Defining the Relationship
Commercial and not-for-profit theatres can’t do without each other, but hooking up can be as problematic as it is profitable
By Gordon Cox
Related stories: History of an Incursion: Mission Drift? and Fresh Canon Fodder
In the basement office where he presides over the bustling activities of New York City’s not-for-profit Lincoln Center Theater, Andre Bishop tells a story about Sunday in the Park with George that sounds downright comical.
The current artistic director of LCT formerly held the same post at Playwrights Horizons, the Off-Broadway nonprofit that commissioned Stephen Sondheim and James Lapine’s 1984 musical about George Seurat. “When it was announced that Stephen Sondheim, until then a commercial Broadway composer, was coming to us Off Broadway at Playwrights Horizons, we got enormous criticism that we had sold out,” he recalls. “I remember thinking, ‘If you think this musical about a pointillist painter is us selling out, you’re crazy.’ But people tried to stop us from getting whatever government money we were getting at the time, because they thought we were straying from the path of right. That would be unimaginable today.”
In a contemporary theatrical landscape where nonprofits and commercial producers are frequent accomplices, rivals and sparring partners, he’s right. Bishop’s anecdote hearkens back to a time when the two worlds were separated by a Berlin Wall—a wall that over the past 30 years has been felled by a complicated mix of economic, cultural and artistic shifts. Today the overlap between the two sectors is a fact of life.
“In this changing environment of the arts in America, it is a reality for institutions to seek partnerships that enable the work,” says Diane Paulus, artistic director of the American Repertory Theater in Cambridge, Mass. Under Paulus’s leadership, the venerable not-for-profit has become one of the poster children for a regional theatre that benefits from strong ties to the commercial world. This season alone, the organization has collected royalties from a trio of Broadway shows that had earlier runs at ART, all with varying levels of commercial attachment: Pippin, The Glass Menagerie and All the Way.
In the eyes of most not-for-profit leaders as well as commercial producers, the overlap is an ongoing, occasionally fraught partnership borne out of economic necessity, but one that can pay dividends both financial and artistic.
Even today, however, not everyone is on board with the new state of affairs. Contrast Paulus’s acceptance with the stance of Robert Brustein, one of the fathers of the not-for-profit movement and the founder of the theatre Paulus now runs. He bristles that since it began some 50 years ago, the not-for-profit movement has been adulterated by the very commercial forces that it was created to counterbalance.
“The alternative theatre, the resident theatre, was originally founded to do the kind of work Broadway couldn’t do, or wouldn’t do, or couldn’t afford to do,” Brustein says. “If the nonprofit and the commercial theatres merge, one of them is going to lose direction, and I think the nonprofit theatre is doing that right now.”
That kind of criticism is just one of the things with which not-for-profit leadership must continually grapple as they struggle to follow their missions in the face of waning funding from the government, foundations and other sources.
“There are things I do regularly that horrify Robert Brustein,” admits Oskar Eustis, the artistic director of the Public Theater. The Off-Broadway not-for-profit founded by Joseph Papp was one of the first to have an institution-changing Broadway success with A Chorus Line, and has since succeeded on Broadway with productions such as the recent revivals of Hair and The Merchant of Venice. This season’s critical hit, the Alison Bechdel–based musical Fun Home, played at the Public with commercial producers onboard.
Eustis continues, “But my job is to figure out, in this environment, how to fulfill our mission. We just have to be very vigilant that we are not watering down what we stand for.” There’s the rub, as the challenges of sustaining subscriberships, buildings and staffs make commercial money increasingly tempting no matter what the project.
These days critics such as Brustein have diminished in number, and there’s no denying that a wealth of exciting works, stretching from Hair to Passing Strange, have come out of the interchange between the two worlds. But not-for-profits and commercial producers alike recognize they must proceed with caution into territory that can be potentially dangerous for both sides. It’s a careful dance that each nonprofit takes day by day, achieving what most in the field consider a new equilibrium.
But secretly, everybody thinks somebody else is doing it wrong.
“Everyone in this business can name three nonprofits that we feel are losing their way to commercial interests,” teases Jason Robert Brown, the composer whose musical Honeymoon in Vegas premiered at New Jersey’s Paper Mill Playhouse earlier this season and whose current Broadway outing, The Bridges of Madison County, bowed first at the Williamstown Theatre Festival in Massachusetts. “But none of us will do it on the record.”
At the crux of the conflict is a tangled knot of artistic and ethical ideals and legislated tax protection, conferred on nonprofits as an incentive to uphold missions to create work that has social and cultural value but may not have an equivalent value on the free market. As not-for-profits have expanded over the years and intermingled with the commercial world to produce shows, the distinction between the two sides can become muddied.
