Two years ago, Arizona Theatre Company almost shut its doors because of financial woes.
Instead, after a successful fundraising campaign, it opened the 2016-17 season — the company’s 50th — which became one of ATC’s most successful.
This year, that success continued with increased single-ticket and subscription sales, and a season that has been enthusiastically embraced by patrons.
But that doesn’t mean everything is copacetic.
Going into the 2016-17 season, the company had an accumulated deficit of $2.4 million. The summer ’16 fundraising flurry that kept the theater’s doors open, combined with the success of the 50th anniversary season, cut $1 million out of that.
The current $1.4 million deficit doesn’t threaten closure, and Billy Russo, who served as interim managing director for about a year before accepting the position permanently last summer, expects that to go to zero by the end of the 2020-21 fiscal year.
But it does cut back on the big plans Russo and artistic director David Ivers had hoped to implement immediately, such as programs that allow for theatrical risks, build audiences and deepen roots in the community.
“I don’t see challenges in terms of the work we do,” said Ivers, who joined ATC in July. “I just see challenges in how we fund it. … We can’t get to the vision part until we fix the balance.”
Russo agrees.
“To me, the challenge is balancing our aspirations of where we want the theater to go with the resources we have,” he said.
An anticipated operating surplus for the 2017-18 fiscal year, which ends in June, is expected to cut the deficit by an additional $250,000, Russo said. And with a recent Stonewall Foundation matching grant, the pay-down could go more quickly.
Russo is planning for the same surplus in the future.
“If we have an operating surplus of $250,000 for the next four years, we would wipe out that accumulated deficit and we would be back at a very cash-strong position. At that point, any surplus we had would go into a surplus fund, or capital improvements — things like that that we haven’t been able to do.”
There is reason to believe ATC can do that.
In the last two years, the company has increased:
- Contributed income by 18 percent.
- The subscriber base by about 20 percent.
- Single sales by 50 percent.
- The company’s earned income to a projected $4.5 million this season — that’s an increase of close to $1 million over two years ago.
Russo thinks that some of those successes are a result of directing more resources into the productions, which is why the budget for the last two fiscal years was about $7.5 million, an increase of close to $1 million over the 2015-16 budget. The 2018-19 budget is $7.9 million.
“When you are at a financial crossroads, the best way to recover is to prioritize and put as much of your resources into the main mission-driven activities,” said Russo. “Those are our shows. You have to spend more money in order to right the ship.”
The goal now is to increase the donor base and secure more grants so that the deficit can go away and the theater company has a cushion that will allow it to realize its bigger visions.
“But we need major donors again who will say ‘let’s capitalize the theater so that the new vision can take hold,’” said Russo.
“That way, we can continue what we achieved just in terms of renewing excitement, engagement with the audiences and the sense that there’s a vitality in the theater.”
