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Studio Arena fires 14 staffers $1 million in losses prompted the cuts

Seven weeks after its executive director left and a day after firing 14 staff and production employees, Studio Arena Theatre said Thursday the cuts were necessary to stem "grave and potentially life-threatening" losses that totaled $1 million over just the past two seasons.

Leaders said they are adopting an "entrepreneurial" approach aimed at reducing the annual budget from $5 million to about $3.5 million.

Changes will include hiring fewer outside directors; employing one artistic team -- lighting director, stage manager, costumer and others -- instead of changing teams after every show; and adapting some of the same sets for different productions.

"This is a challenging time for Studio Arena," said Michael S. Piemonte, board president of the 80-year-old Main Street theater, long regarded as a leading regional theater. "It is painful for everyone involved.

"However," he said, "we have made the dramatic changes required to set the course to be fiscally sound and are doing all we can to ensure the future of the organization."

"We've hit a bad patch, but we'll get through it," said Kathleen A. Gaffney, a New York City stage veteran who became artistic director in April and added the title of chief executive officer after Executive Director Ken Neufeld departed in November.

Studio's troubles began after the terrorist attacks of Sept. 11, 2001, when it saw "a huge decrease in philanthropy," Piemonte said.

Other regional theaters experienced similar declines, but none expected the trend to continue, Gaffney added. "Nobody saw it as a long-term trend."

Then came the South Asian tsunami of 2004, followed by Hurricane Katrina in 2005. Those disasters combined to stretch charitable giving even further, which contributed to the closing of Charlotte Repertory Theatre in North Carolina and the current fiscal distress of San Jose Repertory Theatre in California, among other affected organizations, Gaffney said.

Annual contributions to Studio Arena have fallen from a zenith of $1.2 million before 9/1 1 to between $700,000 and $800,000 annually. Though subscription and ticket sales easily exceed industry averages, the theater has been unable to close the gap with earned income. "Our board and principal funders have worked hard to raise additional funds, but the deficit was too deep to continue business as usual," Piemonte said.

In November the board hired two out-of-town consultants, J.C. Jones and Art Market, which prescribed the staff and production cutbacks.

These days, "running a regional theater requires a different business model," said Gaffney. The former actress and director believes her work with Artsgenesis -- a nonprofit organization she founded to expose learning-disabled children to the arts -- gives her the experience to lead Studio Arena out of the woods.

"The classic model was: new artistic team for each show," she said. "It was very glamorous. Each production had a completely different look. But that was extremely expensive. There was no carry-over, no economy, no reuse.

"Now we have to ask how can we allocate our scarce resources to maximum effect -- not just how can we sell this show."

Gaffney and Piemonte said Studio Arena will never function merely as a presenter, renting its stage to other companies to reduce expenses instead of producing its own plays, as the Erie County Cultural Resources Advisory Board recommended in 2005. "We looked at that but did not believe it was a viable option," Piemonte said.

On the other hand, Studio Arena expects to co-produce plays with other regional theaters and local companies, he and Gaffney said. For example, the upcoming "Of Mice and Men" will be co-produced with Cleveland Playhouse.

The fresh cutbacks are expected to yield "a small surplus" by June 30, the end of the current season, Piemonte said. The new business model will be in effect for 2007-08 and should produce enough savings to put Studio Arena back in the black, he said.

Once finances are stabilized, the board will address the accumulated deficit, which stands at $1.1 million, according to a report filed with the county cultural board.

The optimistic financial outlook is small comfort to the 14 Studio Arena staff and production employees -- a quarter of the payroll -- who were abruptly terminated after meeting with Gaffney, Piemonte and the theater's consultants.

Most worked in marketing; others included the house manager and publications manager. Several said they were given 10 minutes to clean out their desks and leave the Theater District offices.

"The way it happened was very barbaric. It was so cold," said Dianne Giliforte, corporate sales manager and a 14-year employee, who said she was given the news by "a consultant who never had a conversation with me.

"I will always love Studio Arena Theatre . . . "but I will always be disappointed about the way this happened, and my inability to have a say or any control in how I walked away."

Gaffney said while it was "very, very painful" to cut ties with employees, "our duty was to protect the theater."

Studio Arena's bold steps nevertheless drew praise from two leading members of Buffalo's theater community. Neal Radice, artistic director of Alleyway Theatre, said Studio, as one of the theater community's flagships, must remain solvent.

"Studio Arena is designed to show off wonderful lighting, wonderful scenery and wonderful costumes. It's stagecraft at its best," Radice said. Losing that "would be catastrophic," he added.

Though Studio Arena programming has been subpar in recent years, Gaffney is infusing new creative energy, said Randall Kramer, artistic director of MusicalFare Theatre.

"Over the past five to 10 years, they've made way too many conservative choices," he said. "You start this endless cycle where you try to play to the lowest common denominator. When you're worried about offending five percent of your audience, what you end up doing is not interesting anyone because the entertainment is so watered down."

Under Gaffney, Kramer said, "they can grab that mantle they've dropped in recent years."

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