Virginia Repertory Theatre’s November Theatre at 114 W. Broad St. (BizSense file)
Months after its co-founders departed, Virginia Repertory Theatre says it is at risk of having to close its curtains for good.
The nonprofit theater group on Thursday issued a public appeal to raise $600,000 in donations that it said is needed to continue to operate long enough to restructure the organization and put it on more solid financial footing.
It said it has a $1.7 million budget shortfall in its current fiscal year and an anticipated a $1.6 million deficit next year.
Without that $600,000, Virginia Rep would end operations shortly after the end of its current production of Stephen King’s “Misery,” which runs until Sept. 29, managing director Klaus Schuller said in an interview.
“We know what restructuring and other steps we need to take to reconstitute the company in a sustainable way. What we lack is the runway to get there,” Schuller said.
He said the $600,000 would keep Virginia Rep going through the end of the year and would go toward paying vendors and covering operational costs.
Budget cuts were expected to come as part of the restructuring, but Schuller declined to comment on what form those measures might take.
Klaus Schuller
Virginia Rep has an annual budget of roughly $5 million, according to recent tax filings. Schuller said the organization has 200 employees, of which 40 are full-time workers.
Virginia Rep’s appeal for funding came in the wake of its parting with co-founder and former managing director Phil Whiteway in August 2023.
Schuller said Whiteway’s exit, which followed the departure of fellow theater co-founder Bruce Miller in 2019, caused a notable number of donors to pull their support for Virginia Rep, which accounts for the theater’s financial difficulties. The donors who withdrew their support represented a $500,000 loss of revenue.
“I will not and have not said a word against the founders,” Schuller said. “But their departure did cause a fair number of supporters to back away.”
After his departure, Whiteway sued Virginia Rep alleging he was forced out of the organization because of his age; he was 71 when he was fired. Virginia Rep denied the accusation, and the theater and Whiteway settled the matter out of court earlier this year.
Another challenge is that audiences have been slow to return to Virginia Rep productions since the COVID-19 pandemic, Schuller said.
While audience numbers have increased annually in recent years, they haven’t reached what they were before the pandemic. He estimated that it could be five years before Virginia Rep sees attendance return to 2019 levels.
“We are still a long way from getting back our pre-pandemic audiences. This is something every not-for-profit theater in the country is experiencing,” Schuller said.
Schuller assumed his role in early August. He said that once he took stock of Virginia Rep’s finances, it was clear the nonprofit had a problem.
“What I discovered here was a substantially worse financial situation than I had anticipated,” Schuller said. “Pretty quickly I reached the conclusion we had no available cash and some rather substantial obligations.”
Schuller said that the theater put out a call for $600,000 to keep the lights on while it restructures, as opposed to money to erase the whole deficit. The hope is that it would be a more manageable goal in an environment Schuller said is characterized by donor fatigue in the theater sector.
“We want to be known as a reasonable and well-managed organization, and we know the hardest work has to be on us. We’re starting out asking for the smallest amount to give us the ability to do that work,” he said.
Schuller said organizations of Virginia Rep’s size typically have an endowment of $10 million to $20 million, which is a resource Virginia Rep lacks. He said the organization, should it remain in business, would seek to kick off a multiyear project to create such an endowment.
As of midday Thursday, Schuller said Virginia Rep had received at least $27,000 in small contributions and about $55,000 in larger, single donations from individuals as word circulated about its financial challenges. Schuller said he was confident the theater would be able to meet its near-term funding goal.
Virginia Rep reported a net income of $2 million in fiscal year 2023, which ended in June 2023. The prior fiscal year, the nonprofit reported net income of $1.8 million and in fiscal year 2021 a net income of $713,121, according to tax filings.
Schuller said that revenue reported for fiscal years 2022 and 2023 was buoyed by the nonprofit’s fundraising efforts related to its $3.5 million acquisition of the former Scottish Rite Temple property at 4204 Hermitage Road in 2022. The nonprofit uses the building for its Center for Arts and Education.
In addition to the Northside theater, Virginia Rep, which was founded in 2012, also runs the November Theatre at 114 W. Broad St. downtown and hosts performances at Hanover Tavern in Hanover County.
Virginia Repertory Theatre’s November Theatre at 114 W. Broad St. (BizSense file)
Months after its co-founders departed, Virginia Repertory Theatre says it is at risk of having to close its curtains for good.
The nonprofit theater group on Thursday issued a public appeal to raise $600,000 in donations that it said is needed to continue to operate long enough to restructure the organization and put it on more solid financial footing.
It said it has a $1.7 million budget shortfall in its current fiscal year and an anticipated a $1.6 million deficit next year.
Without that $600,000, Virginia Rep would end operations shortly after the end of its current production of Stephen King’s “Misery,” which runs until Sept. 29, managing director Klaus Schuller said in an interview.
“We know what restructuring and other steps we need to take to reconstitute the company in a sustainable way. What we lack is the runway to get there,” Schuller said.
He said the $600,000 would keep Virginia Rep going through the end of the year and would go toward paying vendors and covering operational costs.
Budget cuts were expected to come as part of the restructuring, but Schuller declined to comment on what form those measures might take.
Klaus Schuller
Virginia Rep has an annual budget of roughly $5 million, according to recent tax filings. Schuller said the organization has 200 employees, of which 40 are full-time workers.
Virginia Rep’s appeal for funding came in the wake of its parting with co-founder and former managing director Phil Whiteway in August 2023.
Schuller said Whiteway’s exit, which followed the departure of fellow theater co-founder Bruce Miller in 2019, caused a notable number of donors to pull their support for Virginia Rep, which accounts for the theater’s financial difficulties. The donors who withdrew their support represented a $500,000 loss of revenue.
