🔒With new leadership, Goodspeed Musicals ready to tackle financial, artistic challenges

For decades, Goodspeed Musicals’ multimillion-dollar endowment had allowed its theaters in East Haddam and Chester to survive and flourish, despite downturns in the economy, declines in both contributions and attendance and annual deficits, some in the seven figures.

But annual royalties that go into the endowment from the smash 1970s musical “Annie” — which had its premiere at Goodspeed Opera House in East Haddam 45 years ago — as well as from other shows the theater launched, have been diminishing over the years. That makes Goodspeed’s recent string of deficits — totaling nearly $4 million over a three-year period ending in fiscal 2018, according to its most recently available public tax filings — a critical issue facing the new leadership team taking over this spring.

In an effort to deal more effectively with growing financial pressures, which were exacerbated by the pandemic, Goodspeed’s trustees nixed the single executive director model that was established when Michael Price took over the newly renovated theater in the late 1960s. This singular “impresario” role continued when Michael Gennaro succeeded Price in 2015.

With Gennaro’s retirement last year, the board decided to split the leadership with one person focused on the creative side of the business and another on finances, assisted by a proactive money-management team from Goodspeed’s banking partners and accounting firm blumshapiro, says John F. Wolter, chairman of the board of trustees and a lawyer at Hartford law firm Updike, Kelly & Spellacy P.C.

In January, David B. Byrd was named the new managing director in charge of the business side of the organization. The 41-year-old was previously managing director of Virginia Stage Company in Norfolk, Virginia. A Yale School of Drama grad, Byrd was also an associate managing director at Yale Repertory Theatre and director of marketing at Westport Country Playhouse.

Donna Lynn Hilton, 59, is Goodspeed’s new artistic director. She began her career at Goodspeed in 1988 as a stage manager and has been a producer for the last 13 years. She has led the expansion of the Festival of New Musicals annual weekend, and the creation of the Johnny Mercer Foundation Writers Grove, a writing retreat for musical theater artists.

Byrd will oversee a budget that stood at approximately $12 million pre-pandemic.

The theater said it took a $5 million financial hit as a result of forced closures from COVID-19.

In a typical year about half of Goodspeed’s revenues come from ticket sales; other income streams include concessions, educational services and costume rentals.

Since the pandemic began, Goodspeed laid off 40 employees and furloughed an additional 31. Twenty-four other staffers have seen a partial furlough, working reduced hours at reduced pay.

Goodspeed did receive a $1.2 million potentially forgivable loan through the Paycheck Protection Program. It is also applying for a Shuttered Venue Operators (SVO) Grant from the federal government.

The one bright spot is there may be light at the end of the COVID-19 tunnel. With vaccines rolling out, Gov. Ned Lamont recently loosened restrictions on indoor event capacities.

Goodspeed said it hopes to reopen in June with a revival of the classic "South Pacific," and debut a new musical — "Anne of Green Gables" — in September, pending state guidelines.

Byrd says the downtime over the last year has given the institution time to reassess its operations.

“The planes are grounded so now we can look at how do we fix the planes,” he says. “We have time to dive into that from dedicated board members to get a deep analysis and figure out how best to position ourselves going forward.”

Endowment limits

Part of Goodspeed’s fiscal challenge is the physical size of its historic East Haddam theater, which was built in 1876 and renovated in the 1960s. Even with its three annual musicals selling out during its eight-month season, Goodspeed Opera House’s 398-person capacity limits its ticket revenue-generating ability.

Its Norma Terris Theatre in Chester, which opened in 1984 and presents developmental productions, adds to the red ink. In some years Goodspeed management decreased the number of shows produced in Chester as a cost-savings measure. Prior to the pandemic, Gennaro announced the Chester theater would be doing script-in-hand developmental presentations instead of fully-produced shows.

Besides earned income, not-for-profit theaters have traditionally relied on contributions from individuals, foundations, corporations and government, but that revenue basket has increasingly shrunk over the years, a trend seen by most arts institutions.

“Corporate support is 20 percent of what it once was,” says Wolter, as an example.

What keeps the institution going is its staggering endowment — at least from a regional theater's perspective.

Its nest egg is currently valued at $19 million, down from $23 million a few years back.

The endowment provides a buffer when revenues are down, and allows the theater to do productions at a higher quality.

In the past, Goodspeed has been able to replenish any annual endowment draw-downs through royalty revenues and healthy stock market returns.

“The endowment is doing exactly what it’s supposed to do,” says Wolter, who noted the theater also has a line of credit to draw from. “I would emphasize there is an element of our losses that we expect and that’s the reason the endowment is there.”

Wolter says a planned capital campaign to upgrade the 145-year-old Opera House will be delayed until after the pandemic. And plans for a new theater with a larger audience capacity across the street “is not our focus now,” he says.

“We’re looking first and foremost at the financial infrastructure,” he says. “A lot of that has to do with how you’re managing expenses.”

Changing times

Goodspeed also faces a changing market from its golden years decades ago when it produced hits such as “Man of La Mancha,” “Shenandoah” and “Annie.”

Goodspeed was nearly alone when it started producing musicals in the 1960s. But in 2021, the theatrical landscape is vastly different and many major regional theaters across the country — most in major metropolitan areas — are producing musicals in collaboration with commercial producers and have regularly transferred shows to Broadway, where the financial rewards are greatest.

Goodspeed’s last Broadway transfers were “Holiday Inn” in 2016, “Amazing Grace” in 2015, “The Story of My Life” in 2009 and “13” in 2008, all of which had brief New York runs. Its musical “Cyrano,” starring “Game of Thrones” star Peter Dinklage, transferred off-Broadway in 2019 and is now being made into a film.

Hilton says some classic works will continue at Goodspeed, but she will “lean into collaborations with outside partners and producers and we will put a lot of focus on new work.”

“I am known for putting people together and making deals,” she added. “For whatever reason it was not a priority for Goodspeed in the past but it will be a priority in my tenure. It’s one of the best ways to increase earned revenue and attract a wider swath of our state to Goodspeed.”

Developing the audience base is crucial, says Byrd. East Haddam’s population is under 9,000 people and it is surrounded by rural communities. Because of the limited and isolated population base, Goodspeed presented itself over the decades as a destination theater to attract theatergoers from much further away.

But those audiences are divided between those who are lured to classic titles and others attracted to new works.

“How do these two audiences exist,” Byrd says, “or do they not? I think there is a very fine line that has to be thread there.”

It’s a phrase that all three Goodspeed leaders mentioned separately as they consider artistic choices and grapple with financial realities.