Documents reveal Luminato festival funding problems; $15-million reserve nearly depleted

Share

With the eighth edition of Luminato kicking off Friday, CEO Janice Price and artistic director Jorn Weisbrodt are about to become extremely busy, welcoming and entertaining the likes of art-world star Matthew Barney, legendary dance company Tanztheater Wuppertal Pina Bausch, and pop musicians such as David Byrne and Josh Groban to Toronto.

But Luminato's leadership is unlikely to be swept away by the 10-day whirlwind. That's because the festival is without guaranteed long-term funding from the province and has a looming multimillion-dollar hole in future budgets, as its $15-million-dollar reserve fund is almost dry. This year, Luminato received $2.5-million from the Ontario government for a festival that costs about $11-million to produce. Next year, festival leaders have no idea what size a cheque the province will cut, if its cuts one at all – this year's was the final instalment of a multiyear agreement.

The uncertainty is compounded by the impending provincial election, which will take place in the middle of Luminato and almost certainly be a factor in determining the size and scope of the festival going forward.

Unlike many other arts institutions in Ontario, Luminato has always received the bulk of its provincial funding directly, rather than via an arms-length agency such as the Ontario Arts Council. This raised hackles, especially at the start, as the festival was seen by many as owing its richly subsidized existence to being the brainchild of well-connected insiders David Pecaut and publisher Tony Gagliano.

Depending on who comes to power, Luminato will have to justify its existence in a way it hasn't to date: Has it won the goodwill and affection of Torontonians and become a top-tier, destination arts festival capable of being mentioned in the same breath as those in Edinburgh and Adelaide? Or did it spend too many years trying to find its footing and focus, overspending on administrators and uninspiring commissions, and importing artists who were yesterday's news?

There appears to be no talk, in any case, of "right-sizing" Luminato – that is, reducing its budget to match reduced revenue or paring down a program that sprawls from elitist performance art to populist concerts, from literary programming to magic shows.

Says Weisbrodt: "I think a festival needs to overwhelm and needs to be too much."

How exactly Luminato will continue to overwhelm, however, becomes harder to fathom the closer you look at the festival's financials. According to documents obtained from the Canada Revenue Agency, Luminato has been regularly spending upwards of a million dollars more a year than it brings in from three levels of government support, corporate sponsorships, donors and ticket sales – $1.3-million more in 2012 and $1.4-million more in 2013.

How has Luminato pulled that off without running a deficit? The answer comes in the form of a one-time $15-million lump sum received from the province in 2008 – and which the festival has been drawing down as annual funding has decreased instead of scaling down costs or finding alternative revenue sources. "Because we didn't want it to appear in any way like some kind of a slush fund or a piggy bank, we did designate it immediately as a board-restricted reserve fund," says Price of this fund that provided $2-million of Luminato's 2013 revenue.

By the end of the 2014 festival, Price estimates that there will only be $500,000 left in the fund, and then that backup stream of revenue will be lost entirely.

Direct funding has made Luminato unusually susceptible to political fluctuations – and the festival has had to swallow cuts of 37.5 per cent to its expected provincial funding in 2013 and another 44 per cent this year. While planning is well under way for Luminato 2015 and onward (including, Weisbrodt and Price say, a couple of overdue major commissions from Canadian artists), Luminato still has no idea how much it will be supported by the major government partner that helped found it in 2007. "The election was somewhat unfortunate timing on that front," admits Price.

Would a Progressive Conservative government run by Tim Hudak deem the festival worthy of public support? Perhaps having Hudak's old boss, former premier Mike Harris, on the board of directors will help. Harris joined Luminato's board last fall along with heavy hitters Kirstine Stewart, of Twitter Canada, and former provincial Liberal finance minster Greg Sorbara.

If Price and Weisbrodt are nervous about the future, they barely show it in a series of interviews in the month leading up to Luminato. "I didn't come here to shrink the festival," says Weisbrodt, who took over as artistic director of the international arts festival in 2012. "I wanted this job to make it more important and to make it bigger."

