News & Politics

The Kennedy Center Will Furlough 60 Percent of Its Staff

Photograph by Jeff Elkins

The John F. Kennedy Center for the Performing Arts says it must furlough 60 percent of its full-time staff. Even with $25 million in funding from the most recent stimulus bill, the arts center says, and even if it could reopen by mid-May, the center says it would still be on track to run out of money by July.

All performances are halted until at least May 10, “thus depleting almost all ticket income and greatly reducing charitable gifts to the Center,” the statement says. It plans to retain a “skeleton staff” in its marketing, box office, finance, and development departments.

The Kennedy Center says it will draw on the stimulus funding and a $10 million line of credit. It has already idled more than 700 part-time workers and last week, it gave musicians in the National Symphony Orchestra one week’s notice that their April 3 paycheck would be their last, and that it would cease to provide their health-care benefits at the end of May. The center will provide healthcare benefits to all furloughed employees. A spokesperson tells Washingtonian that includes the NSO musicians.

The arts center also released a breakdown of how it intends to spend the stimulus money, the subject of some criticism when it was first announced:

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

Full press release:

A STATEMENT FROM

THE JOHN F. KENNEDY CENTER FOR THE PERFORMING ARTS

Kennedy Center Takes Steps to Ensure the Future of the Presidential Memorial and National Center for the Performing Arts Amid Pandemic

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.

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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.

Senior editor

Andrew Beaujon joined Washingtonian in late 2014. He was previously with the Poynter Institute, TBD.com, and Washington City Paper. His book A Bigger Field Awaits Us: The Scottish Soccer Team That Fought the Great War was published in 2018. He lives in Del Ray.

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