Empire State Plaza Performing Arts Center, Inc.

Financial Management Practices

The Empire State Plaza Performing Arts Center, Inc. (Corporation) develops and manages theatrical programs for the Performing Arts Center and related facilities at the Empire State Plaza in Albany. The Corporation is funded by State appropriations as well as revenue from ticket sales and rental fees. The amount appropriated for the Corporation in the 1995-96 fiscal year was half the amount appropriated in the prior year. We examined the Corporation's financial performance since 1991 to assess how the Corporation's financial viability will be affected by a lower level of State funding. We found that, between 1991 and 1995, the Corporation increased its operating revenues and decreased its total expenses. However, during that period, operating revenues never exceeded 36 percent of total Corporation expenses. According to theater industry data, the operating revenues of the average not-for-profit theater cover 60 percent of its total annual expenses. We believe certain improvements in marketing efforts could increase the Corporation's operating revenues. However, even with a successful marketing effort, it will be difficult for the Corporation to sustain theater operations.

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