Milwaukee Journal Sentinel: Milwaukee performing arts groups lost $38 million in the past 3 years. The upcoming season will be crucial to their survival.
As they prepare for their fourth consecutive season affected by COVID-19, Milwaukee performing arts groups acknowledge that they're still climbing out of the pandemic pit.
The United Performing Arts Fund's 14 member groups "experienced a collective revenue loss of nearly $38 million during the past three seasons," UPAF wrote in a letter to the Journal Sentinel.
Returning to public performances in 2021-'22 after mostly working online the previous season, they reported ticket sales from 20% to 50% lower than pre-pandemic levels. "Much of these losses stemmed from audiences hesitant to return to our venues" as well as 98 canceled performances forced by breakthrough infections among performers and staff, UPAF wrote.
As these nonprofit organizations face their 2022-'23 seasons, they are budgeting for increased costs for COVID-19 safety and inflation, while strategizing how to win back the missing portions of their former audiences.
They're also planning for life without the $15 million in federal funds — largely Shuttered Venue Operator Grants and Paycheck Protection Program forgivable loans — that helped them survive previous seasons.
"The lack of future government support is what keeps me up at night because we do not anticipate pre-pandemic projections of high ticket sales for the next three to five years, yet our costs of production — from lumber to wages to additional hires — continues a meteoric rise with inflation," wrote Renaissance Theaterworks managing director Lisa Rasmussen in response to Journal Sentinel questions.
"Without a significant increase in community attendance and support, we face the reality of a community with far fewer performing arts experiences," UPAF warned in its letter.
UPAF board chair Tim Mattke, the chief executive officer of MGIC Investment Corp., sees Milwaukee's arts performances as an important element of a thriving downtown and Third Ward. He supports live performances there as part of an ecosystem that attracts workers to this city.
Recognizing the situation is critical, the UPAF board has approved for this season an additional $750,000 in funds for its member groups ($700,000) and affiliates ($50,000) beyond normal allocations, UPAF executive director Patrick Rath said.
Canceled shows, increased costs
Like the artistry, the pain is in the details for individual groups, which vary in the percentages of revenue they derive from ticket sales and in their ability to adjust quickly when a performer tests positive for COVID-19.
Milwaukee Repertory Theater had to cancel 68 performances, or nearly 10% of the 700 it had scheduled last season, due to positive COVID-19 tests. The most painful loss: two weeks of sold-out performances of "Titanic the Musical."
Losing those 15 "Titanic" performances prompted the Rep to make an unprecedented decision: It changed the coming season's schedule to remount the large-cast musical beginning Sept. 20, believing there are still thousands of people who still want to see the rarely performed show.
"Our business model is 60% dependent on earned revenue from tickets sold," Milwaukee Rep executive director Chad Bauman wrote.
The Rep used a record of number of understudies last season, costing an additional $250,000, Bauman said.
"Toward the end of the season, it seemed that the only way we could consistently perform without cancellations was to have a second full cast prepared to go on, as we did with 'Murder on the Orient Express.' As performer costs are our largest expense, having a 1-to-1 ratio of actor to understudies is exceptionally expensive and not a long-term solution."
Smaller theater groups felt a proportionately painful bite. Renaissance Theaterworks had to cancel the final six performances of "The Cake" in November 2021 because of a positive COVID-19 test on the production team.
"These performances represented over a quarter of the total performances," wrote managing director Rasmussen. "Many of the patrons who missed the show donated their tickets back, but we did lose an estimated 30% of total revenue by canceling last-minute or walk-up sales."
In contrast, the Milwaukee Symphony Orchestra did not cancel a single performance last season. "The nature of a symphony orchestra allows us to use substitute musicians at times when numbers are low. While doing this on an extended basis is not the best thing to do artistically, it did allow us to continue," wrote MSO president and CEO Mark Niehaus.
But everyone had significant additional costs for COVID-19 testing, compliance and mitigation. The MSO estimated its extra COVID-19 costs, including HVAC system upgrades, at $300,000. Skylight Music Theatre spent an additional $55,000 to $60,000, wrote executive director Jack R. Lemmon.
Will attendance return to pre-pandemic levels?
Performing arts groups knew the return of live audiences for 2021-'22 would be, like nearly everything else right now, unevenly distributed.
