Arts, struggling to survive pandemic, face a longer road to recovery

Adam Immerwahr, the artistic director of Washington, D.C.’s Theater J, realized that he had no choice but to deliver the bad news.

It was his duty, just three days after the perilous Ides of March, to inform a group of 20-some-odd costume designers, lighting technicians, stage managers and a lone actress that the one-woman show they’d been rehearsing, “Becoming Dr. Ruth,” would be canceled due to the expanding coronavirus pandemic.

One burst into tears. Another wondered if they would be able to afford to stay in the city.  

“It was heartbreaking, heart-wrenching,” Immerwahr said Friday, noting that many on the show’s crew were in danger of losing their health insurance.

And their production is anything but an outlier.

Across the country, theaters, museums, music venues, comedy clubs and other entertainment venues are facing a longer and more precarious road to recovery than other sectors of the economy affected by the pandemic.

The arts, reliant on large groups of people gathering in often-expansive venues, are expected to struggle well after schools, small businesses and restaurants get up and running again.

“Theater is all about gathering people together, whether they’re building scenery, hanging lights, rehearsing a play, being on stage where they might need to be connected and intimate with each other, and of course gathering an audience together in the same air to experience it in person. That’s the magic of theater” said Immerwahr, who also saw his Princeton production of “Sleuth” shuttered during previews as Americans began to follow social distancing guidelines.

“I think the arts are going to be devastated by coronavirus,” he added.

In many ways, the arts are facing the same challenges as most other businesses. The pandemic, and efforts to contain it, have sent the economy into free fall. Nearly 17 million people applied for unemployment in the past three weeks alone, blowing previous records out of the water.

J.P. Morgan estimates that unemployment will rise to Depression-era levels of 20 percent this month, and the economy will contract at an annualized rate of 40 percent this quarter.

Advocates point out that the arts are a key part of the economy.

“The word ‘arts’ doesn’t sound as much like a business, but the arts are an industry just like any other industry,” said Robert Lynch, president of the advocacy group Americans for the Arts.

According to the Bureau of Economic Analysis, creative and cultural production account for $877.8 billion in economic activity, some 4.5 percent of GDP. The sector accounts for 5.1 million jobs, the majority of them freelance positions lacking employment safety nets.

“People spend more money on the arts than on sports events,” says National Endowment for the Arts (NEA) Chairwoman Mary Anne Carter. “That’s something most people are really surprised to hear.”

And the arts are particularly vulnerable during pandemic conditions, with the one-fifth that are nonprofits facing unique challenges.

Every revenue stream for arts organizations is getting hit, according to Lynch. Earned income from ticket sales, books, concessions and souvenirs, which account for about 60 percent of revenues for nonprofit arts groups, have all but evaporated.

The donors who account for another 30 percent are stretched between the various arts and social service groups they often fund, all of which are struggling.

Endowments invested in markets have seen roughly a fifth of their wealth disappear. Many sponsor corporations are struggling to keep their own businesses afloat. And local and state governments, which often distribute arts grants, are at their budgetary breaking points.

About 40 percent of artistic nonprofits operate at the break even point at the best of times.

“I would imagine there will be some fallout with organizations going out of business,” Lynch said.

And the arts may be among the last sectors to find relief once the pandemic starts coming under control.

“I think it will be a gradual opening,” said Paul Winfree, who directs economic policy at the conservative Heritage Foundation.

The Foundation’s economic recovery plan, released Friday, says it won’t be possible to start reopening any parts of the economy until the virus’s spread is under control.

“Testing needs to be much more widely available, and there needs to be some sort of contact tracing program in place,” Winfree said.

Even when that happens, restrictions are likely to be lifted on businesses that rely on smaller gatherings well before stadiums, concert halls, arenas and theaters can reopen for business.

Sports and the arts will likely be the last to return, said Winfree, who holds season tickets to a local Shakespeare theater with his wife.

“It really pains me that we can’t experience that right now and that it might be not until next spring until we’re able to go again,” he added.

Even when the government gives the all-clear, questions will remain as to when consumers will feel comfortable gathering in large crowds.

Colleen Dilenschneider, a data analyst and expert on cultural organizations, says that when the economy opens up, people will not snap back into their old habits.  

“The near-term demand for onsite cultural engagement is likely to be redistributed away from some organization types and towards others,” she wrote in a recent blog post.

According to Dilenschneider, people say once the pandemic is over, they are more likely to visit public parks, zoos and beaches than they were before the pandemic. They said they’d be far less likely, however, to go back to a movie theater, performing arts venue or concert hall.

“People whose normal behavior is to go to symphonies report being less likely to return to the symphony,” she said.

The No. 1 thing that people said would convince them to get back to cultural events is a coronavirus vaccine, which is not expected for at least a year.

The NEA’s Carter says that timeline raises questions for how many artistic institutions can withstand the downturn.

“Before they can think about opening doors, the question is whether there will be doors to open,” she said. “A lot of it is going to depend on whether they even survive the current devastation, and that word is accurate.”

In the meantime, the $2.2 trillion CARES Act President Trump signed at the end of March allows nonprofits to apply for the same Payment Protection Program forgivable loans available to small businesses, which may offer a lifeline.

It also provided $75 million to the NEA, which can distribute the money to struggling organizations without requiring the usual one-to-one match in outside donations. Advocates are hoping that Congress will temporarily strip that requirement of regular federal arts funding, too.

Cultural institutions are also adapting, shifting their wares online and searching for additional revenue streams through the crisis.

Immerwahr says Theater J has moved some of its theater appreciation courses online and opened up several new ones to keep up with demand. While questions remain as to which institutions will survive and exactly what the landscape will look like on the other end of the pandemic, he remains optimistic for the arts in the long haul.

“Theater has come back from near demise over and over and over again. London theaters used to close all the time because of plague, even during Shakespeare’s time,” he said. “It’s clear to me that theater will thrive again, people will gather again, and it’s going to be a place of healing, a place of celebration, a place of sharing our hope, as it always has been.”