“There’s nothing that says a not-for-profit can’t make money,” notes longtime theatre attorney John Breglio, the executor of the estate of A Chorus Line creator Michael Bennett and the commercial producer behind revivals of A Chorus Line and Dreamgirls. “It’s what’s the not-for-profit does with the money that’s important. None of the proceeds can ‘inure to the benefit of a private individual.’ It has to go back to the not-for-profit.”
Nonprofit and commercial interests can weave together in a seemingly endless number of contractual permutations. A nonprofit can develop and produce a new work that a commercial producer subsequently picks up for Broadway or beyond. A producer can bring a potential commercial property to a nonprofit to develop it, or a theatre can solicit a producer’s financial support in order to produce an ambitious new show, in exchange for the first right of refusal should its reception warrant a future life. Three New York not-for-profits own stages on Broadway, the flagship of commercial theatre, and some nonprofits (such as New York’s Manhattan Theatre Club) maintain for-profit subsidiaries to shepherd their own shows on to further success.
In today’s climate, the intersection between the nonprofit and the commercial sectors primarily centers around musicals, as rising production costs have made mounting large-scale shows with big casts and sizeable orchestras increasingly challenging on both sides of the fence.
These days, for some nonprofits, such deals are so commonplace they’re nearly rote. Pacts tend to hinge on a not-for-profit financing a production with the same amount of money it would budget for any show in its season, while the commercial producer kicks in whatever amount the project requires above and beyond that. The producer then has the right to steer the show into the commercial realm, while the nonprofit receives revenues from those market endeavors, often 1 to 2 percent until recoupment, when the percentage can go up.
Even accounting for a range of variation based on the specific project and partnership, that’s the basic framework. “The really big issues, like how much the enhancement is and the payment schedule, tend to be resolved pretty easily,” says theatre and entertainment attorney Carol Kaplan, who has represented both commercial and nonprofit entities in such deals. “Often it’s now the smaller things, like seats to the opening night on Broadway, that become a major negotiation.”
The back and forth between the not-for-profits and the commercial world has been a force at work in the field for almost as long as the nonprofits have existed, but good luck finding a definitive history of such exchanges. In the earliest, most idealistic days of the nonprofit movement, any interaction with the commercial realm was a badge of shame to be hidden at all costs.
Still, a handful of landmark developments can be singled out, starting with the 1967 play The Great White Hope, which bowed at Arena Stage in Washington, D.C., and became the first instance of a regional theatre cast being brought to Broadway, winning Tonys for stars James Earl Jones and Jane Alexander. The two actors went on to star in a 1970 film version, one more example of the enticing rewards that could come the way of a not-for-profit should one of its productions find success in the market.
The 1975 smash A Chorus Line, produced on Broadway by the Public, alerted resident theatres around the country to the potential jackpot that a hit musical could funnel back to an organization’s coffers. Later, the 1984 musical Big River, a project brought in early development to Brustein at the ART by producer (and former student) Rocco Landesman, was such a hit that Landesman guided it toward Broadway after a stop-off at California’s La Jolla Playhouse.
The latter wasn’t intended as a model for future alliances but it became one anyway, a blueprint for collaboration even down to a project’s generative roots, paving the way for across-the-aisle partnerships that resulted in long-running hit productions like Rent, which started life at New York Theatre Workshop, and Jersey Boys, another La Jolla alumnus.
For all the concern that the not-for-profits have been sullied by the filthy lucre of Broadway, perhaps the most striking aspect of the discussion is the fact that in most of these partnerships, there’s rarely a significant impact to the bottom line.
“Royalties, or in some instances profits, from shows are episodic, not continuous,” says Barry Grove, executive director of Manhattan Theatre Club, which owns and operates a Broadway venue as well as a for-profit subsidiary. “When they’re significant, as they have been in a few occasions”—he names Ain’t Misbehavin’, Proof and The Tale of the Allergist’s Wife as examples—“they’ve helped clean up the campsite from traditional and ongoing operating debts.”
“We earned more than $1.2 million from Hairspray,” notes David Armstrong, executive producer and artistic director of Seattle’s Fifth Avenue Theatre, where the John Waters–inspired musical premiered. “But it’s been $1.2 million over 10 years.”
In the best cases, those additional funds are used to prop up endeavors, including education initiatives and new-work development programs, that aren’t money-earners. That’s the balance Todd Haimes, artistic director of New York’s Roundabout Theatre Company, tries to strike, even if some ventures can attract criticism for their obvious box-office aspirations. This season’s most likely target: the Roundabout’s Broadway return of its hit 1998 revival of Cabaret, this time starring Michelle Williams.
