The decision to close the eight-year-old theatre company was announced Sept. 19 and followed the departure of Louis Hobson, the Broadway actor who appeared in Next to Normal and served as Balagan's former artistic director, and Balagan founder Jake Groshong.
The two left the non-profit company earlier this year to found a for-profit producing entity, Indie Theatricals, and Danielle Franich was hired soon thereafter — in late July — to be the company's executive director.
"We were not aware of the severity of the debts which ultimately led the board to make this difficult decision," she told Playbill.com by email. "Like a lot of non-profits, the board and I knew we had some debts, but we wanted to be sure we had the complete picture. So when I got into the new position they asked me to put together a full picture. As I put it all together, and as new previously unknown debts came to the surface, it became clear that we needed to discuss it as soon as possible."
She added, "Balagan has debts to a variety of people and companies," but would not reveal figures or names — as the company is in the process of contacting its creditors.
Following the announcement of Balagan's closure, Seattle-area publication The Stranger shed light on companies, actors and others owed by Balagan. Brandon Ivie, the assistant director of Broadway's First Date and director of Off-Broadway's Jasper in Deadland, collaborated with Balagan in February 2013. Ivie, the artistic director of Seattle's Contemporary Classics, directed the area's premiere of Next to Normal — a co-production between Balagan and Contemporary Classics.
"We (Contemporary Classics) co-produced Next to Normal with Balagan with the understanding that all expenses and income would be split 50/50," he explained to Playbill.com. "We came up with a budget together and went forward with the show… All tickets sales (income) were run through Balagan's box office."
Following the show, and after all bills were paid, Balagan owed Contemporary Classics $8,708.37 in expense reimbursements, $182.05 in ticket sales and $2,766 for a soundboard purchased specifically for the production. To date, the company received one payment of $3,000 and is indebted $8,656.42.
Christine Bateman, who provided marketing and publicity support as an independent contractor for Ernest Shackleton Loves Me, confirmed that she is a creditor for $3,500 for her work on that production, produced in a partnership with ACT and Seattle Rep.
Regarding the December 2013 production of Hedwig and the Angry Inch, co-produced with Seattle Theatre Group — and starring Jerick Hoffer, whose drag alter-ego Jinkx Monsoon was the winner of the fifth season of "RuPaul's Drag Race" — Hoffer is indebted $2,500 for his starring turn, and The Stranger reported that the company hasn't paid off all its actors.
Vivian Phillips, Seattle Theatre Group's director of marketing and communications, explained to Playbill.com via phone, "The way that our agreement with Balagan was shaped, Balagan was responsible for contracting and paying artists associated with all of our productions. We took responsibility for paying the local direct expenses — all the advertising, all the stagehands, all of the front-of-house personnel — [but] it was not ever in our purview or range of agreement to pay actors. That was fully Balagan's responsibility, and that they shirked that responsibility is unfortunate, but it was spelled out very clearly in our agreement that that was theirs to take. I think what I really need to say is that whatever they owe actors, we are unaware of. It was not a part of our agreement."
Seattle Theatre Group, which also co-produced the June 2013 production of the cult-favorite Carrie (starring Tony winner Alice Ripley), told Playbill.com that they have "forgiven a large debt that Balagan owed to Seattle Theatre Group."
"Essentially, we've put that debt behind us. It is essentially a loss that was incurred," said Phillips. "We had to close out our books at the end of August, so it's not our practice to carry debt from one season to another season… We really had to shut down our books at the end of August to begin our September fiscal year, so that had to be put behind us. Did we know that any of this was coming down the pipe? We had absolutely no idea — none — and we learned about every aspect of this operation in the media… We learned about it with everybody else who read those stories. I think it's a very unfortunate situation that the board of Balagan Theatre was put in, but we were in that same boat, essentially."
When asked what caused the company to fall so far behind, Balagan executive director Franich said, "We are still early in our process, and working to figure out what happened." However, the unexpected loss of the company's former home, the Erickson Theatre, created an unforeseeable hurdle. An earlier statement released by Hobson and Groshong said they were "shocked and saddened" about the board's move to shutter Balagan. "The unexpected loss of our contract at the Erickson Theatre at the beginning of last season proved too difficult a financial hurdle for the organization," read the statement issued by Hobson to Playbill.com. "Despite a scaled back co-production heavy model, commercial enhancements, strong fundraising efforts and moves made internally to cut overhead, the board didn't feel Balagan could overcome the deficit created by the loss of its permanent space and produce another full season."
In addition, Hobson added by email, "Whenever an arts organization shutters it leaves lots of people in a lurch, and it pains me to know that some people and organizations are still owed money from this last season. That group also includes me personally and my family. I had taken pay cuts late last year, donated back paychecks and contributed my own personal funds to keep the company going. Up until last week we had worked tirelessly to instate new funding models and took myself off payroll over the summer to provide breathing room, but in the end the board didn't feel the company could recover from last season's deficit.
"As to the amount owed or what transpired between the board on those funds, I had only my perspective as artistic director and was focused primarily on the artistic vision of the theatre and cultivating its donor base. I am still very shocked by the move after all we had done to create a sustainable model and grow the company into a nationally recognized creator of theatre, but absolutely believe the mission and vision of the theatre will live on."
As for the future of Seattle theatre, STG's Phillips said, "Hopefully this punctuates the necessity for transparency in organizations — small, midsize, large; particularly the smaller to midsize organizations — that it's really important that the leadership, that means the board of directors as well as staff, really have a handle on the finances because it can dictate the future. This does not leave a sour taste in our mouth for working with local theatre, but again, I think that — maybe this is a little bit more harsh than I want it to sound — some extended due diligence is in order."