How Much Is Too Much?

The New York Time published an article by Patrick Healy last week about nonprofit theatres mounting commercial productions on Broadway, partnering with commercial producers, or extending runs or remounting hits in order to increase revenue.  Nonprofit theatres have to make revenue.  In the absence of the kind of government support (or even ownership) enjoyed by European theatres, that’s how they fund their missions.  This post isn’t about that.  It’s about a nugget in the middle of the article: Andre Bishop, artistic director of Lincoln Center Theatre (currently presenting a commercial production of War Horse) is quoted as saying, “unlike commercial producers, none of us at Lincoln Center Theater are personally making money off of these shows.” The article goes on to report Bishop’s compensation at $482,000, so clearly he is making money, just not directly from the ownership interest a commercial producer would have.

There was a lively twitter conversation about this and other issues raised by the article, so I wanted to see where Bishop’s compensation falls in relation to that of other arts organization executives.  This information is publicly available. (I got mine from the 2009 Form 990 tax filings available from the National Center for Charitable Statistics).  Bishop’s compensation is about 2/3 that of his Lincoln Center neighbor Peter Martens at NYCB but higher than that of the artistic heads of the Roundabout and Manhattan Theatre Club (and lower than that of LCT executive producer Bernie Gersten).  Here it is laid out, along with some others, one large and one small theatre in several other cities.  I acknowledge that the sample size is small and so one can’t draw any statistically significant conclusions:

Company state AD salary ED/MD salary Total expenditures Salary as % of Expenses
LCT NY $487,407 $506,634 $53,786,823 1.85%
MTC NY $336,270 $315,899 $20,037,669 3.25%
Roundabout NY $402,403 $467,718 $54,073,308 1.61%
Public Theatre NY $313,751 $274,364 $21,373,089 2.75%
Arena Stage DC $240,674 $168,268 $14,906,255 2.74%
Woolly Mammoth DC $90,635 $84,335 $3,644,137 4.80%
Guthrie MN $542,144 $229,000 $27,913,555 2.76%
Mixed Blood MN $79,763 $0 $1,113,134 7.17%
CTG CA $398,456 $295,819 $51,854,000 1.34%
Son of Semele CA $10,800 $10,800 $64,169 33.66%
Goodman IL $370,000 $346,000 $18,344,522 3.90%
Redmoon IL $63,366 $41,921 $1,366,809 7.70%
ATC AZ $144,092 $117,230 $6,687,654 3.91%
ATP AZ $78,859 $0 $1,113,791 7.08%

So, I return to Bishop’s statement about not making any money off the commercially successful shows.  He makes A LOT of money, but his and Gersten’s salary combined represent less than 2% of the total expenses of the organization.  The smaller the company, the higher the proportion the AD’s salary is of total expenses.  Would paying Andre Bishop less lead directly to increasing the compensation of, for example, a playwright trying to make ends meet?  Probably not.  But, what if nonprofit companies that make revenue off commercial productions were required to re-grant some portion of that revenue directly to artists to develop new work (altering somewhat Diane Ragsdale’s proposal of a few weeks ago)?  Or were required to re-grant it to small arts organizations in the community?  As the (eco)system stands now, Bishop’s statement to the contrary, the organizational incentive is to produce more commercially viable productions to support the production of….more commercially viable productions.

The three companies producing on Broadway plus Center Theatre Group share not just size in common.  They also earn a higher proportion of their revenue from box office receipts than the other smaller companies.  Yet, they still garner direct public grants and benefit significantly from the tax-exempt status of their (especially real estate) assets.  One could argue (and perhaps with more research I will) that the amount of grant revenue such organizations receive should be capped by either a dollar amount or percentage of total revenue freeing up funding for the smaller companies not only on this very short list but throughout the country.  Or, in order to be eligible for grant revenue, would need to make some programming free, as Mixed Blood has done with its Radical Hospitality program.

Finally, a point I made poorly in 140 characters on twitter: there are market forces at work in setting executive compensation in any sector.  I am not saying that is a good thing or a bad thing, just that these forces exist.  In a world where the head of NYCB makes over $600K and the head of the Metropolitan Museum of Art over $800K,  that the head of LCT makes close to $500 doesn’t seem so outlandish.  Unless, of course, you, like me, are one of the 99% making less than $506,553.

About lindaessig

Linda Essig is director of Enterprise and Entrepreneurship Programs at the Herberger Institute for Design and the Arts at Arizona State University, including its award-winning arts entrepreneurship program, Pave: http://pave.asu.edu The opinions expressed on creativeinfrastructure are her own and not those of ASU. You can follow her on twitter @LindaInPhoenix and "like" the Pave Program in Arts Entrepreneurship at http://www.facebook.com/pages/pave-program-in-arts-entrepreneurship/386328970101 Find Pave's journal, Artivate, at http://artivate.org
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6 Responses to How Much Is Too Much?

  1. Matt McLaughlin says:

    @Poorplayer –

    Is the contention that producing theater for people with a lot of money is somehow unethical??? Or is it that the cultural artifacts produced for those people are warped cultural artifacts? Because if there’s any art form in which “trickle-down” actually works it is surely theater. Think of every major cultural theatrical artifact from the last 30 years that is now a staple of the community and regional theater circuit. Where was it incubated? In prestigious NY or large regional theaters whose patron base was the rich. Was Arthur Miller less able to hone in with laser like focus on the disastrous effects of the rat race in Death of Salesman because it got its premier at a prestigious theater?

