University School - Hunting Valley
Instructor: Scott Boehnen
The Show Must Go On: A Story of Resilience within Cleveland's Performing Arts Community
The Show Must Go On: A Story of Resilience within Cleveland's Performing Arts Community
The arts sector is a crucial sector in society that is often underappreciated by the broad majority of Americans. It does not make headlines like professional sports or politics. However, the sector plays a major role in the economic success of the country, and especially here in Cleveland, Ohio. In Cleveland, there are four leading arts organizations, including the Cleveland Museum of Art, the Cleveland Orchestra, the Playhouse Square Foundation (PSF), the Rock and Roll Hall of Fame, and countless smaller arts organizations. These four leading arts destinations alone generate roughly $822 million for the local economy and $117 million in tax revenue for local and federal governments annually. In addition, the businesses surrounding these destinations, such as restaurants and other stores, profit over $300 million from attendees of the arts every year. Similar to sports franchises' ability to attract visitors and generate enthusiasm, Cleveland arts organizations create an identity for the city as a lively destination for experiencing the arts. For example, these four art destinations bring in roughly 2.6 million visitors to Cleveland annually, with 1.4 million of them being from out-of-town (Carey). With the substantial economic impact generated by these visitors in mind, it is safe to say that Cleveland's economy relies on the arts to thrive.
However, as the world shut down on March 13th, 2020, for the COVID-19 pandemic, the local economy could have been left decimated without the bolstering economic impact of the arts. As important to the community as the arts are, the industry faced many setbacks during the pandemic. Some of the problems caused by the pandemic persist even now as the world begins to recover from the worst of the COVID-19 pandemic, most especially the declining audiences for live theatrical and musical performances. This decline in audience size leads to a lack of overall cashflow for arts organizations as well as neighboring businesses. Additionally, the aging of performing arts audiences and a lack of ongoing government aid, all weigh heavily on an industry that is so important to the social and economic health of society. Here in Cleveland, however, the Playhouse Square Foundation has defied the odds to emerge resilient from the worst of the pandemic. Specifically, PSF shifted to online work and cut expenses in the early stages of the pandemic; opened safely in 2021 with a conservative budget for the following years; appealed to younger audiences, including future young attendees and donors; and developed a strong sense of community with its patrons. All of these steps help set up PSF for success in the years to come.
The Playhouse Square Foundation, the second largest theater destination outside of New York City, was forced to shut down at the start of the pandemic in March 2020. No arts organization was able to reopen until over a year later, in the summer of 2021. For the 2019-2020 theater season, PSF had over 48,000 annual subscribers to the Key Bank Broadway Series. Then, on March 15th, 2020, that subscriber number suddenly dropped to zero (Gaul). In the weeks following, the rest of the season was postponed, and later canceled. This issue was not just faced here in Cleveland, but also was faced in prominent theatrical destinations like New York City. When New York City lowered its curtains at the start of the pandemic, the 75% attendance average rate dropped to zero percent, with less than 24 hours' notice (Paulson and Hernández).
No theater could have anticipated a global pandemic with a sudden drop in attendance, and they certainly would not have expected that this drop would be mandated by the government. On March 13th, 2020, the Broadway touring production of Jesus Christ Superstar had just opened in Cleveland and was on its second night of performances when the cast and crew were suddenly sent home, with the future unknown. "All of the sudden, it was very real… it was here," Chief Financial Officer of the Playhouse Square Foundation, Patricia Gaul, remarked. Jesus Christ Superstar and all the other shows running at the time were initially postponed. Gaul continued, "Everyone thought this was going to be something that was going to go on for a month or two," but of course, it was going to go on much longer. The rest of the season was eventually cancelled, either by the productions themselves, or because PSF was not able to postpone the shows any further into the year. The 845,000 total attendee number that accrued through mid-March 2020 was expected to be much higher, but was cut short with several shows yet to open.
