Ballet West dances through financial pressure
A trip to Ballet West's third-floor rehearsal studio, esteemed guests in tow, is one of the dance company's long-standing traditions.
Is a potential donor, or corporate sponsor, skeptical of the company's talent or quality? Is a civic leader simply curious about the professional ballet company's latest work in progress?
JÃ³hann Jacobs, Ballet West executive director, takes them upstairs. Even in rehearsal, skeptical visitors appear convinced quickly by the sight of dancers moving through lines and sequences that match the strength of the human form with the delicacy and precision of fine ballet.
For a long stretch starting in 2009, Jacobs found himself taking that same trip, more often than not, all by himself. So did many other staff members, he said.
It wasn't for lack of donors to impress, but because Jacobs and staff needed a lift in spirits. The magic of dance that impressed visitors so much became the balm that soothed the staff's weary collective soul as they worried about the art form they loved.
Jacobs recalls the "white-knuckle days," the deep, dark grip of the 2008 financial crisis that hit arts organizations nationwide. It was a time when he and artistic director Adam Sklute wondered if they'd ever have time to take their minds off the company's immediate financial concerns to focus again on a long-term artistic vision.
"I tend to block out horrible memories, but those were times when we lived very much day-to-day," Jacobs said. "We knew our future vision was there in the distance, but it was very hard to find. We sought almost any form of affirmation possible, from donors to the latest review of a production."
The financial death of Ballet West? • When financial markets plunged and the national economic mood veered from dour to near-apocalyptic, Ballet West had to reduce its 2009-10 operating budget and fast. Four administrative positions were cut. Salaries were frozen. Concessions from three union contracts representing musicians, stagehands and dancers were secured. Weeklong employee furloughs during April were scheduled for the foreseeable future.
The nonprofit dance company wasn't alone. Around the corner at Abravanel Hall, Utah Symphony | Utah Opera was staring at a similar set of dire balance sheets.
Harry Rosenthal, treasurer of Ballet West's board of directors, remembers 2009 as the year the dance company "took a $4 million loss" on almost every source of revenue it had depended on.
Even after the necessary slashing and burning, Jacobs said he still faced daily conversations with bankers and vendors to ensure that payroll would be met and bills covered. Credit lines were ramped up, paid down when cash trickled in. Board members were asked to accelerate contributions.
The next year proved no less brutal. At Salt Lake County's Zoo, Arts and Parks program office, alarm bells sounded in November after Ballet West's 2009 audit, along with that of Utah Symphony | Utah Opera, showed signs of assets quickly becoming overshadowed by future liabilities. Jacobs and the Ballet West board of directors were put on notice that, without a plan to stop the hemorrhaging, the dance company's share of county sales tax, allotted to hundreds of arts organizations, would be imperiled.
Rosenthal remembers the difficult conversations that took place during monthly board meetings. There were times, he said, when the company was staring at 60-day cash-flow projections, and board members and administrators wondered how bills might be paid.
"Perhaps the danger was that we could no longer be the ballet company we wanted for Utah," he said. "Quality costs money. If it turned out that was no longer sustainable, what was the next life?"
The Sklute difference • Ballet West's "next life," to the relief of its loyal Utah base, should look much like the top-tier company they've come to expect. Or better.
Tour stops in destinations such as Washington, D.C., New York City and Las Vegas have become more frequent as the economy improves, which has helped raise the company's profile nationally. Ballet West has seen an 8 percent increase in the number of its subscribers over a 10-year period, Jacobs said, with a 4 percent increase in the number of subscribers so far this year. This year became the first, after three in a row, without an employee furlough.
And although an anticipated $6 million in federal tax credits for construction of its planned Jessie Eccles Quinney Center for Dance failed to materialize, Ballet West still plans to break ground on the facility's lot in June. The building will be just west of its Capitol Theatre headquarters, a spot that's currently home to "Sway'd," a temporary art installation. Jacobs said Ballet West is $4 million shy of its $14 million share of the $33.4 million facility, which will be operated by Salt Lake County, as is Capitol Theatre.
Ballet West board members and Jacobs credit at least three factors to the company's slow, but sure-footed, turnaround.
One was the willingness of everyone at the organization to make sacrifices, from salary freezes to furloughs. Certainly the resurrection of financial markets to their relative positions before 2008 helped, too.
But it's Sklute who gets the lion's share of mentions. That makes sense, as he's the driver and leader behind the company's artistic vision. Sklute, Jacobs said, is that rare artistic director whose passion and drive are matched by his magnetic personality.