    Let me turn this around – would you want someone running your 55M$ organization who could only command $100K in salary in a competitive labor market?

    • This is a really interesting and tough problem, Matt, because you’re right. Money doesn’t make stuff bad. Usually it makes life easier. That’s why we all like raises. That’s why being independently wealthy makes it easier to live as an artist. But there’s another way of looking at it, also valid, and not evil.

      The way a lot of cultural institutions got set up in this country, and remain funded to this day, wasn’t about enriching culture and improving the lives of all the people. It was about entrenching class divides. And that has weird and complicated consequences in museum memberships, orchestra subscriptions, what art gets supported by the market only and what art lives in this weird patronage-philanthropy world, and more. And so the argument you’re fighting isn’t really the one that says money is bad and we should all be starving artists.

      It’s the one that’s frustrated and angry at a lot of the class boundaries the “fine arts” are stuck with, much to most of our chagrins.

      • Matt McLaughlin says:

        “was about entrenching class divides”… really? The people who set up the Met which charges $0.25 admission had a stated goal of entrenching class divides?

        I think what you’re reacting to is more a natural consequence of the fact that cash and excellence so often go together. You’re not going to find Picassos for $10 in a junk shop that you can display in your podunk town museum. We can bemoan the fact that every town can’t afford to support a museum with the financial clout to curate Picassos but that won’t change the underlying economics.

        And in terms of cultural cohesion, it’s not even clear to me that that would be desireable. No one is going to travel all over the country to see every town’s museum in order to get a snapshot of our cultural heritage, but they will take a trip to NYC and visit the Met.

        Points of consolidation of cultural artifacts play a vital role in cultural dissemination.

        If you can think of another economic model where a patron of the theater could see 12 shows of the excellence of high end NY theaters in a week if the theater support resources were distributed more evenly across the country, I’d love to see it.

        Points of consolidation of economic support for the arts also play a vital role in developing cultural artifacts.

        Do you imagine that the overall excellence of the theater world would increase if it were no longer possible for critical mass of theater artists to support themselves in one place? If the Julie Taymors of the world were scattered across the country each with a shallower pool of potential collaborators?

        • lindaessig says:

          Gentleman:

          Thank you for your thoughtful comments. Much of institutional arts ecosystem in this country does seem to reify rather than dissipate class divides. There is a concentration of wealth in certain cultural institutions, just as there is a concentration of wealth in certain cities, or more precisely, neighborhoods. Because the market fails to correct for these inequities, the government can (in my opionion “should”) intervene to make quality artistic products of a diversity of cultures available to people of all classes in such a way that income, race, etc are not barriers to cultural participation. That having been said, in relation to the topic of my original post, the skills needed to lead a $50million arts organization are not only the skills of a stage director or a choreographer, but the skills of an organizational leader. Thus, when an arts organization or, for example, a university, sets compensation levels for its executives, it does so with both artistic and managerial responsibilities in mind.

  2. poorplayer says:

    Hi Linda,
    An interesting perspective. My comment lies more along the lines of not looking necessarily at the percentage of overall budget represented by AD/MD salaries, but rather by looking at the overall demographic of for whom these companies are producing theatre. Andre Bishop is being paid a lot of money to produce theatre for people with a lot of money. Of course you have some exceptions on your list, but in general, to borrow the Occupy Movement terminology, this is a one-percenter argument, because it applies only to the people working at the highest 1% of the business. It does, to me, remain outlandish that these NGO theatres continue to profit from their practices at the cultural expense of the rest of the country, and people are being paid a lot of money to maintain the status quo. That being said, I think your suggestions are worthwhile, as is any suggestion to break up mainstream theatre to produce a more culturally equitable artistic landscape. But I don’t think that giving these people a pass on their salaries is justified given the current state of inequality in the theatrical landscape. It’s just wrong.

  3. My friend linked me to your blog, and you’re totally going in my RSS reader. She wanted to know my response, and instead of posting on FB I thought I’d post here.

    Clay Shirky has a good point about how the first goal of an institution is never its official goal. Above all of the mission-related stuff is simply self-preservation. That’s not because they’re bad organizations, it’s just by definition. If you go out of business you can’t serve your mission.

    And arts organizations of all kinds (not to mention the entire entertainment industry) are living under fairly constant existential threat these days. If we want to guarantee the survival and budget of big non-profit theaters, then we could reasonably expect them to turn some of their energies away from producing revenue generating shows that sustain the company, and towards mission-driven work that enlightens an audience, connects with a community, and supports smaller theater companies.

    Though in all honesty, I’d rather both have a big governmental commitment to the survival of these organizations, and also have a big governmental commitment to the survival of the smaller ones, without putting any kind of dedicated levy on the big fish in the field. Let’s dedicate some levies at people who can afford them, and use the arts to improve our society, instead of demanding that the arts pay for themselves all the time.

    Is it awkward to be defending as needy an arts field that contains highly paid executives? Yeah, it kind of is. But we should be happy for anyone doing well in the arts, really, unless they’re actually evil. And compared with the excesses of other executives, seeing people say we don’t deserve more help because our executives have salaries too is kind of ragingly hypocritical.

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