Chapter 9: Skin in the Game
I can hear some of you (and when I was younger, I would have been among you) protesting that suggestion. “But I’m poor,” you cry. “Where am I supposed to get money to buy a share in a startup theater company? I can barely make rent.” The flip response might be to point out that Shakespeare and Burbage didn’t have that kind of money on hand either, they borrowed—Burbage was kvetching about how long it took to pay the loan back for years afterwards; or alternatively, to point at all the young filmmakers maxxing out their credit cards to make a small-budget film. But neither really answers the question, which is a fair one.
As I said earlier, I am writing out of a conviction that it is important for the future of the theater for its artists to wrest control of the means of production, which means being an owner. And startups (that’s what a new theater company is) are usually bootstrapped by their founders, at least at first.
More importantly, however, my belief is that theater companies in the US don’t stay together long enough to capitalize on the manifold benefits of continuity. And often the reason that contemporary companies split up is that many of the members didn’t really commit beyond the first show. Once the beer-soaked energy is gone, and when that first show is over (and has more than likely lost money because there wasn’t really a plan beyond “Let’s do a show!”), some members head for the exits and the next audition for something that might pay them a salary—i.e., they escape back to being employees.
You don’t want these folks; you want someone who’s in it for the long haul. And actually coughing up some hard cash is a sign of commitment. It's the business version of putting a ring on it.
I think that it should be hard to join a company, and hard to leave one. I believe you want company members who have weighed their other options and have committed to being a part of something that is ongoing and has a vision they share. It makes sense to me that Shakespeare wrote Titus Andronicus and the three parts of Henry VI when he was new to the company, and that Hamlet came after six years together.
Why do I think this is so important? After all, Daniel Quinn didn’t make Hap and C. J. buy a share of the East Mountain News, did he? And that’s a fair question.
The reason is that every member of the company needs to be directly affected by the quality of the work being done and the sustainability of the decisions being made. The Lord Chamberlain’s Men distributed the profits to the shareholders after every performance. So there was a direct connection between that night’s work and the number of coins jingling in their pockets. If the company decided to do a play that nobody wanted to see and, after the hired men and production expenses were paid, there was nothing left for the shareholders to divide, then they might not eat that night. In turn, the lack of money generated that night might determine that they do a proven play the next night to make up the loss.
I know I’ve been in productions that I could tell midway through rehearsals were going to be bad. And I’m not afraid to admit that I told my poorer friends that I wouldn’t be crushed if they didn’t shell out their hard-earned cash to see it. And I could do that because somebody else would be taking the loss. We get inured to this in college when nobody is getting paid and the production costs are being covered by the departmental budget. But if your income is dependent on attendance, then you have skin in the game, and it influences your judgment.
I’ve seen college productions in which the director and members of the cast were thrilled whenever a member of the audience was offended enough to walk out mid-performance. “Ha! We got three of them tonight! High five!” They might have felt differently if that meant they couldn’t pay their phone bill that month.
This doesn’t mean that your company should never take a risk on producing a play that may not be popular but is nonetheless important for some other reason (maybe it is an important artistic stretch for one or more of the company members, or a play that you feel your audience needs to see). Instead, it means that its anticipated low sales are taken into consideration when deciding how many performances it should receive, or how much should be budgeted for production costs, or when it should be scheduled. (We'll talk about this later.)
At the risk of repetition, I think looking at the structure of the Lord Chamberlain’s Men is instructive.
There were three categories of people who worked with the company (I’m going to set aside the householders for a moment):
- Shareholders
- Hired men
- Apprentices
Shareholders
We’ve already discussed the shareholders. These were the men who bought a share in the company, and made the artistic and business decisions concerning what the acting company did day-to-day. They chose and purchased the plays or commissioned the playwrights, decided which plays in their repertory would performed any given week, arranged for the costumes, props and set pieces, arranged for handbills announcing the day’s production to be printed and distributed, and so forth. The number of shareholders varied over the years, but at any one time there were between eight and twelve of them, each of who received a share of the profits proportionate to their investment.Hired Men
These were employees (gig workers) who were hired to perform mostly smaller roles. They were paid a set salary per performance and received their pay immediately after the performance. They often had a specialty or played a specific type—John Sinklo, for instance, was particularly tall and thin and so is thought to have played the role of Slender in The Merry Wives of Windsor and Starveling in A Midsummer Night’s Dream, among many other roles including for other companies.Apprentices
There were usually two young actors who were not paid, but were apprenticed to one of the shareholders who provided him with room and board in exchange for training. They played the female roles until they outgrew them and, presumably, were given an opportunity to join the company.This is an interesting structure that provides categories that could be quite useful to your company today. There might be certain jobs, onstage or not, that are hired out when needed. But remember that these salaries come directly out of the company costs and will reduce the amount left over to be divided by the shareholders. Apprentices could also be part of the company, as long as they are not simply exploited for free labor—they should receive valuable training as well as consideration for becoming shareholders at a later date, and be provided room and board.
