The Truth About Why Wayside Theatre Middletown Virginia Suddenly Closed
After 52 years of operation, Wayside Theatre in Middletown, Virginia closed on August 7, 2013.
While this event came as a shock to the local community, clear warnings of financial disaster had been obvious for any reasonable person to see. Irrational faith in the unwavering good of live theatre, however, apparently perpetuated the organizational leaders' habits of failing to heed these warnings. Failure to heed the warnings continued right up to the theatre's zeroth hour, causing an unannounced, arguably irresponsible action that truly did NOT have an alternate course.
What The Numbers Tell
The following tables show information gathered from Forms 990 (federal returns open to public inspection) for Wayside Foundation for the Arts, Inc./ Wayside Theatre, covering the years 2001 to 2012 [RED text indicates NEGATIVE changes; TRIANGLE symbol means "change".]:
Wayside Theatre Financial Indicators 2001-2012
As these tables indicate, Wayside Theatre had been struggling severely for the entire eleven years prior to its 2013 closing:
- Between 2001 and 2012 (a span of twelve years), eight of these years showed expenses EXCEEDING revenue. This means that the theatre operated in the red for three fourths of the time during these twelve years.
- During much of these same twelve years, liquid assets did NOT exist to cover a year's worth of operating expenses, usually falling to levels that could NOT even support six months or even three months of operating expenses.
- Program service revenue (the measure of how an organization's mission is succeeding in the community via ticket sales and other services) DECLINED every year for the last four CONSECUTIVE years prior to closing.
- In 2009, the theatre was flat broke, and it probably should have closed then. Liquid assets showed NO signs of recovery during the next two years, dipping even lower in 2011 – signaling an even more certain time to close.
2009 A Critical Year
Focusing on 2009, a reasonable person could plainly see that FOUR negative trends were in control SIMULTANEOUSLY:
- Total revenue was in decline.
- Program service revenue was in decline.
- Fund balances (assets minus liabilities) were in decline.
- The ratio of liquid assets to liabilities was at a dangerous low (practically zero).
Adding the fact that this theatre was severely in debt, a reasonable person could see these trends (operating simultaneously in the same year) as clear indications of a theatre at the end of its lifespan. Even so, the organization's leaders apparently refused to see these trends or to believe these trends. Instead, artistic vision apparently enabled a rigid alliance of corporate entitlement, administrative detachment, personal agendas and conflicts of interest that completely strangled financial intelligence.
Wayside Theatre (the corporate body) simply failed to apply even a basic level of business savvy consistently. In essence, Wayside failed to maintain itself with proper tools, proper knowledge, and proper expertise to conduct the BUSINESS of theatre in today's information technology-driven world.
The result was an inevitable, catastrophic collapse.
Critics could easily make arguments for arrogance, ignorance, incompetence, and negligence that perpetuated a rein of mismanagement over multiple years, but the bottom line is that Wayside Theatre's corporate balance sheet never had a sustainable strategy from its first day of entering the 21st century. When a company, therefore, operates so dangerously close to the edge of creation and destruction for so many years, a mere disturbance or overnight realization is all that is required for any hope of its continued existence to crumble.