CULTURE

Austin arts groups defy recession, so far

Venues and performance outfits trim costs, cancel marginal shows, offer ticket deals to make their budgets work.

By Jeanne Claire van Ryzin
AMERICAN-STATESMAN ARTS WRITER
Sunday, January 11, 2009

Quietly, on New Year's Eve, the Austin Museum of Art announced it was postponing its plans for a $23 million new museum downtown. After a decade of growth for the arts in Austin, the news echoed the tough new reality that arts organizations in Austin — and around the country — face as the recession spirals deeper.

Yet many major Austin arts groups have been weathering the recession with some success. At least, so far.

To survive, Austin arts managers say they are staying alert to trends and forecasts. Responding nimbly is the strategy. So is some pre-emptive belt-tightening and creative marketing.

Reports indicate that based on ticket sales, Austinites are still willing to ante up for arts entertainment. Though donations have generally stayed on track with projections, some corporate and individual giving is showing signs of decline. And several arts leaders caution that the real impact of the economic downturn might not be felt until later this spring when most arts groups begin their push for contributions from the public.

It's grim around the country, where new reports of struggle — and closure — grab headlines every day. In New York, more than a dozen Broadway musicals and plays are closing this month because of poor ticket sales. The venerable 58-year-old Baltimore Opera declared bankruptcy in December and canceled its season. And major arts organizations in Detroit stand to lose millions in philanthropic dollars as the auto industry falters.

In Austin, the pre-emptive budget cuts have already begun. At Austin Lyric Opera, leaders opted to call off the lavish annual ball when individual and corporate sponsorships began to slow in December. Instead, it launched "The Curve Ball" campaign to raise the same $170,000 as the elegant fête, but with all the money going to the opera, not to party expenses. The Long Center canceled poorly selling shows, chopped 20 percent out of its operating budget and lowered some ticket prices.

The relatively modest size and youth of Austin arts groups seems to be to their advantage. Without the large endowments developed over generations that support many storied arts organizations elsewhere, Austin arts groups aren't dependent on the investment income those endowments pay out — income that has dropped as much as 30 percent in recent months along with the stock market. The Field Museum in Chicago, for example, saw its endowment drop from $315 million to about $220 million in the last six months. In Los Angeles, the Museum of Contemporary Art was on the verge of closing after its endowment dropped from $40 million to $6 million, saved only by a $30 million bailout from leading patron Eli Broad.

In Austin, creative fundraising is an everyday reality — and remains the current game plan. "We have always had to raise our entire ($850,000) budget from a variety of sources which we've had to continuously develop and maintain," said Sue Graze, executive director of Arthouse, the contemporary arts center poised to start a $6.6 million renovation to its historic Congress Avenue home this year. "And at times like this that (creative fundraising ability) is actually helpful." Graze said that to date $4.3 million has been raised for the campaign. "Our strength has been our smallness," she said.

Indeed, unlike the Austin Museum of Art, some organizations have good news to report. Ballet Austin reached new highs with "The Nutcracker," staged at the new Long Center for the first time. More than 38,000 people attended this year, with sales exceeding $1 million — both record-breaking numbers. The Paramount Theatre saw a 22 percent increase in subscription revenue this season. And in October, Zach Theatre received $1 million each from Austin arts philanthropists James Armstrong and Bill Dickson, both gifts for its $20 million capital campaign to add a new theater to its two-venue complex. And just last week, Armstrong pledged another $1 million to the Austin Symphony Orchestra to endow its youth education programs.

With budgets that are 30 to 75 percent dependent on ticket sales, nonprofit performing arts organization typically feel the sting of an economic downturn more immediately than museums, where admission revenues count for usually less than 10 percent of an annual budget. Fissures in the economy started to appear last summer, leading many arts managers to prepare.

When Ballet Austin put together its budget for its current fiscal year, leaders took note of national projections that indicated a decrease of 20 percent in contributed income over the next year. In response, Cookie Ruiz, Ballet Austin executive director, said the organization lowered its fundraising goals to match. The ballet has also implemented a hiring freeze and trimmed some expenses.

Ditto at Zach Theatre, where 65 percent of the $3.5 million budget comes from ticket revenue. "We began to see the signs last summer," said Elisabeth Challener, managing director. "So we did an immediate 5 percent cut of the overall budget." Implementing incentives such as early purchase discounts and $20 Wednesday night shows that regularly sold out kept sales strong, Challener said.

However, she noted that corporate giving was the unknown factor as arts groups head into 2009. "Business donations are the big question mark for this year," she said. "And we need to be prepared for that."

