We write on behalf of the concerned businesspeople of New York City in advance of the Community Advisory Committee’s Public Hearing on September 11, to urge James G. Sheehan, the Chief of the Charities Bureau of the New York Attorney General’s Office, and the CAC, to independently investigate the numerous issues raised below with the sole parties opposing the Caesars Palace Times Square (“Times Square”) — the Shubert Foundation; its wholly owned for-profit subsidiary the Shubert Organization; and both of their shadow sponsorship of, and alliance with, Broadway Cares.
We implore the NY Attorney General and the CAC to give these critical issues of shadow influence and perverse financial dynamics the attention they require, for the good of New York City businesses, the People of New York State, and the integrity of administration of New York State charities.
The Shubert Foundation and Shubert Organization
The Shubert Foundation is technically a 501(c)(3) exempt private foundation. However, it operates as the nexus of a sprawling, mixed network of for-profit and ostensibly not-for-profit entities, prominently including the Shubert Organization.
The Shubert Organization’s vast family of companies is strategically segmented into three categories: (1) theater and real estate holding entities (with monopolistic chokehold control over some 17 Broadway theaters, 6 off-Broadway theaters; and the most prominent theater in Philadelphia); (2) nearly all ticketing, distribution, and audience services across Broadway; and (3) the great majority of hospitality, food, and beverage service across Broadway. This structure might appear to serve money up to a charitable organization. But the black-box nature of Shubert Organization’s vertically integrated monopoly, combined with the relatively small amounts upstreamed to its “charity” parent the Shubert Foundation, begs the question – where is all the money that people believe is going to charities actually going???
Through its extensive subsidiaries and divisions, the Shubert Organization dominates Broadway. It owns 17 out of Broadway’s 41 theaters and 6 off-Broadway theaters. It promotes that its “various ticketing brands offer unparalleled distribution and marketing to the theatre industry and beyond: Telecharge for retail ticket sales; Broadway Inbound for group buyers, tour operators, and the travel industry; and Plum Benefits for corporate consumers.” This is information taken from the Shubert Organization’s own websites.
While there is only limited public information available, the Shubert family of entities constitute an alarming web of intermingled relationships and conflicts of interest among key members of their boards and leadership – conflicts among for profit businesses that do not account for where their revenue goes and the charities that people believe are running the show.. These individuals serve in leadership roles across both the for-profit and ostensibly not-for-profit sides of the business, raising serious questions about the use, or misuse, of the Shubert Foundation’s 501(c)(3) status.
Moreover, while the Shubert Organization’s financial performance is hidden from the public, the Shubert Foundation’s most recent IRS Form 990 reports receiving only $20 million in dividends from the Shubert Organization. Despite these surprisingly low reported figures, the Shubert Organization commands a vast portfolio of lucrative theaters and ticketing operations. The graphic depictions below point strongly to more than $20 million in profit per year. Unless of course money is being siphoned away from the not-for- profit parent before it gets there. And without any public visibility whatsoever.
| Broadway | |||
| Ambassador Theatre | Barrymore Theatre | Belasco Theatre | Booth Theatre |
| Broadhurst Theatre | Broadway Theatre | Golden Theatre | Imperial Theatre |
| Jacobs Theatre | James Earl Jones Theatre | Longacre Theatre | Lyceum Theatre |
| Majestic Theatre | Music Box Theatre | Schoenfeld Theatre | Shubert Theatre |
| Winter Garden Theatre | |||
| Philadelphia | |||
| Forrest Theatre | |||
| Off-Broadway | |||
| New York Stages | Stage 1 | New York Stages | Stage 2 | New York Stages | Stage 3 | New York Stages | Stage 4 |
| New York Stages | Stage 5 | Stage 42 | ||
In short, what we know about the Shubert Foundation and the Shubert Organization compels a single question that needs an immediate answer: where is the Shubert Organization’s money going if not to the Shubert Foundation?
Broadway Cares
A look just past the surface of Broadway Cares reveals a profound disregard for Broadway itself. It also demonstrates that Broadway Cares is a thinly veiled front for the Shubert Organization – a foil to present much of the same false narrative in opposition to the Times Square as is put forth by the Shubert Organization.
Broadway Cares’ most recent financial reporting shows $15.9 million in grant giving. Yet, of that $15.9 million in available grant money, a shockingly small portion of $1.4 million is split among organizations actually based or operating in Manhattan.
Accordingly, although New York City is undeniably the heart and home of Broadway, over 90% of Broadway Cares’ funds are diverted away from Broadway and New York City.
Broadway Cares thus appears to have no genuine commitment to Broadway, let alone any legitimate authority or interest in speaking for the community it purports to serve.
* * *
The businesspeople of New York City, and the People of the State of New York, deserve immediate comprehensive and transparent investigations by James G. Sheehan, the Chief of the NY Attorney General’s Charities Bureau, and by the CAC, into these critical issues of shadow influence and perverse financial dynamics. The integrity of the CAC process, and of New York State Charities administration, demands it.
