|| Boston Business Journal
|| August 10, 2012
|| Mary Moore
After a period of financial instability, the Boston Ballet is back on its feet, a turn around linked to a quick, $10 million fundraising campaign to retire debt and a new, small theater designed to build audiences.
With its so-called Clean Slate Fund campaignin 2010, the Ballet raised $10 million in eight months and from eight donors, an ambitious and hush-hush undertaking that required Ballet executives to present donors with a plan for how they would reach solid financial footing. That plan includes building audiences, drawing more individual donors and corporate sponsors, and keeping expenses low.
A portion of the money raised through Clean Slate went toward paying down $1.3 million in long-term debt the Ballet had accumulated, a debt load that hit $5.1 million in 2005, comprised of a loan and a mortgage on a building in Newton that houses a ballet school and studio space.
The proceeds of the campaign also closed budget gaps for the Ballet for several years.
About $500,000 was used for an intimate, 144-seat “black box” theater within the Ballet’s headquarters at 19 Clarendon St. This theater, which finishes off a $3 million renovation of the headquarters that started in 2010, represents a significant first for the Boston Ballet.
By creating an up-close theater experience, dubbed BB@home, the Boston Ballet allows audiences to better connect with the dancers, ballet insiders said.
“The black box theater gives them more flexibility on how the Boston Ballet presents work,” said Jill Johnson, director of the dance program at Harvard University.
The Ballet is governed by a well-heeled group of trustees, including Jack Meyer, former CEO of Harvard Management Co. and currently senior managing partner of Convexity Capital Management LP; Laura Sen, CEO of BJ’s Wholesale Club; Belinda Termeer, wife of former Genzyme CEO Henri Termeer; and Nina Fialkow, wife of General Catalyst Partners Managing Director David Fialkow.
Corporate partners include State Street, Loomis, Sayles & Co., LPL Financial, American Airlines, British Airways, the Barr Foundation, Admirals Bank, Lincoln, and Comcast Corp.
With an annual budget that today tops $31million, the Boston Ballet had a rough time of it in 2008 and 2009, as it cut jobs, including nine dancers, and performances. The pain hit hardest in 2009, when the Ballet reported a sharp decline in revenue — falling to $23 million in 2009 from $28 million the previous year — and in individual ticket sales, which declined by nearly 4,500 over the same period.
Many nonprofits were struggling then, but the Ballet’s problems started years earlier, sparked by its ouster from the Wang Center. When it lost that lease, the Ballet moved its annual Nutcracker performance to the Colonial Theater for a season, forced to build a new set that fit the smaller space. Expenses ratcheted upward in 2008 when the Ballet shifted completely out of the Wang Center and into the Opera House.
Worse, perhaps, the Ballet faced public perception that it would not survive outside the Wang, and lost ticket sales as a result, said Barry Hughson, the Ballet’s executive director. Annual subscriptions, for example, fell to 33,000 in 2010 compared to more than 38,400 the previous year.
To help cover swelling debt, the Ballet raised an initial $5.8 million in 2008, largely from its trustees. In 2010, the Ballet completed a second fundraising initiative — the $10 million Clean Slate Fund campaign.
"This was a huge step forward. Unless we did this, we’d always be playing catch up,” said Eleanor Pao, a Ballet trustee.
Retiring the Ballet’s debt was a critical part of the Clean Slate initiative, and it was a message Hughson used to convince the small slate of donors to participate. The Ballet’s annual donors would be more likely to give if they knew it was debt-free, Hughson explained.
“It was important to say that this institution, in one of the worst economies, got the monkey off its back,” he said, adding the Ballet kept the $10 million campaign quiet so that it did not draw support away from the Ballet’s annual fundraising efforts.
Meanwhile, the Ballet has cut administrative costs 33 percent over three years, once again has 50 dancers in its professional company, offers 16 more performances on its schedule this season compared to the 2007 and 2008 season, and has increased corporate partnerships. The Ballet had 84 corporate partners last year, representing a total of $1.6 million, up from 69 partners in 2010, for a total of $838,000. Moreover, the Ballet has kept its promise to Clean Slate donors to balance its operating budget.
Hughson expects the BB@home series to push up the Ballet’s audience numbers. The Ballet is selling performances at 70 percent of capacity, Hughson said, and he hopes to boost it to 85 percent.
“I walk to the orchestra pit and look at the faces in the audience,” Hughson said. “I’ve been really pleased with the number of young people who are coming to the ballet. It’s a healthy sign that audiences will grow. But we can do more and do better.”