Madison’s $205-million Overture Center for the Arts is bracing itself for a budget pothole in its coming season — a $735,000 gap between projected revenues and expenses, against an $11 million total budget. At the heart of the problem is a projected 29 percent drop in ticket sales — to $4.1 million, about $1.6 million less than 2006 — along with increased operating and staffing expenses.
It’s not uncommon for a major new cultural facility to face budget woes in the years following its gala opening (remember the Kimmel?). Just as the ”newness” wears of, and audience and donor attention drifts elsewhere, the facility staff and leadership are just beginning to realize the true cost of running the space. Costs are invariably higher than expected (especially when external forces drive unavoidable costs like heating and health insurance). And the rosy glow of early revenue and contribution projections smack up against reality. The lack of a major, extended blockbuster show like Lion King or Phantom of the Opera only makes the numbers crunchier.
And, after all, so many new facilities are ”aspirational,” envisioned and designed to be bigger, better, and busier than anything the community has experienced before.
To fill the gap, Overture is drawing down the assets of its support foundation, reducing the scope and scale of its artist contract budget, and hitting the pavement for new and continuing sources of contributed support (around $500,000 a year, according to one board member). The Center opened with only a small endowment, and without obvious plans to raise one.
It should be an interesting first week, month, and year for the Center’s new president, who officially begins on Monday.
Living in Philadelphia, I have followed the Kimmel Center story over the last few years. Recently, they publically announced that the Center will finish in the black for the first time in its 5 year existence. This made me think of the old adage about new businesses–that you can’t expect to see a profit for the first 3-5 years. New art centers are new businesses themselves, yet they are often expected to break even or be profitable immediately. And when they aren’t, as most new businesses aren’t, there is hand wringing and I told you so’s from many corners. Understandably, art center’s are community oriented entities, making them much more open, rightly, to public scrutiny and accountability than private businesses. But I can’t help think, when I read stories about Overture or Kimmel or other art centers struggling or finally finding success, that maybe everyone’s expectations for them are a little too high, and sometimes almost impossible to meet.
Kimmel booked the out-of-court settlement with its design architect as reveue. Or as my friend Andrew Tayor says, “Don’t believe everything you read.”
There is an unresolved sustainabilty issue with this and many other major performing arts centers. Wouldn’t it be wise to understand the P & L before pouring hundreds of millions of dollars into the ground?
Go figure.