Financial woes of Foothill Theatre Company
We’re in the third year of a pronounced downturn in the housing market. And not coincidentally, Foothill Theatre Company (one of the region’s few professional theater companies) is in serious financial peril. Other performing-arts groups are also feeling the pinch.
Let’s pause and connect the dots by going back to the last market cycle—remembering what happened to performing-arts groups at that time.
Home prices rose steeply through the late 1980s, peaking around 1989. Prices started falling in 1990, and the downdraft continued for years. Things didn’t really turn around until 1996 or 1997. By then, several regional performing groups were in financial straits.
The biggest casualty was the old Sacramento Symphony, which went bankrupt and disbanded in 1996. In 1998, a $330,000 bailout package was crafted by city and county government to keep the Sacramento Theatre Company, Sacramento Ballet and Sacramento Opera afloat. The B Street Theatre also had a close call and was saved largely because founder Tim Busfield wrote a big check to keep the doors from closing.
The housing market eventually found its feet in the late 1990s, and went wild thereafter, with home prices escalating rapidly from 2000 onward. And performing-arts groups stabilized and grew. The Sacramento Philharmonic sprouted from the ashes of the old Sac Symphony, though the Phil remains part-time. The B Street Theatre built up a subscriber base, stabilizing the finances. An edgy new professional theater company, Capital Stage, was launched three years ago. And so on.
But housing prices don’t rise by double digits indefinitely. The market correction began in 2005. And owing to the subprime shenanigans of the mortgage industry, Sacramento is now mired in foreclosures, depressing the regional economy.
Needless to say, the performing-arts groups—which depend on discretionary income for both ticket sales and fund-raising—are feeling the chill. Foothill Theatre is in danger of closing. The B Street Theatre, which has long contemplated a capital campaign to build a new venue, is holding off. Just about all groups have to work harder to sell season subscriptions. Relying on single-ticket sales makes it hard to plan a budget.
Part of the puzzle is that Sacramento lacks the philanthropic infrastructure that supports arts groups in most cities. I recall hearing the Cincinnati Symphony Orchestra at the Mondavi Center last year and thinking “Hmm, as a metro area, Cincinnati ranks 25th nationally, with 2.1 million residents. Sacramento ranks 26th, with 2 million residents. How come they have a full-time orchestra that tours and records and we don’t?”
The answer, in part, is that Cincinnati has Procter & Gamble (23rd on the Fortune 100), Kroger (26th) and Macy’s (91st), plus seven more companies in the Fortune 1000.
Sacramento has one Fortune 1000 firm: The McClatchy Co. (813th), which is shedding employees, slashing budgets and downsizing its remaining newspapers. McClatchy has long supported the performing arts—but times are tough.
The other local corporation that’s traditionally helped the performing arts is Raley’s. But Raley’s is under siege from big-box Wal-Mart and Costco stores, from the Modesto-based Save Mart chain and from Trader Joe’s.
Getting back to where we started—this is the third year of declining home prices. It’s probably going to be two (maybe three) years before things get better. So hold on tight, because performing-arts groups—which are linked to the local economy at multiple levels—are going to face some tough sledding before the economic picture starts to improve.