Madison Ballet's The Nutcracker soon hits the stage, but the colorful holiday spectacle takes second place to an even more impressive performance behind the scenes: The company has cut its debt by more than half in a single year.
"We are doing really well," says artistic director W. Earle Smith. "By no means is this going to be easy, but we've got a really solid plan."
It's been a rough few years for nearly all arts groups nationwide. Foundations are giving less, endowments are underperforming and, in Wisconsin, Gov. Scott Walker has sharply curtailed arts funding.
The ballet took aggressive action early in the recession, making painful cuts to staff and trimming its 2008-09 season. But the company continued to rely on a line of credit to maintain liquidity during summers, until Nutcracker annually replenished funds to pay down the debt. That's risky but not unusual for performing arts companies, given their seasonal nature.
"In 2008 we made the conscious decision not to pay down the debt, because we knew that cash was going to get really tight," says Smith.
Tax records show that the company, as a result, had a net deficit of $111,543 by the time it ended its fiscal year in August 2010. (Its audit report, which uses a different accounting method, showed a net loss of $56,906.) The ballet's net assets remained steady, at just more than $1 million, but change was obviously necessary.
"This summer we retooled the organization," says Smith. "We basically created a business model that focuses on our core revenue streams." Those are the ballet's six-year-old dance school and The Nutcracker, which is the only show in its 2011-12 season.
The line of credit, once $120,000, as of last week has been paid down to $70,000. Even better, the ballet's preliminary audited net loss now stands at $31,000 - a stunning turnaround.
The company has also brought in a variety of other arts groups to share its space and associated expenses, including the Madison Youth Choirs.
This is the ballet's 30th season. Its annual production of The Nutcracker, Dec. 17-26 at the Overture Center, will include many special events, some of them spotlighting company alumni. On Feb. 25, the ballet will hold a "Steampunk Gala" fundraising event, at which a major new full-length work will be unveiled.
"I'm very optimistic about this year, and leveraging this organization for, I think, some really great things in the future," says Smith. "We still have a lot of challenges, but we are making huge dents in our debt and focusing more on our business strengths. You can't ask for much more than that."