The not-for-profit operates three Broadway stages and two Off-Broadway spaces and frequently pairs with commercial producers, but also oversees a host of other activities, such as Roundabout Underground, which develops and stages new work in a 62-seat space that charges $20 a ticket. “Hopefully commercial partnerships will generate income for the Roundabout, and that money will go back to the theatre to fund things like Roundabout Underground, which loses a fortune,” Haimes says. “Something’s got to pay for Machinal and The Winslow Boy,” he continues, in reference to two of the theatre’s worthy Broadway revivals this season that were never likely to become big box-office draws. “These are plays that should be done, but you have to balance it with a show that has some hope of generating ticket sales for the theatre.”
For a lot of not-for-profit leadership, the uncertain monetary gain is only one attraction of a commercial partnership. Even a show that flops on Broadway can provide a booster shot of national visibility to a resident theatre.
So says Michael Kaiser, the outgoing head of D.C.’s Kennedy Center, which spurred Broadway transfers of its productions of Ragtime and Follies, the latter of which was orchestrated by the Center itself. Both productions failed to recoup in New York, but for the Center, he contends, the transfers were major successes.
“More than 60 percent of our fundraising is done outside of Washington, so there’s a real rationale for being in New York, in terms of its potential for expanding the donor base and benefitting from the national attention of a Broadway run,” he says.
The Kennedy Center’s next big musical project is director Bill Condon’s revival of Side Show, a co-production with La Jolla, where the musical played last year ahead of a summer run in Washington. After that comes Little Dancer, the latest musical written by Lynn Ahrens and Stephen Flaherty, directed by Susan Stroman. With the pedigree of the creative teams involved, both are sure to have the attention of the broader theatre world, including commercial producers.
“Those earlier Broadway transfers gave us great credibility with the creative community,” Kaiser says. “It’s why the Side Show people thought of us. If we hadn’t moved Ragtime and Follies, I don’t think some of the projects we’re doing now would have come to us.”
Susan Medak, who for more than 20 years has served as managing director of Berkeley Repertory Theatre, echoes the idea that commercial ties can yield increased access to artists, noting that Ian McKellen and Patrick Stewart would never have trod the California theatre’s boards last year had its production of Pinter’s No Man’s Land not been bound for Broadway under the auspices of a commercial producer.
But there are other advantages to such endeavors, she notes. Audiences and theatre staffs alike feel significant pride when one of the shows they embrace is validated by a successful future life elsewhere. Besides, working closely with commercial producers can also provide an important opportunity for institutional learning. Medak remembers that the extraordinary sound requirements to mount American Idiot, the commercially enhanced rock musical by the band Green Day, prompted the entire sound department to learn new tricks. “I think that kind of thing is one of the aspects of these collaborations that have been of the greatest value to us as an organization,” she says.
In the best possible scenario, an interaction with the commercial world doesn’t sully a not-for-profit’s mission, but marks a true extension of it.
“This is a first for us,” says Bill Rauch, director of All the Way, the Robert Schenkkan play now on Broadway starring Bryan Cranston as Lyndon B. Johnson. Oregon Shakespeare Festival, the organization Rauch leads, commissioned the play as part of its American Revolutions initiative, and the show’s premiere at OSF in 2012 led to the commercial involvement of producer Jeffrey Richards, who teamed with ART for a Cambridge run before its Broadway berth.
“Most important for us, the success of All the Way gives more exposure to a play we commissioned and that we passionately believe in,” Rauch says. “It’s an extension of our commitment to create new work that contributes to the field of new American plays. A commercial expression is one way we can contribute to that dialogue.”
“Oregon Shakespeare Festival is an extraordinary operation,” raves Richards, also the producer who shepherded the Steppenwolf Theatre Company’s production of August: Osage County to Broadway accolades. “Is it on everybody’s radar? No. But perhaps now it will be.”
Commercial producers readily admit the attraction of the not-for-profits is a financial one, allowing them to test new work in front of an audience in a run subsidized, in a sense, by the producing nonprofit. But that’s far from the only reason to do it.
“The obvious advantage is always economic, because in this economy, the model we all used years ago of taking a show out of town for a commercial tryout doesn’t quite work anymore,” says Joey Parnes, the commercial producer who scored a Tony for his Broadway transfer of Christopher Durang’s Vanya and Sonia and Masha and Spike, which originated at Lincoln Center Theater and McCarter Theatre in New Jersey. He’s also behind the much-lauded Broadway production of the musical A Gentleman’s Guide to Love and Murder, which originated at Connecticut’s Hartford Stage and played the Old Globe in San Diego prior to New York.
