Cash crunch at Sacramento Ballet leads to temporary layoffs

As Gregory Smith can attest, art and commerce don’t always make great dance partners.

Just weeks away from what is typically one of the Sacramento Ballet’s heavier performance months—not to mention May’s expected announcement of next year’s schedule—Smith, the company’s harried executive director, fielded calls from an empty office.

An unexpected cash crunch meant temporary layoffs for four full-time administrative employees last week, Smith confirmed. Smith added he was hoping to start welcoming the affected employees back as early as next week, but couldn’t promise that would be the case.

“[The decision] won’t be locked in until the end of this week,” he told SN&R on Monday.

It wasn’t a perfect storm that caused the 59-year-old arts champion to buckle, but rather the absence of one.

The company’s performance of Ron Cunningham’s A Midsummer Night’s Dream in March at the Community Center Theater brought in only a drizzle of paying customers, while annual donations and payouts from a couple sizable grants were delayed, leaving the Sacramento Ballet technically in the black, but short on actual green. Add in the ballet’s struggles to weather the current recession, and the pinch was on.

“Like any company, the ballet has a cyclical cash flow,” said treasurer Jeffrey T. Clair.

And there isn’t much wiggle room when one of the ballet’s in-studio shows falls short of box-office projections. It took roughly $160,000 to mount the three-night production of Midsummer, which in turn only recouped about $130,000.

“We’re very dependent on the cash flow from tickets sold,” Smith said. “So, if any show comes up short, it causes a problem.”

Midsummer’s ticket bummer “caught us at a time when our donors had to delay their pledges as well,” Smith added.

Smith promised those donor bucks weren’t disappearing—they just weren’t coming in fast enough. The same goes for the grants: One was delayed due to a miscalculation, while another was set back several weeks after the sponsor encountered some “individual family challenges,” Smith said.

The confluence of events put into play something the company began working on during last year’s budgeting process. It was then that the board of directors had staff develop detailed contingencies for what was becoming a regular springtime fallow period.

Once ballet administrators realized a minidrought was in store for the end of March through the end of April, the temporary layoffs were employed.

“Everybody on the administrative staff was onboard,” Smith said. “It was uncomfortable, to be sure … but we didn’t feel we could let the dancers go with [the performances coming up].”

Historical data and advanced ticket sales suggest the crunch will soon be over. The company’s upcoming Modern Masters: Proteges, for example, is currently on track for a ticket run comparable to the last four years, and the company is starting to see cash come in from its ballet school.

“We know what our revenue streams are going to be for now,” Smith said.

But Clair said the ballet is still digging its way out of a hole.

According to federal tax returns, the ballet reported $2.4 million in revenue in 2011, but more than $2.6 million in expenses, meaning a $272,894 loss.

“We like to think we’re climbing upward, but the overall state of the economy and charitable giving [to the arts] are cause for concern,” he told SN&R.

The ballet is in the midst of developing a five-year strategic plan to figure out whether it can keep putting on large, mainstay performances with its own company of professional dancers.

“Or is there some other form we need to operate?” Clair wondered.

Back at the office, Smith will continue tap-dancing until he can bring his people back. His office still has next year’s schedule to plan and a new website to roll out.

Until then, it’s intermission.