Like many theater organizations, the Philadelphia Theater Company has been struggling in recent years. Unable to meet its mortgage obligations, it stopped paying in 2012, but was still unable to cover the cost of operations with its ticket sales. Operating at a deficit, and running into cash flow problems, it was notified its bank would start foreclosure proceedings in April 2014.
The theater’s board did not seem to be worried, however, with Chairman E. Gerald Riesenbach saying they were “confident of a positive resolution to those discussions.” Riesenbach also disclosed that the organization was, at the time, “engaged in the late stages of discussions with a very significant donor that will once and for all put us on a very strong financial footing."
While he did not disclose the size of the donation or the name of the donor, many rightly assumed that Ralph and Suzanne Roberts were stepping up to the plate again. After all, the Comcast cofounder and his wife did make a sizeable enough donation to get naming rights for the theater building, which opened in 2007. So it wasn’t a surprise when Ralph and Suzanne announced a $2.5 million gift to the theater in September, bringing their total contribution to the organization to over $5 million.
The couple wasn’t about to dump that kind of capital into a failing institution without having some sort of plan, however, so they made the gift contingent on bringing in former Kennedy Center president Michael Kaiser. The plan that Kaiser put in place is beginning to get results, too: More than $400,000 has been raised in the last four months, with the Roberts donation encouraging other patrons to open their wallets as well.
The money is not being used to pay off the mortgage debt, but to create a cash reserve, pay operating costs and other obligations, and ramp up marketing and fundraising efforts. Still, the turnaround has prompted TD bank to suspend legal action, at least for the time being, enabling the company to complete audits and apply for foundational grants. The building itself is still for sale, though, so the company is not out of the woods yet, and may have to find a new home if the bank finds a suitable buyer.
Obviously, we’ll have to wait and see how things pan out, but for now, it appears disaster has been avoided. It’s certainly a story worth following though, and may provide some valuable lessons for other theater organizations that find themselves in similar situations.