Hard Times For The Arts

Economic downturn reduces income from box office, endowments and contributions

November 23, 2008|By Tim Smith | Tim Smith,tim.smith@baltsun.com

As the Baltimore Opera Company rehearsed last month for the production of Bellini's Norma , it faced a serious problem: Its available cash had dried up. With rumors spreading about the company folding, a board member ensured that the show would open - by making a personal guarantee to cover the cast's salaries.

Norma went on as scheduled - the final performance is today - but the remainder of this season, and beyond, depends on the company's making a major fiscal turnaround. Already this year, ticket sales fell $200,000 short of the goal for Verdi's Aida, normally a very popular work at the box office.

Deborah Goetz, senior director of marketing and communications, saw sales dip with each nose-dive of the stock market. "This is worse than what we saw after 9/11."

FOR THE RECORD - In the graphics accompanying Sunday's article on the economic impact on the arts, the date for the most recent endowment figures for the Baltimore Symphony Orchestra and Baltimore Museum of Art were reversed. The correct dates are Oct. 15 for the BSO, Oct. 31 for the BMA. Also, the pie chart showing sources of revenue for the BSO's operating budget should have indicated 15 percent from government grants. The caption for the photo accompanying the article on the front page suggested that the Baltimore Opera Company's production of Aida had not yet been presented; it took place in October.

Although most other local arts organizations don't feel quite as threatened, all must confront unusual financial pressures and uncertainties. Due to stock market turmoil, endowments at the Baltimore Museum of Art and the Baltimore Symphony Orchestra have dropped by millions of dollars, limiting the money that can be withdrawn for operating expenses. State grants have been cut significantly. And some arts groups have seen a drop in ticket sales.

The latest casualty is the Baltimore Chamber Orchestra, which yesterday canceled some of its scheduled January activities, including a recording session. The news comes just three weeks after the ensemble made its successful New York debut. Locally, concert attendance has dropped sharply since the orchestra opened its season in October, and contributed income is likewise down.

Stories of the economy's impact on the arts pop up almost daily around the country. Within the last few weeks, Opera Pacific in Southern California's wealthy Orange County closed its doors. A little farther north, a consortium of orchestras in Pasadena canceled half of this season's remaining concerts and furloughed its executive director.

Despite strong advance ticket sales, the Washington National Opera has postponed its much-anticipated production of Wagner's Ring, a four-part cycle of operas, because the company could not find donors for the remaining $5 million-plus needed for the project. At the San Francisco Opera and New York's Metropolitan Opera, there is talk of fewer and less expensive productions next season.

That the arts have survived other downturns doesn't provide much encouragement.

"To me, it feels scarier," says Michael Kaiser, president of the Kennedy Center. "No one really has a sense of how deep this is going to be. I've never seen endowments fall in this precipitous way."

The Baltimore Museum of Art's endowment has declined $19 million in value since July, for example. That leaves about $52 million, but the decrease will hit the museum's operating budget - nonprofit organizations take an annual "draw," typically around 5 percent, from endowment funds to help offset expenses.

At the Baltimore Symphony Orchestra, the endowment is down to about $51 million, nearly 20 percent lower than where it was at the end of August. The Walters Art Museum has also seen a 20 percent drop in its endowment (officials declined to provide a dollar figure). And at Centre Stage, the endowment has dropped from $19 million to $14 million, more than 25 percent.

Local organizations are re-evaluating budget plans, especially after the Maryland State Arts Council cut all grants by about 12 percent. That means a loss of $240,000 that the BSO had been counting on, for example. Baltimore Opera and Centre Stage will get about $55,000 less than originally expected.

"We all are on tenterhooks because we all could be looking at another big cut [in state grants] after this one," says Anne Fulweiler, executive director of the Baltimore Theatre Project. She anticipates having to shrink an already small staff and defer such expenses as an upgrade to the theater's heating and air-conditioning system.

But Fulweiler, like other arts administrators in the area, remains confident. "We are all in this together, prepared to tighten our belts because we understand the difficult position the state is in," she says. "We'll survive because we've survived for 37 years now. But we anticipate it being a very, very difficult time."

Ian Tresselt, managing director of Everyman Theatre, notes strong ticket sales this season and a solid start to the company's annual fund drive, enough to make the cut in state arts funding less troubling. "People who have contributed to us in the past are continuing to contribute."

Centre Stage's fund-raising is also holding steady, says director of audience development Barbara Watson, although she has noticed that people are buying less expensive seats. "We have generally weathered economic downturns, like post-9/11, pretty well."

But the Centre Stage operating budget relies on a draw from the endowment, and the steep drop in that fund's value is already being felt at the theater company - literally.

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