The arts sector has confronted an additional long-term and chronic contributing factor to shrinking audience sizes, a problem that preceded the arrival of COVID-19: the aging of its audiences. In New York City, one of the most prominent cities for live performance, people aged over 60 are four times more likely to attend live performances than those under 20, which demonstrates that performing arts relies predominantly on older people for funding (Seaman, p.13). Unfortunately, the pandemic is not officially "over," at least for those who are immunocompromised or older in age. In fact, people aged over 75 are 14 times more likely to die of COVID-19 than those aged under 21 (Kang and Sook). With mortality rates front of mind, it is hard to blame seniors for not being as adamantly committed to attending performing arts events in person as they once were. Even disregarding COVID-19, older audiences naturally decline with time in contrast to younger audiences. Adding the natural inclination of older audiences to stay home to their heightened pandemic-related fear of attending live performances, the performing arts face an even steeper decline in the number of older patrons, exacerbating the overall decline in audience sizes.
In the first year of the pandemic alone, Cuyahoga county's art destinations lost a total of over $146 million in revenue ("COVID-19 Pandemic Continues to Devastate Local Creative Economy"). PSF had its expected $7 million in net profit for 2019-2020 wiped away (Gaul). At the time, the federal government passed two large grants, specifically aimed at keeping the arts community afloat: one in March 2020 and the other in March 2021 ("National Endowment for the Arts on COVID-19"). The March 2020 bill was passed at the start of the pandemic in the form of COVID-19 relief aid, known as the CARES Act, intended "to preserve jobs and help support organizations forced to close operations due to the spread of COVID-19" ("National Endowment for the Arts on COVID-19"). The March 2021 aid was passed as part of the American Rescue Plan, under which roughly forty percent of the overall funding was sent to local and regional art institutions across the country. ("National Endowment for the Arts on COVID-19"). Unfortunately, no further funding has been issued since, and the performing arts were now left to fend for themselves.
Fortunately for the Cleveland and northeast Ohio community, PSF was strategic in its tireless efforts to survive the impacts of the pandemic. Like many arts organizations of its kind, PSF was not originally in a position to move to online work, but the tech support team on staff worked nonstop to make PSF ready. They were able to keep all employees on staff, most working online for the first eight weeks of the pandemic. Eventually, some of the employees were furloughed and some were even laid off. "For most of them, they were part-time workers, so it wasn't their only source of income that was putting food on the table… We were very conscious of taking care of our employees," Gaul said. With the main expense for PSF during the early months of the pandemic being payroll, PSF was "cutting every expense [they] possibly could to get [them] through that year" (Gaul).
In the early weeks of the pandemic, PSF was fortunate enough to receive various grants and forgiven loans from the government, including the Payroll Protection Program, specific art-organization funds (Small Business Administration Shuttered Venue Operators Grant), employee tax credits, and smaller grants, targeted locally, which totaled over $16.2 million. In addition to these, PSF was fortunate to have a loyal donor base. "The community was unbelievably generous," Gaul said. "A lot of [donors and board members] doubled down on their gifts, and said, 'you need help.'" For the 2020-2021 fiscal year, PSF had a net loss of $3.8 million before federal funding. Then, the donors helped them to net roughly $12 million in profit. Perhaps, in addition to federal grants and loans, PSF was set off extremely well in the early days of the pandemic due to their most important asset— their supporters (Gaul). When PSF was finally able to reopen their doors to the public, it had been nearly 16 months since the last performance. "When we opened our doors, and we started having shows… it was really very emotional… The public's response was just incredible," Gaul said. But the Playhouse Square experience was nowhere close to where it was pre-pandemic. The first performance after the shutdown was Choir of Man. It was performed in the Mimi Ohio Theater and was shown at fifty percent capacity. Masks and vaccinations or negative tests were required before entering the building (Gaul).
Even with a supportive attendee base, the return to in-person performances would still wreak havoc on PSF's finances. But PSF knew that in order to stay afloat, they would need to be conservative in all of their budget estimates and project zero net income from their shows at first. Their guiding principle during budgeting, put simply, was to "Hope that we do better but expect less," according to Gaul. In the 2020-2021 fiscal year, PSF chose to "budget no [revenue from] performances," instead they only budgeted for "expenses and fundraising." They considered any shows they were able to put on as "extras" financially. PSF would not be relying on any shows to break even. These decisions by the financial team were crucial in keeping the PSF sustainable and would set PSF up to net several million dollars in the following fiscal years (Gaul).
