We had a really valuable question from an NCTS Member about NCTS Executive Director Eleanor Stacey's recent letter, which we thought was very much worth sharing. If you read the letter, did you wonder why we are continuing to go ahead with our capital project in the face of such financial complexities, and not just reopening The Civic to show films for a while? In short, there are some specific reasons why we are forging ahead. Here's more about this important and thoughtful question.

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‍Q:

Hi…  I appreciate the update as a long time member.  However I have one question…. Why, when the income loss during the shut down from the roof upgrading is so great, are you planning on another interior renovation at this time?  Surely with the income loss from this year it would be better to resume operations as they existed before the roof reno immediately once it is finished and take 2025 (and beyond if necessary)  to rebuild your financial resources again through regular programming, memberships and grant writing until you are back in the black?  At which point it would be reasonable to consider another expansion. I am happy to support the theatre but I need to see fiscal responsibility and I’m not hearing it.  If I’m missing something please fill me in but I cannot support your plan as I currently understand it.  

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A:

I really appreciate your questions and comments. It is hard to know what people are aware of in terms of the history and inner workings of our project. It sounds like we may still need to explain a bit more about why we are continuing to build at this time.

There are a few reasons we are undertaking the renovations as quickly as we possibly can.  First, we have raised $3.5 Million in funding to complete them and these grants each have expiry dates, all of which are quickly approaching. In some cases we can request extensions, but in others we risk losing them altogether. We have one at the moment that must be spent within this fiscal year, for example, or the balance of it will need to be returned to the treasury. 

The bulk of these funds were awarded between 2018 and 2020, and we were ready to go in Q1 2020.  But at that time, the city was investigating and applying for grants to undertake accessibility and green upgrades to the Civic Centre overall. Because any accessibility changes to the exterior of the building would affect where the exits from our theatres would be located, it became difficult for us to move forward until those plans were more clear (and unfortunately they were not successful in that intake). The issue of the roof repairs developed as the city was beginning the green retrofits, and was not anticipated, so that timeline was added later too. During all of these delays, the cost of building has gone up an estimated 40%, so the value of our grants has decreased.  Even if we could extend our grant reporting deadlines, the longer we wait, the more money we will need to continue to raise to maintain scope. (To complicate things further, each of our grants are related to the scope for which they were received.)

The other piece that is critical to mention is that film distribution terms have changed significantly over the last few years to become much longer minimum engagements with much more expensive box office splits with distributors, which is increasingly putting single-screen theatres in a very difficult position.  We have always had to find a balance between commercial and more independent fare, but that balance is becoming harder to maintain. At the same time, minimum wage has increased 63% in BC over the last decade, which means that it costs us more to serve audiences than it used to.  We are trying to keep ticket prices affordable while meeting these external financial pressures. We need to add more theatres to increase our bottom line faster, and recoup our losses sooner. 

We have also considered renovating one theatre and just playing films for a while, but in light of these conditions, our calculations show that it remains a better financial choice for us to move forward as quickly as possible. Our plans always included a four-month closure of The Civic Theatre, but we never expected to have to contend with such a long closure.  It's very possible that we'll find a way to reopen one theatre while the others are being completed, but we want to be careful about making promises before we know for sure.  We are also looking at two interior pop-up screening spaces currently - one or both of them may happen, either in succession or with some overlap.  They would potentially make a difference to our operational bottom line, but neither will exceed 60 seats so the box office grosses we need to truly get ahead will still not be there.

Finally, we've thought about closing down everything, but it's impossible because we would still have core staff expenses to coordinate the capital project plans and communications with our members and the public, so those expenses would still exist and the community would lose The Shoebox and Reo's in the process. As such, we have reverted to our pandemic playbook goals: to remain visible and relevant and exist when it's over.  The better outcome here will be that we will also finally be the shape and size of organization we have envisioned for more than a decade.

The goal we have announced this fall is our overall fundraising goal for this year - there will also be sponsorship and advertising income counted toward that number, as well as a few applicable grants, should we be successful with them.

 If you have other thoughts on how we could further diversify income, we are of course all ears! Our team is small, experienced, and dedicated, and we're doing our best not to burn out while also keeping programming going and still trying new things. Our board has also worked hard to support our efforts, challenging and engaging with us on the same questions you have asked. I'll be honest - this has been a very, very hard few years for NCTS. Some of the hardships have been unexpected and simply unlucky, but we've tried to face them with strategy and optimism.  There have been no easy answers.

I hope this helps to illuminate some of the complexities - if you are interested in a deeper dive, I have our business plan (intended to take place over 2018-2021) as well as a revised case for support that we did for the city last year to refresh it with new numbers.  I'm happy to share them both.

Again, many thanks for your email - I may refine some of this message into a community note soon too, as I'm sure you're not the only person with these questions.

With best wishes,

Eleanor

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Ways You Can Help Right Now

There are several ways you can support NCTS this year:

• Start or renew your NCTS membership or buy a membership for a friend as a gift!
• Make a one-time or monthly donation
• Contribute a gift of securities
• Sponsor a program, event, or film screening
• Purchase a Cinema Lovers holiday gift bag (a great option for family, friends, coworkers, or employees!)
• Come to movies!

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