During most of its 225 years, Moscow’s Bolshoi Theater had little concern for economics. In czarist and Soviet times, it didn’t need to raise private money or to compete for government subsidies. Budgets were defined solely by artistic need; ticket prices were kept low to provide broad access to top-quality culture; and the government generously filled the funding gap. Under this system, the Bolshoi became one of the world’s premier stages for classical ballet.

Then came Russia’s economic transformation, leading to big subsidy cuts that left the Bolshoi struggling. Aspiring dancers are still drawn to the dance company, but established stars can earn more elsewhere in the new Russia or overseas. The Bolshoi realized that to fulfill its artistic aspirations and to compete for the best talent, it needed more professional management and would be forced almost to double its revenues. To that end, the theater has redesigned its ticket distribution system and started fund-raising in earnest. Other measures are currently under consideration as well.

Revolutions may come and go, but one fixture at the Bolshoi has been the "pillar people": scalpers who congregate under the neoclassical columns of the theater and pocket the difference between the face and market value of its tickets. As part of a review of ticket pricing and distribution, the company’s managers tapped into the expertise of the scalpers. Many of them are second-generation operators, and the precision of their instant pricing decisions—taking into consideration a customer’s look and language as well as the time remaining before a performance—is really quite stunning.

A big problem inherited from the old distribution system was the fact that about a third of the tickets—usually the best—could be reserved for artists, theater managers, and state bureaucrats. More often than not, these tickets were sold to the pillar people for a small fraction of their market price. By cutting the number of reserved tickets and creating a pricing structure based on acoustics and sight lines, the theater has begun to realize the true value of its seats (Exhibit 1). Prices for tickets in the very cheapest zone, accounting for about 300 of the Bolshoi’s 1,847 seats, were reduced under the new scheme and, at 10 to 20 rubles (34 to 68 cents) apiece, are well within reach of students and other low-income citizens.

The Bolshoi identified nine other variables that could affect ticket prices, including whether headliners were in the cast, a ballet or an opera was being performed, and an individual or a group had booked the seats. Few theaters incorporate all of these factors into their pricing policies, but by doing so the Bolshoi can more easily predict demand for tickets and set appropriate prices for the upcoming season.

This new ticket-sales system increased ticket revenue by 82 percent in its first month. Further price increases, made possible by a new distribution system with many sales points, should push up ticket revenue to $10 million—almost three times higher than last year’s figures—in the 2001–02 season. This could be one revolution the pillar people won’t survive.

But the overhaul of ticket prices is just part of the story. As a result of the economic changes of the past decade, the theater has had to rely increasingly on private donations. Last year, it raised about $400,000, a minuscule amount compared with the sums raised by other theaters around the world (Exhibit 2). In recognizing fund-raising as a top priority, the Bolshoi has established a board of trustees comprising members of the country’s political and business elite and also has installed a professional fund-raising team.

The board is a lobbying organization and an in-house sounding board for new ideas. Its members, like their counterparts in other regions of the world, pursue corporate donations by using their business contacts and extolling the theater’s prestige. They also lobby for increased government support and for legislation authorizing tax benefits and other measures that would help attract sponsorships. At the board’s kickoff meeting, in April 2001, the trustees announced commitments for public and private donations totaling $2.1 million, more than the amount raised during the five previous years combined. Soon two more trustees offered an additional $1.3 million to the pool. To broaden the theater’s donor base, the new fund-raising team established the Friends of the Bolshoi Society, which features nine levels of sponsorship, based on the amount contributed and on the type of donor (individual or business).

By ensuring that a solid financial foundation supports the artistic side, the Bolshoi’s new management effort is helping to preserve it—for donors and for the art world generally.