Does supply and demand apply to LA Theater?

Why doesn’t LA have a thriving mid-sized theater scene?

That’s the question lurking behind the vitriol and accusations on both sides the 99 seat plan argument (debate, lawsuit, kerfuffle: choose your favorite term). The challenge for Los Angeles is that our ecosystem is uniquely out of balance in relation to most theater cities.  

A healthy theater ecosystem looks like a pyramid: at the top is be a handful of large (say over 600 seat) theaters, in the middle a healthy section of theaters above 200 seats, and at the bottom (in terms of size, not quality) is a grassroots of smaller, 100 seat or less, theaters. Los Angeles has a small number of large theaters, a few struggling, mid-sized theaters, and an overabundance of small 99 seat theaters. Our pyramid looks a bit like a witch’s hat (or maybe a sombrero).

In a press release, Equity said:

In the most recent period where data is available (2014-2015), LA County (with 7,000 members) had 6,500 paid work weeks for Equity members; whereas, Baltimore/DC (with 854 members) had more than 8,700; Boston (with 845 members) had over 7,900; Chicago (with 1,589 members) had more than 15,800 paid work weeks; and Minneapolis/St. Paul (with 437 members) had more than 6,700.

What they are saying is essentially, why can’t LA be like other cities? Cities where we make money. Cities with a thriving mid-sized theater scene. Why can’t you have a healthy middle section, more mid-sized paying theaters?

Equity goes even further,

During the same period (2014/2015), there was a total of 11,013 unpaid work weeks for actors in Los Angeles County. If those unpaid work weeks were actually paid work weeks, then 99-seat theatre would represent the second largest source of paid employment in the Western Region – second only to LORT.

How do you magically transform those “unpaid work weeks” into minimum wage work? Equity’s solution, and the argument being put forward by their twitter proxy North Hollywood 10, is captured in this tweet.

Which boils down to a “Field of Dreams” argument, “if you build it they will come.” Or maybe said more pessimistically, “if you get rid of it, they’ll pay.” The thing keeping that middle section from thriving, following Equity’s reasoning, is the existence of the 99 seat plan. Without it, the tweet would suggest, a mid-sized theater infrastructure would naturally bloom into existence.  

Equity argues as much,

How is it that the rest of the nation can afford to pay its actors who perform in small theatres, yet Los Angeles cannot?

How does Los Angeles theater answer this question? How should we even begin to tackle it? One way might be that gem from ECON 101 – the law of supply and demand.

Essentially, the reason the price of actors is so low in Los Angeles, the argument would go, is that there’s simply too much supply: too many actors willing to work for too little (in fact, they are willing to volunteer). Ignoring for a moment the question of whether for profit economics even meaningfully apply to the arts or a nonprofit economy, the answer would seem to be glaringly simple: constrain supply and raise the price.

Equity’s answer is to rebalance the “market” by, depending on which side of the argument you are on, removing the artificial subsidy (the 99 seat plan) or, if you’re less sympathetic to Equity, unilaterally imposing a higher price (a minimum wage).

Dakin Matthews, the wonderful Los Angeles actor who has a rich history at every level of LA theater’s imaginary pyramid and is currently performing on Broadway in “Waitress,” has already thoroughly debunked the false equivalency between Equity’s “paid work weeks for Equity Actors” and Los Angeles’ “unpaid work weeks” in an insightful and amusing open letter. If Equity’s goal is to balance the supply side of this market at the level of minimum wage, not only don’t all of those unpaid weeks magically transform into paid weeks, very, very few of those weeks would. By satirically trying to create a “rate of exchange” between Equity’s paid weeks and Los Angeles’ unpaid weeks, Mr. Matthews demonstrates the folly of the argument,

To arrive at some reasonable estimate of the relative value of a [paid work week]  to a [unpaid work week], in order to see just how realistic is the hypothesis set forth in Equity’s email that 11,013 [unpaid work weeks] could ever be transformed into 11,013 [paid work weeks] . In terms of getting actors to work for pay rather than volunteer for stipends, I see no problem at all. But in terms of real-world theatre economics, the idea that anything Equity is currently proposing could ever facilitate turning that many [unpaid work weeks] into [paid work weeks] is pure fantasy, given the obvious real-world exchange rate of at best 50:1 (in terms of cost to producers) and at worst 100:1 (in terms of box office).

If we follow Mr. Matthews’ reasoning, and frankly it’s far more rational, even in its whimsy,than Equity’s, the amount of Los Angeles theater would decrease by at least one order of magnitude and possibly two.  That would make our “sombrero” look more like a pyramid but it’d be a much, much smaller pyramid.

Shifting from the supply side to the demand side of the equation, if every 99 seat theater in Los Angeles was sold out for every performance, we might think that the 99 seat plan was the thing keeping a mid-sized theater scene from burgeoning. That’s not the case. No one has, to the best of my knowledge, city-wide audience numbers but if I had to hazard a guess, LA theater is not likely breaking 50 percent of paid capacity.

The cold, very hard fact is that while Los Angeles has an abundance of great theater and while a lot of people see theater in Los Angeles, we do not have a healthy and consistent theater audience. We do not have a level of demand that supports (or demands) mid-sized theaters. That has nothing to do with the 99 seat plan or minimum wage or Equity. It has nothing to do with the quality of intimate theater. It has nothing to do with economics (at least not simplistically). It has to do with what makes Los Angeles – Los Angeles.

Maybe it’s the great weather? Maybe it’s the lack of corporate headquarters which affects corporate giving? Maybe it’s a philanthropic community that has different priorities and different capacities than an East Coast city? Maybe it’s the fact that the film industry is so closely related to theater? Maybe it’s that a mostly white theater is playing to a city that’s brilliantly diverse? Maybe it’s a challenge of density and mass transit?  

Those are the real questions and, at least in the conversations I’m overhearing, what nobody is really talking about when talking about 99 seat theater.

Ironically, and presumably unintentionally, Actors’ Equity has framed exactly the right questions for Los Angeles theater, why is Los Angeles different from Baltimore or Boston or Chicago or Minneapolis? What does a healthy theater ecosystem look like for Los Angeles?

Until Los Angeles theater, as a whole from the smallest theater to the largest, is collectively asking those questions both in their rhetoric and in their work, we are missing the point.