Writing a New Script

Leader’s ‘fearless’ ways help transform a nonprofit theater

Todd Haimes, artistic director of the Roundabout Theatre Company, sits in his photograph-filled office with his

black sneakers resting on the coffee table, fielding phone calls from staff members, casting agents, board members, and well-wishers. Such rituals have become so ingrained after 20 years at the theater’s helm that Mr. Haimes finds it hard to break away from them, even now as he recoups from bouts of chemotherapy to prevent the return of cancer in his jaw.

“I should be resting, but we are doing all these shows,” he says with a sheepish smile. “I don’t want to miss being a part of Nine, or The Look of Love, or Joe Egg.”

Mr. Haimes’s single-minded devotion to the Roundabout has helped transform the group from a bankrupt small regional theater into a Tony Award-winning company with 40,000 subscribers and a national reputation for revivals of classic plays and musicals. Nine, for example, which stars the movie heartthrob Antonio Banderas, earned the Roundabout eight of its 14 Tony nominations this year.

Throughout his tenure, Mr. Haimes has challenged the norms, starting with his appointment as the theater’s top administrator at age 26. After getting the organization’s finances in order, Mr. Haimes made the rare transition from chief executive to artistic director. In 2000, he secured the Roundabout’s first permanent home, in part by selling the naming rights of the building to American Airlines for $8.5-million — a move common among sports arenas but rarely seen in the fine arts. He has also been attacked in the press for not taking enough artistic risks, resulting in shows that some critics perceive as indistinguishable from his commercial competitors.

Even so, Mr. Haimes has cultivated a loyal following among his employees, board members, actors, and donors. Christian C. Yegen, a New Jersey real-estate executive who is vice chairman of the board, attributes Mr. Haimes’s successes to his “ability to deal with people in the way that makes them want to help, whether it’s writing a check, or being an employee, or being on stage.”

Financial Hurdles

When Mr. Haimes was offered the job of managing director in 1983, the theater had been in Chapter 11 for six years. Its financial statements were in disarray, and it faced a huge tax bill. Shortly after Mr. Haimes began, the fire department closed the theater, then housed in a supermarket basement, for outstanding violations.

Mr. Haimes, who has been a theater buff since seeing the musical Oliver! at age 10, took a practical view of the challenges he faced. “I said to myself, Look, I’m 26 years old, and nobody is going to offer me a managing director job unless the theater is really screwed up, because much more qualified people will get it,” he recalls. “I have no kids, and I’m at the point where I have nothing to lose. I really believed the theater had a mission they articulated well and executed well.”

But the job almost ended before it really began: Two weeks after Mr. Haimes started, the theater ran out of money. Mr. Yegen’s mother stepped in with a $100,000 personal check. In the memo line she wrote, “Hope this helps.” Mr. Haimes got to work.

After his first full year, the theater made money, and it has never run another deficit since, even as its annual budget has ballooned from $1.5-million to $25-million. In addition, the organization emerged from Chapter 11 two years after Mr. Haimes started, and retired its debt in 1995.

Mr. Haimes credits his lack of experience with allowing him to jump in without preconceived notions of how a theater should be run. To start propelling the Roundabout in the right direction, he relied on the accounting and business skills he had learned while getting his MBA from the Yale School of Management, as well as observations from his 18 months as general manager of the now-defunct Hartman Theater in Stamford, Conn.

“He is fearless, not in a boastful way,” says Jed Bernstein, who attended undergraduate and graduate school with Mr. Haimes, and is now president of the League of American Theatres and Producers, in New York. “When he first started working at Roundabout, it never occurred to him that he wouldn’t get them out of bankruptcy.” He adds: “If I were trying to identify one boy-scout or girl-scout quality of what it takes to be a successful leader, that would be pretty high on the list: a confidence that you will always find a way through.”

Confidence in his employees, as well as in himself, has helped Mr. Haimes chart the Roundabout’s successful path. His reliance on two senior staff members, who have worked at the theater for more than a decade each, allows him to focus less on the daily operations of the theater and more on crafting its long-term and artistic goals. In addition, Mr. Haimes and his trusted aides have pioneered marketing strategies, such as singles nights and other specially themed subscription packages, that have since become a staple for many theaters.

Among the cost-cutting measures Mr. Haimes immediately instituted was zero-based budgeting, in which each department starts the year’s budget from scratch and justifies each expense instead of simply adding to the previous year’s budget.

