SF arts groups could lose $73 million in coronavirus shutdown, study says

Paintings at the de Young Museum have been covered to reduce light exposure.

Photo: Thomas P. Campbell, Fine Arts Museums of San Francisco

The galleries of San Francisco’s de Young Museum are filled with works by one of the most significant — and most popular — painters of the 20th century. But not a single visitor, much less the anticipated blockbuster crowd, is anywhere to be seen.

The exhibition, “Frida Kahlo: Appearances Can Be Deceiving,” was to open to the public Saturday, March 21, after two days of celebratory parties and previews. Ticket, membership and concession sales associated with this show were expected to provide 15% of the year’s total revenue for the museum’s parent organization, the Fine Arts Museums of San Francisco. Now the loss could amount to $9 million if the city’s coronavirus shelter-in-place regulations stay in effect until June.

A Frida Kahlo exhibition, featuring “Self-Portrait Dedicated to Dr. Leo Eloesser” (1940), was to open Saturday, March 21, but no visitors are allowed because of the coronavirus pandemic.

Photo: © 2020 Banco de Mexico Diego Rivera Frida Kahlo Museums Trust, Artists Rights Society, New York

“We, like the entire arts community, have just been sideswiped” by this shutdown, FAMSF director Thomas P. Campbell said in an interview with The Chronicle. “The impact is immediate, and I think we are typical.”

Campbell’s instinct is supported by hard evidence. Every day brings new announcements of curtailed programs. Every performing arts group in the Bay Area contacted by The Chronicle has canceled its spring season, even as most had barely begun. Now a study reports that arts organizations stand to lose more than $73 million in revenue and donations if the shutdown continues through summer.

The American Conservatory Theater has laid off about 230 workers — including 25 full-time employees, 75 part-timers and 130 who had been hired for specific productions.

“We canceled the remainder of our season. All classes and training programs. We’re looking at a $5 (million) to $6 million loss through summer, out of an annual budget of $27 million,” Jennifer Bielstein, executive director at ACT, told The Chronicle. “That’s 20%.”

Among the cancellations is the West Coast premiere of “Toni Stone,” a highly anticipated play about the first woman to play professional baseball, who got her start with the Negro Leagues’ San Francisco Sea Lions. The production opened March 5 and was shut down the next day after Mayor London Breed ordered a ban on large gatherings.

Dawn Ursula as Toni Stone during a dress rehearsal of “Toni Stone” at ACT’s Geary Theater on March 4. The production opened the next day and played one night before the city banned large gatherings.

Photo: Scott Strazzante, The Chronicle

“I believe the arts are essential,” Bielstein said. “It’s not like they can go and work in another theater. We need to be part of those government stimulus packages.”

The San Francisco Ballet also hasn’t performed publicly since the opening night of “A Midsummer Night’s Dream,” which was the night before Breed ordered the closure of the War Memorial Opera House and Performing Arts Center venues.

“Seventy-two percent of our budget is human,” said Kelly Tweeddale, executive director of the San Francisco Ballet, who has been in her job for barely six months after a 35-year career in arts leadership. Many of the dance company’s artists make their homes in other countries. “These are people on work visas, and in 30 days we have to return them” if they are not legitimately working here, she said. Others will lose their union-provided insurance if they don’t work a sufficient number of days.

Moreover, Tweeddale added, dancers are finely tuned athletes. “Two weeks without practice or performing — that is a career conversation.”

“We have to be very careful of what levers we use” to maintain a balanced budget, she told The Chronicle, concern obvious in her voice. “As we wait for clarity, many of us wonder if we’ll get through it.”

Even the comparatively wealthy San Francisco Symphony, with an $81 million budget in 2019, faces a substantial challenge that could lead to personnel cuts, as losses mount by $2 million each month, Mark Hanson, executive director of the Symphony, told The Chronicle.

“We are looking at a variety of financial models,” Hanson said. “But we are the current — not the only — stewards of this historic resource, and even if our worst-case scenario comes true, we need to retain the ability to recover.”

The San Francisco COVID-19 Arts Impact Survey details earned and contributed income and projected losses because of the city’s coronavirus shutdown.

Photo: San Francisco Arts Alliance

The San Francisco Arts Alliance, a loosely organized assembly of the leaders of about 15 of the largest arts institutions in the city, has come together in this moment of crisis to conduct what it has dubbed the San Francisco COVID-19 Arts Impact Survey. The alliance gathered data from 145 organizations in the city, large and small, in all arts disciplines, which were shared exclusively with The Chronicle.

