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Performing The Fine Art Of Selling

August 23, 1987|RANDY LEWIS

It wasn't so long ago that the only pitch heard in most concert halls was the musical kind.

But in recent years music lovers have been increasingly subject to the sales pitch: for souvenir T-shirts, sweat shirts, books, records, lapel buttons, post cards, designer jewelry, crystal wine glasses and other mementos of the evening's performance.

Product merchandising, which has long been a gold mine of revenue for "Star Wars" movies, Saturday morning cartoons, amusement parks, sports franchises and rock 'n' roll bands, is also catching on big in the refined and sophisticated world of opera, ballet and symphony music.

Taking a cue from the rock 'n' roll world, where sales of merchandise at concerts sometimes generates more net profit for a band than paid admissions, performing arts groups and administrators are finding product merchandising to be one hedge against rising performance and production costs, new tax laws that may threaten charitable donations and dwindling government funding.

And merchandising can pay off not just at the cash register, but also in self-promotion and in public relations.

"I'm surprised that more people aren't doing it," said Paul Gruber, director of business development for the Metropolitan Opera Guild, whose vast professionally staffed merchandising program he claims is the largest and most successful of any performing arts group's in the country.

Though he didn't break down figures, Gruber said the guild's on-site product sales, book publishing, original record pressings and a mail-order catalogue business represent a significant part of the $3 million the guild contributes to the Met's $65-million annual budget.

"It's the new horizon of revenue for us," said Craig Palmer, director of marketing and media relations for San Francisco Ballet. "We have pretty much maximized our traditional sources for funds, including ticket sales and donations. So in the last year or two we've begun to give (merchandising) higher priority in our operation."

Sales of various products in formal gift shops or makeshift booths, which are typically handled by volunteer members of performing arts support groups or guilds, account for an average of 7% of a given organization's budget, according to figures from the American Arts Alliance, which represents more than 350 nonprofit U.S. arts groups.

Chip Raymond, managing director of New York City Ballet, said that company will raise about $200,000 of its $22-million budget this year from sales of a plethora of dance-related items--from autographed pictures of principal dancers to a line of custom jewelry--both when the company is in residence at the New York State Theater and traveling the country on tour.

Raymond said earned income from ticket sales made up about 75% of the company's budget in 1980, but that figure has dropped to 63% this year.

"Where do you get (the balance) from? You can raise ticket prices, but we want to keep ticket prices down," Raymond said. "The number of performances we do is pretty much fixed. Expenses are going up faster than earned income and that gap is widening. You can either get it from the government, which has flattened out, or from individuals and corporations. . . .

"But we are reaching a plateau. So the gift bar, as small as it may be, is important because it might pay for a couple of dancers," Raymond said.

Figures from the National Endowment for the Arts show how much federal arts funding has slowed during the Reagan Administration.

In 1966--the first year the endowment made grants--a modest $2.5 million was distributed. But that figure rose an average of $10.4 million every year until it reached $158.7 million in 1981, Ronald Reagan's first year in office. Subsequently, endowment funding fell in 1982 and 1983, increased in 1984 and again slightly in 1985, then dropped in 1986--partially due to budget cuts mandated by the Gramm-Rudman Deficit Reduction Act--back to $158.5 million. The arts office's allocation for 1987 is $165 million.

Yet the decline in federal funding is only part of the bleak overall financial picture for arts groups. According to the American Arts Alliance, two-thirds of all professional symphony orchestras in the United States ended their 1986 seasons with deficits, double the amount of groups operating in the red just five years earlier.

So for many organizations, merchandising is at least one small bright spot in the constant scramble to balance their books.

At the Orange County Performing Arts Center in Costa Mesa, which faces first-year operating deficits of some $4 million even after having successfully raised more than $70 million in private funds for construction, officials are putting a greater emphasis on merchandising as the facility moves into its second year of operation.

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