"The attendance from last season was much suppressed from what we anticipated for our first season at the Bradley Symphony Center due to the continued effects of COVID," the MSO's Niehaus wrote.
With the Bradley venue having a smaller capacity than the MSO's former home, the Marcus Performing Arts Center's Uihlein Hall, the MSO anticipated 90% attendance last season. But average attendance turned out to be 54%, according to Niehaus.
"Yes, it is true that more popular programming continues to pull people in, however the programs that were on the margins but would still do well in the past were not as well attended," he wrote. "People will go out for a 'must see' performance, but not for a 'may want to see' performance."
While subscribers and regular donors have remained faithful and involved, "we are dependent on not just the folks on the inner circle, but those that come every now and again to buy tickets and those who rent the space. Those are the areas where we were most affected," Niehaus wrote.
Milwaukee Rep's Bauman also noted that attendance depended on programming.
"For our most popular work, attendance was nearly back to pre-pandemic levels," he wrote. "For our lesser-known or new work, attendance levels were significantly lower than pre-pandemic levels."
Some lowered their expectations for attendance significantly.
"We had budgeted for 60% of what we would have expected to see pre-COVID," wrote Tai Pauls, Milwaukee Ballet interim managing director. "In general, we saw our attendance numbers increase as masking and vaccination requirements relaxed in the second half of our season."
One exception to that trend for Milwaukee Ballet: Attendance for "The Nutcracker" was almost the same as 2019 levels, with more than half being new attendees.
First Stage deliberately limited capacity at its shows to 50% maximum to allow for social distancing. It also reduced the number of school-group matinees it offered. Even given those lowered expectations, the surge in the Omicron variant depressed attendance further.
Both Skylight's Lemmon and Renaissance's Rasmussen cited WolfBrown's Audience Outlook Monitor, a longitudinal tracking study of audience behavior which, Lemmon says, "shows that there is a stubborn number of people who will not be returning anytime soon."
"We are still looking at 15% to 20% long-term non-returners; positions have hardened," the monitor reports in a June 27 update.
Just as sobering for performing arts groups that like to create new work, here's another takeaway from the monitor's June update: "Increased volatility and reduced demand for lesser-known artists and artistic works may be the new normal.'
Inflation means everything costs more
So how are groups approaching the imminent 2022-'23 season? For starters, they're planning to spend at least much or more on COVID-19 testing for performers and production staff.
"We expect these costs to increase," the Rep's Bauman wrote, because the theater plans to test performers daily for many shows.
Skylight and Milwaukee Ballet also plan to spend more on these measures. In the ballet's case, that's related to a programming decision. It has scheduled four story ballets, including "Swan Lake" and "Peter Pan," which tend to be popular works, but also have larger casts.
COVID-19 mitigation is not the only reason expenses will increase in 2022-'23.
"We are experiencing a rate of inflation unseen in the last four decades," Milwaukee Rep's Bauman wrote. "We have had to reimagine many lines of business, not only due to inflation but also because of supply-chain disruptions, from our Stackner Cabaret restaurant to the productions on our stages."
To maintain quality in the face of mounting expenses, the Rep raised ticket prices slightly, an average of 5%, Bauman reported.
"The cost of our materials for props and sets has risen substantially," Renaissance's Rasmussen wrote. "We are also facing extreme difficulty in hiring experienced professionals for every aspect of what we do. Many artists left the industry altogether, due to the long hiatus of the pandemic."
First Stage noted that the cost of building sets has increased tremendously: "For example, one type of lumber we use to construct our scenery has increased 178% since 2021."
UPAF, which wraps up its annual fundraising campaign on behalf of 14 member groups and additional affiliate grantees at the end of August, is urging people not only to donate but also to buy tickets, subscriptions and flex-passes to performances.
In one creative example, Milwaukee Chamber Theatre offers a new season-long Cream City Pass. For $198, a passholder can "attend any show, on any date, as many times as you'd like if a seat is available."
Planning for significant additional expenses in the coming season, Milwaukee Rep’s board of trustees has agreed to use 10% of its cash reserves, "but we are forecasting a return to normal operations in the 2023-'24 season," Bauman wrote.
Renaissance, which operates on a shoestring budget, has "an unbroken history of debt-free operation," Rasmussen wrote. But it's projecting a 5% to 10% shortfall for 2022-'23, so Renaissance plans to use some hard-won reserve funds.
"This thing ain't over yet," she wrote.
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