Grammy-nominated choir Conspirare also decided to economize before the economy got the better of it. Last week Conspirare leaders announced that they were postponing the June premiere and live recording of a new piece commissioned from celebrated composer Eric Whitacre. Though Conspirare, which has a $1.7 million annual budget, has seen an impressive 24 percent increase in ticket sales this season, individual donations declined by 7.5 percent in December. Conspirare leaders decided to postpone the $275,000 Whitacre project before it was too late. "It was a hard artistic decision, but a necessary one," said Conspirare executive director Erich Vollmer. "Given how individual donations have gone — and could continue to go in 2009 — it would have upended our budget to do it this year," Vollmer said.

Paul Beutel, managing director of the Long Center, which depends on ticket revenue for 73 percent of its operating budget, dropped low-end ticket prices for some shows, making second balcony seats available for $15. He also instigated a "buy three, get one free" ticket deal for several recent family-friendly shows.

The strategy worked. "Cirque Dreams Jungle Fantasy" attracted more than 15,500 people, or about 75 percent of capacity of its eight-performance run in late November.

"What (recent sales) tells me is that, right now, people are still willing to go out and spend the money on a ticket if they know a show is guaranteed entertainment," Beutel said. "But if a show is unknown or less familiar, people aren't willing to take a risk right now." Beutel said that with cost-cutting as well as staff attrition and reorganization, the Long Center trimmed its operating budget by a hefty 20 percent — from $5 million to $4 million. "We're running lean," he said.

At the Paramount, Stacey Fellers, director of marketing and development, said that the organization, which has a $5 million annual budget (about 60 percent comes from ticket revenue), was being prudent. "We are planning (our next season) on a slight scale-down, not in terms of number of shows, but in terms of number of performances," Fellers said. She said ticket sales dropped this fall by 10 percent as the economic news worsened. Last-minute discounts were developed in response. Sales picked up in December as holiday shows beckoned.

Fellers said that the Paramount has actually seen a 66 percent increase this year in new donors and is on track to reach its $2 million annual fundraising goal.

At the Austin Lyric Opera, Kevin Patterson, general director, said his organization would not raise ticket prices for next season and would continue to develop special marketing strategies such as a recent $25 ticket offer to the University of Texas community. "We have to market far more aggressively than in a good economy," Patterson said.

At the Blanton Museum of Art, leaders opted to leverage the November opening of the museum's second building, with its gift shop and café, with special incentives for new members. Visitors were offered 14 months of membership for the price of a year's dues. And walk-up membership purchases doubled in December.

"I think people began to realize that membership, with its free admission, became a good buy in tough economic times," said Ann Wilson, the Blanton's interim director.

Just as people turned to Hollywood films during the Depression, Wilson said, in a downturn economic period, people seek arts and culture as a respite.

"In really hard economic times, arts and culture tend to survive because people look for things that feed the spirit — and they look for experience that are relatively economic," Wilson said. "I think the arts provide that."

jvanryzin@statesman.com; 445-3699

Museum postponed

The Austin Museum of Art's downtown project is the arts community's largest victim of the weak economy. And perhaps the most symbolic.

The new museum was in partnership with Houston development firm Hines Interests to build a museum and a 30-story office tower on the choice museum-owned downtown block at Fourth and Guadalupe streets. But now that the booming downtown development has soured, Hines has opted out of the deal, leaving the museum project adrift.

This is the third time in three decades that the museum and its leaders have tried — and failed — to build a downtown facility.

The first time the museum, then known as Laguna Gloria Art Museum, proposed building in downtown Austin was in the early 1980s. In 1985, voters approved $14.7 million in tax-supported bonds for the project. But the real estate bust of the late 1980s sent the project into a tailspin. Plans by famed architect Robert Venturi were shelved after $3 million was spent on design and administrative fees.

In 1995, the museum moved to its current location on Congress Avenue and made another bid to build downtown. A $64 million capital campaign was launched and noted architect Richard Gluckman was selected. At the same time, the museum returned $13.7 million in city bond money after museum leaders said they wanted control of their project and its land.

But in 2002, Austin's high-tech economy fizzled, then-director Elizabeth Ferrer left abruptly and supporters of the project retreated. In 2004, the Gluckman plans for the new museum were scrapped. Of the $14.25 million the museum had raised for the project, all but $860,000 was spent on architect fees and fundraising and marketing expenses.

20 percent: Amount Long Center has cut its annual budget

10 percent: Drop in ticket sales this fall at the Paramount

7.5 percent: Decrease in donations to Conspirare

5 percent: Budget cuts at Zach Theatre

38,000: People who saw Ballet Austin's 'The Nutcracker,' a record