Eric Salisbury: ‘My dream for Overture is to be relevant to everybody here, whether you buy a ticket or not.'
There's good news at the Overture Center for the Arts.
Despite the economy, advance ticket sales have increased. More popular programming is coming. Top road shows looking for venues now put us on par with Milwaukee. Better financial management is in place. Studies have begun for changing management, possibly privatizing it. Best of all, donations are up - way up.
"I can't even believe it. We're projecting about a 40% increase in individual donations," says Eric Salisbury, Overture vice president for development. "That feels a little bit insane to say in this market."
Overture president and CEO Thomas Carto is more cautious. "There are a couple things that we're optimistic about right now," he says, mildly.
We're all used to bad news coming out of the city's arts center. In September, lenders liquidated Overture's trust to settle all but $28 million in construction debt, hammering the budget for operations. There have been layoffs, most recently of marketing staff. Overture closed out the 2008 season with a deficit.
Then there's public perception; media complaints don't exactly help. "Everyone of course winces, and I think it's a disservice to the community," says Deirdre Garton, chair of Overture's fundraising arm. "People in the community really are the ones who ultimately make what happens inside that wonderful building."
In fact, Overture is doing well in a lot of ways. But to understand how, first you have to sort out all the separate entities that, together, the public calls "Overture."
The Overture Foundation was created to receive Jerome Frautschi's $205 million gift. The Overture Development Corporation built the center and owns it; it also "owns" the construction debt. The Madison Cultural Arts District (MCAD), an appointed board, manages the facility; it has no taxing authority. (Isthmus associate publisher Linda Baldwin is chair of MCAD.) The city of Madison employs most Overture administration and operations staff, not counting stagehands.
The Overture Trust Fund is gone; its activity was overseen by the defunct Support Organization for the Madison Cultural Arts District (SOMCAD). The Madison Community Foundation oversees the Great Performance Fund, which assists resident organizations such as the Madison Symphony Orchestra, Madison Opera and Kanopy Dance. The 201 State Foundation fundraises for some Overture-produced programming.
Finally, Friends of Overture is a volunteer group. "Every time the whole building's full, it takes about 125 volunteers," says Salisbury. In 2008, volunteers worked 34,630 hours, saving Overture an estimated $311,670 in wages.
Several fiscal changes to operations are already in place. This is going to be the first season Overture has had a July through June fiscal year, the industry standard.
"We've always had a calendar-year budget with the city, which is untenable because when we do a budget with the city, half of our season isn't booked yet," says Carto. "So we don't know what product we'll have, we won't know what's booked, and we can only take a guess at what ticket sales will be."
Those are no longer concerns. New management software also allows Overture to budget on an accrual basis, instead of the city's cash basis. Accrual accounting lets Overture track activity as it occurs. "From an accuracy standpoint, we're far better than we used to be on controlling our budget issues," Carto says.
Doing more with less
There were some bumps in the better-budget road. A six-month transitional budget was necessary to move to the new calendar. Meanwhile, Overture didn't count on difficulties at two resident organizations that created schedule vacancies: the collapse of Madison Repertory Theatre and the long musicians' strike against the Wisconsin Chamber Orchestra.
"Overbudgeting by a percentage or two can mean $100,000 to $200,000. We got caught on that," says Carto. "Yeah, we're going to end up with about a $275,000 deficit for six months, but we could very easily point to those issues." Despite scheduling gaps, ticket sales last season were down only 4% of what was projected.
The 2009-10 budget is conservative. Staff planned for 67% capacity. MCAD revised that to 64%, triggering the last round of layoffs.
Besides hosting resident organizations and renting to promoters, Overture has its own programming. "We've basically cut out classical music, we've reduced our modern dance," says Carto. "We made some decisions to really try to extend our profit margins. We're doing fewer things, and thankfully we have the mega-hit Lion King in the middle of that. There's no question that's going to be a big help." (The touring musical The Lion King begins a multi-week stint next April.)
The snapshot gross margin - a quick and dirty look at the difference between ticket sales and artists' fees - was 29% in 2008-09. Next season it's projected to be 33%.
"But that's still conservative, especially with the kind of product we have," says Carto. "Our subscriptions, by being ahead now by almost 20% over last year at this time, especially in Broadway [road-show presentations], what that's doing is front-loading our shows with subscribers, so we have less single-ticket inventory to sell. I think we have much more potential for overshooting our capacity numbers."
