The debt, "combined with sharp declines in earned and contributed revenue due to the global economy, place us in imminent peril of shutting our doors," according to a Magic statement.
The not-for-profit troupe is now "in the midst of a staff shutdown" and "may be forced to cancel the remainder of its season and close for good."
A cash infusion "will allow us to bring back our staff, go on with our season, and remain responsible to our creditors."
The theatre is seeking donations at magictheatre.org.
From its beginnings in a Berkeley, CA, bar, Magic has offered world premieres and Bay Area premieres, staging the work of "diverse and powerful voices of contemporary American artists, including four Pulitzer Prize winners."
Billing itself as the second largest theatre in San Francisco, Magic "employs 200 artists annually and touches the lives of tens of thousands of people. The Board remains committed to Magic's new plays mission and in concert with the staff has been proactive in drastically cutting its $2 million budget by over $300,000 and raising additional funds in an attempt to close the gap between Magic's expenses and revenue lost as a result of the recession."
Magic's next production, Tough Titty by Oni Faida Lampley, slated to begin Jan. 24, 2009, is in jeopardy (as is the remainder of the 43rd season). Fall 2008 saw the area premiere of Evie's Waltz, a play about parenting and teen violence, and The K of D, about a small town.
"The critical success of the first two productions of this season demonstrate the rigor Magic passionately brings to each aspect of new play production — and the hoped for excitement, awe, and wonder that come from watching great art play out for audiences."
Magic welcomed its new artistic director Loretta Greco in spring 2008.
On Dec. 14, Shakespeare Santa Cruz announced that its 2009 season would not happen without an infusion of $300,000 by Dec. 22. It reached its goal, and then some, welcoming $417,000 in pledges.