Thoughts from a Los Angeles Theater Producer

The “J” Curve of Los Angeles Theater

Posted in Producer's League by Rick Culbertson on October 25, 2009

I have a friend.  She lives is a beautiful 600 square foot loft in downtown Los Angeles.  Her rent is about $500 a month.  The loft next door is a 700 square foot loft that rents for about $1500.  Why the price difference?  My friend’s loft is subsidized by the government.  Each year, her income has to be roughly between $18,000 and $24,000.  If she makes more than $24,000, she will have to move out of her apartment and into a market-rate apartment, which would cost about three times as much.  Because of this, she can not take a raise or get a better job, unless that job or raise will jump her salary up to around $40,000 – this is what she would need to afford to move into a market rate apartment.  Anything less, and she would have to move into an apartment that is not as nice as her current one, thus lowering her quality of life.  So, my friend hovers at $24,000 income each year.  Its not that she doesn’t want to earn more, it’s that it’s simply not in her best interest to earn more because doing so will prevent her from keeping her nice apartment.  

 LA Theater is stuck in this same situation.  In Los Angeles, a huge gap exists between the maximum budget one can use to produce a 99 seat production, and the minimum budget one can employ for a HAT production.  I call this the J-Curve of Los Angeles Theater.  Using a graph to measure the maximum profit potential (week potential minus week cost) on the y axis and our budget (from small to large) on the x axis, we will see a curve that looks like a “J”.  Here is our graph:

 LA Theater J Curve

 

As our graph illustrates, low budget 99-seat productions offer a small profit potential, while high budget HAT contracts offer larger potential.  Many theater companies start out with low budget 99-seat productions.  However, these types of productions have many limitations.  For one thing, musicals on this level are unable to include live musicians (unless they are all volunteers). Additionally, most of the participants including directors and designers are volunteers, which means that the production will have very little potential for high quality production values and, quite frankly, talent.  This is why most theater companies that are successful try to raise their production budgets. Eventually they hit point A on our graph– which is the realm in which high budget 99-seat theater productions must stay if they want to have a reasonable chance of breaking even from week to week.  But many limitations with high budget 99-seat theater productions still abound.  Those who work on this level never see true livable wages, and rarely do shows on this level boast great production values.  And, of course, no 99-seat theater production can run longer than 80 performances. 

 Once a theater company does get to point A, therefore, they have to make a choice.  Either stay forever at point A, or make the enormous and risky leap to point B.  If they stay forever at point A (which almost all of our theater companies in Los Angeles have chosen to do) it means that actors will never be paid higher wages, and productions will never see high production values.  If they try to make the jump to point B, then this decision will come with the huge risk of the theater company falling short and landing in the bottom of our “J,” somewhere between Points A and B.  Since this is the most likely outcome, a theater company would need to have stored a tremendous amount of reserve capital in order to bridge the years that it will invariably take to reach point B.  With very few theaters able to amass the required capital, this transition is an extremely rare occurrence.

 For independent producers like myself, in order to produce at point B or higer, we would need a show to be an extreme crowd pleaser in order to guarantee that we will be able to sell the 300-400 tickets every week needed just to break even with our weekly expenses.  To keep expenses down, we use tracks instead of live musicians and look for shows with very small casts.  Recouping our capitalization would require us to sell even more tickets, and for a long period of time.  Add to this the fact that we don’t have a middle theater zone in which to produce—a circumstance that forces us into 99-seat theaters and limits the number of tickets we can sell on a given weekend. Because of this, the independent producer must look at LA simply as a place to develop their production—not as a money making production. It follows, that if a producer is just looking to develop, he or she would want to produce on the easiest level possible—the 99-seat contract– in order to loose as little money as possible.

 How do we change this situation, and raise the level of theater in Los Angeles?

 Well, in my opinion, we have to have a coordinated approach:

 Step One (1) We have to allow producers to recoup some capital (if not turn a small profit) on the current 99-seat plan.  Perhaps we need to look at profit sharing ideas with our actors so that they become stake holders in the 99-seat production.  This would prevent a producer making money on the back of very low paid actors.

 Step Two (2) We need to rework a new contract that sits somewhere in between 99-seat and HAT.  A contract that will bridge the gap so that theater companies that want to expand or spend more money on productions can do so without risking total failure (by falling into the bottom of the “J”).  This new contract must allow for shows to run open-ended.  This will help build long running shows that will promote our theater community by allowing more people to see our better shows.

 Step Three (3) With steps (1) and (2) in place, a new need will be created for theatres at the 199 seat level.  Theater owners will start to build them. 

