Campbell Robertson's Sunday Times piece on The Cult of Enhancement Money is an excellent primer and starting point for any conversation on the topic.
Basically we all have known it goes on. But it's been a while since NYT reported on it and good for those readers to be aware.
Personally I don't think it necessarily damns nonprofit theatres to enter into partnerships with producers whereby the producer effectively becomes a donor in exchange for a kind of "first refusal" on any commercial producing options. I don't see anything sneaky about this, as along as it's transparent. Also, it's clear there's risk involved. The producer is throwing money at a show on just the hunch it will get buzz, reviews, and sales enough to make a go at Broadway. I say they're entitled to take that risk. And as long as the nonprofit company gets to do work they believe in anyway, and even take in more ticket revenue, then good for them.
As the Atlantic's AD Neil Pepe says in the article: “There are years when we went a whole season without enhancement money and did fine....And there are years when I don’t know if we could have gotten by without enhancement money.”
Then again, the greyer areas, artistically, are evident in cases where we suspect a company starts doing work other than the work they'd normally do in order to get said enhancement. Look at what the head of the small Urban Stages company bluntly told Robertson:
Frances Hill, the artistic director of Urban Stages, said she had no misgivings about it. She had a good working relationship with the producers, the production got an upgrade, and the play got an afterlife. The fiscal situation has become so bleak, Ms. Hill said, that she would consider producing a script she might not otherwise if it came with enhancement money.
“It would depend upon what financial shape the theater was in at that moment,” she said. “It might be a challenge to say, ‘How can we make this into something fantastic?’ ”
But, again, let's keep in perspective how many times and under how many circumstances a theatre company may compromise on artistic selection for financial gain--whether that's to lure a certain star actor or playwright, or to please a certain donor or constituency. Or to do work merely acceptable aesthetically as long as it has low overhead. (Lots of one-man shows in our resident theatre companies lately, aren't there?)
So I don't see any sense in somehow "banning" the practice. (Although I'm sure some would be happy to see some companies' nonprofit tax-free status looked into.) We should just, as always, hold companies accountable for their programming decisions. If you think someone has really sold out to do lame material, cancel your subscription. Write a letter. Those complaints do get noticed.
I'll tell you, my main concern is actually that nonprofit theatre don't get enough recognition for the work they shepherd to Broadway. I would hope that every tourist who enjoys a Spring Awakening, a Grey Gardens--or a Rent or a Hairspray--would become an NEA convert for life! They should be hit over the head repeatedly with the fact that their tax dollars helped such a show happen. (Like, in the program.)... Now of course that risks backlash when they hate the show. But like all patrons of the arts they need to get used to the fact having Broadway theatre means taking the good with the bad. That without funding all of it, then you're less likely to get any shows you like.
(Likewise, programs for Les Miz and History Boys should give thanks to the British taxpayers and show us how much more they freely donate to what ultimately becomes our entertainment.)
One commercial producer is quoted in the piece as saying: “We don’t have out-of-town tryouts anymore....This is the way we do it.” This new reality needs to be acknowledged continually and emphatically. The nonprofit sphere has stepped into the vacuum left by the commercial near-impossibility of theatrical excellence. (And I say "excellence" purely in the sense of pursuing excellence.)
The term "research and development" gets bandied about here and in other conversations about this topic. To take that analogy further, just imagine the importance university laboratories hold in the world of commercial technology. If university science departments started to fold, there'd be some rescue money pretty quick--from all kinds of "sectors."
Put simply: The American Theatre is the nonprofit theatre, for better or for worse. This is just further evidence for that.
PS. Do take note of the chilling funding statistics Robertson cites. Both federal and state arts funding have been clearly worse than stagnant over the last 30 years. And not getting better.