The results of the survey show that as of Friday, March 20, arts groups had already lost a combined $21.4 million in earned income because of the city-ordered shutdown. That is a figure expected to grow to $42.5 million if the crisis lasts until June 15, and $47.8 million — a whopping loss of 25% of all expected earned income from ticket and concessions sales for the entire year — if programs must be curtailed into mid-September.

The San Francisco COVID-19 Arts Impact Survey broke down cost-cutting decisions that city arts groups were considering and had already made.

Photo: San Francisco Arts Alliance

Add to that the possible loss of an additional $25.6 million in contributed income among the surveyed group, as donors turn to social service needs while, at the same time, attempting to nurse their investment portfolios back to health.

The alliance is “working now to grow this into a broad and inclusive Arts and Culture Alliance so that we can help support our whole ecosystem,” according to co-chair Deborah Cullinan, whose day job is CEO of the Yerba Buena Center for the Arts. Efforts in the past have been focused on city and county of San Francisco funding, but the group has turned attention to state and federal legislation, hiring lobbyists to make the case that arts and culture workers provide essential services and play a significant role in the economy. If more than $1 trillion in stimulus funds is to be spent in the next few months to shore up the economy, the organizations want to be sure their workforce is not ignored.

The arts industry, certainly no less than the travel and hospitality sectors, must be considered, local leaders contend.

The most recent study of the overall economic impact of the arts in San Francisco, released in 2017 and based on 2015 figures, showed that nonprofit arts and culture organizations spent $780.6 million annually “to pay employees, purchase supplies, contract for services, and acquire assets within their community.” That amounts to an overall impact of $1.45 billion in annual economic activity in the city alone, apart from the rest of the Bay Area.

Smaller organizations also face big challenges, even if their daily considerations are different.

Maria Jenson, executive director of SOMArts, told The Chronicle that her group is nimble. With annual spending of $1.5 million and a free admission policy, she said, “We don’t take a lot of revenue from the door. … I would think the larger organizations are going to have a longer process of discovery.”

Still, “we are evaluated by our service to audience” by the city, SOMArts’ largest funder, and by the foundations that provide grants. “We have deliverables based around programming,” she said.

She points out, too, that city funds come largely from hotel taxes, which means “if the hotel industry is decimated, when that leg is gone, the whole table collapses.”

In hopes of keeping that from happening, Breed announced the city created an Arts Relief Program to assist working artists and “small- to mid-budget sized arts and cultural organizations … serving cultural populations that are the most vulnerable.” The program will be funded by an initial $2.5 million from the city and will provide two options: a grants program and low-interest loans.

“Our artists and cultural institutions are at the heart of who we are as a City and a community,” Breed said in a statement released Monday, March 23, after the alliance’s survey results were revealed online by The Chronicle. “We need to do everything we can to stabilize our arts community now.”

Breed’s announcement also noted that “the philanthropic community will be allowed to donate to these programs to expand impact.”

“I hope our public investment will encourage private donors to join us in supporting our vulnerable artists during this challenging time,” she said.

Susie Medak, managing director of Berkeley Repertory Theatre, said that after 30 years in the job, “this is a new experience. I’ve used the word ‘unprecedented’ more in the past few days than in my entire life.”

Berkeley Rep is looking at a $3 million to $5 million loss on an $18 million budget, requiring cuts of up to $6 million. Medak’s organization is teaming up with the Oakland Museum of California and Cal Performances, groups of similar size, to support San Francisco efforts.

“We’re holding out as long as we can,” Medak said, “to see what the stimulus package holds.”

The Marin Theatre Company, much smaller at a $4.2 million total annual budget, feels the sting intensely. In a joint interview with The Chronicle, artistic director Jasson Minadakis and interim managing director Jenna Deja described working for two years on what was to be a world premiere, with a prominent New York director signed on. Representatives of four New York theaters had flown out to see the play in previews. MTC hopes to recoup losses by presenting the play online, as many theaters around the region are doing with their productions.

The new Akiko Yamazaki and Jerry Yang Pavilion, as envisioned by an architect, was scheduled to open in May at the Asian Art Museum.

Photo: © Asian Art Museum, Why Architecture

But if there is an arts CEO more entitled to rage against the situation than the director of San Francisco’s Asian Art Museum, it is hard to know who that might be. That is not Jay Xu’s style, however.

After 10 years of planning, fundraising and construction, the museum was set to open its major new gallery and completely renovated museum on May 8. Opening events have now been postponed, with a date to be announced. “We were so close to the finish line,” Xu told The Chronicle.

Xu said he foresees expense reductions, “but we have a plan to keep everyone employed.”

