit[, San Antonio, and
 

Springfield, listed at the back of this report). 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 government 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 produced 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) likewise respends 60 percent of his or her receipts.
 

In terms of arithmetic, the process is illustrated 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 initially. (As pointed out in Research Division
 

Reports #6 and #15, this method disregards


the many individual differences between
 

theatres and communities.)
 

STUDIES OF THE EFFECT OF THEATRE ON
 

INCOME AND EMPLOYMENT
 

The only published investigation of the effect of the theatre (as distinguished from
 

other arts organizations) on the economy
 

127
 
 

Table 39 

Theatre
 

Recipient 1
 

Recipient 2
 

Recipient 3
 

Recipient 4
 

Recipient 5
 

Total (rounded) 


The multiplier process_

applied to a theatre dollar 

Receives Spends
 

$i.00 ~ $i.00
 

$i.00j ~$0.60
 

$0.60/ ~ $0.36
 

$0.36/ ~$0.22
 

$0.22/ ~ $0.13
 

$0.13/ ~ $0.08
 

- $2.50
 

was undertaken by William Baumol, who investigated the contribution of the Broadway theatre to the economy of NewYork City
 

and the nation .(The Impact of the Broadway
 

Theatre on the Economy of New York City,


Princeton: Mathtech, Inc., 1977). In this


investigation, which obtained estimates by
 

comparing data from a period when a portion 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 qonservative $275 million during fiscal 1975
 

to the nation’s economy. Approximately
 

$165 million of this accrues to the New
 

York City economy, and $57 milllion accrues
 

to economies outside New York City. Given


that ticket sales during the 1974-75 season amounted to approximately $57 million,


this estimate implies that total impact is
 

approximately a 5 times multiple of ticket
 

sales.
 

In another study conducted by the National
 

Research Center of the Arts, Inc., survey
 

results showed that the operating budgets
 

of arts organizations in Washington State
 

were approximately $12 million in fiscal
 

1974. It was estimated that attendance at
 

arts events generated an additional $20
 

million in related expenditures (expenditures for restaurants, transportation, lodging, etc.). No full analysis of the multiplier effects of these expenditures was
 

undertaken. While this study de/nonstrates


the principle that arts organizations contribute 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 organizations on the economy was completed by


David Cwi and Katherine Lyall, Research
 

Division Report #6, Economic Impacts of


Arts and Cultural Institutions: A Model
 

for Assessment and a Case Study in Baltimore (Washington: 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, Estimating the Impact of a Colle~e or University on the Local Economy. The subsequent


econometric model for measuring the effects of arts organization on the economy


was applied to 8 cultural institutions in
 

the Baltimore, Maryland Standard Metropolitan Statistical Area: the Baltimore Opera, Walters Arts Gallery, Baltimore Symphony, Morris A. Mechanic Theatre, Baltimore
 

City Ballet, Baltimore Museum of Art, Center Stage, and Arena Players.
 

The operating budgets of these 8 institutions in fiscal 1976 were approximately
 

$9.4 million. Cwi and Lyall estimated that
 

the direct and indirect effect of this expenditure was to generate a total of $29.6
 

million in additional income in the Balti128
 
Table 40 1977 estimated expenditure base by theatre type 

(millions of dollars) 

Ticket 

income 

Broadway $ 93.7 

Road $115.0 

Dinner (including $ii0.i 

estimated bar 

receipts) 

Regional (Theatre $ 47.5 

Communications 

Group survey 1976) 

Other (summer $ 42.0 

stock, etc.) 

Total $408.0 

more area. They did not estimate the contribution of arts organizations to income
 

outside Baltimore. Assuming that about
 

one-half of every dollar spent initiall~ in
 

Baltimore is respent outside Baltimore
 

(this appears to be a reasonable assumption from survey findings reported by Cwi
 

and Lyall), then it seems reasonable to
 

conclude that somewhat more than $i0 million in additional income may be generated outside of Baltimore, leading to a conservative estimate that the 8 Baltimore
 

institutions contributed directly and indirectly approximately $40 million.
 

