LA law: How Assembly Bill 5 could change small-scale theatre in Los Angeles forever

In 2020, California took aim at the gig economy with a landmark new bill, specifically targeting transport companies Uber and Lyft, in a bid to provide workers with more security, a minimum wage and benefits. But a totally unintended consequence of the legislation has been to threaten the future of more than 100 small venues across Los Angeles, with theatremakers facing spiking costs, broken business models and potential closure.

California’s introduction of Assembly Bill 5 led to almost all workers across the state, whether in profit or non-profit businesses, being classified as ‘employees’ rather than ‘independent contractors’, as those driving Ubers – and indeed those working on LA stages – had been before the bill was brought in.

This meant all of those employees would be paid at least minimum wage and would have access to unemployment benefits, while the employers would be subject to payroll taxes and other costs. All very well, except post-AB5 the multibillion-dollar Uber is treated the same as a non-profit theatre in Burbank with an annual budget of $140,000. And it could fundamentally change small-scale theatre in LA for good.

Beatrice Casagran, who runs the 50-seat Ophelia’s Jump theatre at the eastern edge of LA county on a budget of $185,000, now needs to raise $560,000 to maintain programming. “I’m in despair,” she laments.

Because the new classification standards under AB5 all but eliminates the category of ‘freelancers’, all theatre workers from backstage to actors, designers and front-of-house staff are now employees for the time they work at a company. Consequently, according to a dozen LA-area artistic directors interviewed, the annual budget of small arts organisations has spiked by an average 40%, disproportionately punishing companies operating on less than $300,000 a year, particularly common in a state with a dearth of public funding for the arts.

California’s arts budget was ranked at 24th highest in the US in 2021, according to the National Assembly of State Arts Agencies, at just 73 cents a head. This compares to the highest, Minnesota, with $6.37 per head.

During the pandemic, legislators attempted to mitigate the damage of AB5 with a bill designed to funnel state funds to struggling small arts organisations. Passing the Senate and the Assembly, state governor Gavin Newsom vetoed it, saying the state budget’s one-time $50 million allocation to small arts groups was enough. Local advocates disagree, saying AB5’s added cost to small arts organisations is as much as $350 million. “A Band-Aid repair,” bemoans Playwrights’ Arena artistic director Jon Lawrence Rivera.

The once 150 or so professional companies producing theatre in LA County in venues of 99-seats or fewer were last year described in the New York Times as “a vibrant subculture of experimentation and tradition”. These venues operated with the reluctant blessing of the national stage actors’ union, Actors’ Equity Association.

The union permitted these companies to “waive” its minimum-wage requirement for actors and stage managers, providing producers didn’t turn a profit on these shows – hence the union’s restriction of companies to venues of 99-seats or fewer and a mandatory stipend for actors that increased from $9 to $15 per performance.

In a bygone, golden era for live performance, when LA real estate costs were markedly less than on the East Coast, theatremakers poured into LA from cities where rising costs had constricted their creative opportunities. Graduates of local universities formed companies under this ‘Equity Waiver’ later called the 99-Seat Theatre Plan. Fresh out of UCLA in 1980, actor Tim Robbins founded his Actors’ Gang under this scheme, staging productions that went on to tour in New York, London, Europe, Central and South America, and China. The AEA initially justified its waiver as an employment opportunity, since talent scouts frequented these theatres.

Deaf West Theatre was operating under the plan in its North Hollywood venue when it staged its version of Big River in 2001. Two years later, that show was on Broadway. Over at Sacred Fools Theater Company, Vanessa Stewart’s 2008 musical Louis & Keely: Live at the Sahara transferred to the mid-size Geffen Playhouse adjoining UCLA, with union contracts, and went on to play in Chicago.

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