Milwaukee Business Journal: UPAF member groups face nearly $38 million loss over last three seasons

Margaret Naczek | August 22, 2022

From empty stages and virtual streamings to masked-up shows and socially distanced seating, Milwaukee's United Performing Arts Fund member groups saw the strong and steady impact of Covid-19 over the past three seasons.

The 2019-2020 season was essentially halted in March 2020 and the 2020-2021 season saw a plethora of virtual and minimal capacity performances. The most recent 2021-2022 season saw the eager return of audiences but coupled with the recent Omicron variant surge, there was hesitancy for some groups to return. There also were increased costs.

According to UPAF, its member groups, which include the Milwaukee Repertory Theater, Milwaukee Symphony Orchestra and First Stage Children's Theater, faced nearly $38 million in revenue losses over the last three seasons.

Audience admission, whether paid or complimentary, was down 30%, or about 150,000 tickets, compared with pre-pandemic numbers. With UPAF member groups averaging about $40 for a ticket, that equates to $5.6 million in ticket revenue losses alone. In addition, 98 performances were canceled because of Covid-19 spread among performers, again a loss when factoring in refunded tickets and yet money spent to pay the actors.

The upcoming 2022-2023 season does not indicate a return to normalcy. While many of the harsh impacts of the Covid-19 pandemic have waned from the removal of masking and longer quarantine policies, other symptoms linger from increased staffing costs for alternate casts, consumer hesitancy to purchase tickets and a disrupted supply chain.

UPAF members are looking at where to cut costs while still delivering the same high-quality product, and UPAF looks to increase public and private support.

The Milwaukee Business Journal sat down with performing arts leaders to see just how they are managing another return to the stage this fall.

Milwaukee Symphony Orchestra

Milwaukee Symphony Orchestra's president and executive director Mark Niehaus estimated the Milwaukee Symphony Orchestra lost $4 million in revenue this year. The majority of that, he said, was earned revenue that was not captured because of attendance suppressed by the Covid-19 pandemic.

The symphony's end-of-the-year numbers showed the symphony rested at just 54% capacity for its programming.

"That’s far below where we ever expected to be in the Bradley Symphony Center, and it’s honestly far below than when we were in the Marcus Center," Niehaus said.

The new Bradley Symphony Center was also designed to capture earned revenue from rental events including concerts, weddings and other programming. This last season, the Pabst Theater Group rented the theater just twice for a Tori Amos and Hannah Gadsby concert.

Niehaus estimated MSO's annual budget is $21.5 million. The symphony received about $6 million in government funding over the course of the Covid-19 pandemic to supplement lost costs, but since then, earned revenue from ticketing has not returned to pre-pandemic numbers, creating an imbalance.

Milwaukee Repertory Theater

Milwaukee Repertory Theater executive director Chad Bauman said his organization's challenges are very operational based.

"When you have really large productions on your stages, which is what people want to see, it’s the perfect breeding ground for Covid-19. You can’t perform a musical without singing in front of someone’s face. We were testing daily. Everybody was vaccinated. All the artists were very reasonable in trying to isolate," he recalled of the most recent season.

But as science has shown, a Covid-19 vaccination did not prevent people from getting the highly-infectious Omicron strain. It significantly lessened the impact of the infection but did not eliminate it entirely. Because of both Centers for Disease Control and Prevention guidelines and performers unions' guidelines, that resulted in higher costs for actors.

For the Milwaukee Repertory Theater's performance of "Murder on the Orient Express," the production had 10 actors, but the organization had to hire a second cast of 10 to combat performers getting Covid.

"In some of our performances, we had lost 50% or more to Covid-19. At the end of the year, what we were doing is we were essentially hiring an entire separate cast," Bauman said. "We’re paying $750,000 more for actors than what we normally would have. We’re paying hundreds of thousands of dollars more in testing than we normally would. We can handle that because we built our reserves over a decade. We can handle that for a decent amount of time. We can’t handle that forever."

First Stage Theater

First Stage Children's Theater managing director Betsy Corry said a great challenge for managing the 2021-2022 season was the unique audience that First Stage serves. Because the performing arts organization caters to children, many of First Stage's audience were not even eligible to be vaccinated throughout the past season.

Because of that, First Stage had to make some decisions different than its peers to accommodate the audience types. All of First Stage's performances were limited to 50% capacity with socially distanced pods for different groups. First Stage also went into the season with a much more limited schedule including far fewer school matinee performances since schools were not returning to field trips in the same numbers as pre-pandemic.

Like other organizations, First Stage required proof of vaccination for its staff, Covid-19 testing three times a week and a person hired specifically for Covid-19 compliance and reporting to the Actors' Equity Union. First Stage also had to hire more understudies than pre-pandemic to accommodate cast members getting exposed or testing positive for Covid-19. Corry believes that is something the organization will have to continue into the future season.

First Stage was lucky, however, that it only had to cancel one performance this past spring because of a positive Covid-19 case.

For the upcoming 2022-2023 season, First Stage is removing its 50% capacity and opening up most of its seats. That, however, does not mean the organization will return to pre-pandemic planning and budgeting.

"Our expectation for budgeting is maybe 60-65% capacity. It’s way lower than it has been in the past for what we’re predicting," Corry said.

Financing for the future

UPAF CEO Patrick Rath is confident there is a path moving forward.

"It’s going to need a mix of new revenues, new ways in which we do attract either public support, long-term support. It’s not something where we can expect that the arts as we know it will be the same five years from now without some more investment," Rath said.

UPAF currently has its annual campaign running through Aug. 31 to support its performing arts organization. Rath said UPAF has under $1 million to go to reach its goal of $10.5 million, but other revenue streams are needed including public funding and long-term operational changes.

A significant challenge is that the state of Wisconsin is one of the worst ranked in the country for public support of the arts.

Both Bauman and Niehaus referenced the lack of American Rescue Plan Act (ARPA) funds coming to support arts organizations throughout the state.

"For the longest time, we have been successful because of our private-sector support — UPAF, corporations, donors. That's why we're successful," Bauman said. "It's a non-diversified revenue stream. You should have public support, private support."

Niehaus estimated Milwaukee arts organizations receive under 1% from public support.

"Where the cracks in the system were already there in some things before Covid, this just opened the cracks," Corry said.

The performing arts organizations have to also look internally where they can save on higher costs.

At the moment, the Milwaukee Rep's strategy remains the same.

"We are investing in art at a scale and scope that hopefully people feel like thy have to go see it. That’s very expensive. Our hope is over the next year we as a field and as a country can figure out how best to live with Covid-19," Bauman said. "We’re going to do big productions that people want to see. We’re going to spend a lot of money for understudies, a lot of money for testing. That is a one-year strategy. Can we continue that for four or five years? No."

Niehaus said the Milwaukee Symphony's strategy is to fundraise in the short term to "get the runway to let the Bradley Symphony Center do what it was designed to do, which was create a tremendous amount of earned revenue for the symphony through ticket sales and other events that are happening in the building."