Making Theater that Makes Money

Advice from Gorilla Tango Theatre

With a lot of nonprofit theater companies struggling to make ends meet in a tough economy, it seems implausible that anyone in their right mind would start a storefront theater company expecting to make money. Yet Dan Abbate has done just that. He started Gorilla Tango Theatre as a for-profit business in 2006 and sees that model as the future for live theater entertainment. Earning profits is contrary to the very essence of most small theater companies in Chicago—literally, since they are incorporated as nonprofits, and figuratively, since they’re primarily motivated by making art—so CAR Theater Researcher John Carnwath contacted Dan to find out how this profit-making theater business works.

(For more on commercial theater ventures in Chicago, see John's interview with Brian Loevner.)

How is Gorilla Tango different from other small theater companies in Chicago?

Gorilla Tango Theatre has always approached its work as a for-profit business; the product this company sells just happens to be theater and other types of live entertainment. As in any other for-profit, we’re focused on product, volume, quantity, diversity, maximizing capacity and looking for opportunities to create economies of scale. Our success is a direct function of our business model being based on profitability and sustainability, rather than a specific creative agenda. This enables GTT to be nimble and adjust our product mix based on market demand. We are not tied to a specific mission (which can be difficult to change in a nonprofit even when that mission is no longer working for the organization), nor is our ability to make quick decisions restrained by the group politics often found on non-profit boards.

What led you to adopt this structure instead of forming a nonprofit around an ensemble of artists as most other theaters do in Chicago?

My background is in business (manufacturing, mergers/acquisitions, and internet technology). I had no creative agenda, only a business/profit focus. Combining the structure of a business with talented people doing creative work is the best production system, and it turns out the most marketable products.

The goal was—and still is—to develop a sustainable, profitable business. Although there are some examples of success in the "ensemble" system, most companies end in disastrous failure or suffer "slow deaths" as key people get tired of working in the theater without getting paid while having to maintain a day job. When building a for-profit business, the focus is on developing a company that has potential for long-term success. Hence the creation of GTT.

I feel that Gorilla Tango's model is the future of theater. Anyone truly interested in creating a theater company would be better off working with Gorilla Tango rather than following the old-school nonprofit system they learned about in college or wherever. Theater academics and authorities are stuck in tradition and "the way things have always been done." They are generally disconnected from the world around them, which is constantly changing and moving forward.

If your objective is to make money, why did you decide to open a theater? Managing theaters isn't generally thought of as a surefire way to get rich.

The key words in that question are "generally thought of." That is precisely why theater was a good business to get into. There is a large demographic of consumers who are willing to spend money on theater and most of the competitors in the field aren’t delivering these products in a profitable and sustainable way. Taking a for-profit approach to an industry that is generally written off as done "just for the love" gives us a great competitive advantage by doing it "just for the money." It's just as easy (or difficult) to make money running theaters as it is in any other business. The people who don't succeed in theater probably couldn't run any other sort of business either. I think that is the root of the problem. People who are interested in the creative side of theater should focus on being creative. They should not be starting companies. They should let business people like GTT manage the business infrastructure and devote their own attention to the creative aspects. This is not a new concept. This is exactly how it is done in film and TV as well. The director of a TV series is not concerned with the overall management of the TV network; the director is only concerned with the specific production.

Could you describe the terms of the contracts you sign with the companies that produce shows at GTT?

GTT's producing deal is completely turnkey and requires no money up front from the producing companies. At GTT, we run shows seven nights a week. Any time slot that isn't already booked is available for other producers. We supply all of the infrastructure: performance space, rehearsal space, box-office services, house management, online ticketing, basic marketing, standard light/sound package, a projector/screen, etc. Our producers supply the shows and the general hustle for their target audience to generate the minimum revenue, which covers their slice of GTT’s monthly overhead. The minimum ticket revenue is $250 per show hour and any amount above that is considered profit, which is split 50/50 between the producers and us. More than 80% of shows at GTT are profitable, so that the producers don’t pay us anything and we write them a check immediately after their last show. The shows that are most successful at GTT can go on to extended runs both at GTT and at other venues and may be picked up for further development and national distribution through Gorilla Tango Capital.

For which types of shows does this arrangement work well? What limitations does it have in terms of set construction, tech, running times, etc.?

The only restrictions we put on producers is that they design their sets in such a way that they can be moved on and off stage between shows, allowing the next group to build their set on an empty stage. The lights are on a standard plot, which everyone shares. Each group can play with the board all they like, but they aren’t allowed to change the physical setup (i.e., they can’t refocus or re-gel the lights). And, of course, you can’t do anything that is contrary to city fire, safety and other related codes.

Have you worked with any equity companies? Is that even feasible given your business model?

We have worked with a variety of equity companies, but they are usually not the best fit for our schedule. The projects they produce often don’t appeal to a broad market (Joe and Jill Everyperson are generally not terribly interested in traditional works) and their cost structures do not lend themselves to likely profit. I have seen many proposals for shows where the company would not make a profit even if every show were sold out. That type of production is obviously contrary to the goals of GTT.

You recently opened a second theater in Skokie and you founded Gorilla Tango Capital to finance productions at other venues. What are your plans for the future?

We have been working with our attorneys to develop a license agreement to create a network of corporate as well as independently owned and operated GTT's all across the country. This will give us a national distribution system for the most successful productions. In the next 12 months we plan to run test residencies of a few of our most popular shows in New Orleans, Los Angles, New York, Miami, Philadelphia and Richmond (followed by London and Toronto if all continues to go well). Preliminary results in these cities are very positive and mirror our success in Chicago. Once a permanent GTT network is in place, each venue will create new shows on an ongoing basis, the best of which will then be distributed to the other theaters in the network.

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Dan Abbate is the owner and CEO of Gorilla Tango Theatre. Dan began his business career at age 15 when he joined his family’s metal stamping business and was put in charge of setting up computer hardware, developing software and designing organizational processes per the ISO 9002 Standard. During his late teens and early twenties, he formed a number of small business ventures that heavily utilized Internet technology to streamline business processes and make those processes manageable in real-time from multiple geographic locations. In 2002 at age 22 Dan formed Gorilla Tango Theatre, a Chicago-style improv theater in the heart of Albuquerque, New Mexico. He recreated this venture in Chicago in 2006 and has since solidified GTT’s business plan to produce a thriving, local, live performance venue in Chicago’s Bucktown neighborhood.

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Recordings produced by Audio Arts + Acoustics students, Columbia College Chicago, and EARS, the Engineering And Recording Society of Chicago, for the Chicago Creative Expo 2013.

Thank you AA+A students: Adam Chismark, Ryan Greenburg, Trevor Roberts, Eric Somogyi, and Ming Yu.

Thank you EARS pro-members: James Wood Autwarter, Blaise Barton, Daniel Christmas, Danny Christy, John Christy, Rob Gillis, Reid Hyams, Danny Leake, Fran Allen-Leake, Eric Roth and Stacey Simcik.

Edited & Assembled by Ryan Greenburg (AA+A / Columbia College Chicago).

Executive Producer Reid Hyams (X-Art Entertainment) for EARS, AA+A / Columbia College Chicago & the Chicago Department of Cultural Affairs and Special Events.

Published by Aeneas Hemphill on Sun, 02/10/2013 - 10:42am
Updated on Fri, 06/14/2013 - 1:52pm