Ashland, Ore.--Oregon Shakespeare Festival's Executive Director Paul Nicholson and Artistic Director Bill Rauch informed the company today about anticipated shortfalls in the 2008 budget as well as the projected 2009 budget.
Like businesses across the country, Nicholson noted that the Oregon Shakespeare Festival is facing one of its greatest financial challenges in its history. Though attendance has been strong during the 2008 season, OSF anticipates a projected $750,000 deficit in 2008 as a result of lower investment returns and below budgeted ticket revenues.
Reserves will be able to cover the loss, but the balance will be seriously depleted, Nicholson said. In addition, it is highly likely that the organization will not meet the revenue goals set out in the 2009 budget. Donations across all categories are down and, because of the falling stock market, OSF anticipates declines in the payout from the endowment fund and other investments. Looking at these trends, Nicholson currently projects a shortfall in 2009 revenue of $1 million.
Based on strong attendance through the end of this season and conservative 2009 goals, OSF still hopes to meet its ticket revenue budget. Group sales are underway; member presale begins in early November and runs through the end of the month. At that time OSF will have a better perspective on 2009 ticket sales and will respond accordingly. However, Nicholson does not believe ticket sales will make up the $1 million shortfall.
After careful deliberations, Nicholson, Rauch and the senior management team concluded that the most prudent response to the anticipated decrease in revenue was to further cut the already austere 2009 budget that was approved by the Board of Directors at its September meeting. The budget had been approved at $26.5 million, but will be cut to $25.5 million. Nicholson identified a number of areas where there would be reductions in expenses, including scaled back production choices and new play development, administration, reductions in executive management salaries and not filling open vacancies except in critical areas. He noted that he and Rauch will not be implementing any new staff layoffs at this time.
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