 Step Four (4) Successful theatre companies will start to produce in the bigger houses, and with 199 seat houses popping up, commercial producers will be able to work in venues where profit numbers make sense to investors, thereby allowing them to produce better shows and experiment with bigger shows. All of this will mean higher salaries for actors.  (And sure it’s not going to be enough to live on, but $25 or $40 a show is better than $11, right?  And it’s better to be in a show that has good production values, as opposed to a show that doesn’t, right? and maybe there is a way to add in 1/4 health care shares where 4 weeks on this contract equals one on a full contract.  Then you would have 2 weeks toward your equity health care from an 8 week run.)

 Step Five (5) will be to start it all over again to work up to the 299 level.  It will be at this point that will we have a viable Off-Broadway theater scene in Los Angeles … With real money and real salaries.

 The thing that we need to understand is, we are not facing an audience problem.  Our audience is here.  People go to the theater.  The tourists are here.  They will go to the theater (especially when we work with solid and well-funded marketing plans like this).  The only thing preventing this new level of theater growth from occurring is, quite simply: the theater community.  If we don’t fight to change our situation, then it won’t change.  I think if we we’re smart as a community, and if we really work together with all of our best interests’ in mind, then we could put in place a 20-year Plan to make this vision a reality.

 Of course, we can simply keep going along as we are now.  But, just like my friend with the subsidized apartment, we will never have a reason to better ourselves.  And a successful, happy, nationally respected future will always be out of our reach.

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LA Ovation Awards

Posted in Till Death Do Us Part by Rick Culbertson on October 19, 2009

I have to take time out from my usual posts today.  I have just returned for the LA Ovation Award Nominations announcement.  It brings me a lot of joy to announce that Divorce! was nominated for five Ovation awards.  Nominations are as follows:

 Production of a Musical – Intimate Theatre (All of us!)

Book/Lyrics/Music for an Original Musical (Erin Kamler)

Director of a Musical (Rick Sparks)

Music Direction (David O)

Acting Ensemble (Greg Franklin, Matt Kaminsky, Keri-Anne Lavin, Rick Segal, Deb Snyder, Steve Staley, Leslie Stevens, Lowe Taylor, and Gabrielle Wagner)

 Other than Best Production of a Musical, all awards are city-wide with no restriction on theater size (Best Production is limited to theaters under 100 seats).

 I have a tremendous amount of pride for everyone involved in Divorce!  Congratulations to everyone.

 I would also like to say special congratulations to all of my investors.  I hope all of us in the theater community, whether our shows were nominated or not, remember that artists can’t do their jobs if investors don’t invest.  Let’s all be thankful to everyone who supports the arts financially and let them know how much we appreciate their commitment to theater.  They don’t get awards, they don’t get interviewed, they don’t stand in front of an ovation, and they often lose money.  But without them, we wouldn’t exist.

To investors everywhere… THANK YOU!!!

What could a Producer’s Organization look like?

Posted in Producer's League by Rick Culbertson on October 12, 2009

I have been asked how, given all the different types of theater companies that exist in Los Angeles, a producer’s organization could work.  I have taken this question to mean that a lot of people feel that we are too diverse of a theater community to allow for a cohesive, agreed-upon structure, and that our missions and goals don’t align.  I disagree. While there are certainly some differences among us, we have many more things in common than we think.

We are all producers.  Every one of us.  Whether your company is small and actor-based, whether you work independently in the 99-seat world, whether you are a mid-sized non-profit with 100-499 seats or a big regional theater, your mission is to produce theater.  This means that you must deal with unions, hire (even on a volunteer basis) artists and staff, sell tickets, and market shows.  We all interface daily with theater venues, actors, directors, designers, writers, and material. We all vie for the same limited number of reviewers and patrons. We all have to work within budgets, and we all have something to say.  

If we created a producer’s organization, it could help all of us accomplish the tasks we have in common.  We could organize committees that break down these tasks according to our various specific types of theater.  We could implement one committee for each of the following: the large budget 99-seat non profits, the low budget 99-seat non-profits, the actor based 99-seat houses, the independent producers, the midsize theaters, the large theaters… etc.  Each committee would work on the behalf of the group of theaters within their category.  The committees would then meet with the producer’s organization to make sure it is adhering to the needs of all producers and theater companies. 

Imagine being able to negotiate with equity– all with one voice.  We could begin a dialogue with other unions so that they finally get on board with the 99-seat contract.  Each of these negotiations could receive input from the smaller committees, creating a situation in which each theater company has the weight of the entire community behind it. 

Additionally, all members of the producer’s organization, no matter what their size, would benefit from the marketing efforts of a producers league.  (READ THIS  POST!)

