Events losing money at Aspen’s Wheeler Opera House
June 23, 2011
ASPEN – At first glance, it appears that events at the city-owned Wheeler Opera House bleed money, with combined losses for one-time shows totaling $90,599 in 2008, $59,721 in 2009 and $54,175 last year.
The three festivals the city of Aspen hosts at the historic building also fail to turn a profit. In March, the first-time Aspen Laff Festival and the second-year 7908 Songwriters Festival lost $39,725 and $48,463, respectively. In August 2010, the 2-year-old film festival MountainSummit lost $28,885.
Those losses don’t include marketing costs and staff time.
“Any time you open the door and turn on the lights, you’re going to lose money,” said Gram Slaton, who has been the Wheeler’s executive director for more than five years.
But the raw numbers don’t tell the whole story, Slaton and others point out. First, the festivals are in their fledgling years, needing time to grow before they can reach a point where the city doesn’t have to subsidize them at such a high level. Second, by most accounts, the community has always indicated that it wants high-quality “one-off shows,” the nightly concerts and programs featuring big-name artists that are more commonplace in big cities than towns like Aspen with a full-time population of about 6,000 residents.
Third, the festivals and one-time programs have an indirect economic benefit to the community, but that impact has yet to be measured. Fourth, since a massive rehabilitation of the building in the early 1980s, Wheeler events on the whole have always lost money, although the exact amount over the last three decades is not precisely known because accurate record-keeping only began with Slaton’s tenure.
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Those factors are recognized, but there are many other concerns surrounding Wheeler operations. That’s why a City Council discussion on Monday ran a bit longer than most meetings that feature a simple request for a 5.5 percent budget increase that only amounts to $12,500. Slaton was asking for extra money for festival production expenses so that he could start booking acts for 2012.
Council members reluctantly went along with the request, but decided that Wheeler issues needed further study, perhaps at their retreat in late July. Some suggested that aspirations for the entertainment facility should in some way be incorporated into the council’s official top 10 goals for the coming year.
“I’m OK with the Wheeler showing some loss,” said Councilman Derek Johnson, “as long as there is measurable community benefit tied to it. Heads in beds, a further appreciation of the arts, [impact on] restaurant and retail revenue … I just want to better understand what the Wheeler brings to us.”
Johnson said there is common agreement among city officials that the Wheeler is a huge asset. “I just think we all need to better understand its operations and its function in today’s economy, today’s marketplace,” he said. “Let’s move forward cautiously, but get some more data.”
One of Johnson’s concerns Monday night was a plan by Slaton to reduce the number of “one-offs” to focus more on the three festivals.
“I think we need to have a balance – we can’t put all of our eggs in one basket,” he said.
Councilman Adam Frisch agreed with the need to understand more about how the facility benefits the community, and said a low-cost economic study may be in order. “It would be great to know if the Wheeler’s operating subsidy is no more than what their [indirect impact] on the community is,” he said.
Frisch said the Wheeler does a good job of keeping its events affordable, given the size of the town and its small seating capacity of about 500. The only way to truly cut into the city’s subsidy, as he understands from talking with other city officials, would be to substantially raise ticket prices – an act that could backfire and result in lower revenues.
“We are a 6,000-person town with 30,000 people during the tourist seasons, but we have the desires of a half-million-person community,” Frisch said. “The thought process is, we have the money to underwrite all the performances the community wants to see. The way to lose the least amount of money is just to shut it down, which is not what I think the community wants.”
Another problem, Frisch noted, is that the Wheeler facility is leased to the Aspen Music Festival from mid-June until late August, the high point of the summer season. That’s a time when the city could be hosting profitable “one-off shows” and festivals, but can’t.
Slaton noted that the Music Festival obtained a “sweetheart deal” with the city in 1984 that runs all the way until 2034, guaranteeing its use of the opera house each summer. That contract doesn’t bring a lot of direct benefit to the city, he said.
Council members expressed the need to better coordinate the timing of Wheeler events with other organizations that book entertainment or hold events. For instance, as Slaton noted, the 2011 Aspen Laff Festival – which evolved from the 2007 loss of the U.S. Comedy Arts Festival – was held in mid-March at the same time as Aspen Skiing Co.’s Big Air Competition, an obvious scheduling error.
Another question, Frisch said, is whether Wheeler staff are booking the kinds of shows that are commercially viable. Admittedly, Frisch said he doesn’t know the answer to that question, but said that it bears examination. The collective losses on “one-off shows” could be significantly reduced if a handful of events weren’t such a huge drain.
For instance, the Bernadette Peters show in late 2008, during the height of the economic downturn, lost more than $40,000, 44 percent of the total loss that year. Slaton admits that was a bad booking, but he made it more than a year earlier at a time when it made more sense. And the 2010 Rita Moreno show lost more than $19,000, about 35 percent of last year’s losses, although Slaton points out that poor weather could be to blame for the low turnout that December night.
The Wheeler has about $30 million in a fund for capital projects, money derived from decades of a dedicated real-estate tax. But that money has been set aside for a possible expansion project that’s been put on hold. Interest on the fund is used for other expenditures, such as between $350,000 and $400,000 that the Wheeler annually contributes to area arts groups, Slaton said.
Slaton said bookings can be tough – what’s popular one year may not work well two years later. He tries to offer a diverse array of entertainment that will be a hit with a cross-section of the community.
All in all, the Wheeler director said he believes that the city’s subsidies of Wheeler events will start coming down, and recent numbers suggest that’s the case. Unless the unexpected occurs, such as a double-dip recession, something that would not only affect the opera house, but every entity in the area that depends on tourism and the discretionary dollar.