EXCLUSIVE: The Public Theater has earned tens of millions of dollars for its role developing Hamilton — and is spending as little of it as possible on two ambitious projects.
The venerable nonprofit is fundraising for a new rehearsal and audition space — dubbed Public Studios — that’s scheduled to open early next year across the street from its Astor Place headquarters. It’s also renovating the Delacorte Theater in Central Park, to be completed around 2022.
The company is deploying some Hamilton funds initially, but ultimately plans to pay for the work with contributions and grants. “We are borrowing from ourselves instead of having to borrow from a bank,” a Public insider said.
It has enviable assets. As of August 2018, the Public reported holding cash and cash equivalents, which includes money market funds, of $32.4 million. In August 2014, a few months before Lin-Manuel Miranda’s blockbuster premiered at the East Village complex, the cash was less than $2 million.
Likewise, the Public’s royalties and subsidiary rights income soared by 63 percent in 2017-18 to $20.4 million, according to its financial statement. A Public spokeswoman confirmed that most of the income was attributable to Hamilton, which has grossed more than $1 billion in New York, London, Chicago, San Francisco and on three U.S. tours.
The price of the company’s infrastructure upgrades may exceed even its Hamilton bonanza. The outpost across the street, at 440 Lafayette St., will include offices and cost $16 million to $18 million, people familiar with the project said. The Public signed a 21-year lease for the space. The New York Times reported that the estimate for the Delacorte renovation is $110 million, with substantial investment likely by the city. There are donor naming opportunities on both projects.
“We are not just planning for today or even for the next 5 years or 10 years,” Executive Director Patrick Willingham told Broadway Journal in July, via the spokeswoman. “We’re making sure we’re financially stable to ensure that The Public Theater’s mission continues for communities in New York and across the country for generations to come.”
According to a fundraising brochure I obtained for Public Studios, “artists will be welcomed into 20,900 square feet of space for nurturing new work, experimentation and artistic collaboration.” Communal areas are to encourage artists across disciplines to inspire each other. The white 1871 building was a onetime warehouse and site of a high-end men’s clothing manufacturer. A theater spokeswoman said that the Public’s “10-year strategic plan” is to create space where work can be developed and rehearsed, instead of the current-and-costly need to rent some 60 spaces around the city.
The Public has had a role developing a range of recent Broadway plays and musicals, including Fun Home, Sweat, Eclipsed, Latin History for Morons and Sea Wall/A Life. (None was anywhere near as commercially successful as Hamilton. ) Girl from the North Country, with songs by Bob Dylan, opens at the Belasco in March after playing the Public last year. Soft Power, by David Henry Hwang and Jeanine Tesori, is in previews before a possible transfer.
The theater receives a royalty of 1.5 percent of box office income and five percent of profit of the various Hamilton productions. The Public earned $6.2 million from the Broadway run alone in the year ending in July 2018, according to my calculations based on Hamilton documents filed with the state.
The Public’s overall revenue, contributions and grants totaled $67.5 million in 2017-18, more than any other New York nonprofit theater that year. Wllingham told Broadway Journal that Hamilton revenue “will allow us to continue to create and present bold and innovative theater, to expand our community programs that bring the arts to local partner organizations, and to strengthen our reserves and our endowment to protect us no matter what financial challenges we may face.”
Hamilton has also helped the Public raise executive salaries. In 2017, Artistic Director Oskar Eustis was paid $659,000 in salary and benefits, up 72 percent from 2014, according to tax returns. The raise puts Eustis’ pay roughly in line with comparable theater companies. The tax return notes that he and Willingham were granted the ability to fly first class on overnight flights that are six hours or longer. A person familiar with the company said Eustis occasionally upgrades to business class on overnight flights when he has to work the following day.
Generally, the institution known for pushing envelopes artistically is playing it safe financially. Its investments excluding cash remain modest: $20.5 million, which is about half of the Roundabout Theatre Company’s and a fifth of Lincoln Center Theater’s.
The Public’s trustees are mindful of its history of booms and busts and mixed record on Broadway. It made tens of millions from A Chorus Line, which opened at the Shubert Theatre in 1975 after its initial run at the Public’s Newman Theater. Two decades ago, it lost about $14 million transferring the musicals The Wild Party and On the Town to Broadway. More recently, it lost about $650,000 on Michael Friedman and Alex Timbers’ prescient 2010 musical Bloody Bloody Andrew Jackson, about the seventh U.S. president and American populism. (It didn’t directly invest in Hamilton‘s Broadway move and no longer risks its own capital when shows transfer as commercial productions.)
The success of Hamilton hasn’t hurt the Public’s fundraising. Many patrons like being associated with a winner. In 2017-18, contributions and grants soared by nearly a third, to $35 million.
“Fundraising in the cultural sector is based on the ability to offer donors comfort and joy, not on some objective measure of need,” said Adrian Ellis, founder of AEA Consulting and a former executive director of Jazz at Lincoln Center. Donors seek nonprofits that spend money intelligently, he said, and have a buzz or energy that gives contributors a sense of pride and excitement by association.
And benefactors will have the opportunity to see their names inscribed outside the Public’s new rehearsal studios — the rooms where it happens.