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Earned Operating Revenue

Earned Revenue Index, 2016-2018 Overall Trends

 

Earned Revenue Index Trend (1,530 organizations)

 2016 2017 2018 2016-2018
change		 2016-2018
change, adjusted for
inflation
Unrestricted Earned Operating Revenue/Total Expenses (before depr.)
 48.3% 51.8% 49.1% 0.8%  
Ave. Unrestricted Earned Operating Revenue $1,263,943 $1,315,235 $1,333,572 5.5% 0.5%
Ave. Total Expenses $2,618,955 $2,538,064 $2,715,921 3.7%  -1.2%
  • Inflation-adjusted growth in earned revenue was only 0.5% while expense growth fell short of inflation by 1.2%. The net result was a 0.8% increase in earned operating revenue relative to expenses.

Earned Revenue Index, 2016-2018 Trends By Sector

 

EARNED REVENUE INDEX TREND, BY SECTOR 2016 2017 2018 2016-2018 change 2016-2018 change, adjusted for inflation
Arts Education 66.20% 64.20% 66.50% 0.30%  
Ave. Earned Operating Revenue/ $1,256,005 $1,328,667 $1,432,035 14.00% 8.60%
Ave. Total Expenses (before depreciation) $1,897,383 $2,069,752 $2,154,153 13.50% 8.10%
Art Museums 36.90% 43.50% 31.90% -5.10%  
Ave. Earned Operating Revenue/ $7,520,688 $7,345,170 $6,116,099 -18.70% -22.50%
Ave. Total Expenses (before depreciation) $20,355,540 $16,869,389 $19,196,516 -5.70% -10.20%
Community 48.30% 46.30% 46.50% -1.80%  
Ave. Earned Operating Revenue/ $365,609 $368,807 $388,606 6.30% 1.20%
Ave. Total Expenses (before depreciation) $760,277 $799,805 $836,356 10.00% 4.80%
Dance 59.00% 56.50% 56.70% -2.30%  
Ave. Earned Operating Revenue/ $1,078,692 $1,071,560 $1,134,174 5.10% 0.10%
Ave. Total Expenses (before depreciation) $1,827,013 $1,896,127 $1,998,963 9.40% 4.20%
Music 46.20% 46.10% 46.00% -0.20%  
Ave. Earned Operating Revenue/ $186,694 $195,478 $205,280 10.00% 4.70%
Ave. Total Expenses (before depreciation) $404,421 $424,174 $446,381 10.40% 5.10%
Opera 31.90% 31.80% 32.50% 0.60%  
Ave. Earned Operating Revenue/ $1,677,479 $1,725,737 $1,813,934 8.10% 3.00%
Ave. Total Expenses (before depreciation) $5,263,400 $5,419,966 $5,579,117 6.00% 1.00%
PACs 59.40% 66.90% 68.80% 9.40%  
Ave. Earned Operating Revenue/ $7,146,896 $8,097,959 $9,012,034 26.10% 20.10%
Ave. Total Expenses (before depreciation) $12,037,333 $12,105,435 $13,095,914 8.80% 3.60%
Symphony Orchestras 46.70% 44.30% 48.90% 2.20%  
Ave. Earned Operating Revenue/ $1,095,479 $1,020,697 $1,203,553 9.90% 4.60%
Ave. Total Expenses (before depreciation) $2,343,682 $2,304,185 $2,459,484 4.90% -0.10%
Theatre 56.80% 58.60% 56.50% -0.30%  
Ave. Earned Operating Revenue/ $1,142,035 $1,228,507 $1,218,390 6.70% 1.60%
Ave. Total Expenses (before depreciation) $2,010,982 $2,094,750 $2,156,803 7.30% 2.10%
Other Museums 47.20% 50.80% 47.70% 0.50%  
Ave. Earned Operating Revenue/ $2,732,407 $2,849,539 $2,789,375 2.10% -2.80%
Ave. Total Expenses (before depreciation) $5,789,970 $5,613,315 $5,843,239 0.90% -3.90%
General Performing Arts 40.80% 40.10% 40.90% 0.10%  
Ave. Earned Operating Revenue/ $772,689 $738,836 $799,186 3.40% -1.50%
Ave. Total Expenses (before depreciation) $1,894,690 $1,840,324 $1,953,657 3.10%

-1.80%
  • PACs experienced the highest growth in earned operating revenue at 20.1%. Eliminating an outlier leaves the magnitude of the average lower but the direction and intensity of the trend intact.
  • Art Museums, Other Museums, and General Performing Arts had lower earned revenue in 2018 than in 2016 after adjusting for inflation. One Art Museum accounts for more than half of that sector’s average annual earned operating revenue and expenses, skewing the averages. Without it, Art Museums’ inflation-adjusted expense and earned operating revenue 3-year growth would both be -8%.
  • In inflation-adjusted figures, all sectors saw a growth in total expenses except Symphony Orchestras, Art Museums, Other Museums, and General Performing Arts organizations.
  • Both Other Museums and General Performing Arts organizations had negative growth in earned operating revenue and total expenses in inflation adjusted figures but saw positive growth in the earned operating revenue index. This is because the decline in total expenses was greater than the decline in earned revenue.
  • In the Community, Dance, Music, and Theatre sectors, both expenses and revenue grew but expense growth outpaced revenue growth, which brought down the index.

