Pearl Theatre Company closed its doors at the end of its 2016-2017 season after declaring bankruptcy. The company, which had just finished its 33rd season, said in a post on its web site that despite “record-setting audiences, and landmark institutional support, the efforts of the artists, staff, and Board of Trustees simply could not outpace the economic reality of operating a mid-size theatre company in Manhattan amid a crowded field of worthy causes.”
The demise of the off-Broadway company illustrates the financial pressures facing many performing arts communities. In addition to underlying weak economic indicators for the broader U.S. economy, which always impacts the arts, the Pearl Theatre Company was also cobbled by rising rents.
The company moved from its longtime home at Theatre 80 on St. Marks Place in the east nearly a decade ago to New York City Center Stage II in Midtown, and then to its final home at West 42nd Street on Manhattan’s far west side, just one block east of the Hudson River. It was at the West 42nd Street address where the company signed a 20-year lease in 2012, a move that would be costly for the 160-seat non-profit theatre company.
“Artistic enterprises are live beasts, and everything that’s live has a life span,” said Shepard Sobel, who founded the company in 1984 and left in 2009. “Finances are a bitch.”
Indeed they are. Like many smaller theatre companies, the Pearl ran large deficits over the last number of years. In 2012, the company burned through much of its endowment (from $241,354 to $28,066) to help with the moving and construction costs to its new 42nd Street address.
Moreover, rent was rising fast, from $282,825 in 2017 to $329,317 in 2020.
The writing has been on the walls for a couple years now; in 2015, the company’s annual report noted that there was “substantial doubt” about whether the Pearl could survive.
The then-current leadership said it was working to “redress strategic management errors of past administrations,” those errors being a lack of fundraising and marketing, which hurt the company’s chances of building and diversifying its audience.
In the court filing, the Pearl had less than $50,000 in assets and between $100,000 and $500,000 in liabilities.
By filing a petition for bankruptcy under Chapter 7, all assets and control of assets have been turned over to a Chapter 7 trustee who has been appointed by the bankruptcy court.
According to the Pearl Theatre web site, it employed 15 company members and an in-house staff of six. One of the most famous alumni to come from the Pearl Theatre is David Hyde Pierce, who was part of the company’s first season.
“A Message From The Pearl Theatre Company,” Pearl Theatre Company, June 7, 2017.
“Curtains for the Pearl, as the Theatre Company Files for Bankruptcy,” The New York Times, June 7, 2017.