In a statement that would surely be embraced by his colleagues in positions high and low, in arts organizations large and small, he said of his deferred dream, “There is a big psychological and emotional impact.

“But we are resilient.”

Chronicle staff writers Lily Janiak and Joshua Kosman contributed to this report.

Click here for The Chronicle’s Coronavirus Tracker and other updates about the pandemic.

Arts groups have never been very flush with cash. Now, they’re facing an even bigger battle for survival.

The National Gallery of Art is closed indefinitely. (Jonathan Newton/The Washington Post)

By Peggy McGlone and Geoff Edgers 

March 23, 2020 at 8:15 p.m. GMT+9

Entire orchestras have been laid off, museums are calculating the losses in millions, and whether you’re David Crosby or a backstage tech, the moment has become a battle for survival. This is the new arts world, where live streams and inspirational singalongs go viral but don’t pay the rent. Where those charged with balancing the budget are filled with dread.

The numbers don’t lie: 431 canceled performances, 725 people laid off, 150 musicians in limbo. And that’s just at the Kennedy Center, where administrators late last week calculated the crushing equation of even a best-case scenario.

“We have to figure out how to make it to May 10, and if we have to [close] longer than May 10 what does that mean?” says Deborah F. Rutter, the Kennedy Center’s president. “We have to be responsible, make sure everybody is healthy. But there’s been nothing like this. How long will it last? How long will it last?”

At the Metropolitan Museum of Art in New York, officials are planning for a $100 million shortfall if they remain shuttered into July, a time frame looking realistic with each new government update. The Metropolitan Opera canceled its season and told its orchestra, chorus and staff that their paychecks would stop after this month.

Same story, different shuttered box office across the country, as arts institutions are cutting staff and programs to mitigate financial losses that will stretch long into the future.

Museums nationwide are losing $33 million a day, according to a letter to Congress from leaders of the American Alliance of Museums and its partner umbrella organizations seeking $4 billion in federal aid. Americans for the Arts, a national advocacy group, issued a survey to cultural nonprofit groups, and in less than a week, several thousand responded with real losses topping $5 billion. A quarter said they had already cut staff.

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The Oregon Symphony has laid off the entire orchestra and half of its administrative staff. The San Francisco Ballet has canceled more than half of its season. The Houston Grand Opera has pulled the plug on its spring season, which could lead to losses nearing $2 million.

Some companies, including the Houston opera, have promised to pay half the amount of their canceled contracts, while others, such as the Actors Theatre of Louisville, which shut down the Humana Festival of New American Plays, says it will pay staff for the first month of a shutdown.

Even in that best-case scenario — say, a May return — it may take years to return to the vibrant, cultural universe that defines our country.

“In the past, most disasters have had a component of a time frame,” says Kate D. Levin, who oversees the Bloomberg Philanthropies Arts program. “Hurricane Sandy. The damage was understood. The question was how to get past it. Similarly, with 9/11. This is a very different kind of circumstance.”

“If it’s six weeks, most will survive. A lot of people will suffer, there will be a lot of pain, but we’ll get the sector back,” says Michael Kaiser, the former head of the Kennedy Center and now chairman of the DeVos Institute of Arts Management at the University of Maryland. “But if it goes on for six months, we are in for a very radical reduction.”

As stimulus packages and bailouts are discussed, lawmakers have been referencing covid-19’s crushing impact on airlines, restaurants and the cruise industry. But the cultural community, never flush with cash even in the best of times, has also been devastated.

“It’s not just a show that got canceled. People’s lives got canceled,” says Benjamin Burdick, the producing artistic director of Boise Contemporary Theater, which had to cancel its latest production.

There are efforts underway to help. In New York last week, a group of foundations announced a $75 million fund to help social service and arts and cultural organizations struggling to survive the slew of demands and cancellations brought on by the coronavirus outbreak.

The organizers hope that the NYC Covid-19 Response and Impact Fund — meant to provide assistance to groups with budgets of $20 million or less — will serve as a model for similar efforts outside New York.

“Just as inequality is playing out in our society, it’s playing out in the arts,” says Darren Walker, the president of the Ford Foundation, one of the fund’s contributors. “When you get to the medium and smaller arts organizations that don’t have endowments, that don’t have rich boards, that don’t have huge amounts of operating cash flow . . . those organizations are panicked.”

During the crisis, Ford and other funders have become flexible with the nonprofit groups they support. They’re discussing ways to shift money for now-canceled projects to whatever is needed to keep groups afloat.