“I will not and have not said a word against the founders,” Schuller said. “But their departure did cause a fair number of supporters to back away.”
After his departure, Whiteway sued Virginia Rep alleging he was forced out of the organization because of his age; he was 71 when he was fired. Virginia Rep denied the accusation, and the theater and Whiteway settled the matter out of court earlier this year.
Another challenge is that audiences have been slow to return to Virginia Rep productions since the COVID-19 pandemic, Schuller said.
While audience numbers have increased annually in recent years, they haven’t reached what they were before the pandemic. He estimated that it could be five years before Virginia Rep sees attendance return to 2019 levels.
“We are still a long way from getting back our pre-pandemic audiences. This is something every not-for-profit theater in the country is experiencing,” Schuller said.
Schuller assumed his role in early August. He said that once he took stock of Virginia Rep’s finances, it was clear the nonprofit had a problem.
“What I discovered here was a substantially worse financial situation than I had anticipated,” Schuller said. “Pretty quickly I reached the conclusion we had no available cash and some rather substantial obligations.”
Schuller said that the theater put out a call for $600,000 to keep the lights on while it restructures, as opposed to money to erase the whole deficit. The hope is that it would be a more manageable goal in an environment Schuller said is characterized by donor fatigue in the theater sector.
“We want to be known as a reasonable and well-managed organization, and we know the hardest work has to be on us. We’re starting out asking for the smallest amount to give us the ability to do that work,” he said.
Schuller said organizations of Virginia Rep’s size typically have an endowment of $10 million to $20 million, which is a resource Virginia Rep lacks. He said the organization, should it remain in business, would seek to kick off a multiyear project to create such an endowment.
As of midday Thursday, Schuller said Virginia Rep had received at least $27,000 in small contributions and about $55,000 in larger, single donations from individuals as word circulated about its financial challenges. Schuller said he was confident the theater would be able to meet its near-term funding goal.
Virginia Rep reported a net income of $2 million in fiscal year 2023, which ended in June 2023. The prior fiscal year, the nonprofit reported net income of $1.8 million and in fiscal year 2021 a net income of $713,121, according to tax filings.
Schuller said that revenue reported for fiscal years 2022 and 2023 was buoyed by the nonprofit’s fundraising efforts related to its $3.5 million acquisition of the former Scottish Rite Temple property at 4204 Hermitage Road in 2022. The nonprofit uses the building for its Center for Arts and Education.
In addition to the Northside theater, Virginia Rep, which was founded in 2012, also runs the November Theatre at 114 W. Broad St. downtown and hosts performances at Hanover Tavern in Hanover County.
So many questions, wow. I wonder if the former employee is truly thinking age was the cause of the firing OR if it was really leading the org while overseeing spending $3.5m on a non-revenue producing asset just 2 short years ago given it was also after they experienced a drop in attendance and their statements were so out of whack. Maybe they refused to look at the balance sheet? I don’t think it took a team of forensic accountants to realize this place wasn’t running a fiscally sound establishment. Sounds like the new director has at least been basing… Read more »
If some of it wasn’t age related why settle??? And settle so quickly; I have a feeling he had enough to support his claim and maybe it is just me but when I sat next to the November’s to see Mame several year ago it would have taken much to realize most of the high end donors were of that same age group. You fire a popular director, alienate your donors, wait a full year before saying OMG our finances are bad and your board is still the same. PS He will not “say” anything at all because the settlement… Read more »
To be clear, “Schuller assumed his role in early August” which is a month ago. So he did not “wait a full year before saying OMG our finances are bad“.
I agree with all that. I wonder the same thing. Still the main issue I see is the $3.2m in cash outflow for what the best I can tell is a kids educational venture outside of their core. Well intended use of the building, but probably a fiscal disaster for their bottom line to stay operational in their core day to day.
Theatre IV is one of two theatres (the other being Barksdale Theatre) that merged to form Virginia Rep in 2012. Theatre IV was the first professional children’s theatre in the Commonwealth and Virginia Rep has retained programming for young audiences as a core part of its mission. Prior to the purchase of the Scottish Rite Temple, children’s programming was held at the theatre at Willow Lawn (which was vacated in 2021) and also at the November Theatre downtown.
And the use of the word “departure” is being generous. Why do you think the donors backed off? It was not because of a retirement. This is so discouraging. My family has enjoyed so many Va Rep productions over the years. Perhaps the kind of programming needs to be examined, as well. As far as the acquisition of the former Scottish Rite Temple building, that type of facility does not come on the market often. They had to make the jump. They received a very generous $1 Million dollar gift in memory of Jessica Bogese. It would be a shame… Read more »
Phil and Bruce spearheaded this organization for more than 40 years and managed to keep the lights on. They also were instrumental in raising $5.2million dollars to buy the Scottish Rite Temple, which seemed to be a perfect long term home for Virginia Rep. I wonder how all the donors to the capital campaign who contributed because of the long term relationships with the founders will feel if Virginia Rep sells the building to some entity that is not in the non profit area – i.e. a developer who would tear the building down and repurpose the location. What would… Read more »
This stretch could really use a Sheetz.
Jus’ sayin’
Wow! You are obsessed. Why Sheetz? You seem very focused.
My post is, admittedly, chock full of assumptions and those assumptions could certainly end up making an ass out of me, but the reality is I’d be shocked if the majority of these donors are not the exact same demographic as Phil Whiteway: a Baby Boomer. When those donors watched Phil get canned in a scenario that quite possibly was at least partially due to age, among other factors, and those same donors are who Phil spent years developing relationships with, what did the Virginia Rep expect? Donors are fickle and they’re going to let their money do the talking… Read more »
As it should be. It is, after all, their money. Let the new people develop new relationships and get new audiences for the programming that they are showing.