See the Trend Chart

Earned Revenue Index, 2016-2018 Trends By Size

 

TOTAL EARNED REVENUE INDEX TREND, BY SIZE 2016 2017 2018 2016-2018 change 2016-2018 change, adjusted for inflation
Small 39.00% 38.90% 40.40% 1.40%  
Ave. Unrestricted Earned Revenue (less cap. Gains)/ $38,444 $38,649 $40,410 5.10% 0.10%
Ave. Total Expenses (before depreciation) $98,698 $99,382 $100,051 1.40% -3.50%
Medium 37.10% 37.50% 37.10% 0.00%  
Ave. Unrestricted Earned Revenue (less cap. Gains)/ $367,046 $363,964 $365,676 -0.40% -5.10%
Ave. Total Expenses (before depreciation) $988,437 $971,370 $985,642 -0.30% -5.00%
Large 50.70% 55.10% 51.70% 1.00%  
Ave. Unrestricted Earned Revenue (less cap. Gains)/ $7,103,433 $7,010,561 $6,633,899 -6.60% -11.10%
Ave. Total Expenses (before depreciation) $13,999,978 $12,712,063 $12,826,941 -8.40% -12.70%
  • In inflation-adjusted figures, average total expenses were lower for every size organization (edit: organizations across all sizes) in 2018 than in 2016.
  • In inflation adjusted figures, Small organizations experienced very slight earned revenue growth but Large and Medium organizations had lower earned operating revenue in 2018 than in 2016, both in nominal and real dollars.
  • The earned revenue index did not change for Medium organizations as both earned revenue and total expenses decreased at roughly the same rate.
  • Large organizations had a decline in both earned revenue and total expenses but the decline in expenses was greater, leading to the increased index value.

See the Trend Chart

Earned Revenue Index, 2016-2018 Trends By Geographic Market

 

TOTAL EARNED REVENUE INDEX TRENDS, BY GEOGRAPHY (1,530 ORGANIZATIONS) 2016 2017 2018 2016-2018 change 2016-2018 change, adjusted for inflation
New York-White Plains-Wayne, NY-NJ 45.00% 55.40% 43.00% -2.00%  
Ave. Unrestricted Earned Operating Revenue/ $5,065,633 $5,450,561 $4,578,619 -9.60% -13.90%
Ave. Total Expenses (before depreciation) $11,263,317 $9,836,490 $10,658,690 -5.40% -9.90%
Los Angeles-Long Beach-Glendale, CA 63.00% 65.50% 64.40% 1.30%  
Ave. Unrestricted Earned Operating Revenue/ $837,497 $934,739 $967,070 15.50% 10.00%
Ave. Total Expenses (before depreciation) $1,328,389 $1,426,479 $1,502,069 13.10% 7.70%
Chicago-Naperville-Arlington Hgts, IL 40.50% 40.10% 41.70% 1.20%  
Ave. Unrestricted Earned Operating Revenue/ $716,444 $722,001 $762,083 6.40% 1.30%
Ave. Total Expenses (before depreciation) $1,769,810 $1,799,176 $1,826,810 3.20% -1.70%
San Francisco-Redwood City- South SF, CA 45.40% 51.40% 48.50% 3.10%  
Ave. Unrestricted Earned Operating Revenue/ $1,345,110 $1,618,449 $1,533,892 14.00% 8.60%
Ave. Total Expenses (before depreciation) $2,960,042 $3,150,689 $3,162,745 6.80% 1.80%
Washington-Arlington-Alexandria; Bethesda-Rockville-Fredericksburg, DC-VA 46.60% 44.90% 44.40% -2.20%  
Ave. Unrestricted Earned Operating Revenue/ $952,417 $989,648 $1,029,387 8.10% 2.90%
Ave. Total Expenses (before depreciation) $2,041,847 $2,205,490 $2,316,534 13.50% 8.10%
Larger Markets 50.40% 51.30% 52.50% 2.10%  
Ave. Unrestricted Earned Operating Revenue/ $831,390 $862,246 $958,630 15.30% 9.80%
Ave. Total Expenses (before depreciation) $1,650,424 $1,682,139 $1,827,042 10.70% 5.40%
Medium Markets 50.10% 49.70% 52.60% 2.40%  
Ave. Unrestricted Earned Operating Revenue/ $1,345,142 $1,305,321 $1,495,212 11.20% 5.90%
Ave. Total Expenses (before depreciation) $2,682,498 $2,625,502 $2,843,076 6.00% 0.90%
Small Markets 61.20% 61.70% 62.10% 0.90%  
Ave. Unrestricted Earned Operating Revenue/ $677,302 $697,714 $755,168 11.50% 6.20%
Ave. Total Expenses (before depreciation) $1,107,259 $1,131,484 $1,216,594 9.90% 4.60%
Very Small Markets 48.70% 50.70% 50.40% 1.80%  
Ave. Unrestricted Earned Operating Revenue/ $463,738 $506,190 $523,362 12.90% 7.50%
Ave. Total Expenses (before depreciation) $952,488 $999,227 $1,037,490 8.90% 3.70%
  • Growth in earned revenue topped inflation for organizations in all markets except New York when adjusted for inflation. One New York organization skews the magnitude of annual average earned operating revenue and total expenses. Eliminating this organization from the analyses would leave New York’s inflation-adjusted earned revenue virtually flat over time and expenses 6% lower.
  • The greatest growth in earned operating revenue was in Los Angeles, where it rose 10% more than inflation.
  • The average organization in all markets increased their total expenses above inflation except New York and Chicago.
  • In DC, growth in earned operating revenue fell short of growth in total expenses, leading to a lower index over time.
  • The highest growth in index value is seen in San Francisco at 3.1%, followed by Medium Markets at 2.4%. In both markets, earned operating revenue growth exceeded expense growth, leading to an increase in the earned revenue index.

 

See the Trend Chart

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Methodology

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