A stirring sentiment, but one that fails to address the perilous situation. With polls showing a three-way race, it could go any which way for the festival. The Progressive Conservatives say they will review every government program, cancelling any that "don't give taxpayers good value," while the NDP promises to best the Liberals by providing "the long-term, stable funding that Luminato needs not just to survive, but to thrive."

As for the Liberals, even if they are re-elected, Luminato is set to get less money than it has been receiving to date. Indeed, Price, who has had conversations with all the party leaders, has asked for a decreased amount – though she won't say exactly how much. "We've been talking about reducing dependence on provincial funding," she says.

It looks like a real fiscal cliff – but Price believes she and the board saw it coming, and have prepared for it. There is a $1-million, one-time payment associated with the PanAm Games that will help cover the gap in 2015. Boston Consulting Group, the firm where Luminato's late founder Pecaut worked, recently completed a study (pro bono) figuring out how to avert a crisis, tabled with the board last month. It recommends lining up more corporate sponsors, finding new private donors – and, as will be clear to festivalgoers this year, boosting earned revenue by selling tickets to concerts by the Roots and TV On the Radio at the festival hub (as well as turning that hub into the city's largest licensed outdoor patio).

Of course, this leads to a Catch-22: Having Torontonians pay for concerts that might have been free in previous editions and boosted attendance numbers will make it harder for Price and Weisbrodt to make the case that Luminato, in the parlance of the potential PC government, "gives taxpayers good value."

If the festival's leaders really don't intend to reduce the budget from its current $11-million to $12-million range, how Luminato spends its money will no doubt come under greater scrutiny from the public and politicians going forward – particularly in the area of salaries. There's a pay freeze in effect now, but, according to the Sunshine List, Weisbrodt's pay jumped 18 per cent from about $146,000 to $173,000 last year, while Price's salary crept up over $400,000 even as provincial funding was declining and the board-restricted reserve fund was running low. "I think there are cultural executives who are very much in a comparable range," says Price, noting the Sunshine figures include pension contributions and a vehicle allowance.

As for the portion of the budget that goes to art and artists, Luminato has in the past raised eyebrows when, for instance, the festival reportedly poured a whopping $1-million into British director Tim Supple's production of 1001 Nights – a show that underwhelmed in 2011 and had only a limited life afterward.

On that front, Luminato is definitely spending more wisely under Weisbrodt than his charisma- and connection-light predecessor Chris Lorway, as the new German-born artistic director has made sure to line up partners to share costs before commissioning works.

While big international names such as Barney are nabbing the most attention this year, Luminato is also supporting Canadian performances such as a promising cinema/theatre hybrid by turntablist and graphic novelist Kid Koala called Nufonia Must Fall (directed by K.K. Barrett, the incredible Oscar-nominated production designer of Her). After Toronto, Kid Koala – a.k.a. Vancouver's Eric San – will travel with the show to the Adelaide Festival, as well as make other important stops in Hamburg and Santiago thanks to Weisbrodt's influence. And all for a fraction of what 1001 Nights cost. "Ironically, it would appear that we're investing less, but we're actually getting bigger bang from our buck," says Price.

As for the high-end marquee programming, after the appearance of theatre director Robert Wilson and performance artist Marina Abramovic in recent years, followed by news the late Pina Bausch's Tanztheater Wuppertal company would be coming with Kontakthof, Luminato has threatened to develop a reputation of being where you can see what was avant-garde in the 1970s today. (Kontakthof was created in 1978 and toured to Montreal, Ottawa and New York way back in 1985.)

As he settles into his role, Weisbrodt is increasingly shining a light on new artists too – and this year, shows by the American performance artist Derrick Ryan Claude Mitchell and Argentine director Mariano Pensotti promise to lure those international festival hoppers who want to see who will be the next Abramovic or Wilson. (As someone who has regularly travelled to the Avignon Festival on my own dime, this is the type of programming that excites me, in any case.)

The leadership of Luminato is nothing if not savvy – but it remains to be seen if their connections will help them where it really matters now, finding corporations and donors willing to cover a budget gap for which, Price admits, "there is no magic bullet."

Follow me on Twitter: @nestruck