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THEATER

What killed Madison Rep?
The end came faster than anyone expected


Credit:Vlad Alvarez
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Just a few days ago, on May 10, the city's second-oldest theater troupe was to have completed its run of My Fair Lady, bringing a glittering 40th anniversary season to a close.

Instead, Madison Repertory Theatre is dead.

"It was devastating. It continues to be really devastating," says Trevin Gay, a four-year Rep veteran who for a few months was the final producing artistic director. He's now exploring opportunities in the public sector.

It seemed so fast. In January the Rep announced a liquidity problem. It had to find $50,000 - a relatively modest sum compared to the previous year's $2 million budget - or else suspend the season.

Some money was raised, enough to finish the run of Bus Stop. On Feb. 13 the season was canceled. Seven days later the board of directors voted to dissolve the theater. The company's debt was estimated to be $450,000.

What happened?

You name it, someone blames it, at least off the record: It was the board. It was the staff. It grew too fast. It didn't grow enough. It was secrecy. It was openness. It was the business model, fundraising, the venue, the audience that left, the audience that never came.

It was you. It was me. It was Madison.

Everyone agrees on a cliché. A "perfect storm" of problems shuttered the company.

Selling plays

Legally, the Rep continues as a corporation. A subset of its board meets to dispose of assets and settle debt. Sets and costumes have been sold to Children's Theater of Madison, for example. The corporation will not file for bankruptcy.

Vicki Stewart saw every one of the Rep's 40 years. She and two others founded the company in 1969. It began as a driveway discussion, after a Madison Theatre Guild rehearsal. Stewart was on the board right through the end.

"I'm very saddened by all that happened," she says. "You hate to see anything that you labored to create go away."

It was born as the Madison Civic Repertory Theatre. The troupe was amateur for 14 years. Audiences at Pres House, at the foot of State Street, sat on the floor. After a variety of homes, in 1981 the Rep moved into the Isthmus Playhouse of the new Madison Civic Center. In 1983 it turned semi-pro. In 1987 it became an Actors' Equity signatory.

Five years earlier, Madison Civic Repertory had dropped "Civic" from its name. Some might argue that it gradually became less "Repertory," or even "Madison."

Artistic directors Joseph Hanreddy (1986-92), D. Scott Glasser (1992-02) and Richard Corley (2002-2008) were each told to take the company to "the next level." There were many next levels. Over time it meant fewer local actors, more regional performers, and finally more national performers. Quality improved, it cost more, and it changed the Rep's market.

"Bringing in different actors for every play makes you depend entirely on the audience's interest in the plays you choose," Hanreddy told Isthmus after he departed for the Milwaukee Repertory Theatre. "You're not selling a company. You're selling plays. And that's tough to predict."

Sales grew, but then plateaued before they were expected to; they did not meet long-range projections. Longtime audience members did not take to later, edgier productions, which would have been popular with younger audiences if they could have afforded tickets.

"You had a certain number of people who wouldn't come see it, and you had a certain number of people who couldn't come see it," says Jon Furlow, Rep spokesman and past president, who remains on the board.

Deficit financing

Theater is a seasonal business. For the Rep, money waxed and waned like phases of the moon. Covering lean times was an ongoing problem.

"We never built up a reserve," says Furlow, though it wasn't for lack of effort. Still, there was a solution.

Back in 1982, Isthmus reported that moving into the Civic Center "almost destroyed" the company. In less than seven months, it racked up a debt of $30,000. That's peanuts compared to later amounts, but the important thing to note is the reaction.

Board president Joseph Hildebrandt said that money would be borrowed to make payroll, and that this was "not unusual."

Deficit financing had become habit. The company may have learned the wrong lesson: that it worked.

Call that the Civic Center "next level." The Actors' Equity "next level" created a $65,000 deficit in 1991. Then, in February 2006, the Rep moved into the Playhouse at Overture.

Corley continues to live in Madison with his family. He freelances nationally. "When I came aboard [the Rep] there was a significant deficit," he recalls. "I was told not to worry about it. It was going to be taken care of, and I should do what I was mandated to by the board, which was take the theater to the next level, which I explained would cost more. I made that very clear."

"There was a plan," recalls Furlow. "We were looking at a transition." Overture costs would be more, but an endowment was building. The problem was, that would take years. So board members and others personally guaranteed what was essentially a bridge loan of around $200,000. The expected revenue could be enjoyed right now.

"It was a very clever solution," says Furlow.

The last next level

During the Rep's final years, profit-and-loss sheets improved, but some major grants were matching; the loss of one would trigger the loss of another. The Rep also was carrying around a lot of old debt, loans and a line of credit, rolled over from year to year. It was budgeted but, without a reserve, any liquidity problems could whipsaw the corporation into insolvency within weeks.

That's exactly what happened.

The corporation begins its fiscal year July 1. The Rep's final full season, in 2007-08, saw a three-year high in gross revenue: $2.02 million. Local actors and safer plays were going to be featured in 2008-09, and expenditures had been significantly reduced.

A tight season was ahead, but there was no apparent reason to worry. Ruth Domack was president. "This board was one of the hardest-working boards I have ever seen," says Furlow. "We knew the business inside and out."

The debt, while alarming, was not unusual. For example:

The Capital Times reported in 2004 that $300,000 in debt had been paid off, mostly by donations from members of the board.

Tax records show that in 2004-05 the corporation ended its fiscal year with a debt of $140,125.

In 2005-06 it ended with a debt of $357,279.

In 2006-07 it ended with a debt of $465,850.

On June 30, 2008, as the Rep prepared for what would be its last season, it carried over a debt of $424,888. However, the last year's grants and contributions were the largest they had been in three years, $1.06 million.

In retrospect, individual donations should have been much higher, because they're less volatile than corporate support.

"We were able to get more corporate support than we ever got, for projects that were significant," recalls Corley. "You're always a little nervous about that because it just takes one bad year of corporate profits to make the flow stop."

Autumn 2008.

Recession.

Chain reaction.

"There were some grants that we did not get, that we had anticipated getting, that we had budgeted for, that we had been getting for years," says Furlow. Corporate sponsorships disappeared.

Tom Farley, who was on the 26-member board from mid-summer until December, recalls that everyone was exhausted. "I saw the problems coming up back in October, late September," he says. "They were talking about this money that was about to dry up. And it was, 'All right, let's meet again in November.' No, let's meet next week."

Fundraising continued, but, Furlow says, "When people find out you're having these challenges, suddenly they look at you a little bit differently. And maybe revenues - not on the individual side but on the foundation side - they don't come. I mean, that's frustrating. So things get thrown in a bit of chaos."

In December the loss of funds from Overture's Great Performance Fund, endowed by Pleasant Rowland, was staggering.

"Pleasant started pressing them, and they had no comeback," says Farley. "There was no plan. That was kind of the beginning of the end. That lost the confidence in the fundraising."

"We had actually asked for some additional distribution from the Rep's endowment as well, and that was declined, too," says Furlow. "In that circumstance it's really tough to go forward. It's a cash-flow business."

It happened that fast?

"It happened that fast," says Furlow.

40 years of theater

Over the decades, as it grew and changed, there have been many different Madison Repertory Theatres. The latest version failed - but how can 40 years of theater be a failure?

One final thought: In 1985, when he joined the Rep as managing director, Gian Paul Morelli made a remark that in retrospect is chilling.

His first task, he said, was "to create a sense of community ownership...so if we were to go away tomorrow, the community would notice something was missing."

We noticed.

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