🔒Musical royalties lift Hartford Stage’s finances, but other pressures weigh on its bottom line

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The night of June 8, 2014, is one Hartford Stage officials will long remember.

It was when “A Gentleman's Guide to Love & Murder,” which the theater developed and premiered, won four Tony Awards, including best Broadway musical. Darko Tresnjak, the theatre's artistic director since 2012, also won for best musical director.

The opening night party held at Rockefeller Center's skating rink that balmy late spring evening was a celebratory high for the theater, which was ending its 50th season and getting a taste of the national spotlight, with the promise of a new income stream, thanks to royalties from the show premiering on Broadway and elsewhere.

The musical ran for more than two years in New York City, with 905 performances, then toured nationally. It also received an Australian production.

Then came the musical “Anastasia,” which premiered at Hartford Stage in 2016 and is still running on Broadway after nearly two years. It's now touring nationally and has two separate productions in Europe, with several more expected internationally this year.

So far, royalties from both shows have brought back about $500,000 to the theater, officials said, money Hartford Stage has desperately needed to cover shortfalls in other areas.

Part of Tresnjak's legacy during his artistic-director tenure — he is stepping down June 1 — is that many of his productions have had a life beyond Hartford, providing a crucial revenue stream — in the form royalties — during a time when theaters across the country are struggling financially.

And there are high expectations from the theater's leadership for the future of the recently opened play, “The Engagement Party,” and the upcoming new musical, “The Flamingo Kid” — which are Tresnjak's farewell shows.

But rolling the dice on new shows — especially big-budget musicals — is risky business.

Other Hartford Stage productions that were thought to have potential runs beyond Hartford, but didn't, included a revival of the Cole Porter musical “Kiss Me Kate,” which, like “A Gentleman's Guide,” was co-produced with San Diego's Old Globe. There was also “Rear Window,” which was a big hit, but failed to get national play even with Kevin Bacon as star.

Still, the awards and attention Hartford Stage's two Broadway musicals received gave a boost to the theater's fundraising and subscription base, which grew from a little over 5,000 eight years ago to 7,500 today, officials said.

However, if you think that means Hartford Stage has been rolling in the green, think again. It recorded a modest surplus of about $4,000 in fiscal 2018, but has been in the red and black in other more recent years, according to its publicly available financial statements.

A key issue: Royalty revenues have only partially offset the drop-off in funding from the state, foundations and the Greater Hartford Arts Council.

The concern now is what happens when the royalties diminish — or dry up entirely. It's still unclear what the priorities will be for Tresnjak's successor, Melia Bensussen, and for the person who succeeds longtime Managing Director Michael Stotts, who left the theater in January for a position with Paper Mill Playhouse in New Jersey. His successor has yet to be named.

Income from “A Gentleman's Guide” has trickled off, but “Anastasia” royalties are expected to continue for a few more years.

A look back and ahead

Before Stotts departed to New Jersey he sat down with Hartford Business Journal to discuss his management and the future of Hartford Stage.

He said his focus was on creating diverse revenue streams. Box-office sales, which have leveled off in recent years after the bump and are likely to remain stagnant for a while, and donor contributions aren't enough to survive in the long run, he said.

To help mitigate fluctuating ticket sales, he said the focus has to be on finding cost savings and leveraging entrepreneurial opportunities, such as renting out costumes and building scenery to other theaters, or cashing in on new ideas from staff.

During his tenure Stotts said he was encouraged by the expansion of Hartford Stage's education program and its many classes offered to the community, which brought in $1 million a year in revenue. Beyond the money, he said it also gives the theater an opportunity to connect to families with which it wouldn't otherwise have relationships. It also nurtures young audiences for the future.

Another “must” is to increase the theater's $5.5 million endowment, not the easiest — or sexiest — of campaigns to launch.

One thing the new managing director will not have to worry about is updating the facility. Last year, the theater completed its multi-phase, multi-year $14 million renovation. Even with the refresh, however, the theater is limited in what it can do artistically with a 500-seat venue, which is fine for big-hit shows but problematic for more difficult-to-sell new works.

Stotts said a new smaller theater isn't necessary, but Hartford Stage can take advantage of other theater spaces around Hartford, such as the Aetna Theater at the Wadsworth Atheneum.

Stotts even imagines the possibility of having a “pop-up” theater in a vacant storefront.

“After all, that's how Hartford Stage began,” he said.