As PSF was able to bring back the Key Bank Broadway Series in fall of 2021, 38,000 loyal attendees subscribed to the season: only 20 percent off the previous 2019 subscriber count of 48,000. The total attendees for the 2021-2022 season grew to over 660,000, which is less than 200,000 fewer attendees from the 2019-2020 season, with significantly fewer shows presented. Even then, for the overall financials, they still "budgeted a loss for [the 2021-2022 fiscal year]," Gaul said. "Our actual results—we had net income of several million dollars… we exceeded our budget significantly." In fact, the net income that fiscal year was $6 million. In the 2022-2023 Broadway series, 43,000 attendees subscribed to the season, which was only 10 percent off of the 2019 highs. Looking to the future, PSF is confident that "We'll get back there, [to the 2019 subscriber count of 48,000] but we're thinking it will probably take another year or two," Gaul said. From where PSF was just shy of two years ago, the numbers and projections are beyond impressive (Gaul).
With the rise in subscription sales to nearly pre-pandemic levels, it might seem that PSF is in the clear; however, the truth is that they must continue to address a long-term challenge unrelated to but worsened by the pandemic—the aging of their audiences. Fortunately for PSF, "[they] were already focusing on that [before COVID-19], knowing that Broadway tends to be an older crowd because of interest, because of time availability etc.," Gaul said. Even before COVID-19, PSF was "very focused on getting a younger audience." They started with hiring younger employees in marketing positions to promote PSF on various social media outlets and on the radio.
They also use different price points to hopefully entice the younger crowd. They have different subscription packages to accommodate for the younger audience's needs. Within these targeted packages, patrons have a more flexible way of seeing shows, where they can change out their ticket for a different night if something comes up at no additional charge. Also in the flexible subscription, PSF's "Swap a Show" allows ticketholders to exchange one of their tickets for an entirely different show in the same series. These tactics all support the overall goal to make seeing shows "more affordable, flexible, easy, and interesting to different types of audiences and ages groups," Gaul said. These policies were all in place before COVID-19 and continue to significantly help PSF grow younger audiences after COVID-19. This issue is by no means solved, and PSF will "continue to focus on that" in the years to come (Gaul).
Additionally, vitally important to PSF is its donor base, and that too is majority senior citizens. This issue had also been at the forefront of PSF executives' minds even before COVID-19. In light of this, PSF has created "Partners" that is "for younger people interested in the theater [age 21-40]," Gaul said. For the participants themselves, it serves as a way to get involved at PSF, receive various benefits, and have the ability to network with board members. "Partners" accomplishes two major goals at PSF: get younger donors connected earlier and maintain younger donors for season after season (Gaul).
Tied closely to increasing the younger donor base is PSF's important goal of growing a sense of community between PSF and the consumer. PSF believes that, by having this goal, audiences and donors will want to be a part of the arts and will want to continue to subscribe or donate year after year. "We want to develop relationships," Gaul said on the goals of the Playhouse Square Foundation. In order to foster this goal, one of their policies is that "A rep [for the Key Bank Broadway Series] will reach out occasionally during the year so there is constant communication." PSF does not want to be just a theater destination, they want to be a community for the one-time show attendees all the way to major donors and board members. After all, part of PSF's mission is "to provide diverse offerings for the community," Gaul said, which brings up the point that "if we think something is really important that it is shown here, even if it means we're going to make less money or even lose money… we're willing to do that" (Gaul).
The Playhouse Square Foundation was able to remain strong through even the roughest stages of the pandemic and continues to thrive economically as well as culturally. This latest success is especially timely as PSF celebrated 100 years of performing arts in the region's second largest theater for Broadway, the Connor Palace, in November of 2022. Much like the potential permanent shutdown in 2020, PSF faced a similar challenge in the 1970's when demolition plans were set out for the entire district (Segall). The story of PSF over the decades, put simply, is one of resilience. It is incomprehensible to imagine Cleveland without its theater district and the enthusiastic visitors and significant revenue it attracts. The thriving artistic community that PSF has built continues to be important to Cleveland and all of northeast Ohio to this day. Even if the performing arts, or the arts in general, do not influence the day-to-day lives for some, everyone in the area should recognize the region-wide positive impact that the arts have, and this impact can and will be felt for decades to come thanks to the strategic and tireless efforts of the Playhouse Square Foundation.