The policy has helped lead to some reductions in administrative expenses. For example, when he started, 14 employees worked in the subscription office and ticket exchanges took weeks instead of days. Mr. Haimes cut the number of employees to six, and instituted a faster system of exchanges, while saving the theater $150,000 in salaries, he says. He also trimmed the group’s marketing and advertising budget as much as he could, until he saw the cuts were beginning to slow ticket sales. In addition, in 1983, star actors were paid two or three times the salaries of other cast members. Mr. Haimes saved money by paying everyone at the same rate, a practice still in effect today, even with actors such as Chita Rivera, who is appearing in Nine.

“It wasn’t a miracle the theater turned around relatively quickly,” he says. “The theater was managed really poorly, and when the theater was managed well, things turned around.”

At the same time that Mr. Haimes was stabilizing the theater’s finances, he was also trying to build up its credibility among donors, patrons, actors, and creditors. At the Hartman Theater, which had also been financially beleagured, Mr. Haimes had watched as the managing director promised to pay creditors with money he didn’t have, which resulted in a loss of trust in the institution.

“When I got to the Roundabout and was faced with the same creditor situation, I remember consciously thinking, Whatever I do to them, no matter how bad the news is, just don’t lie,” says Mr. Haimes. He told creditors he could pay them 50 cents on the dollar of each debt now, or 100 percent at some future time. All took his offer of being immediately paid at a reduced rate, he says.

In addition, when Mr. Haimes recruited Robert G. Donnalley Jr., now a retired accountant, to the theater’s board in 1990, he talked in detail about the group’s financial problems. “The first thing that struck me was his candor,” says Mr. Donnalley, who is still on the board. “He didn’t try to hide from any of the issues and he had a complete understanding of what the ramifications were. From a management standpoint, honesty is a commodity to be cherished.”

Mr. Haimes still makes a point not to dodge hard truths. When the theater decided not to extend The Boys From Syracuse past its scheduled run last season, he told the cast himself. “I explained to them, ‘Look, the issue is we are not selling enough tickets,’” he says. Even though some cast members did not agree with the decision, he says he hopes they appreciated his willingness to hear and respond to their points.

Listening is a key part of Mr. Haimes’s job, as he habitually visits the actors in the Roundabout’s shows every few days to talk about any concerns and nip problems in the bud.

He puts a similar emphasis on serving donors and patrons. For example, the theater allows people who buy season packages to exchange tickets up to 24 hours before a performance. Mr. Haimes also decided to incur extra expenses when renovating the American Airlines Theatre by building a rooftop lobby where patrons can relax before shows and a very large ladies’ restroom, and adding extra legroom between the rows. A commercial theater might think twice about those choices because of the added cost and lost revenue from fewer seats, but Mr. Haimes says the moves play a crucial role in persuading patrons to maintain a long-term relationship with the theater, by buying season tickets again or making donations.

In 1989, Mr. Haimes became the theater’s artistic director after the founding artistic director, Gene Feist, stepped down. Mr. Haimes says that it was “heresy” at the time for a person from the business side of a theater to take the artistic reins, but the Roundabout has benefited from the arrangement, winning 13 Tony Awards and having balanced books.

Mr. Haimes has expanded the theater’s scope to include musicals and new plays by esteemed authors in addition to revivals of classic plays. Despite paying paltry wages compared with Hollywood, the Roundabout’s reputation has attracted many headline actors, including Juliette Binoche, Anthony LaPaglia, and Martin Short, to appear in its shows.

Not everyone has been a fan of the theater’s artistic direction under Mr. Haimes. In a recent review of The Look of Love, the Village Voice‘s theater critic, Michael Feingold, wrote: “Why is the Roundabout, a Broadway producing firm that rarely raises its sights above commercial exploitation, granted nonprofit status to produce this kind of Vegas-lounge dreck?”

But Mr. Haimes says the Roundabout takes plenty of artistic risks, including reviving shows that commercial producers are not interested in presenting. He makes no apologies for balancing his artistic choices with the theater’s financial goal of balanced books. “The full focus of my energy is devoted to making sure that every decision is made not only with the artistic interests but with the total management interests of the institution,” he says. “You are never going to get with me, ‘I’m an artist, don’t bother me with money’ kind of thing.”