A more modern description of this model is what economist Richard Wolff calls, in Democracy at Work, a “Workers Self-Directed Enterprise” (WSDE). It is based on the old idea that “production works best when performed by a community that collectively and democratically designs and carries out shared labor.” In a WSDE, “no separate group of persons—no individual who does not participate in the productive work of the enterprise—can be a member of the board of directors.” Instead, “all of the workers who produce the surplus generated inside the enterprise function collectively to appropriate and distribute it. They alone compose the board of directors.” Finally, “the workers collectively determine what the enterprise produces, the appropriate technology, the location of production, and related matters.”
While Wolff is talking about more traditional businesses, I suspect you can see the parallels with what I have been describing and with The Lord Chamberlain’s Men. At the center is control of the theater by those who create the product.
How much money must each company member invest?
For Shakespeare, becoming a Householder cost him around 70 pounds at a time when the average artisan made 10 pounds a year, and a playwright made 6 pounds for writing a play. Let’s do some math.
Shakespeare cranked out three plays in 1599/1600 right after becoming a householder. For a freelancer, that would represent a payment of 18 pounds, so buying his share cost him the equivalent of about four years work as a writer.
A day-laborer, on the other hand, made about 10 pounds a year. If we use the lowest US minimum wage as a means of making an estimate ($7.25/hr), that comes to $15,080/yr. Shakespeare paid 70 pounds for his share, so seven times that: $105,560.
Did I hear a gasp? I sure as hell gasped when I wrote it. I had to remind myself that his share of annual revenue likely would be 100 pounds, which makes it a bit more palatable, since theoretically he’d make back his investment and a 40% profit in the first year. But still damned scary. It puts into perspective the level of risk Shakespeare and his fellow Householders were taking. Failure would have ruined them, and likely have landed them in debtors prison. So there was a lot at stake.
Nevertheless, I’m not suggesting that each potential company member needs to come up with $100K, but the investment ought to be large enough to make walking away difficult. Very difficult.
So you get to decide the amount of buy-in necessary and the number of people who will be in the company. You want the total amount to provide you with startup money to finance at least a year of expenses. At this stage, you’re not living off this money—you’re probably still holding down at least a part-time day job—but you’ll need money to run the experiments you need to devise a viable business model and to start moving toward scale.
Becoming part of a theater company should involve serious thought. It may take a while for everybody to come up with their share. That’s OK, there’s no rush. And since this is a long-term commitment, each member needs to consider whether they can imagine working together that long. It’s a relationship, not a shomance.
I know, I know—you want me to give you a number. How much should you be required to invest? It should be a lot clearer by the time you finish this book, but in round numbers I’d say $10,000-$20,000 each. Way less than grad school, but if there are, say, five of you in the company, then you have $50,000 to $100,000 in seed money. That’s a lot, especially if you spend it thoughtfully and mindfully. You could do it with less ($5000 each might be a possibility), but remember that part of the purpose is making the decision to invest a serious commitment, and the decision to leave a more difficult one. Also, the less money you have up front, the faster you need to on your feet and sustainable. Seed money creates a longer runway.
However, it would be possible to work with a smaller amount of seed money if all members committed to small budgets and not taking any distribution for the first year while also producing enough productions to be worthwhile. (If you all contribute $3000 and then only do one show during the next twelve months, you haven't taken a step toward a sustainable scale.) Another option would be for the company to take out a loan as a group (perhaps, once you were incorporated, you could take out a small business loan), and then make repayment part of the budget.
However you approach it, and however much is a share, the goal is to pay as you go. You can't afford to run at a deficit for too long, or your cushion will be gone. Shakespeare anticipated getting his investment back very quickly. That’s a critical orientation for you to have. This isn’t money to blow, it’s money needed to build an audience base and a sustainable business model. It's your runway, but the goal is flight.
Believing in the possibility of such a thing—that theater can simultaneously be good and make money—requires a real change of orientation for most contemporary theater people, who have accepted the belief that theater is a losing game that requires annual fundraising to balance the books. Most people immediately think that becoming a nonprofit 501(c)3 is the way to go because then you can apply for grants and raise money using tax deductible contributions.
I disagree. The model described in this book is not a nonprofit, but a traditional small business. Again, skin in the game.