“But there’s a lot more to be gained in working with the nonprofit in terms of the development of the work itself,” Parnes explains. “Having a really astute nonprofit producer creatively developing a project over a number of years, at a theatre devoted to developing new works and good at developing new works, is a huge benefit.”
“If a show needs development, you put more brains behind it when you add a nonprofit,” agrees Robyn Goodman, the Second Stage co-founder and artistic producer at Roundabout Underground whose commercial career has included Avenue Q and Bengal Tiger at the Baghdad Zoo, both seeded in the not-for-profit sphere.
Combatting the image of the cigar-chomping bully, most commercial producers contend they go into a not-for-profit looking for the added input a resident theatre’s artistic staff can provide. Thomas Schumacher, the president and producer of Disney Theatrical Group, has frequently paired with not-for-profits in order to shepherd development of Disney titles, with examples including Aida, Peter and the Starcatcher, Newsies, Aladdin and The Jungle Book.
Aida, for instance, had its first production at Atlanta, Ga.’s Alliance Theatre, at the time run by Kenny Leon. “It was my production in Kenny’s theatre,” Schumacher allows, “but Kenny sat with me every night. And I want those partners.” Producers say that as costs rise, especially for musicals, the comparatively safe haven of the not-for-profit offers an opportunity to nourish the creation of a work in a way that a purely commercial production, subject to the pressures of the marketplace, cannot.
“The working environment of a nonprofit is an enormous plus,” Richards says. “The stakes are different. I wish I had gone to a resident theatre with The Anarchist.” That show, a new play by David Mamet that starred Debra Winger and Patti LuPone, tanked on Broadway. “I think it’s one of David’s best plays, but it’s one that defies people’s expectations of him. Opening on Broadway might not have been the best thing for it. I think it maybe needed a little bit of breathing room that a resident theatre could have provided.”
Even with a wealth of potential benefits on both sides, the not-for-profit world and the commercial sector have two different missions at their core: the nonprofit to nourish art and serve a community, and the commercial producer to make money for investors. What’s more, commercial producers see a project as their baby, while for a nonprofit with multiple shows on the season slate, it’s just one child in a family of four or six or eight.
It’s enough to make any relationship thorny.
All agree that problems arise when the goals of the nonprofit and the producer don’t align for the project on which they’ve partnered. “It’s different every single time, and every one of these partnerships is like a marriage,” says Christopher Ashley, the La Jolla Playhouse artistic director whose first production at the San Diego theatre was Memphis, which went on to have a Tony-winning run. “You have to figure out the expectations upfront. The marriage vows need to be very clear.”
Nonprofits must retain ultimate control of a project while it’s under their auspices, not just as a matter of integrity but also as a legal requirement of nonprofit status. “But it’s naïve to think that a commercial producer won’t have some kind of input,” warns Roche Schulfer, longtime executive director at the Goodman Theatre in Chicago. “That’s being a co-producer.”
Hal Luftig, the Kinky Boots producer who enhanced the Old Globe’s recent production of the Jeff Buckley musical The Last Goodbye, makes it a point to tread carefully in the territory of a long-established organization with its own ecosystem, community and politics. “When I take a show to a regional, I always say to my team, ‘You are a guest in someone’s home,’” he says.
There can be serious pitfalls to such arrangements. For a not-for-profit, one of the worst-case scenarios involves making a deal with a producer and moving forward on a production only to have the money fall through on the commercial end at the last minute.
Barry Edelstein, the artistic director of the Old Globe, faced the commercial collapse of The Honeymooners, which had been scheduled to premiere at the theatre in the fall of 2013. “That left me in an unbelievable jam three months into the job,” he grouses. His only option was to find a production on a similar scale and with a corresponding commercial potential, which is where Last Goodbye came in. “The business model of this theatre depends on a certain number of shows selling an enormous amount of tickets,” he says.
It’s a bind, Edelstein admits, but it’s one that’s rooted in the theatre’s longstanding tradition of producing musicals. “There’s an audience in San Diego for high-quality, lushly produced musical theatre. I can’t say, ‘No more commercially produced musicals,’ because my audience would abandon me.”
The predicament that so many in the nonprofit realm fear is of getting to the point where the theatre’s survival relies on commercial money. Managing directors do all they can to ward off that kind of codependence. Every nonprofit leader contends, at least publicly, that they never budget an “enhancement slot” into a season’s budget. In addition, an extremely conservative estimate of commercial revenue is usually figured into the bottom line, even at a theatre like ART, with three shows on Broadway at once.
