Teatro Español & Madrid's Arts Organizations Find New Friends

Congratulations to Teatro Español, ISPA member organization on being included in the recent New York Times article about Madrid arts organizations developing alternative financing strategies to assuage government budget cuts.  Read a reproduction of the article below, which was written by Doreen Carvajal and published on September 23, 2013, or on the New York Times website.

Bloodstains mixed with graffiti mark the walls of this city’s old slaughterhouse and its vast compound of arched neo-Moorish pavilions. They are signs of an eclectic history: over the last century, the complex, called Matadero Madrid, has changed from an abattoir to a homeless squat to an outpost for contemporary art, theater and documentary films.

Now Matadero is evolving into a cultural laboratory, where a new arts financing strategy is being tested. Companies and institutions are providing financial support to supplement dwindling government arts subsidies, but with a twist: they don’t just send checks, they move in.

Within the walled 59,000-square-foot center, there are public theaters and exhibition spaces that last year drew more than 500,000 visitors for music and art events and avant-garde plays. But five new residents are private institutions, including a designers’ association, a publishing house’s foundation and offices of Red Bull, the Austrian energy drink maker.

They are in the compound rent-free for now, but have invested millions in the remodeling of pavilions there, as well as in programming, from art exhibitions to music festivals.

These new partnerships are forged, out of necessity, here in Spain, where government support for culture has plunged by almost 50 percent over the last four years, a result of a lingering economic crisis that hit late in 2008. In other struggling countries in Europe, austerity policies have forced art institutions to curtail programs and court private donors.

There is, though, some wariness about how far to press this approach. Increasingly, in some European countries, the emerging down side of corporate patronage is that culture is heavily influenced by those businesses. One example is a museum exhibition in Paris this year devoted to the "art” of Chanel No. 5 perfume; in France, this trend has been mocked as "publicity exhibits.”

But there is not the same criticism in Spain, where most cultural institutions are struggling to stave off more cuts in their activities. Within Matadero, the corporate neighbors are embraced as full partners who share in the coordination of the compound and discussions about programming, a model that has intrigued arts executives in other countries who have come to Madrid to study it.

Casa del Lector, a foundation to promote reading created by the founder of the Spanish textbook publisher Anaya, moved into Matadero last fall after financing a $16.8 million makeover of a pig slaughterhouse within the compound into a high-tech lecture and exhibition space. The foundation offers lectures, workshops and art exhibitions on themes like Bram Stoker’s "Dracula” and the covers of early Spanish romance novels.

Red Bull — whose name is emblazoned on the front of a former stable — moved into Matadero in 2011. It spent more than $2.2 million to create its own musical academy and fashion a garden in the interior of the building, where there are also whimsical sandbag huts built on top of the red earth ordinarily used in bullfighting rings. The academy includes a professional recording studio and performing space, part of Red Bull’s international network of music workshops and concerts that it has organized since 1995 in cities from New York to Berlin to promote its brand.

"We’re creating a new model of partnership,” said Victor Flores, the cultural director for Red Bull in Spain, who calls it the first time a company has worked so closely with a public cultural institution in Spain. "In Spain’s cultural landscape, museums have sponsors, but they don’t get involved so deeply in terms of the programs, schedules and how to create and run space.”

Red Bull is negotiating an extension of its three-year lease, partly because it was attracted by the demographic of Matadero’s visitors, many of whom are in their 20s and 30s. "For us, it was super fresh, cutting edge, innovative in its way with the arts,” Mr. Flores said.

In the meantime, Matadero is still looking for more partners to finance a multimillion dollar makeover of two more empty pavilions. The existing arrangement has helped Matadero thrive, earning a spot on a Top 10 list of cultural institutions in Spain that have weathered the financial crisis, a roster compiled by the Culture Observatory, a nonprofit organization in Madrid that tracks culture spending and convenes a panel of arts experts to highlight high-performing groups.

"In the future, none of Spain’s cultural institutions are going to recover the budgets they had,” said Alberto Fesser, director of the observatory. "The alternative path is this mix of private and public income — sponsorships, commercial projects and individual contributions.”

In that regard, Matadero is an innovator, he said. The art of the deal, according to arts executives, is key to survival.

"It’s really different from the old way,” said Carlota Álvarez Basso, the programming director for Matadero, who was appointed in 2012 and whose aim is to preside over a paradigm shift in fund-raising. "Before, I just got the money and I didn’t need to knock on the doors of different institutions. We were rich. In the context of the crisis, we need to find new ways. We have to change tactics.”

When Matadero opened, in 1911, it was a pioneer in industrial architecture. But by 1996, it had closed and was abandoned to squatters, whose graffiti has been retained as local color in one of Matadero’s hip restaurants. Its reconstruction as a cultural center started in 2007, before financial markets began panicking about the difficult financial situation in Spain and elsewhere.

Matadero’s executives are dreaming up other cost-saving strategies, from scouting for co-producers in prosperous countries to enlisting unlikely patrons, like a German insurance company with a modern art collection to lend for an exhibition.

To supplement Madrid city hall’s $3.8 million budget for Matadero’s administration and construction, the center draws revenue from two restaurants in the compound and is opening a bicycle rental business. Revenue from warehouse rentals and fees grew to roughly $930,000 last year.

Ms. Álvarez has also enlisted foreign embassies to help finance residency exchanges of visiting artists, part of a broader plan to build up Matadero’s international profile.

Her search for alternatives is a reflection of systemic difficulties for cultural institutions. The government imposed a 21 percent sales tax on ticket sales and, despite government pledges and lobbying efforts, companies are not eligible for tax deductions for sponsorship contributions.

The threat of more government budget cuts has also inspired Teatro Español — which runs an offshoot avant-garde theater in Matadero — to seek private producers to mount small plays and to form alliances with Spanish-speaking institutions outside the country, according to Natalio Grueso, the director of Madrid’s programming for theater arts.

Mr. Grueso noted that the annual budget for Teatro Español, now $8 million, is half of what it was 10 years ago. He added that the cuts are continuing.

"It’s important,” he said, "to look for new alternatives.”