Can the Center hold?
'The Nutcracker' is ousted, the deficits are posted, and the competition is making it hard to attract bread-and-butter touring shows. At the Wang Center, the pressure is on
When the Wang Center for the Performing Arts kicked out "The Nutcracker" last month, its leaders said that it could no longer be so closely linked with the fortunes of the financially strapped Boston Ballet. But in making the controversial decision, the Wang has brought to light its own budget woes.
The Wang, the city's primary stage for large-scale productions during much of the 1990s, is hurting.
Gone are the days of the multimillion-dollar capital campaigns and booming business from touring Broadway shows. For the last two years the nonprofit arts center has run a deficit. It has steadily been beaten out for marquee productions -- glamorous draws such as "The Producers" and "Hairspray" -- by for-profit Broadway in Boston, a division of Clear Channel Entertainment, the media giant that operates the Colonial and Wilbur theaters and will soon open Disney's "The Lion King" in the renovated Opera House. And the Wang's attempts to invest in productions such as last month's "Thoroughly Modern Millie" have so far resulted in losses.
That's why the Wang was forced to do the unthinkable, booting a Boston institution for the roaming Rockettes.
"You've got an aquarium that's going under, a zoo that can't finance itself, a horticultural society that's nonfunctioning," says Josiah Spaulding Jr., the Wang's president and chief executive officer since 1987. "It's no secret that Boston Ballet has had financial difficulties and we've been talking about our model being broke for a couple of years. So this is not new."
Still, the decision to replace "The Nutcracker," a production that plays to 120,000 people a year, caught many by surprise and sent shock waves through the city's tightknit community of arts supporters. Boston Ballet's production earns almost 30 percent of the ballet's $20 million budget. By replacing it with the "Radio City Christmas Spectacular," the Wang has put the company's future in doubt.
The Wang has also become a target in the national dance world, where ballet leaders have criticized the decision and the way the Wang operates. They question the center's priorities and its top administrator, Spaulding, who despite two years of losses is paid $536,159 a year, more than almost any other nonprofit performing arts center head in the country. Michael Kaiser, the president of the John F. Kennedy Center for Performing Arts -- which has a $120 million budget, 10 times larger than the Wang's -- makes $548,113.
The "Nutcracker" decision was "the cultural equivalent of the Red Sox sale of Babe Ruth to the Yankees," one Boston Globe reader wrote to the editor. Community Newspapers slapped a photo of Spaulding, who refused to discuss the decision publicly for two weeks, on the front of its weekly arts section next to the headline "Where's Joe?"
During the booming '90s, Spaulding turned the center into the money-making vortex of the city's performing arts community. He renovated the 3,600-seat Wang Theatre, the showpiece hall of the Wang Center where the ballet regularly performs, and built loyalty by handing out millions of dollars and office space to struggling nonprofits.
Evicting "The Nutcracker" has made Spaulding a villain to some of his former partners. The Wang's board calls him a victim.
"Joe's fighting for his survival," says Spring Sirkin, a Broadway producer and Wang trustee. "I don't think it's any more complicated than that. He's got a huge nonprofit institution that he doesn't want to see go down."
A home for nonprofits
Most American cities have a complex like the Wang Center, which comprises the Wang Theatre, the smaller Shubert, various education programs, and the Commonwealth Shakespeare Company.
Many such centers are larger, with multiple stages under one roof, and are funded with city or state funds. (The Wang receives virtually no public money for its operations.)
To nonprofit groups, the Wang is more than a hall. It is home. The nonprofit groups depend on low rental rates and a supportive landlord who is concerned about serving the community as much as the bottom line. As a nonprofit, the Wang receives its own benefits. Corporations, for example, can claim gifts to the Wang as tax write-offs. Also, any profits are invested back in the organization instead of being distributed to shareholders.
It is not an easy business, and, from the time the Wang was incorporated in 1976 to Spaulding's arrival in 1987, the center struggled to balance its budget and fell into disrepair. Spaulding developed a business model that would allow the Wang to use profitable, commercial shows to help underwrite the cost of hosting nonprofits. The formula worked throughout the '90s, during which Spaulding added the Shubert to the center, giving Boston Lyric Opera
$1 million to set up shop in the space. More recently, Spaulding took Commonwealth Shakespeare Company under his wing, moving the fledgling company's offices from a cramped, stuffy room in Chinatown to the Wang's digs on Tremont Street. In 2003, of $11.7 million spent overall on general operations, the Wang listed $1.4 million it gives to nonprofits in reduced rental rates and an additional $1 million to community outreach and its own Suskind Young at Arts program. "This is part of our mission, a very broad and balanced programming," says Spaulding.
Sirkin is one of the trustees who urged Spaulding to talk openly about the reasons for replacing "The Nutcracker" after 35 years at the Wang Theatre. The CEO had informed his trustees he could no longer afford to keep Boston Ballet, which pays a lower rental rate than a commercial touring show, in the Wang for six weeks of prime holiday season. The ballet's supporters felt different.
"No one would put up with the Boston Pops' getting thrown off the Esplanade on July 4," says Bruce Marks, the ballet's artistic director from 1985 to 1997. "They shouldn't put up with Boston Ballet's getting thrown out of the Wang. If I were on Joe's board, I'd ask for his resignation."
Boston Ballet's current leadership says the Wang is within its right to kick them out. Executive director Valerie Wilder remains frustrated most by the timing of the decision. By that, she's referring to the call made Oct. 21 informing her of the Wang's move. Wilder concedes she had heard Spaulding talking about his struggles for months, and she knew the Radio City show was out there and would prove enticing.
