Nonprofit Paramount theater, struggling financially, seeks help

“We are trying to find a sustainable model of operation,� she said. “And we are facing a financial deficit that will be hard to overcome without help.�

Canfield said the pandemic drastically changed the way that performing arts centers and live entertainment venues operate.

“The costs of everything has increased, and this reduced an already-narrow profit margin,� Canfield said. “Ticket sales are the Paramount’s largest revenue source. With nearly 90% of all ticket revenue now going to artists, the historic theater has encountered growing financial difficulties and is at risk of closure.�

Paramount Arts Center’s board president William Boykin said in a prepared statement that the current financial position “is at no fault of the dedicated volunteer board of directors or executive management.�

“Navigating the post-pandemic arts and culture landscape is not for the faint of heart,� he said in the statement. “Amid the financial challenges, Paramount executives have employed several cost cutting measures including staff layoffs. Heavy fixed costs for the operation and maintenance of the historic building are unavoidable, however.�

According to documents filed with the Internal Revenue Service, the Paramount’s financial troubles began before the COVID-19 pandemic. The Paramount ran a total operating deficit of more than $1.5 million from fiscal year 2019 through 2022. In only one of those years did the Paramount report more revenue than expenses, and that surplus was only $12,480. In the other three years, its operating deficit ranged from $381,038 in 2019 to $600,327 in 2022. In that time, its assets and fund balances declined by more than $1 million, from $4,492,059 in 2019 to $3,425,957 in 2022.

The 2023 return was not available as of Friday morning.

Paramount asks for city, county help

Canfield said she reached out to Ashland Mayor Matt Perkins on May 3 requesting help from the city.

“The mayor empathized but said that the city could not help at that time,� she said.

Between May 3 and June 3, the Paramount worked with the Boyd County Fiscal Court to acquire a donation for the closing of a bond.

“However, part of that money was a refund back to the Paramount for underpayment of the bond in 2011,� Canfield said. “We are an independent theater and receive no consistent financial assistance from the city or county. Most remaining historic theaters receive ongoing financial support from their local governments.�

On Aug. 21, Boyd County Judge Executive Eric Chaney had a meeting with members of the Paramount board. Canfield said he committed immediate and ongoing financial support.

Purchase offers received, rejected

Canfield said the Paramount executive board was notified on Aug. 22 that the City of Ashland wanted to make an offer of support as well.

She said Perkins and a city attorney met with the Paramount board and made an oral offer to purchase all Paramount real estate, but the offer did not include specifics on future operations of the theater.

Days later, Canfield said, Chaney rescinded his commitment of financial support.

The arts center’s board then rejected the city’s offer, but Canfield said the board worked with the city to reach an agreement with a provision that the theater would continue to operate as a nonprofit, community-based performing arts center.

“In this agreement, the Paramount would also have up to five years to re-purchase the real estate, the contents of the buildings were not to be included in the purchase price, and the city would cover all maintenance, upkeep and repairs of the buildings under their ownership of the property,� she said.

Canfield said the city submitted a revised offer that excluded the Paramount’s ability to repurchase the property within five years and had other aspects that caused a pause for the board.

Boykin said in his statement that selling the venue and property to the city was not a decision the board considered lightly.

“We have a responsibility to the Paramount and community to ensure that it continues to operate as the performing arts center that we know and love,� he said in the statement. “At this time, we are not confident that will happen.�

Canfield said she is not sure if negotiations will continue, but “we remain hopeful.�

Paramount’s impact

Canfield said if the theater is forced to close it doors, it will leave behind a large cultural and economic void that cannot quickly be filled.

“Each year, an estimated 250,000 individuals attend arts programming at the Paramount from all 50 states and three countries,� she said.

She said the theater produces a regional economic impact of nearly $12 million per year.

“During fiscal year 2022-2023, our community witnessed record dollars in tourism spending at $147.29 million that can largely be attributed to Paramount events,� Canfield said. “Our patrons stay at local hotels, eat at local restaurants and shop at local businesses. Paramount programs drive local tourism and increase economic development even when they don’t financially benefit the theater itself.�

Canfield said she is now asking the community for help.

“I fear that it’s the only solution we have for the theater to continue its mission as a community arts center,� she said. “Every tax-deductible contribution, no matter the size, will play a critical role in continuing theater operations.�

The Paramount is accepting donations.

No comments

The following people were contacted at least once and sometimes multiple times for comment for this article:

• Ashland Mayor Matt Perkins
• Boyd County Judge-Executive Eric Chaney
• Boyd County Commissioners David Salisbury, Jeremy Holbrook and Randy Stapleton
• Ashland Convention and Visitors Bureau President Amy Daubenstek

They did not responded to requests for information as of noon Friday.

In at least one case, a person’s secretary requested that questions be submitted in writing. Those questions were submitted but not answered.