Mutilating the majors: Can Portland's arts groups survive a thousand cuts?

By Barry Johnson

When Michael Kaiser spoke to a large Gerding Theater audience of arts administrators in May, his message was simple. Even though they face the worst economy in decades, arts organizations can't cut themselves to health.

“Revenue comes from really strong, exciting work," he said (I'm quoting from Lisa Radon's Ultra PDX here). "People get excited about the work, and your family gets bigger. It becomes a self-reinforcing cycle. On the other hand, if you cut programming as a first response, do less work, less marketing, your family starts to look elsewhere where something exciting is going on. You get sicker and sicker.” An analog might be the fox caught in the trap. To survive, he gnaws off his own leg, but in doing so, he endangers his survival going forward, post-trap.

If Kaiser is right, then the premise of David Stabler's article in The Oregonian on Sunday is all wrong, because Stabler equated success with the severe budget cutting the city's largest performing arts groups did this year to stave off large deficits. No budget deficit, no problem.

Although I'm about to argue that Kaiser is, in fact, right, that isn't to disparage my old colleague, Mr. Stabler. No one at the paper has kept us better informed about the ongoing state of the major performing arts institutions (Portland Center Stage, Oregon Symphony, Portland Opera, Oregon Ballet Theatre) than he has during the past decade. I just think he's making a mistake by confusing the absence of red ink for organizational health.


What did the budget-cutting frenzy at the majors really mean?

• They had the discipline to plan and execute serious cuts to their own salaries and benefits and other expenses.
• They didn't have the cash reserves, endowments or lines of credit sufficient to cover their deficits, or, if they did, they didn't think their future prospects were stable enough to dip into that money now.
• Their ability to project themselves into the center of the city's cultural life was compromised along with the potential to increase their audiences and donor base.

In short, they have gnawed off a leg. Those furloughs, staff reductions, salary cuts and hits to their  production or marketing budgets will hurt them in the long run.  Let me just say, though, that for some of them and maybe all, chewing away a limb really was the prudent course. But the central question at this point isn't whether or not they avoided deficits this year. (Of course they did; for some of them, failure was not an option.) The question is, what are their plans for the future and how likely are those to succeed.

The other question, of course, is what can we do to help. The arts aren't a spectator sport. If we believe that a vital, locally produced cultural life is important to us, then we can't sit by and watch a three-legged fox limp around. There are other traps in the woods, and the survival rate for two-legged foxes is zero.

Kaiser was helpful and characteristically provocative about the future.  He was big about leadership (and speaking with one voice as an organization), big on artistic ambition and big on planning to achieve it over much longer time-frames than arts organizations usually consider. He had good advice about boards and their roles, wanted arts groups to focus on big donors and he wanted the blame-game about the past to stop. You didn't have to agree with each of his 10 points, each carefully articulated, to accept the notion that a positive, dynamic, ambitious, well-marketed arts organization has a better chance to succeed in this (or any) economy than the alternatives.

How closely are our arts organizations following Kaiser's advice? I don't know -- a lot of this stuff is behind the scenes and hard for an outsider to ferret out. I do know that even if they wanted to, it's difficult to get buy-in from everyone involved -- donors, subscribers/members, staff, sponsors, board members. Maybe that's why good leadership was Kaiser's very first point.

Some observations based on Stabler's story:

1. The symphony's ticket income fell $1.1 million and "the number of paying customers per performance dropped 11.9 percent." This is exactly what Kaiser predicted. The symphony pays a full-time wage to more local artists (in its case, musicians) than any other arts group in town, and so it faces special problems when it has to cut.

2. The Portland Opera cut its budget 15 percent, and substituted "The Barber of Seville," an easier sell, for Berlioz's "Beatrice et Benedict." Under fire, it's harder for arts groups to stick by their artistic guns, though the opera's programming is still far more adventurous these days than it once was.

3. Portland Center Stage almost set subscription records AND cut its budget, which Kaiser would not have predicted, though adding an inexpensive-to-produce "The Santaland Diaries" that was also a big hit helped a lot.

4. I don't know how White Bird had a 2 percent drop in ticket income and a 34 percent drop in donations and still only lost $6,000 after increasing its budget 6.4 percent.  Some very large foundation grants must have covered the balance?

5. Going into the year, Oregon Ballet Theatre, which I covered extensively last year when it teetered on the brink of bankruptcy, cut its budget most severely -- around 28 percent -- and managed a large surplus of $400,000 on a budget of $5.1 million. New executive director Diane Syrcle still has some tough decisions to face going forward.

The deep cutting that the major performing arts groups did is evidence of how fragile they are. They don't have big stores of money to cushion economic downturns or to invest in major production or marketing initiatives. For the most part, they scrape by season to season. Small waves can endanger them. And if we are in the middle of a real economic "reset" as some have suggested, their situation is going to take the most creative and disciplined kind of thought, the kind that leads to major restructuring. But again, this isn't something we, their public, should observe silently from the sidelines. Their work is too important for them to be left to their own devices, teeth gleaming in the night.

















Kaiser is the director of the Kennedy Center in Washington, D.C., and has a reputation as one of the preeminent turn-around artists the arts world, having successfully guided several large dance groups back to health.