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The Truth About Why Wayside Theatre Middletown Virginia Suddenly Closed

Updated on May 3, 2014

After 52 years of operation, Wayside Theatre in Middletown, Virginia closed on August 7, 2013.

photo of wayside theatre middletown virginia
photo of wayside theatre middletown virginia

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

Wayside Theatre financial data for years 2001-2004 from federal returns (Form 990)
Wayside Theatre financial data for years 2001-2004 from federal returns (Form 990)
Wayside Theatre financial data for years 2005-2008 from federal returns (Form 990)
Wayside Theatre financial data for years 2005-2008 from federal returns (Form 990)
Wayside Theatre financial data for years 2009-2012 from federal returns (Form 990)
Wayside Theatre financial data for years 2009-2012 from federal returns (Form 990)

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.

Photo of Wayside Theatre financial collapse
Photo of Wayside Theatre financial collapse

CONCLUSION

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.

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    • Robert Kernodle profile imageAUTHOR

      Robert Kernodle 

      2 months ago

      Mrs. DiCarto commented:

      "The only real 'incompetence' is in the 'arrogant' tone of the author who left his heart at home when he wrote this article."

      Perhaps Mrs. DiCarto would like to put forth this argument to the actors and staff who were hired (some relocated from other towns) under the pretenses that the theatre was stable for another season, after two back-to-back emergency fundraising campaigns the previous year, failing ticket sales, unpaid debts, ignoring financial advice of experts and funding agencies, ... leaving actors and staff stranded (some without any place to go home to), when the closing of the theatre was abruptly announced, with zero warning, in the middle of a rehearsal, where everybody was told to stop rehearsing, leave, and go home, ... with zero plans to honor contracts, pay to get people back home, no apologies, ... still asking the community for money AFTER closing (to pay off lingering debts STILL unpaid).

      And that's just the surface story.

      I cannot comment on the many decades of success that the theatre experienced. I have no doubt whatsoever that Wayside did a stellar job in its prime years. I, however, am speaking about its breakdown, starting in 2009, and its ultimate collapse due to an unhealthy denial of financial reality, nurtured by artistic dreams running rampant without any business guidance, because the artistic element could NOT accept the business realities of an organization's existence.

      The events leading up to the theatre's closing in the year it closed were a nightmare for some of the actors and staff, who had been lured away from their lives and stability in other states.

      The tone of my article, compared to these realities, is really rather subdued. I would like to see how some of the homeless actors might write it. And I would like to see how Mrs. DiCarto might write it, if she had lived through these final days as an actor or staff person, realizing that they had been duped as a result of negligent behavior on the part of those bestowed with the trust to run the theatre responsibly.

      Another article should probably be written about Wayside's good old days. This article is NOT that article. This article is about clear, avoidable, financial failure that could have been avoided, if artists and politicians had been willing to face reality, act responsibly, make concessions, make more reasonable choices, and place other people's interests on par with their own.

      Bottom line: The theatre could have gone out in a much more elegant style, befitting of its former glory, had better management been in force. The tragedy is that it fell into a pattern of dysfunction that was beyond saving.

      I speak as a former dancer of many years, having performed on stage myself in amateur and semi-professional performances, and so I have some hands-on insight into show business. But I also have some insight into the BUSINESS part of show business.

      The business part of "show business" is why theatre companies MUST hire a business manager, and this is what Wayside failed to do in its final years, on several occasions, even under the stern advice of its major state funding agency.

      So, Mrs. DiCarto, don't shoot the messenger.

    • Coffeequeeen profile image

      Louise Powles 

      16 months ago from Norfolk, England

      It's a shame when these theatres that have been in operation for so long close down. It looks like it was once a beautiful place too.

    • profile image

      Mrs. J. DiCarlo 

      2 years ago

      Did the article's author ever consider the good that the Wayside Theater did for this small community? Both of our children were involved in Wayside's Teen Shakespearean Theater. As their parent, I can attest to Wayside's staff as gifted, professional and encouraging to its teen actors. My children grew in ways that cannot be counted on a spreadsheet. The Wayside's only "fault" is that it had too much heart. In a world where human beings are numbered and checked off, one could perhaps see this caring group of artists as "failed,"

      but the Wayside Theater's success will forever be measured in the good works that their teen actors-now young adults-perform in their daily lives.

      I believe that counts for something.

      The only real "incompetence" is in the "arrogant" tone of the author who left his heart at home when he wrote this article.

    • profile image

      James Laster 

      3 years ago

      Amazing collection of statistics regarding the financial records of the Theatre.

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