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Subject category: Entrepreneurship
Published by: Stanford Business School
Originally published in: 2003
Version: 4 June 2003
Length: 18 pages
Data source: Field research

Abstract

In early January 1993, American Repertory Theatre''s (ART) Artistic Director Robert Brustein and Managing Director Robert Orchard were concerned about ART''s financial situation. Major government funders had communicated plans to cut sharply, and possibly eliminate, their annual support for ART. Budget cuts and policy shifts at the National Endowment for the Arts (NEA), for example, had made it likely that there would be significant reductions in the funding for major theatres like ART. These threats raised the specter of a reduction in resources that could undermine ART''s continued ability to realize its ambitious, but costly, artistic vision. Brustein and Orchard had pursued ART''s vision aggressively since the theatre''s founding in 1980, and had enjoyed considerable success. Its annual budget had grown from just over $1 million to nearly $6 million, with substantial increases in earned income, contributed support, and endowment. In particular, ART had been very successful in garnering support from national funders such as the National Endowment for the Arts (NEA) and National Arts Stabilization Fund (NASF). But, given the deteriorating outlook for contributed support in 1994, Brustein and Orchard faced a limited set of options, all of which were likely to constrain the artistic freedom Brustein and Orchard prized so highly and any one of which could alienate the loyal but discerning audience that ART had cultivated so carefully, damaging its hard won reputation among critics and theatre professionals, and eroding the cutting-edge image that appealed to the national funders. As they met to finalize the program planning and budget for the 1994 season, Brustein and Orchard were finding it increasingly difficult to identify new sources of income to compensate for the cutbacks they expected. Although in the past ART had been able to fundraise its way out of impending fiscal crises, this time it did not look as if it would be able to rely on increased contributions from any source. Alternatives like courting a broader audience through more conventional work or cutting costs were unpalatable both from an artistic perspective and from a practical perspective. Both seemed risky ways to attempt to ensure ART''s long-term prosperity.
Industry:
Size:
USD6 million annual gross revenues
Other setting(s):
1993

About

Abstract

In early January 1993, American Repertory Theatre''s (ART) Artistic Director Robert Brustein and Managing Director Robert Orchard were concerned about ART''s financial situation. Major government funders had communicated plans to cut sharply, and possibly eliminate, their annual support for ART. Budget cuts and policy shifts at the National Endowment for the Arts (NEA), for example, had made it likely that there would be significant reductions in the funding for major theatres like ART. These threats raised the specter of a reduction in resources that could undermine ART''s continued ability to realize its ambitious, but costly, artistic vision. Brustein and Orchard had pursued ART''s vision aggressively since the theatre''s founding in 1980, and had enjoyed considerable success. Its annual budget had grown from just over $1 million to nearly $6 million, with substantial increases in earned income, contributed support, and endowment. In particular, ART had been very successful in garnering support from national funders such as the National Endowment for the Arts (NEA) and National Arts Stabilization Fund (NASF). But, given the deteriorating outlook for contributed support in 1994, Brustein and Orchard faced a limited set of options, all of which were likely to constrain the artistic freedom Brustein and Orchard prized so highly and any one of which could alienate the loyal but discerning audience that ART had cultivated so carefully, damaging its hard won reputation among critics and theatre professionals, and eroding the cutting-edge image that appealed to the national funders. As they met to finalize the program planning and budget for the 1994 season, Brustein and Orchard were finding it increasingly difficult to identify new sources of income to compensate for the cutbacks they expected. Although in the past ART had been able to fundraise its way out of impending fiscal crises, this time it did not look as if it would be able to rely on increased contributions from any source. Alternatives like courting a broader audience through more conventional work or cutting costs were unpalatable both from an artistic perspective and from a practical perspective. Both seemed risky ways to attempt to ensure ART''s long-term prosperity.

Settings

Industry:
Size:
USD6 million annual gross revenues
Other setting(s):
1993

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