A Permanent Home

Mr. Haimes achieved one of his longtime goals three years ago when the Roundabout occupied its first permanent home, a move that Ellen Richard, the group’s managing director, says allows the theater to keep more of its profits from shows by saving on Broadway theaters’ steep rental rates. It also provides greater control over physical changes to the theater for different shows. Mr. Haimes sees the move as a step toward his ultimate goal: to transform the Roundabout from a place that produces acclaimed plays to an institution that people want to join. “People like to have a home where they feel comfortable,” he says.

The Roundabout had already moved five times before Mr. Haimes approached board members about assuming a long-term lease on the Selwyn Theatre, a historic theater on 42nd Street. Although the board expressed reservations about the move, which would be costly and at the time seemed unnecessary, Mr. Haimes and Ms. Richard presented their case for the fiscal and institutional rewards, and the board eventually said yes.

Shortly afterward, the Roundabout lost the lease on the space it was in, and the move took on new urgency, which helped with fund raising, says Julia C. Levy, executive director of external affairs. The group needed the extra incentive: Mr. Haimes had initially estimated renovations would cost $10-million, a stretch for a charity whose biggest fund-raising campaign to date had been $2.7-million. The theater wound up raising $24.5-million to pay for expenses associated with renovating a historic theater and the extras included for the theater’s patrons.

“If I had known, I would have been scared out of my mind,” says Mr. Haimes. “Sometimes it’s better not to know all the challenges before you do it.”

In addition to $11-million in city and state funds, $2.7-million from the board, and money from foundations and individuals, American Airlines paid for naming rights, a move that some observers criticized as overt commercialization of a nonprofit organization.

“The pity is that the Roundabout, a nonprofit theater, leads the way in Broadway’s commercial arena by selling out to the highest bidder,” wrote John Heilpern, a critic at The New York Observer.

Of his decision, Mr. Haimes says, “I didn’t waiver for one second.” He adds, “Why on earth would you not take $8.5-million from a corporation in order to put their name on it and not have any involvement in the artistic product?”

The Roundabout is in the process of buying Studio 54, a former disco where its long-running hit Cabaret is playing. The $22.5-millon purchase is being financed through a $6.75-million contribution from the city and tax-exempt bonds. In addition, this year the company assumed a 20-year lease on the American Place Theatre, and is in talks with a foundation Ms. Levy won’t name to underwrite part of its $7-million renovation cost. When all the real-estate deals are done, the Roundabout will have a home for its revivals of classic plays, its musicals, and its new plays, solidifying its place as an artistic powerhouse in the city.

Personal Toll

The seven-day-a-week nature of his job has been good for the Roundabout, but bad for Mr. Haimes’s personal life. While he is separated from his wife, they remain best friends, he says. “There is no question that getting home every night at 10 o’clock and working every weekend is not a great thing to be married to, even if the person is relatively nice,” he says.

Neither personal turmoil nor health problems — his doctors do not anticipate a recurrence of his cancer — have made him rethink his commitment to the theater. The preventive chemotherapy sessions end this month.

However, Mr. Haimes did consider leaving the Roundabout permanently a few years ago, after being recruited to salvage the foundering commercial theater company Livent. But after a stint running the Roundabout and Livent simultaneously for a few months, he decided against it, in part because he realized Livent wasn’t going to make it financially.

“It was the luckiest thing that ever happened to me, aside from being artistic director, because it made me appreciate even more what a unique situation I had at Roundabout,” says Mr. Haimes. “That just solidified for me with such clarity and joy the freedom I have here that I could never find anywhere else.”

ROUNDABOUT THEATRE COMPANY

Purpose: To produce revivals of classic plays and musicals, as well as new plays by established authors.

History: In 1965, Gene Feist and his wife, Elizabeth Owens, founded the Roundabout Theatre Company in a 150-seat theater located in a supermarket basement. The theater started with 400 season-ticket subscribers. In 2000, the Roundabout completed a campaign to raise nearly $25-million to renovate its first permanent home, the American Airlines Theatre, on Broadway; it currently has 40,000 season-ticket subscribers.

Finances: The theater brought in $25-million last year.

Sources of funds: Season-ticket subscriptions and single-ticket sales account for 64 percent of the total; contributions account for 28 percent; and investment, sponsorship, and rental income make up the remainder.

Key officials: Mary Cirillo-Goldberg, chairman of the board of directors; Todd Haimes, artistic director.

Address: 231 West 39th Street, Suite 1200, New York, N.Y. 10018; (212) 719-9393.

Web site: http://roundabouttheatre.org.