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Alex Mustakas, standing in the brand new Dunfield Theatre in Cambridge, named his company after the little town where his summer-stock business began.Fred Lum/The Globe and Mail

Entering a jam-packed Thursday matinee at the Dunfield Theatre, it becomes clear pretty quickly why a retirement residence paid $1-million for the naming rights at this new theatre in Cambridge, Ont. Nearly every patron in the 500-seat theatre has gray hair.

Big Band Legends has drawn this lively, older audience, people who happily buy 50/50 raffle tickets from ushers before the lights go down. It's the latest show in the lucrative "Legends" series conceived and directed by Drayton Entertainment's artistic director and CEO, Alex Mustakas.

I've arrived from Toronto to search for the secret behind the box-office success of these musical revues that fuel Drayton's booming theatrical empire. I am not expecting what subsequently unfolds on stage, though .

Legends begins with medleys of hits by crooners from Bing Crosby to Michael Bublé, sung by personable performers such as Yvan Pedneault (former star of We Will Rock You in Toronto) and stitched together by a backdrop of videos and pictures of the singers.

But as the tribute continues, there's some Gene Autry thrown into the mix, and a sing-along of Neil Diamond's Sweet Caroline. Then, bafflingly, comes a sequence called The Italians that includes the theme song from The Godfather accompanied by projections of prosciutto.

That's when I decide I can leave at intermission. As I retreat to my car, I wonder: Is this the financial future of Canadian theatre? And is Drayton going to give Toronto's Mirvish Productions and the nearby Stratford Festival a run for their money?

Make no mistake: Drayton Entertainment is one of the country's biggest theatrical successes. Its circuit of not-for-profit theatres in southern Ontario has expanded to seven with the spring opening of its most urban location, the Dunfield – a $14-million facility it leases from Cambridge that was custom-built for its needs by Diamond Schmitt,the architecture firm behind Toronto's Four Seasons Centre for the Performing Arts.

This year, Drayton is expecting attendance to surpass 225,000 for a season of musicals such as Mary Poppins and light comedies by summer-stock stalwarts such as playwright Norm Foster.

That's more than twice what Drayton attracted in 2000.

And the total audience nearly matches the number of tickets sold by the Shaw Festival. All this is achieved on an annual budget of just over $8-million, 84 per cent of which comes from ticket sales and the rest from donations and fundraisers. None of the operating budget comes directly from the public purse.

Drayton's achievement is doubly impressive since it comes at a time when Stratford is annually selling 150,000 fewer tickets than it did a decade ago. And Stage West, a Mississauga theatre that programs similar light and musical fare, is closing on Sunday after a 27-year run.

The man behind the Drayton story, and the man behind the strange Big Band Legends show, is Mustakas, who over 22 years has grown his empire from one small summer theatre. "He knows the audience – he created the audience," says Drayton's executive director Steven Karcher. "He knows what they want before they do."

The 53-year-old Mustakas came to Canada with his family from Cyprus at age 6, and though he wanted to be an actor, he first studied economics at university at the behest of his father. That served him well when he began his career as a summer-stock impresario in Drayton, Ont., in 1991, mounting shows in an old opera house that had been saved by residents of the village north of Kitchener-Waterloo.

The Drayton Festival Theatre's inaugural season – anchored by a musical called Vaudeville! – had a budget of $99,000 and ran for just 45 performances. In the decade that followed, Mustakas built the Schoolhouse Theatre in nearby St. Jacob's, acquired the troubled King's Wharf Theatre in Penetanguishene, and merged with the two-theatre Huron Country Playhouse in Grand Bend.

Then Mustakas set about expanding into year-around programming near Kitchener-Waterloo, first at the St. Jacob's Country Playhouse in 2004 and now at the Dunfield in Cambridge.

What's his secret? Mustakas, reached over the phone in Grand Bend, is quick to credit his economics background. "I've always looked at the words in show business – one is show, one is business," he says. "We don't believe in entitlement."

His box-office results have led to near-monthly invitations to take over troubled rural theatres, or to run brand new ones that municipalities want to build to rejuvenate downtown cores.

Is Drayton helping create culture in smaller centres across Ontario? Or is it just franchising cheap and easy-access shows? There's a contradiction in the way Mustakas and his employees stress the "grass roots" and "local" nature of their theatres, even as they take huge pride in Drayton's almost industrial approach to the inefficiencies of theatre-making.

In fact, the Dunfield Theatre is a kind of factory for plays. The Cambridge facility contains not only a performance space, but five rehearsal rooms, set, props and costume shops, and even a 33-room actor's dorm (complete with coin laundry). The plan is to centralize all rehearsals and production here, then ship shows out to the other Drayton theatres, all of them renovated to one of two standardized sizes. That allows what's on stage in Grand Bend to be remounted in Penetanguishene in days rather than weeks.

Drayton's business model – every show is a co-production between at least two theatres – spreads out costs and risks, with outperforming markets in any given season making up for underperforming ones. Mustakas has even started to tour his productions in the U.S. through a partnership with New York-based Columbia Artists Management. One aspect of Mustakas's cost-saving model that he is less keen to trumpet is that, while he employs Equity actors and union musicians, the company's stagehands are not unionized like those at Shaw, Stratford and Mirvish.

Can Drayton's model save it from economic forces that have caused havoc lately even at subsidized theatres across Canada? Karcher says Drayton is struggling with the same challenges, including an aging audience that isn't being replaced. Indeed, pamphlets for the Dunfield Retirement Residence ("Unretire here!") are displayed in the lobby of the Cambridge theatre that bears its name. "If you look at statistics over the next 20 years," Mustakas says, "people aren't going to get younger."

Where Drayton has a crucial advantage over other theatrical outfits is in ticket prices. Nowadays, a full-price night out at a mainstage theatre is out of reach for many middle-class families. For the Mary Poppins tour presented by Mirvish in 2011 (which broke box-office records), tickets mostly sold in the $90 to $130 range, with premium seats going for $185.

Meanwhile, Drayton's current all-Canadian production of Mary Poppins – which will resume at the Huron Country Playhouse in August – has a top price of $40; patrons younger than 20 pay just $20. "This is a Toronto performance at half the price," Cambridge mayor Doug Craig proclaimed at the opening.

Is the quality really the same? Drayton certainly hires from the same talent pool as Mirvish – Pedneault in Big Band Legends is an example – while Stratford star Cynthia Dale performed at its Huron Country Playhouse in 2010.

Mirvish director of communications John Karastamatis praises Drayton for hiring about 200 Canadian musical-theatre performers a year, people who might otherwise be underemployed. "We don't see them as competition, because their audience is one that would be difficult to grab on to because of distance and because of cost," says Karastamatis, who adds that they aren't vying for the same customers: "I don't want to say [Toronto audiences] are more discerning, but they're looking for more of an edge than those shows."

Stratford Festival has been marketing to Southern Ontarians more since cross-border traffic slowed, so you might expect it has more to fear from Drayton's discount prices. And yet artistic director Antoni Cimolino sees Drayton less as a threat than as a company building an audience for Stratford. He even cites statistics. "We have seen steady growth in the Kitchener-Waterloo area over the past 10 years, with sales up 67 per cent in that area over 2003," he says. That's since the year-around theatre in St. Jacob's opened.

Mustakas agrees that he's creating an audience for bigger theatre companies, rather than stealing it with accessible shows that don't cater to big-city snobs like me. Putting on a folksy accent, he adds: "Now, in the lobby, patrons come to me saying 'We went to Stratford last week, saw some of that Shakespeare.' That's great."

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