The Met in New York expects losses of $100 million. (Mark Kauzlarich/Bloomberg)

The Hanover Theatre in Worcester, Mass., has had to cancel appearances by comedian Jerry Seinfeld, the Beach Boys and a screening of “This Is Spinal Tap” with director Rob Reiner. The Boston-based Barr Foundation had awarded the theater a two-year $750,000 grant that included support for an outdoor stage. With $250,000 remaining in the grant, the theater received permission to shift the money to general operating support. Troy Siebels, the Hanover’s president and chief executive, says that will enable him to keep from laying off staff until mid-May.“It’s important because we know this will end at some point and we need to be there when it does,” he says.

While larger institutions do generally operate with a great cushion, even the biggest are scrambling.

Metropolitan Museum president and chief executive Daniel Weiss estimates the cost of the anticipated 3½ -month shutdown at $100 million.

Weiss outlined the Met’s three-step approach, which includes redirecting spending from programs and exhibitions to salaries and basic needs; reducing costs, including laying off employees; and fundraising. The museum has 2,200 employees and is committed to paying them until April 4, he says.

Can the Met extend that to the length of the shutdown? “It’s hard to imagine how any organization can do that,” Weiss says.

At the Kennedy Center, Rutter hasn’t had time to calculate the cost of an eight-week shutdown, but it could top $20 million and more if this summer’s 14-week run of “Hamilton” is affected. The arts center depends on its box office, which accounts for more than half of its $279 million annual budget.Rutter said she has taken a 50 percent pay cut (she earned $1.2 million in 2018, according to tax filings), and her senior-team salaries have been cut, too.

Robert Lynch, president and chief executive of Americans for the Arts, is hopeful that Congress, which has been supportive of the arts in the Trump era, will include the arts groups in a federal bailout. His organization is collecting data to show the need.

“The arts economy has always been rough, with slim margins between income and expenses,” Lynch says, adding that about one-third of nonprofit arts corporations are in a break-even or deficit position every year. “When you have something that shuts down all income, it makes for a tougher situation,” he says. “In terms of survival, it’s worse than ever.”

The federally supported National Gallery of Art and Smithsonian Institution — both closed indefinitely — are suffering as much as their nonprofit colleagues. With its 19 museums shuttered at the start of its busy spring season, the Smithsonian will lose several million dollars in earned income from its shops, restaurants and Imax theaters, and other events. But staff layoffs are unlikely, at least in the short term, according to Smithsonian Secretary Lonnie G. Bunch III and National Gallery of Art Director Kaywin Feldman.

Scott Showalter, president and chief executive of the Oregon Symphony, laid off the entire orchestra and half the administrative staff earlier this week to manage an estimated $5 million shortfall, about one-quarter of his annual budget. The Houston Grand Opera has canceled 11 performances over three productions, but it has vowed to pay the hundreds of artists and staff hired for the productions 50 percent of their contracts.

“There’s never been a chance that we would not have paid our artists,” says Perryn Leech, the opera’s managing director. “If we have a financial problem that we deal with in the future, then that’s a financial problem that the whole organization will have to deal with.”

The San Francisco Ballet, here performing Balanchine’s “A Midsummer Night's Dream,” has lost about 60 percent of its season. (Erik Tomasson/San Francisco Ballet)

At the San Francisco Ballet, the staff and 78 dancers are being paid despite the loss of 60 percent of the season and the shuttering of its renowned dance school, said its executive director, Kelly Tweeddale, who estimated current losses at about $9.5 million.“We are going through scenario planning. What does this look like in three months, six months, nine months. We are trying to wrap our brains around how might we come out on the other side.”

A big concern is the federal approach to stimulus and relief efforts, which Tweeddale says may not address their specific needs. “How do you make sure someone doesn’t lose their visa if they can’t work? Will hourly people be taken care of? Many artists work multiple jobs and the safety net of unemployment may not work for them,” she said. “We’re all guessing. It’s the guessing that’s hard.”

The open-ended nature of the crisis means museum directors can’t predict whether exhibitions will have to be canceled or postponed. Bunch is considering three scenarios, the first that sees the pandemic end by summer. The second involves a second wave of the virus in the fall and with it the possibility of a second closing. The final scenario — that social distancing lasts for 18 months to two years — prompts decisions about keeping staff for the stores and restaurants, he said.

Bunch is also focused on online content for housebound students and families, and thinking creatively about the virtual Smithsonian.

But, he admitted, “it’s a little frightening.”

“There’s nothing that excites me more than walking through a museum and seeing crowds engaging with the artifacts. I’m lonely for the crowds.”

Michael Andor Brodeur contributed to this report.