Broadway package renewals are up 9%. New Broadway orders are up 80%. The raw numbers averaged together equal an overall increase in Broadway sales of 18%." "That's extraordinary," says Carto.
One very big change is that Overture is moving into a higher class of presenters. The hottest road shows book only venues that prove they can handle good business during a lengthy run. Booking agencies now place Overture on parity with Milwaukee and Appleton's Fox Cities Performing Arts Center.
"That's a big jump," says Carto. "It means we're getting first-run product. Broadway's going to be a big player in our success over the next couple of years."
Expanding the pool
One of Overture's biggest successes is fundraising. The 201 State Foundation raises money for programming such as Kids in the Rotunda, artist residencies, Overture After Work and more.
"We're doing fundraising primarily for the free and low-cost events, making sure that everybody has access to Overture, not just the ticket buyers, not just people who can spend the money to go to The Lion King, but seniors and kids and other folks," says the foundation's chair, Deirdre Garton. "What is so gratifying is that it appears the community is responding so positively even in these difficult economic times."
This sort of programming is a bigger part of Overture than many might think. In 2008, all the resident organizations combined had ticketed attendance of around 111,000. Overture had 147,000 attend its free and low-cost programming.
"It's a big part of what we do, and we spend a lot of money on it," says Salisbury. Unlike the rest of the staff, he and his assistant are employees of the 201 State Foundation. His position was created just a year and a half ago. Before coming to Madison, Salisbury was executive director of Jubilee Theatre in his native Fort Worth, Texas. His efforts here are beginning to pay off in a big way.
"Last year was our best year, and this year we're tracking above that," he says. For example, in 2008 the foundation received $159,670 from 1,283 donors. This year it's already received $174,096 from 1,011 donors.
There's some grumbling in arts circles that Overture is liable to hurt fundraising for other organizations. Salisbury says that such perceived competition doesn't exist. He's coordinated with other development directors and even staged a meeting at which donor lists were shared and compared. He says there's very little overlap.
"I think there's a much larger pool," says Salisbury. "I think Overture's trying to position itself regionally. How many of our resident companies are out there working on the outskirts, regionally raising money? So I think there's a way for us to expand the pool."
An ongoing problem is Overture's complex management structure, and its cost. "We're talking to the city now about what may be a fundamental change to our operation in the next few years," says Carto.
Overture always counted on a $1.4 million supplement from the SOMCAD trust for capital needs and to create a reserve. "We've been engaged ever since the trust fund went down last fall," Carto says. "We knew at that point that there would be changes in the next few years, from an operational standpoint."
Meanwhile, there's a money crunch. "We're doing everything we can just to bridge the gap until that change happens," says Salisbury. "Tom is working hard to figure out that change and how it's going to be palatable to all the parties involved."
One idea that's been floated for a new business model is an Exposition District run by Dane County, combining Overture with the Alliant Energy Center and the Monona Terrace Community and Convention Center.
The concept makes sense in some ways, but for many it's a non-starter. The city isn't likely to give up the convention center, and it would be a hard sell to county supervisors. Still, the concept views Overture as a regional destination, for which wider area support might be deemed reasonable. A hotel room tax would be a politically expedient solution, since it's paid by visitors who likely use the facilities.
Another, potentially explosive possibility is some degree of privatization.
"We've done a lot of research on different models around the country that are hybrids of either totally private, a combination of public-private, or all municipal," says Carto. "We've done some good research on communities that have transitioned out of more civil-service-type situations to a private situation. If we go that direction, we'll make sure we do that right and with the political will to make that happen.
"But there's no question that the current operating structure is at the point where we understand that we need to do a better job with efficiency and labor. Those are the big strategic issues."
Making Overture relevant
It takes time for a community to learn how to use an arts facility; it took the city years before the old Madison Civic Center found its equilibrium. Now we have a larger facility, with expanded costs and more ambitious goals, but with many of the same expectations.
"I think people want to feel good about the places they go, and feel good about the places they spend money," says Salisbury. "My dream for Overture is to be relevant to everybody here, whether you buy a ticket or not. Madison expects to have a place that's equal for all people to enjoy the arts."
And that's the challenge, he says. "As a person who came from outside the area, I learned very quickly that you don't change expectations in Madison. You meet expectations in Madison."