Kennedy Center Releases Statement Regarding its Future

Kennedy Center for the Performing Arts has released the following statement:

As America and countries around the world try to make sense of the current global public health and economic crisis, new realities have come sharply into focus for business and non-profit leaders, forcing many-including the Kennedy Center-to do everything possible to ensure our long-term financial health and survival. Without question, the Kennedy Center has been impacted by the coronavirus pandemic and has experienced overwhelming financial losses. The shared sacrifices we make as an institution and the financial steps we take today, though painful, are vitally important to securing the future of the Kennedy Center. By safeguarding our financial position now, we also improve our capacity to open our doors and stages for audiences as soon as it is safe to do so.

As a living presidential memorial and congressionally created National Center for the Performing Arts, the Center's economic model is different than most arts organizations. Our business operations rely heavily on ticket revenues and donations, which combined, equal 80% of the Center's annual operating budget. The coronavirus pandemic has forced us to cancel all performances through at least May 10, 2020, thus depleting almost all ticket income and greatly reducing charitable gifts to the Center. With no end in sight to the current crisis, we feel it is prudent to assume that our business may not resume for several months.

Our extensive financial modeling indicates that if no changes are made to our spending patterns, even if we are able to open in mid-May, with the recent $25 million federal stimulus funding, the Kennedy Center would run out of cash as early as July. In order to stretch the Center's finances as long as possible, we must take immediate action to change our expense structure and preserve cash. In addition to drawing from the $25 million stimulus funding and the Center's existing $10 million line of credit, we must furlough approximately 60% of the Kennedy Center's full-time administrative staff beginning April 6 through at least May 10, 2020. These measures are apart from the 725 hourly and part-time employees already impacted. The remaining skeleton staff consists primarily of box office, finance, marketing, and development employees required to maintain business continuity. It is imperative that we scale back the entire institution's personnel costs during this time of closure and dearth of ticket income. Again, all of these choices are difficult, though absolutely necessary for us to re-employ staff and musicians when we can resume our programming and bring audiences back to the Center in the months to come. The human impacts of these actions are indeed devastating, which is why Kennedy Center leadership has committed to covering full healthcare benefits for all furloughed employees.

In the last week, we have received many questions from the public and our patrons about the $25 million designated for the Kennedy Center in the federal stimulus package (CARES Act). This economic relief will save jobs and ensure jobs for our furloughed staff to come back to once the pandemic subsides and we are able to reopen for business. The following breakdown illustrates how the Kennedy Center will use these funds to cover essential expenses over the next six months:

HOW IS THE $25M BEING SPENT?

Employee Compensation $12,750,000

Employee Benefits $7,500,000

Artist Contracts and Fees $1,750,000

Deep Cleaning $250,000

IT to improve telework capacity $250,000

Rent or utilities $1,000,000

Information Technology $750,000

Other Admin Expenses $750,000

TOTAL $25,000,000

After exhaustive review and scrutiny of all options, the Kennedy Center's leadership and board believe the plan outlined above is the only way forward. Our priority and responsibility is to ensure that the Kennedy Center is able to fulfill its mission into the future and re-open once the pandemic has subsided and our lives, our community, and the economy may return to some normalcy. We look forward to re-engaging artists and re-employing staff, just as soon as health and public officials indicate it is safe to do so. Our nation's stages will come alive. On behalf of the entire Kennedy Center family, we wish you all good health and courage in the days to come.

[Editor's note: On March 12, the Kennedy Center announced cancellations through March 31. On March 20, the Center announced performances and events are now canceled through May 10.]

For the most up-to-date information regarding the Kennedy Center's response to COVID-19, please visit the Kennedy Center website.