TURNOUT FOR THE September meeting of the trustees of Pacific Northwest Ballet was about average. Around two-thirds of the current membership took their seats in

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Dancing on the edge

Seattle's world-admired Pacific Northwest Ballet is pirouetting dangerously close to financial meltdown.

TURNOUT FOR THE September meeting of the trustees of Pacific Northwest Ballet was about average. Around two-thirds of the current membership took their seats in the Jane Davis boardroom of PNB's Phelps Center, the main order of business at the first meeting of the new season being a survey of the financial outcome of the last one.

The news was not good. Though the company had run a smaller deficit in 1998-99 than in 1997-98's hugely ambitious "all-new-works" season—$900,000 versus $1.25 million—two big hits in a row had left the company so strapped for cash that it was borrowing to cover current payroll. For a group that five years before had enjoyed a cash surplus on the order of $4 million, it was a sad comedown. How had one of America's most admired dance companies suddenly found itself in such dire financial straits?

Longtime observers of the PNB operation say that in fact nothing about it is sudden. In their view, the Ballet has been living beyond its means for years, depending for solvency on occasional massive one-time cash infusions rather than a sound long-range planning of expenditure and fundraising.

A survey of six years of PNB financial reports from 1992 to 1998 confirms those judgments. The company's declared surplus of $1.9 million for the 1992-93 season turns into a small loss if you deduct the $2 million in state and county contributions toward the building of Phelps Center. In 1993-94, the $767,000 surplus is erased when the National Arts Stabilization Fund gift of $890,000 is subtracted. The next two seasons recorded losses of $580,000 and $261,000 respectively. Special gifts turned the bottom line black by more than $1 million in 1996-97, but that gain has been more than wiped out by losses in the subsequent two seasons.

Considering PNB's artistic ambitions and its considerable success at the box office, the company's main problem doesn't appear to be spending too much; rather, it is raising too little. Large high-art organizations like PNB now usually expect to raise little more than half their income through ticket sales. For the last six seasons, PNB's earned income has composed nearly two-thirds of its take.

In the last analysis, fundraising is the responsibility of an arts group's board of trustees, but trustees can't raise money without a professional leadership that has well-defined budgets and clear-cut goals. Artistic leadership of PNB is and has been for 20 years in the capable hands of the husband-wife team of Kent Stowell and Francia Russell, whose passion, vision, and commitment to quality have brought some of the best dancers in the world to Seattle, creating a company that can go to New York or Edinburgh and dance with confidence and pride before some of the toughest audiences in the world.

WHILE PNB HAS gone from one artistic triumph to another under Russell and Stowell, the less glamorous but equally important administrative side of the operation has descended into something little short of chaos. The company has had three top managers in the past four years. An even more crucial job—that of development director in direct charge of fundraising—has turned over as frequently. It takes time for such leaders to establish themselves in a community, to learn who has the money and who's likely to give it if properly approached. Since the departure of Arthur Jacobus, who left PNB in 1993 to assume the top administrative job at San Francisco Ballet, no manager has remained in the post long enough to put down roots.

It doesn't take a great deal of research to find out why they left. The evidence can be seen in the PNB annual reports. When he left Seattle, Jacobus enjoyed the title of president and chief executive officer of PNB, at a salary of $119,626: higher, though only very slightly, than either Stowell or Russell's. His successor had to be satisfied with the title of general manager and a salary of $103,000. Her successor in turn suffered another cut, to $90,000, and the indignity of having to report to the artistic co-directors rather than directly to the board, as his predecessors did. When he left, after only 14 months in the job, he recommended to the board that his position be eliminated. Given Stowell and Russell's total domination of the organization, a general manager was functionally irrelevant.

If true, PNB was moving in a direction directly counter to the long-term trend among large arts organizations, where today artistic directors share power equally with strong, independent managers who have their own staffs and line of communication to the trustees. In Seattle, such successful duumvirates include Gerard Schwarz and Deborah Card at the Seattle Symphony, Sharon Ott and Benjamin Moore at Seattle Rep, and Speight Jenkins and Kathy Mageira at Seattle Opera. Even the Metropolitan Opera's musically all-powerful James Levine shares power with the company's general manager, Joseph Volpe.

"The leadership of every successful arts organization these days is a collaboration," says an admirer of PNB and Stowell and Russell. "But Kent and Francia are already partners, the most intimate partnership imaginable. People hired as managers at PNB quickly learn that whatever their job title, they have no effective power in the organization because every single employee knows that managers come and go, but Kent and Francia are forever."

As a result, the trustees of PNB have come to depend on the artistic directors for all their information about the organization. And because many board members esteem and value Stowell and Russell as personal friends as well as artists or employees, they tend to accept the information they receive without question. Even the economic jolt administered by the deficits of the last two seasons does not seem—yet, at least—to have produced any sense among a majority of the board that their current problem may be structural rather than strictly economic.

For a while earlier this month the possibility loomed that PNB's auditor, Deloitte & Touche, might not give its approval to the 1998-99 financial statement that has to be on file with the IRS and the state Secretary of State by November 1. Had D&T balked, it would have brought the matter to an immediate head. But in the end the accountants signed off on the statement, permitting sleeping dogs to remain asleep. For now.

 
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