Performing Arts Groups

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Quarterly Insight, Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 9,000 performing arts groups in the US produce live presentations by a variety of artists, including actors, singers, dancers, and musical groups. The industry includes theater companies and dinner theaters; dance companies; musical groups and artists; and other types of performing arts groups. Major revenue sources include admission fees; contracts for performances; contributions, gifts, and grants; and investment income.

Competition From Alternative Entertainment

Performing arts groups compete with a variety of alternative forms of entertainment, including movies, television, sporting events, and digital media.

Industry size & Structure

The average performing arts group operates out of a single location, employs about 8-9 workers, and generates $1 million annually.

    • The performing arts industry consists of about 9,000 groups that employ 76,800 workers and generate about $7.5 billion annually.
    • The industry is fragmented; the top 50 companies account for 32% of industry revenue.
    • The majority of firms operate within a limited geographical market. Large organizations include the Metropolitan Opera Association, the "Big Five" orchestras (New York Philharmonic, Boston Symphony Orchestra, Chicago Symphony Orchestra, Philadelphia Orchestra, and Cleveland Orchestra), Feld Entertainment (Ringling Brothers), and Cirque du Soleil based in Canada.
    • Theater companies account for about 36% of firms and 48% of industry revenue. Musical groups and artists account for about 54% of firms and 37% of industry revenue. Dance companies and other groups account for about 10% of firms and 5% of industry revenue.
    • New York City is considered the center of the US theater industry.
                                  Industry Forecast
                                  Performing Arts Groups Industry Growth
                                  Source: Vertical IQ and Inforum

                                  Coronavirus Update

                                  Apr 25, 2022 - Vaccination, Masking, Social Distancing Decisions Being Left To Individuals
                                  • Federal and local health officials are leaving it up to people to assess if they need booster shots, whether to wear a mask, and how long to isolate after a positive test, according to The Wall Street Journal. Businesses, schools, and other entities are scaling back specific guidelines. The lack of effective treatments, vaccines, and widespread testing early in the pandemic resulted in social distancing mandates and lockdowns. The response is becoming more tailored to people’s own health and appetite for risk, as those tools help blunt the worst outcomes as the virus continues to spread, according to public-health experts. “The history of public health has been a constant tension between individual-level and government or community-level intervention,” said Megan Ranney, an emergency-care doctor and academic dean of the Brown University School of Public Health.
                                  • The Paycheck Protection Program (PPP) is inching toward conclusion as 90% of two years’ worth of loans to small businesses nationwide have been forgiven. As of March 20, $708 billion has been forgiven, meaning that the recipients don’t have to repay the money, according to the latest data from the US Small Business Administration which manages PPP. Of that total, $209 billion — more than three-fourths, or 77% — of the $270.6 billion in PPP granted in 2021, the program’s second round — has been forgiven. That percentage stood at 63% in late December.
                                  • Hawaii, the last US state with a mask mandate in place, allowed the mandate to expire on March 25. Performing arts groups are likely to benefit from the expiration of mask mandates if foot traffic increases. The US Centers for Disease Control and Prevention's latest guidance recommends that people continue to wear masks indoors in communities with high levels of Covid-19. More than 90% of US residents were in a location with low or medium Covid-19 community levels in late March.
                                  • Many cultural organizations are having difficulty getting artists into the US because of a long backlog of visa applications at American embassies and consulates. The problem is particularly acute for classical music, which relies on stars from all over the world to make a circuit of leading concert halls and opera houses. Experts say that the classical touring industry was one of the first sectors hit by the coronavirus pandemic in early 2020, and it may be among the last to recover. The pandemic has served to deepen concerns about the viability of global tours, which have long been considered an essential but expensive part of the classical music ecosystem.
                                  • Some theater venues plan to keep virtual productions going even as live, in-person shows return. John McEwen, executive director of the New Jersey Theatre Alliance — which includes 40 member theaters — said most venues will find a way to have virtual programming going forward. “It may not be to the full extent that they did last year, but I think they are going to have some virtual component,” McEwen said. “The silver lining of virtual programming was that it broke down geographic and accessibility barriers.” People from outside the state are able to tune in to shows, McEwen said, and people with hearing loss or other disabilities were able to participate with captions and other resources — which are impossible or more difficult to accommodate in person. Theaters often charged less for watching virtual shows compared to coming to theaters in person. Sometimes they made the videos free, giving the option for a suggested donation.
                                  • Performing arts groups that received taxpayer-subsidized Paycheck Protection Program (PPP) loans of $150,000 or less during the coronavirus pandemic can seek forgiveness directly with the government through an online portal that was opened in August, allowing them to sidestep the private financial institutions that ran most aspects of the program for 14 months.
                                  • A survey of 7,163 performers by The Actors Fund found that 76% of respondents lost income and 40% reported reduced food security during the coronavirus pandemic. Some 28% fell behind in rent or mortgage and 20% were forced to change housing. About 10% of respondents had to sell a large asset, such as a house or a car.
                                  • The COVID-19 pandemic has forced smaller performing arts groups to pivot and innovate to deliver live performances and survive financially. Groups have performed for tiny audiences (sometimes just two patrons), reduced theater capacity dramatically (25%), installed plexiglass between seats, and performed in parking lots (giving an entirely new definition to “street theater”). The American Shakespeare Center will rotate “Othello” and “Twelfth Night” between indoor and outdoor stages, so audiences can choose where they are most comfortable, and the cast has quarantined themselves, according to the New York Times. “We’d rather go down creating good theater than die the slow death behind our desks,” said Bryan Fonseca, the producing director of Fonseca Theater Company in Indianapolis.
                                  • Most nonprofit arts organizations operate with lean budgets so the loss of earned income can have an outsized impact, according to the National Endowment for the Arts (NEA). About one-fifth of arts organizations are non-profit organizations, and “about 40% of artistic non-profits operate at the break-even point at the best of times,” according to The Hill. Income from “ticket sales, books, concessions, and souvenirs, which account for about 60% of revenues for nonprofit arts groups, have all but evaporated.” Donors, who include wealthy individuals and corporations that account for about 30% of revenue, are also stretched thin trying to accommodate the needs of multiple nonprofits. Grants from state and local governments are in jeopardy. “And the arts may be among the last sectors to find relief once the pandemic starts coming under control.”
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