There’s no such thing as a single fixed cost in a heterogenous situation like this, the analysis you’re making seems based on sort of casually glancing at things and coming up with an opinion.
I work in this space, i actually rent performing arts centers of the kind you describe to put on conferences and have a decent understanding of the economics.
The vast majority of the costs for these arts organizations is the actual art. It’s the salaries for the opera and the cost of the paintings at the art museum and so on.
The actual buildings and complexes can and almost certainly are quite profitable when being used by outside parties like a touring Broadway show.
> There’s no such thing as a single fixed cost in a heterogenous situation like this
> I ... have a decent understanding of the economics
It's patently obvious there are fixed costs to a large building. Here are some fixed costs of the one I mentioned explicitly laid out:
> The Kennedy Center spends about $40 million annually to repair, renovate, operate, and maintain its buildings; these expenses are paid through federal funding.
It's clear you don't understand the economics as well as you think you do, so please don't condescend.
I’ve performed on stage at the Kennedy Center. True story.
Have you been? It’s absolutely massive, it has multiple huge theatres and could sustain several large scale touring productions running concurrently. So our hypothetical Broadway production of Cats should be allocated a portion of those building expenses. And of course only the portion of the year they’re actually there. And of course they’ll sell tickets and either rent the venue or share the ticket revenue depending on how the event is presented.
Of course the Kennedy Center isn’t profitable, it’s not intended to be it’s basically a national monument on the mall.
But my point is that when you see Cats is in town that’s not where the money is going.
Why do you think $40MM is large number? The Kennedy Center has three theaters comprising around 6,000 seats. If you sell out every seat every night of the year for $100 a ticket that’s $219,000,000. You can pay for a couple furry costumes with that. Plus you’ve got the building the rest of the day, that’s only a few hour long production in the evenings.
Popular Broadway style touring productions, rock concerts, corporate product launches or broadcast takeovers (think Apple events or Jimmy Kimmel broadcasting from BAM in Brooklyn), conferences, auto shows, fashion launches, and so on, are subsidizing the performing arts center not the other way around.
Come on, it's absolutely a large number. Especially when added to the amortized construction costs of about $30M (a kind assumption, since it cost around $700M in current dollars to build).
> If you sell out every seat every night of the year for $100 a ticket that’s $219,000,000
...but they don't. I believe program revenue peaked at around $150M, although their site is down. The supposedly nonexistent fixed costs are almost half that!
> and so on, are subsidizing the performing arts center not the other way around
This is nonsensical in context. Counterhistorical nonexistence requires no subsidy, and these private tours choose the subsidized venue because it's the best deal for them. It's not charity.
Edit: I feel like I shouldn't have to say this, but obviously they also have to pay the producer for the show! There are also variable costs!
> supposedly nonexistent fixed costs are almost half that!
Indeed. Revenue in excess of costs is the definition of profitable.
> Counterhistorical nonexistence requires no subsidy, and these private tours choose the subsidized venue because it's the best deal for them.
Sometimes they do sometimes they don’t. There are also for profit venues operating in this space and the PAC’s are for the most part operating in a market rate environment when it comes to pop culture performances and events.
I’m just sure. I literally rented an opera house recently. PAC venues compete with hotels and for profit music venues like Livenation and AEG and event spaces for this business and and it’s generally a profitable arm of what they do.
They use the profits from pop culture and corporate stuff alongside the arts endowments, donations, and subsidies, to fund their fine arts mission.
I work in this space, i actually rent performing arts centers of the kind you describe to put on conferences and have a decent understanding of the economics.
The vast majority of the costs for these arts organizations is the actual art. It’s the salaries for the opera and the cost of the paintings at the art museum and so on.
The actual buildings and complexes can and almost certainly are quite profitable when being used by outside parties like a touring Broadway show.