Still, she says, she had no idea Spaulding and his board would make the change so quickly. "If the Wang Center feels it can no longer support the activities for Boston Ballet, that's OK," she says. "He's making a business decision. But he can't give us 90 days' notice to figure out a new business model."
The challenge is Clear
The Wang's problems started long before the public relations mess that came with the "Nutcracker" decision.
In 1999 and 2000, the Wang peaked with $2 million year-end operating surpluses. The center was riding a strong economy and shows such as "Riverdance," "Rent," and "Phantom of the Opera," Spaulding says. But 2002 ended with a $429,300 deficit, and the results for fiscal year 2003, which ended in May, are similar. Spaulding lists a variety of reasons for the downturn, from the poor economy to dramatic change in the way people have been purchasing tickets -- often at the last minute instead of well in advance -- since Sept. 11, 2001.
His trustees, though, point to another problem. They trace the Wang's troubles to San Antonio, Texas, where, 31 years ago, Lowry Mays and Red McCombs bought their first radio station. Today, the pair's company, Clear Channel, owns 1,225 radio stations, more than 775,000 billboards, and 135 theaters, according to Hoover's Inc.
To understand the threat, Spaulding only needs to walk out onto the sidewalk on Tremont Street. His next-door neighbor is the Clear Channel-run Wilbur Theatre. The Colonial Theatre is around the block. The newly renovated Opera House on Washington Street is opening next year with "The Lion King," a show Spaulding desperately tried to attract to the Wang and that is likely to play for many months, if not longer. At another time, that show would have been a Wang mainstay. Instead, the glossy double full page ads for the show will steer audiences to a house operated by his chief competitor.
"They use their purchasing and leverage power to put guarantees in place that a nonprofit can't," says David D'Alessandro, the John Hancock chief executive who serves as chairman of the Wang's board of trustees. "When you control as much of the product as Clear Channel does through all their enterprises, while it's not a monopolistic practice, they exercise great control."
Spaulding, for his part, said that he fought hard to keep "Beauty and the Beast," which left the Wang for the Colonial last year, and to present "The Lion King." He has pretty much given up on drawing those types of shows in the future.
"And it sets up in your mind, `Jeez, I better do something,' " he says.
But Tony McLean, president of Clear Channel's Broadway in Boston, said that it's easy to blame the media giant.
"The Wang has to kick out the ballet. Suddenly it's the Opera House's fault," he says, pausing. "The Opera House isn't even open yet."
In need of a new plan
What Spaulding has in mind is to create a new model for his business.
He says he has no other choice. Clear Channel's strength has eaten away at the Wang's key source of revenue, the road show, and Spaulding acknowledges he lost money on virtually every touring show he presented over the last two years. The losses got so bad that the board, as a policy, decided to abandon a longtime practice of negotiating contracts in which fees were tied to how well shows did, choosing instead a flat rental fee to avoid the risk of losses, according to D'Alessandro.
The new model Spaulding talks about requires the Wang to become more than a landlord. With so little product to present -- and so many shows going to Clear Channel venues -- Spaulding has started developing productions. He's joined a group centered around Atlanta's Theater of the Stars for "Annie," "The King and I," and "Big River." He's also working with Boston Lyric Opera and Commonwealth Shakespeare Company to create productions that can play Boston and tour.
When Boston Lyric Opera asked for another grant recently, according to general director Janice Mancini Del Sesto, Spaulding told her he couldn't help. He needed to use any extra money to invest in shows developed by the Independent Presenters Network, a group of producers and theater managers who have banded together to work outside the Clear Channel network. But so far, Spaulding's new business model isn't working. "Thoroughly Modern Millie," an Independent Presenters Network production that played the Wang for a week in October, lost $350,000, he says. Even the Kirov Ballet, which played to packed houses earlier this month, lost about $100,000 because of the nearly $1 million cost of the run.
The ballet's Wilder wonders whether the Wang would be better off sticking with the local groups that bring it a steady and loyal audience. "He may not make as much as he will make on Radio City, but with us he has a relationship guaranteed for a length of time," she says. " `Thoroughly Modern Millie' was here for a week, and in that week he managed to lose $350,000. He can't lose $350,000 on Boston Ballet."
Richard Maloney, an assistant professor in Boston University's arts administration department, wonders whether the Rockettes can save the Wang. "Is this Christmas action going to be enough?" asks Maloney. "That's going to be one of the big questions. We are going to see more nonprofits forced into this corner, like Joe was, and having to make this decision. He's having to make this decision that he has to hurt another nonprofit to help his nonprofit."
Living in the present
One night earlier this month, Spaulding walked out of his office onto the cold stretch of pavement separating the Wang from a parking deck. He has big plans for this space -- a glassed-in atrium and a connected small theater. He motions across the street to a cramped lot next to the Shubert. The Wang holds an option on that land, which he hopes to develop.
Those plans are far in the future. For now, he's just trying to pull off a three-performance run of the Kirov Ballet. It's an expensive undertaking, and he believes it exemplifies the Wang at its best. To pay for the Kirov, Spaulding and Martha Jones, executive director of the nonprofit FleetBoston Celebrity Series, have to do more than sell tickets. They also bring in sponsors and host a pre-show, $500-a-head dinner in the Wang lobby. That way they lose only $100,000.
This, says Sirkin, the Wang trustee, is an example of just how much Spaulding cares about ballet.
"Do I enjoy Boston Ballet?" Sirkin says. "Yes. Do I want to see it continue? Yes. But what good does it do the ballet if the Wang Center goes down?"
Geoff Edgers can be reached at gedgers@globe.com.
