When the smash hit Lion King came to the Overture Center last spring, sales were brisk and Overture officials hoped they'd finally found the secret for putting the arts center on solid financial ground: extended runs of Broadway hits, known in the business as full-week shows.
"The Lion King has been everything we hoped for, and more," Overture CEO Tom Carto told Isthmus at the time. "The energy in the building has been just incredible. People who had never been to Overture before really fell in love with the place. We've seen a real spike in subscriptions for next season already, and I'm sure some of those new subscribers are people who had a great experience at The Lion King."
As the Overture Center looks toward a restructuring, with a proposal for the city to take ownership and a private nonprofit group to manage it, Broadway shows are seen as key to the center's financial viability.
AMS Planning & Research Group, based in Connecticut, expects these shows to gross $5.2 million in the first year of the center's restructuring. By the fifth year, the model predicts, Broadway shows will gross $6.2 million. Last season, Overture's five Broadway shows grossed about $6.2 million, so the model seems reasonable.
Much of this money goes to cover expenses or to the Broadway producer. So, of the $6.2 million that Overture brought in from Broadway shows last season, only $1,156,000 went to Overture in the form of revenue.
Nonetheless, AMS expects Overture to earn $371,000 more from Broadway in the first year of the restructuring than it did last season, although the model projects fewer performances and a $1 million decline in ticket sales from last season. And by year five, the profit from Broadway shows is expected to mushroom to almost $1.8 million - $636,000 more than last season, when revenues were comparable.
How is this possible? "The expenses are lower," says Overture spokesman Robert Chappell, adding that having a blockbuster like The Lion King "drives up both sides of the ledger."
Davin Pickell, a theater technician at Overture who is treasurer of International Alliance of Theatrical Stage Employees, Local 251, is skeptical of Overture's ability to match the projections in the report.
"What the data is telling me is that Overture doesn't have the negotiating power to both bring in the bigger shows," he says, "and simultaneously negotiate a lucrative deal for those big shows."
According to the model developed by AMS, Overture will need to sell 67% of the seats for its planned 60 Broadway performances in year one of the restructuring plan.
But, as Pickell points out, Overture didn't get close to those attendance figures last season with most of its shows. The eight performances of Alfred Hitchcock's The 39 Steps sold 41% of available seats; Grease's seven performances sold 47%; and Little House on the Prairie's eight performances sold 48%. Only two shows sold at or above the 67% attendance figure - Rent's eight performances at 67%; and Lion King's 32 performances at 99%.
Carto admits Overture's staff has work to do marketing the Broadway series but is confidant sales will grow. In fact, he says they're growing already.
"When you go to a full-week market, you need to build your subscription base," he says, referring to customers who buy season packages for all shows in a series. "We had 2,700 subscribers last year. That's pretty good. We're now approaching 5,500 subscribers [this season], so we've more than doubled our subscriptions."
Subscription sales are so good, Carto says, that "we have more subscribers now than Milwaukee, Appleton, Seattle, Boston, more than Miami."
These projections are being debated as the city looks to assume ownership of the arts center. But Ald. Mike Verveer understands why some people are concerned.
"In terms of the Broadway numbers in particular, I can see why many would say it's optimistic," he says. "But there aren't really many alternatives to the public-private model."
Last week, a study was released that found the city would be on the hook for another $500,000 a year in maintenance costs for Overture. The city also released a staffing report that showed Overture's payroll decreasing by $300,000 or increasing by as much as $350,000, depending on the number of employees and whom they work for.
In other words, Overture's ability to turn a buck may hinge on changing its employment structure.
Currently, Overture employs 45 full-time permanent workers, and about 150 part-time stagehands and 100 part-time service workers (ushers, ticket staff, building cleaners). The latter two numbers fluctuate by season. The full-time workers are afforded city benefits and civil service protections.
The model proposed would make these workers employees of a nonprofit group. To Pickell, this means that "when we don't hit these lofty projections we were expecting, we're cutting your pay."
Again, Verveer understands the union's concerns. "I can see where they're coming from, and their arguments are logical," he says. "Everybody wants Overture to be a success. Both sides make good sound arguments."
He predicts the Common Council will agonize over its vote on the ownership in November. "As of today, I don't see 11 votes for anything close to what the general proposal is."
On Monday, the city committee studying the restructuring plan looked at the private fund-raising component.
Overture's fundraising arm, 201 State Foundation, now raises $600,000 to $800,000 a year for the center. But Overture needs $2 million a year in private donations to remain viable.
Kathleen Woit, president of the Madison Community Foundation, told the committee this goal can be reached "without a great deal of public angst," saying that fundraising is currently hampered by Overture's debt. Banks and private donors worked out a deal to erase Overture's $28 million debt if the city agrees to assume ownership.
Losing the debt, Woit said, will enhance fundraising. "A consequence of the debt being resolved is every dollar raised will go to support the arts."
Creating a nonprofit to manage the center will also help fundraising, Woit said, because "the more independent this entity can be from a government entity, the more money it is apt to raise."
Former Mayor Paul Soglin, a committee member, asked why the center couldn't be public, given that lots of public entities do successful fundraising, including Madison schools, the Madison zoo, Olbrich Gardens and Madison Public Library.
Woit, in reply, noted that when the city-owned Madison General Hospital merged with Methodist Health Systems to become a private entity in the late 1980s, fundraising became easier. When people give to government entities, she said, they're afraid their money is "going to a revenue pot that [they] don't understand."
Pickell was again skeptical of the presentation, pointing out contradictions. "They like to say they're doing a great job fundraising, but then say they can't do a great job until they're private," he says. "They say if it's owned by the city, people won't donate. But they want to be owned by the city."