In the beginning of 2015, Casey Reitz, the Executive Director of Second Stage Theater in New York City, should have been breathing a sigh of relief, as the five-year run of Rock of Ages had closed and he could prepare for the final steps of purchasing the Helen Hayes Theatre on Broadway. Second Stage had been under contract to buy the Hayes since 2008 when it acquired the rights to purchase the building. Rock of Ages had announced its closing in November 2014 and Second Stage had until February 2015 to collect the funding for the purchase price. However, just as Second Stage received the news of Rock of Ages’ closing, one of the owners of the Helen Hayes made Second Stage an offer: Jeffrey Tick decided that he wanted to keep the theater instead of selling to Second Stage and offered Second Stage its initial deposit of $3.65 million to back out of the purchasing deal.
As the February deadline approached for Second Stage to raise and collect the remaining $21.1 million of the purchase price, Reitz considered the two options he had at hand, buying the Helen Hayes or taking the deposit back. Second Stage had almost $1.4 million in pledges and $374,000 in temporarily restricted net assets allocated to the potential acquisition, but would need to rely significantly on other forms of financial support—such as additional donations, lines of credit, or a mortgage—to make up the difference. Although the organization had planned for its future ownership of the Helen Hayes Theatre for almost a decade, Reitz wondered whether the purchase was still aligned with Second Stage’s mission and future goals and whether the institution would benefit more strategically by having their $3.65 million deposit returned, thus a significant capital infusion.
Publication Date: 2017-05-15
Suggested Citation: Rachel Shuey, "Second Stage Theater," Yale Theater Management Knowledge Base Case Study #14-77, May 15, 2017
Keywords: New York City, Budgeting, Facilities, Organizational Direction, Scale, Strategy, Theater
Teaching Notes: Yes (contact firstname.lastname@example.org)
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