Table 41 1977 estimated audience 

expenditures (millions of 

dollars) 

Broadway $ 99.0 

Road $121.9 

Dinner 

Regional $ 50.4 

Other $ 44.5 

Total $315.8 

Other 

income 

$ 21.0 

Total 

income 

$114.7 

$ 5.0 $120.0 

$ 33.0 $143.1 

$ 35.1 $ 82.6
 

$ 18.0 $ 60.0
 

$106.1 $514.1
 

In spite of thevarying approaches and cases
 

examined in these studies, the conclusion that emerges is that arts organizations in general and the theatre in particular are connected to other sectors of
 

the economy. The result of these linkages
 

is that dollars spent for theatre have
 

multiplier effects throughout the economy.
 

AN ESTIMATE: THE ECONOMIC IMPACT
 

OF AMERICAN THEATRE
 

The starting point for this estimate is an
 

approximation of the total expenditure base
 

(shown as the inflows to the theatre in Figure 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 servilces (restaurants, transportation, etc.),
 

which previous studies have related to expenditures on theatre tickets.
 

The next step in estimating direct and indirect expenditures related to theatre activities is to estimate theatregoers’ expenditures that are theatre-related, as
 

shown in Table 41. These are shown in
 

129
 
Table 42 1977 estimated theatre economic impact (millions of dollars) 

Related activities
 

consequent and consequent Economic
 

expenditures expenditures impact
 

Theatre and
 

534.3
 Broadway $ 286.8 $247.5 $
 

Road $ 300.0 $304.8 $ 604.8
 

Dinner $ 35~.8
 --- $ 357.8


Regional $ 206.5 $126..0 $ 332.5
 

Other $ 150.0 $111.2 $ 261.2
 

Total $1,285.3 $789.5 $2,090.6
 

Figure XIX as the inflow to "Business purchases of goods and services." Baumol
 

recommends, in The Impact of the Broadwa~y
 

Theatre on the Economy of New York City,


that these expenditures on related goo~s
 

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 expenditures on related goods and services
 

are shown in Table 42.
 

Note that no expenditures are shown for dinner theatre audiences. (Estimated bar receipts are included, however, in the estimated 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 ordinarily would incur extra expenditures (food,
 

parking, etc.). Clearly, treating related


expenditures as though they were zero tends
 

to understate related expenditures of dinner theatre patrons since there still are
 

transportation costs to be covered and perhaps other costs as well. The last step in


estimating total direct and indirect expenditures related to theatre activity is to
 

estimate the multiplier effects of the expenditures shown in Table 40 and Table 41.
 

In the absence of specificdata, Baumol’s
 

report used a multiplier value of 2.5.


Following this example, every dollar shown
 

in the tables is estimated to account ultimately for $2.50 of economic effect.


Using 2.5 as a multiplier givesthe estimate of approximately $2.1 billion, as
 

shown in Table 42.
 

130
 
REPORTS IN THE NATIONAL ENDOWMENT FOR
 

THE ARTS RESEARCH DIVISION SERIES
 

Since 1976 the Research Division of the
 

National Endowment for the Arts has been
 

studying matters of interest to the arts
 

community and issuing reports based on its
 

findings. Copies of the reports may be ordered from the Publishing Center for Cultural Resources, 625 Broadway, New York


City 10012 at the prices noted below.
 

Checks should be made payable to "Publishing Center." Prices include postage and
 

handling; no state or local sales tax is


applicable.
 

#i 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
 

#i0 Self-Employment, Migration, and Household and Family Characteristics of Artists:
 

1970. 32 pages. November 1978. $2.00
 

#ii Conditions and Needs of the Professional 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
 

#14 Audience Development: An Examination
 

of Selected Analysis and Predict±on Techniques Applied to Symphony and Theatre
 

Attendance in Four Southern Cities. 48
 

pages. January 1981. ISBN 0-89062-097-0
 

$2.50
 

#15 Economic Impact of Arts and Cultural
 

Institutions: Case Studies in Columbus,
 

Minneapolis/St. Paul, St. Louis, Salt Lake
 

City, San Antonio, and Springfield. 102
 

pages. January 1981. ISBN 0-89062-106-3


$3.50
 

131
 
Produced and distributed by Publishing Center for Cultural Resources, 625 Broadway, New York City 10012. Price (incl. postage) $4.50