A producer’s league, working as a trade organization, could work with the city to address our needs as producers.  This league could seek partnerships with corporate entities (the Broadway Producer’s League in New York has a partnership with Visa. Why can’t we?)  As individuals, we are hard-pressed to make these visions a reality, but as an entire community? We could create a partnership with the Los Angeles Restaurant Association to bring our two industries together to promote “dinner and a show” ideas, and many more partnerships such as these to intelligently grow the visibility of our business. There is no reason why each of us, as individuals, should continue to labor on trying to accomplish these tasks, over and over, again and again– achieving only moderate success at best.

Last, but certainly not least, we could work together to develop better rental agreements with all our local rental theaters.  Better contracts that will promote long running shows instead of forcing you to close. (READ THIS POST!)

There are so many benefits in coming together. Put simply, a group is always greater than the sum of its parts.

Where will we be in 20 years?

Posted in Producer's League by Rick Culbertson on October 7, 2009

Quick note: sorry for no posts in two weeks, I have been busy traveling to Chicago and am now back in Los Angeles. In the future my goal is to post an article every Monday. This will give me the time to write what I hope will be thoughtful posts that have something to say, instead of just everyday “filer.” Ok, now on with the show!

I recently attended a committee meeting for the Bringing Back Broadway initiative. The Committee focuses on the 12 large Broadway theaters in Downtown Los Angeles, and their goal is to revitalize the entire Broadway corridor with shops, restaurants, a street car (a light rail that runs down Broadway, connecting LA Live and the Music Center) and most importantly, filling the large theaters with NYC Broadway-caliber shows. They want so do all this in 10 years.

I think they are crazy. Not because what they want to accomplish, but because of their time line. I believe they will accomplish each of their goals, but that it will take about 20 years.

Don’t think their idea is plausible? Take a second to remember 1989 and then think about how much has changed. Don’t think there is a market? Go back and read my post on rebranding and tourists. And then remember how long Wicked ran at the Pantages. Wicked is exactly the kind of show that will run at these theaters. There will also be room for The Lion King, and every other Disney and Warner Brothers movie they want to musicalize. Add the fact that our city, county, and state politicians want this to happen, the theater owners want this to happen, and the downtown property owners want this to happen. And, just as LA Live is about to prove to us all (and just as the Music Center already has), people will come downtown to be entertained.

It will happen.

So when we end up with five to ten 2,000 seat theaters in LA hosting full scale, Broadway productions in them, what will happen to the rest of the theater scene? Will these theaters compliment us? Or destroy us? Will they be part of our scene or outsiders? Will we be involved in making them successful? Will we protest this change, or cheer for it to fail? Or will we simply ignore it?

I think we should get involved. Just as the city of Los Angeles has a 10-year plan, our theater community should also have a 10-year plan (though I think realistically they should both be 20-year plans). I think we need to participate in the efforts to open these beautiful theaters, and we need to be looking at how this will change our entire theater landscape. After all, it stands to reason that if 80,000-160,000 patrons start to attend these large theaters every week, they are going to be less likely to also go see 99-seat theater. And even if 80% of them wouldn’t ever go to a 99-seat theater anyway, that’s still 16,000-32,000 a week that would have, and now probably won’t!

What are we going to do about this?

I think its time to sit down and work together to figure out a way to build a true “middle” type of theater scene with 100-499 seat houses that are available for rent to long-running shows. These theaters will allow us to produce at a higher level of production quality. Currently, shows that would otherwise have done very well in independent 199 or 299 seat houses are more or less being forced to play in 99-seat theaters. In just the past few years we have seen Marvelous Wonderettes, Louis and Keely, Divorce! The Musical, Lovelace, and now Life Could be a Dream— all shows that could have withstood larger productions but instead were crammed into small 99-seat theaters. How many other shows could have done well if they could have been produced in a slightly bigger house and been run with real marketing budgets and production values (not to mention higher salaries for our artists)?

The shows and talent are already here. What we lack is a plan, and perhaps the will.

Isn’t it time to start planning now? Isn’t it time to come together now? 20 years from now the Broadway theaters will be open. Will we have the foresight to ride this wave by creating our own “Off-Broadway” LA Theater scene?

It’s very easy to get bogged down by our own current shows and projects. Who has time to think about extra stuff when you have a full-time job AND run a theater company? I get it– most of us don’t feel we have time to think about the future when we can barely get though today.

But the problem is, if we don’t come together, if we don’t start to work on a 20-year plan, if we don’t think about the future, then 20 years from now all the great work we’re doing could be rendered irrelevant.