You probably know by now that the Magic Theatre’s fundraising efforts paid off, and they’ll be able to continue the season (although with one less show than planned). But if you’re one of those people who was asking how this could have happened in the first place, the Chronicle has an article with a little more background:
The board had set what [Board of Trustees President Missy] Kirchner now says was too high a budget for the 2008-09 season, partly based on incomplete knowledge of the extent of the company’s debts and operating costs. The $600,000 accumulated debt that [Artistic Director Loretta] Greco cited when she announced the emergency fundraising campaign, Kirchner explains, was a combination of a long-standing $250,000 deficit and its financing, which included “a maxed-out line of credit,” other debt and “the key part, accounts payable.”
Added to that were new expenses, such as a pay raise for actors (from $350 to $490 a week), and the loss of a $132,000 Sloan Foundation grant…. But the biggest problems were in accounts payable, ranging from unpaid rent to credit card interest. This was the surprise that Greco had referred to as not being on the books. “I misspoke,” she says. “It was a surprise, but it was on the books…. Any small new play organization that’s left in the ecology of the American theater is operating on the edge…. You take that, with the global economic crisis, which hit us in both earned income and contributed income in one quarter, and it’s not a surprise that we were knocked off balance.”
The good news is that the community came through; that the Magic is streamlining its budget and stepping up its financial oversight; and that the season continues. Thanks to everyone who donated!