Wharton Center Drives Mid-Michigan’s Economy
No one will ever confuse East Lansing with Midtown Manhattan. That is, until they visit the Wharton Center for the Performing Arts.
Inside, season after season, it’s Broadway; or sometimes it’s Carnegie Hall. This year on stage featured “The Sound of Music,” “Motown,” renowned pianist Lang Lang and singer/actress Kristin Chenoweth. Next season features “Wicked,” Tony Award winner “Fun Home,” Sutton Foster and the Prague Philharmonia.
The Wharton Center, which opened in 1982, defines live entertainment in the greater Lansing area, for mid-Michigan and sometimes the state. A quarter of all tickets are sold outside of the tri-county region, boosting the regional economy by more than $44 million a year, according to Michael Brand, the Center’s executive director since 2003.
Brand has muscled the Wharton Center into the upper ranks of Broadway venues. He said it is the “number one” performance center owned by a university and ranks in the top 50 among all venues with fewer than 2,500 seats (The “Great Hall” seats 2,420).
With a staff of 35 full-time employees and, depending on the show, as many as 320 part-time support and production workers, the Wharton Center budgeted $13.5 million to stage its 2015-16 season. Personnel and fringe benefit costs account for $3.1 million. It will spend $185,000 on in-house management services, $900,000 for stage management crews and $210,000 for capital improvements. It’s essentially a break-even business. Revenue from ticket sales, fees, rentals and the gift shop will total about $10.8 million this season. Another $1.6 million in support will come from contributions, $520,000 from the Center’s endowment and $640,000 from Michigan State University.
Private contributions are roughly split between individuals and businesses. Most of the region’s prominent businesses and organizations are corporate sponsors or participate on the Wharton Center’s advisory council.
“The corporate community is critical to the success of the Wharton Center,” said Development Director Doug Miller. I think they take a great deal of pride that they have a world-class performing arts center in this community.”
“We have 45 to 55 corporate partners that not only sponsor us with private support but also purchase blocks of tickets to entertain clients or reward employees,” said Miller. “They understand the value of the Wharton Center, what it means to their business and what their business means to our business.”
Miller also said that the business-support model for the Wharton Center differs from other larger metro markets, where a handful of large donors make six-figure contributions annually. The Lansing area lacks those kinds of businesses and relies on a broad array of corporate donors.
The Wharton Center has a $15 million endowment, which has grown from $2 million during Brand’s time with the Center. It is projecting that it will grow by $520,000 in 2016 and expects the endowment to reach $23 million by 2020, yielding about $1 million a year to defray expenses.
“It will stabilize our operation. We won’t have to rely on single tickets,” Brand said.
For big Broadway productions like “The Book of Mormon,” on its 108-foot stage this June, the Wharton Center’s total revenue from all sources, though primarily ticket sales, is between $800,000 and $1.1 million. Most shows are sold at a standard price. What venues like the Wharton Center negotiate are items like commissions and inside rents. But there are no guarantees of success. While there are regular season subscribers, not every show sells out. And there is competition — for audience members as well as shows.
The Wharton Center operates from a low population zone between Chicago and Cleveland, which are both big markets. Then there is Detroit, a drivable distance to the east.
“We have to make sure we stay on the national circuit and get the big shows, the new stuff as soon as we can. When shows come out we are in the first round,” Brand said.
Its success in providing first tier entertainment makes the Wharton Center one of the region’s important economic drivers. Relying on information provided by the Broadway League, it estimates its economic impact in mid-Michigan at $20.9 million for its $13.5 million expense budget and another $24.4 million tied to $8.4 million in patron ticket expenses.
“All of this is money would be elsewhere,” said Jack Schripsema, president and CEO of the Lansing Visitors and Convention Bureau. “There is a lot of competition for that type of entertainment. We are glad to have it in our community.”
The Wharton Center also serves as a potent economic development tool for the Lansing Economic Area Partnership.
“It symbolizes that we are a progressive, cosmopolitan, global environment ready for big business and big talent,” said LEAP’s President and CEO Bob Trezise.
It is a venue that helps attract new talent and keep talent in the region, Trezise said. LEAP has introduced a new brochure to promote the region and the Wharton Center is prominently featured.
“Dazzled by Broadway’s lights? Us too. You don’t need to go to New York or Chicago to find them. Michigan State University’s campus hosts the Wharton Center for Performing Arts, one of the Midwest’s premiere theatres, where Broadway shows and the world’s top performers come first. Entertainment doesn’t stop there,” reads the brochure.
“The number one job of this new piece of literature is to surprise people with a great first impression of Lansing, Mich.” Trezise said.
In fact, because the Lansing region is a small market, it has some surprising advantages. National road companies like the East Lansing atmosphere because it’s an affordable stop on the road tour, with good restaurants and accommodations where company members can cook their own meals and have complementary memberships at health clubs. “They love being here just like the young people love living here,” said Brand.
Many arts organizations suffered during the Great Recession and others – large symphony orchestras and opera companies – struggle to complement their aging Baby Boomer audiences.
“We went down during the height of the downturn,” Brand said, adding that it happened later in other markets.
The 2009 season, with mega-hits like “Jersey Boys” and “Phantom of the Opera,” was spectacular, with revenues of $17.6 million and a profit of $328, 951. But in 2010, sales tumbled. Revenues were $11 million with expenses of $11.8 million, resulting in a $776,518 deficit; the largest in the last 12 years. The following year, with the economy staggering, revenue declined to $9.2 million. Expenses were $9.7 million – another large deficit.
By the 2012 season with “Les Miserables,” “Rock of Ages,” “Addams Family” and “Memphis,” the Wharton Center regained its momentum with revenues of $13.5 million and expenses of $13.1 million. As Brand puts it: “We came back blazing.”
Success, Brand said, means finding new audiences. The shows succeeding on Broadway in New York are diverse, reflecting the increasingly changing population of the country.
Producers are taking greater risks with shows like “Allegiance,” a musical about the internment of Japanese Americans during World War II and “On Your Feet,” a musical about the lives of Latin American immigrants. Casts are more diverse. The hip-hop infused smash hit “Hamilton” features black, Hispanic and Asian-American actors. A multi-ethnic cast carries the hit musical “School of Rock.”
Brand said performance centers like the Wharton Center succeed by connecting with entirely new audiences, attracting younger generations. “You have to connect to the demographics of your community.”
Overall, support for the Wharton Center and its diverse activities are broad and tightly integrated into the region’s cultural life. It supports four unique stages: The Cobb Great Hall, Pasant Theatre, MSU Concert Auditorium and Fairchild Theatre.
For the 2015-16 season, it presented 121 performances, 47 of them unique engagements. This includes seasonal events, Live At Wharton and Act One School Series performances. The Center has extensive education programs involving MSU and area K-12 schools. It will provide about 3,500 tickets for performances to under-served children and their families. The Wharton Center staged 11 Lansing Symphony Orchestra concerts as well as performances by MSU’s College of Music and Department of Theatre. It also hosts numerous private functions: commencements, receptions and academic events.
According to officials, the Wharton Center serves more than 30,000 children and adults each year through the MSU Federal Credit Union’s Institute for Arts and Creativity. The program allows the artists who perform at the Wharton Center to work with students in master’s classes, Broadway summer camps, through high school musical competitions and in the classrooms.