Steppenwolf Theatre announces staff cuts in the wake of falling revenue, drop in attendance

Chicago’s Steppenwolf Theatre is laying off 12% of its staff, effective immediately, in the wake of falling revenue streams, the end of federal COVID relief funding and diminishing subscribers.

The announcement was made Thursday morning.

The cutbacks include 13 full-time employees as well as the elimination of seven open positions.

“Unfortunately, like many non-profit theaters across the country, Steppenwolf Theatre Company has been negatively impacted by a protracted post-pandemic economic recovery for our sector and the rising cost of inflation. To be sustainable well into the future has required some very difficult decisions,” the company’s executive director Brooke Flanagan said, in the official announcement.

In an interview Thursday with the Sun-Times, Flanagan said series subscription sales (tickets for a set number of shows each season sold at an attractive rate) and overall attendance at the theater have declined. This is due to several factors, which were revealed through qualitative and quantitative studies undertaken by the company over the past three years, she said.

“We found that factors keeping our subscribers from coming back included traffic concerns, safety concerns and not wanting to come into the city, and long-lasting COVID concerns.”

Steppenwolf’s subscription base dropped from 10,000 in 2019 to nearly 6,000 members this year. Single-ticket sales revenue dropped by 31%.

“And very revealing was that there was a pretty intense lean into the muscle memory of coming to see a live show, which had atrophied due to the pandemic,” Flanagan said.

The ability to devour arts and entertainment coverage via streaming skyrocketed during the pandemic. Flanagan said that stay-at-home mentality is one major reason theaters are experiencing empty seats at performances.

“People are continuing to stay home and stream extraordinary programs and series, so the need to look outside the home for [entertainment] content continues to decrease,” Flanagan said.

That does not apply to concerts and sporting events, she noted. “Attending concerts or a game is something completely different from going to see live theater.”

(To her point, concert behemoth Live Nation’s latest quarterly report shows that’s company’s revenue was more than $5.5 billion, a 27% increase, as of the second quarter of this year.)

Steppenwolf received $7,480,000 in federal emergency relief funding between 2020 and 2022, Flanagan said, which included PPP funds, a Shuttered Venue Operators’ Grant, a FEMA grant and ERTC funds.

The theater’s overall operating budget declined from a pre-pandemic high of $20 million to $16 million in 2023. The reduction is reflected in the the current season’s programming, which features six productions as opposed to eight last season, and nine in years past.

“Our expenses increased by 19% this year,” Flanagan said, “and that’s due to many factors including inflation, cost of living impacting wages, the costs of goods and materials for things like sets and such. The economics of live theater are not what we’ve experienced before.”

The past three years also saw the opening of Steppenwolf’s new Lefkofsky Arts and Education Center at the theater, a $56 million project funded through the company’s Building on Excellence Campaign, an ongoing $73 million fundraising initiative. The project, in essence, created an arts and entertainment campus at the company’s Lincoln Park site.

“It’s an artistic hub for the community and for the artists who present their work here,” Flanagan said, “whether it’s a show we produce or a show we present.”

“We’ve seen audiences responses [to our shows] and house capacities run the gamut [in the wake of the pandemic]. It is even more inconsistent in terms of what will hit and what won’t. For example, ‘Another Marriage’ was extended. ‘Choir Boy’ was super successful. ‘King James’ was super successful. But we’ve also experienced 50-percent houses and productions that have come in way below their revenue goal.”

Flanagan said the 2022 runs of “The Most Spectacularly Lamentable Trial of Miz Martha Washington” and “Bald Sister,” for example, were interrupted by COVID and “both were six-figure losses” for the theater.

The Steppenwolf news comes in the wake of Lookingglass Theater’s announcement earlier this summer that it is pausing operations due to weakening revenue streams.

“As theaters approach the end of extraordinary federal funding, this should be a wake-up call to communities across the country, not just here in Chicago, to support the arts, support local and regional theaters,” Flanagan said. “No theater company is immune to failing. We encourage the community here to rediscover the joy of seeing live theater, that communal experience you can’t get at home. Buy a ticket to a show, make a contribution [to fundraising efforts].”

Flanagan also said the reduction in labor costs coupled with new funding streams are part of a three-year budget arc, which should sustain Steppenwolf as it approaches its 50th anniversary season in 2025-26.