John Chodes’ most recent play, The Longboat, was presented on Theatre Row in New York. He is also the Communications Director for the Libertarian Party of New York City.
As a playwright, I recently had a confrontation with the Securities and Exchange Commission, related to a theatrical production of mine. As a result of this brush with the law, I learned that the S.E.C. regulates much more than the stock market. It negatively influences what kind of theater is produced. The difficulty revolved around the incorrect filing of investor documents for my show. I was fined, To be certain that this never happened again, I reread the prospectus more carefully, and was shocked. The regulations were so absurd: they seemed to challenge producers to raise money outside the legal parameters by making it very difficult for the small theatrical enterprise. One glaring example was a bold-faced “Risks to Investors” statement that seemed more like the warning on a pack of cigarettes: “Even if critically acclaimed a play may not recoup its production expenses. The record for this type of limited run [showcase or mini-contract] production . . . indicates that only a very few, if any, such productions have ever turned a profit and the vast majority have resulted in substantial losses to the investors. . . . Investors should be fully prepared and expect that . . . . they will lose all or a substantial portion of their investment in this offering.” In this one paragraph there are two misleading statements. First, showcase or mini-contract productions aren’t intended to be profit-making. They are used as stepping stones to larger theaters by attracting favorable reviews and thus major producers and/or investors. Small productions also are used to “get a show on its feet” to analyze its strengths and flaws in front of a live audience. Second, the fact of “substantial losses to the investors” is more a reflection of current conditions in the art world, where government subsidies have created the very negative conditions mentioned in the S.E.C. warning. Before government entered the scene, many small productions made back their expenses, which tended to be quite low. Producers and investors weren’t afraid to put their creative energies and money into new and innovative plays. In fact, the showcase was the backbone of the theater. Most plays reached Broadway or became films via this route• Subsidies Raise Costs Then in 1965 Congress created the National Endowment for the Arts, which lavishes $174 million annually on the arts. (This base figure is inflated by city, state, and corporate matching grams.) N.E.A. subsidies have increased the demand for theaters, costumes, and scenery, so that production costs have risen—much as prices tend to rise in an auction when the big spenders show up. In the past decade, rental prices have soared about 600 percent for the most prestigious showcase theaters. One factor is that government-subsidized theater groups have made their permanent homes in what formerly were purely rental-per-show stages. These favored groups have monopolized these sites, restricting access to those periods when the subsidized theater groups are not performing. Another factor driving up costs is that theatrical unions have become more aggressive and demanding. Historically, theater and the other arts were largely labors of love. Unionism was weak at the lower end because there wasn’t enough money to attract organizing activity. Subsidies changed this. The flow of government money extended union rules and unrealistic wage contracts down to even the lowest level productions, whether they were funded or not. This has killed off many small-scale shows. It is unreasonable to expect that many small, independent plays could survive the stringent requirements of the mini-contract rules, the second lowest level in the Actors Equity code book. Wages for each actor in a miniscule 99-seat showcase theater are over $200 dollars per week—not just from opening night, but from the first day of rehearsal. In addition, the producers must contribute to the actors’ pension and health funds. The dollar formula is complex, but the mounts are substantial. If the cast is large, these two items alone can escalate to several thousands of dollars over the life of a play. This wage and benefit plan makes breaking even a fantasy for most producers. It leaves many small productions awash in red ink—unless, of course, Uncle Sam is picking up the tab. The S.E.C. also requires statements concerning the credentials of the principals involved with a play’s production. These pronouncements about the professional experience of the producer and director indicate another disclaimer, this time related to what they have not done more than their accomplishments. (For instance, “Mr. Jones has produced five Broadway musicals but has never produced a mini-contract play before.”) This continues the emphasis on the negative, which creates fear instead of presenting the facts. S.E.C. rules also forbid more than 35 “angels” (theatrical investors) from contributing to a showcase production. Thus, fewer shows get off the ground. By being forced to assume a substantial financial burden, each angel experiences more anxiety about the investment. This tends to make them believe the warning on the prospectus: the play is doomed to fail. The S.E.C.’s doomsday warning frightens off investors. In many cases, their decision for or against participation isn’t based on the merits of the play or on intangible personal motives, such as wanting to associate with the “glamor” of the theatrical world or an interest in helping the arts. Instead, fear becomes the greater propelling force: fear of losing one’s money, no matter how promising the play may be. By this means alone, the S.E.C. has reduced the number of plays that reach the stage. The essence of theater is the individual viewpoint, which can revolutionize our way of thinking. By controlling the theater through S.E.C. rules and N.E.A. subsidies, the federal government is thwarting mind-provoking plays.