“I tell people, ‘This is not the norm! It’s all cyclical!’” says Billy Russo, ART’s managing director. He knows from experience. He was executive director at New York Theatre Workshop as Rent wound down its Broadway run.
“Suddenly we knew Rent was going to go away, and it was a big adjustment to make,” he recalls. “We had to prioritize. What’s most important? What needs to go on hold?”
Projects that are the servant of two masters, one nonprofit and one commercial, can also suffer during the creative process. “The challenge can be keeping the artists in the room, and making sure they don’t turn like little sunflowers toward New York,” says Arena Stage artistic director Molly Smith.
For most artists, the trick lies in not thinking about it. “Every producing entity has their own way that’s right for them, and I can’t think about it too much,” says Jeanine Tesori, the songwriter whose work runs from not-for-profit outings Fun Home and Violet (revived by the Roundabout this spring) to commercial titles like Shrek the Musical. “Everything I’ve done has given me things to put in my tackle box, artistically. For me, it’s all about getting the needs of the piece met.”
“When you’re working on a $20-million musical, there’s no denying there’s considerable pressure for it to be a hit,” says Robert Falls, artistic director at the Goodman, whose commercial projects have included Aida. “That can be energizing, but as a director, I have to approach the work the same way as I would if I were directing something for my home audience at the Goodman.”
Not-for-profits can’t begrudge artists their commercial paychecks, since that money usually represents a major step up from resident-theatre wages that are, to hear nonprofit leaders like Eustis tell it, unconscionably low. “If they want to make a living in the theatre, artists need an advocate beyond a show’s initial run to create value for the show,” says Kevin McCollum, the producer of Rent, Avenue Q and Motown and a former exec at Minneapolis’s nonprofit Ordway Center. “That’s my job as a commercial producer—to create value for the author.”
But some argue that the minute the carrot of commercial success is dangled in front of an artist, the work shifts.
“It does change your writing a lot to know you have to swing for a fence that’s much farther away,” says composer Brown. “A commercial piece of theatre has to serve the money somewhere, and you write differently when you’re there to serve the money. There’s a Broadway aesthetic, just as there’s a Steppenwolf aesthetic and a Goodman aesthetic and a Guthrie aesthetic.”
Negotiating the profits and pitfalls of the nonprofit-commercial exchange is the price of doing business these days, according to many in the field. The controversies are so hard to resolve in part because the ultimate decision to program a work is an entirely subjective one.
“I have little anxiety about anything in our season as long as I can, with a truthful, straight face, say, ‘I want you to come to this show because I believe it’s a good show and it’s an important show,’” says La Jolla’s Ashley. “When I can’t say that is when I would have trouble sleeping at night.”
“Choosing plays is a matter of conscience,” agrees longtime director and producer Gregory Mosher. “Only the person choosing the plays knows for sure whether he or she chose it because there was something about the world right now that made the play valuable and worthy of artistic expression, or whether he or she had a hunch it would sell a lot of tickets.”
With the nonprofit-commercial interplay as entrenched as it is, resident theatres can look to peers for best practices to see how other theaters manage to benefit from commercial revenue without depending on it.
Chicago’s Steppenwolf Theatre Company found itself significantly enriched by the success of Tracy Letts’s August: Osage County, but leaders Martha Lavey and David Hawkanson refused to spend the windfall on day-to-day operating debts. “We put all of that money aside and created an enhancement fund so we could, on our own, produce larger productions like August was,” says Hawkanson. He lists Frank Galati’s The March, Letts’s adaptation of Three Sisters and Zinnie Harris’s The Wheel as shows that have since benefitted from the surplus.
Nonprofit leaders, worried about the increasing focus on commercial success, have proposed pushing for new definitions of success outside the parameters of a Broadway splash. But for now, absent alternative markers of achievement and sufficient government subsidization, partnerships with the commercial world must be done to survive, most agree.
But not all do. “Everybody always says, ‘You have to do this,’ but you don’t have to do anything,” opines Carey Perloff, artistic director at San Francisco’s American Conservatory Theater, which in recent years has largely eschewed commercial partnerships in favor of pooling resources in not-for-profit co-productions. “We are the leaders of this field. We can do something else, if we want to.”
Until the theatre industry figures out what that something else is, the debate looks destined to rage on.
“It’s irresolvable,” Brustein concedes. “But the fact of the debate is important. The worst thing would be if we all just accepted it without examining and investigating it and challenging it.”
“My board, my audience, the critic in the San Diego Union-Tribune, all of them will keep my feet to the fire about what I’m doing,” says Edelstein from t