"Of course we extended his contract," Jacobs said of Sklute's tenure as artistic director, which was recently extended seven years. "He's energized staff, board and community."
Sustaining momentum • Rosenthal said no one number accurately represents the financial health of an arts organization. That said, Ballet West annual budget of money spent has grown slowly from $6.6 million in 2010 to $7 million in June, at the end of fiscal 2012.
Much like dancing 32 "turning fouettÃ©s" in quick succession, though, Ballet West's current financial state is all about grace under pressure. Every move demands precision and efficiency, or else momentum is lost. The ability of dance companies to adapt to sudden economic changes is limited, Rosenthal said. Performance seasons are booked at least 18 months in advance, so canceling or altering planned offerings is an impossibility.
Over the past five years, Sklute seems to have hit the sweet spot in his programming, with the right mix of classic and new works. Given the size of the company and the Utah market, Ballet West has proved its resilience through a willingness to streamline operations and watch its bottom line as carefully as the dance floor.
"There was a time when the artistic director said, 'I want the moon!' And the executive director said, 'Wait right there, I'll find a stepladder.' That's all changed since 2008," Jacobs said. "We're still digging our way out of it."
Sklute has shown his willingness to delay productions based on finances. "It's not a hardship," he said. "It's all part of the creative process."
So far, the recipe has worked to his and Jacobs' satisfaction. Already, this year's season opener and world premiere, "The Lottery," has created buzz within the company and nationally, with prominent dance critics booking trips to Salt Lake City to review the production.
"For our size, we've got a pretty loyal following," said Victor Rickman, senior vice president of UBS Financial Services, now in his third year on Ballet West's board. "Our challenge is to develop more patrons. If we get just a handful of people to see one production, the chance that they'll buy a season ticket package is big."
It's part of any executive director's job at an arts organization to discuss how conditions can always be better. "Are we successful?" Jacobs asked. "We're successful in achieving the goals we've set for this time. We're doing well given the economy, and the economy is slowly coming to life," he said.
He may not enter the rehearsal room alone, for a dose of inspiration, as frequently as he once did. But of course he still goes.
"We had a guest recently with a lot of interest," Jacobs said. "And you can't say 'No.' "
Editor's note: This story is part of an ongoing series examining the financial outlooks of Utah's largest professional arts companies after the 2008 financial downturn.
Ballet on the books
Comparing ballet companies' books nationally is complicated, but potentially revealing. One way to measure a company's community support is the ratio of income earned from ticket revenue divided by donations. A larger number may indicate more demand for tickets.
By this measure, Seattle's Pacific Northwest Ballet, with a ration last year of 2.98, and Denver's Colorado Ballet, with a ratio of 1.8, outrank Ballet West's .71 ratio. But Denver and Seattle are larger markets, says Victor Rickman, senior vice president of UBS Financial Services and a Ballet West board member.
Yet Ballet West brings in more ticket revenue by far in comparison with companies with similar annual budgets in comparably sized markets, such as Milwaukee Ballet and Tulsa Ballet. In 2012, the Utah company brought in almost $1 million more in ticket sales than Milwaukee, and about $1.4 million more than Tulsa, according to figures obtained by Rickman.
Like Ballet West, arts groups across the country are seeing less government support at the city, county, state and federal levels. In 2001, the dance company's ticket sales represented about 27 percent of its total income, with ZAP funds making up 16 percent of the company's total budget.
Last year, ticket sales constituted about 29 percent of the company's budget, with ZAP funds adding another 13 percent. Altering the financial picture was a 2006 ZAP funding readjustment, which subtracted the food tax from Salt Lake County totals. Also a factor was a post-2008 plunge in sales tax receipts during the country's economic downturn.
How much has Ballet West made from "Breaking Pointe?
Ballet West officials don't have a dollar figure, although the show hasn't been "a funnel of money," says Johann Jacobs, executive director, although it has generated a bonanza of press nationally and internationally, and increased traffic to the company's website. One effect of that exposure? More professional dancers are signing up for company auditions, Jacobs says.
Compensation for dancers featured in the show "was extremely low," says artistic director Adam Sklute. "Payment to Ballet West barely covered the costs to do much of the work."
The dancers' union negotiated featured performer and performer fees, and Sklute received a comparable fee as a creative consultant/featured performer. Unions representing stagehands, orchestra and visiting artists also negotiated fees. "From my fee, I paid Ballet West staff members who had to do extra work beyond their job description for this show," Sklute says. "We certainly did not do this for the money, nor did we earn much in terms of cash. However, the exposure and institutional marketing is immeasurable."