Milwaukee Film Faces Problems

Oriental Theatre with Milwaukee Film Signage. File photo by Alison Peterson.

In early January, Jonathan Jackson, the President, CEO and longtime leader of Milwaukee Film announced he was leaving, in what he called “a bittersweet decision.”

That, and the fact that there was no other job or position he planned to take, raised questions as to why he was leaving the organization. Milwaukee Film board chair Susan F. Mikulay offered a statement to reporter Chris Foran that left the impression Jackson was burned out. “We’re very sad to see him go, but we totally understand. He’s done a lot, and he’s done it for a really long time.”

The nonprofit’s federal 990 tax forms suggest another possible reason for Jackson’s departure. Financial problems. The most recent tax statement, for 2022, showed Milwaukee Film had a huge net deficit of just under $1.8 million for the year, with $6.35 million in expenses and $4.6 million in revenue. Even as the group’s revenue was plummeting, the amount it spent on salaries under Jackson rose from $1.65 million in 2021 to 2021 to $2.85 million in 2022.

Perhaps as a result, the group has been shedding staff since at least last fall. Geraud Blanks, Milwaukee Film chief innovation officer and co-founder of its Black Lens program, left last October following an internal reorganization at the nonprofit, Mikulay said, which included eliminating the innovation office run by Blanks, who had been with the group since 2018.

Also leaving along with Blanks was Maureen Post, who had been at Milwaukee Film since 2016, serving as its director of strategic partnerships since 2021. Blanks and Post, along with a former Milwaukee Film part-time employee Ranell Washington have partnered to create a new event curation and experiential marketing agency called Culture x Design, which was officially launched on Jan. 1, as Margaret Naczek reported.

Also departing last fall was chief financial officer Nicholas Werner, though he was replaced by Rebecca Steiner. Other staff who have left in recent weeks, sources say, include education manager Marielle Allschwang who had been with the group since 2017, and Director of Communications Breanne Graziano.

Jackson, whose total compensation was about $229,000, Blanks (about $130,000) and Werner (about $67,000, though that was for a portion of the year he served in 2022) were the three highest-paid staff.

In retrospect, the organization’s difficulties arose from what was probably its most celebrated move, to take over management of the Oriental Theatre on July 1, 2018. This gave Milwaukee Film more control of the most important theater for its festival, as well as a way to expand its offerings for film fest members, with movie offerings all year. Milwaukee Film signed a 31-year lease with New Land Enterprises, owner of the eastside complex on Farwell Ave. that includes the Oriental Theatre.

It was a boldly ambitious idea by Jackson. “Before re-opening the doors, we launched a $10 million capital campaign both to fund restoration projects at the theater and to create an operational reserve for the nonprofit Milwaukee Film,” the group announced a few years ago. “We surpassed our $10 million goal in February 2019, securing the long-term viability of the Oriental Theatre and the organization that operates it.” A three-year plan called for a series of major renovations to the theater.

The entire project greatly grew the size of the nonprofit, whose annual expenses rose from about $1.7 million in 2017 to $5.76 million in 2019. But program revenue was also seeing tremendous growth, rising from $918,000 in 2017 to about $2.5 million in 2019, which combined with contributions and grants, generated a net income of about $1.7 million that year.

Then came the world-wide pandemic, which devastated business for America’s movie theaters. In 2020, as the COVID-19 pandemic turned cinema screens dark, the domestic box office movies plummeted by 80%, dropping from $11.4 billion in revenue to just $2.3 billion, as CNET reported. There was some recovery in 2021, and another jump in 2022, but total revenue that year was still only $7.5 billion, far below pre-pandemic revenues.

The 2023 domestic box office surpassed $9 billion, but that’s still below 2019, and even further behind when inflation in ticket costs is considered. The total number of movie tickets sold in the U.S. has dropped from 1.25 billion in 2019 to 825 million in 2023, a drop of 34%. It’s not just about the lingering impact of the pandemic, but about the ease of streaming movies in your home theater. Even before the pandemic the Oscar show included repeated pleas that people attend movie theaters.

You can see the impact on Milwaukee Film, which saw its ticket revenue drop from more than $833,000 in 2018 to $273,000 in 2020, when the organization’s total budget showed a net income loss of nearly $71,000. While ticket revenue rebounded in 2022, it was far outmatched by the increase in salaries, creating a nearly $1.8 million deficit in 2022, which has required major layoffs by the organization.

Milwaukee Film declined to answer detailed questions, but offered a statement to Urban Milwaukee which makes clear the need for cutbacks.

“Film organizations like Milwaukee Film were hit hard by COVID and our recovery has been slow,” said Anne Reed, the group’s interim CEO. “While we were grateful to benefit from PPP funding in 2020, our community was understandably cautious about returning to the shared theater experience, and both 2021 and 2022 were difficult years financially. We restructured much of our work in late 2023 in a way that both extended our commitment to cultural connection throughout the organization, and also brought our expenses in line with our expected revenue in this changed landscape.”

Under Jackson, Milwaukee Film had risen over a decade to become one of the top 10 film festivals in the country, and its future seemed incredibly bright, until the pandemic changed everything. “We are proud that, through it all, we maintained the Milwaukee Film Festival at the highest quality and have continued broad, varied, and creative year-around programming at the historic Oriental Theatre,” Reed said. “This year we are seeing attendance and memberships returning toward pre-COVID levels and we are preparing for the 2024 festival and beyond with determination and optimism.”

Update: An early version of this story reported that former chief financial officer Nicholas Werner, who left in September, was not replaced. In fact, Rebecca Steiner was hired for the job, according to Milwaukee Film.