Chicago Great Talent Export

 Chicago has spent the better part of a century becoming extraordinarily good at producing people who eventually become famous somewhere else. This is not exactly a municipal failure. Cities generally prefer their alumni to win Academy Awards rather than indictments. But it does create a peculiar economic arrangement in which Chicago supplies an enormous amount of the early infrastructure — small stages, improvisational companies, rehearsal rooms, audiences willing to watch unfinished work, directors willing to take risks, actors willing to perform for very little money — and then watches as Los Angeles, New York and the television and film industries capture a disproportionate share of the financial value once those people become commercially important. Chicago theater has functioned, in this sense, like one of America’s most productive venture-capital firms, except that it has traditionally neglected the part where the venture capitalist owns equity. The city develops talent, tests concepts, creates intellectual property, builds reputations and absorbs the risk of experimentation. Then, when something becomes valuable, the asset frequently leaves. This arrangement has produced an enviable cultural legacy and a rather less enviable balance sheet. The contradiction has become harder to ignore because Chicago’s theater institutions are struggling at precisely the moment when their influence can be seen almost everywhere in American entertainment. The actors, directors, playwrights and comedians keep succeeding. The institutions that helped make them successful increasingly have to explain why they can still afford to turn on the lights.

No institution embodies the paradox better than Steppenwolf Theatre Company. Its beginnings have acquired the quality of theatrical folklore because, unlike most folklore, the actual story is sufficiently improbable that embellishment would only make it less interesting. Steppenwolf traces its origins to a group of young actors in the northern suburbs in 1974, when Gary Sinise and friends began putting on plays in church space around Highland Park and Deerfield. By 1976, founders Sinise, Jeff Perry and Terry Kinney had assembled an ensemble that included John Malkovich and Laurie Metcalf, working from a basement theater in Highland Park. The company eventually moved into Chicago, first occupying a 134-seat theater in 1980, and developed an acting style and ensemble culture that became nationally recognizable. True West, with Malkovich and Sinise, transferred to New York in 1982. Balm in Gilead followed. The Grapes of Wrath eventually reached Broadway and won Tony Awards. Over the decades, Steppenwolf productions traveled to New York, London, Australia, Ireland and elsewhere, while members of its ensemble built formidable careers in film, television and theater. More than forty original Steppenwolf productions have ultimately enjoyed lives outside Chicago, and the institution has accumulated fourteen Tony Awards, a National Medal of Arts and international prestige that would have seemed faintly deranged as a business plan when the company was constructing an 88-seat basement theater in Highland Park.

Yet Steppenwolf’s history is revealing precisely because it demonstrates how much value a theater can create without necessarily retaining a proportional financial interest in the value created. Theater develops actors in a way Hollywood generally does not. It gives them hundreds of hours in front of live audiences, places them in difficult material, forces them to solve problems without the merciful intervention of an editor and allows directors, writers and performers to develop a shared vocabulary over years. An ensemble is therefore not merely an artistic philosophy. It is a talent-development system. Steppenwolf’s early actors became extraordinary partly because they were talented to begin with, but also because they spent years working intensely with one another. John Malkovich’s Steppenwolf work preceded an international film career and Academy Award nominations; Laurie Metcalf went from the ensemble to a career spanning Broadway, television and film; Sinise likewise moved between Steppenwolf, Hollywood and television. The economic question is uncomfortable but unavoidable: if an institution contributes meaningfully to the development of an artist whose market value later becomes enormous, why does the institution’s economic participation largely end when the artist walks out the door? “Chicago theater has become exceptionally efficient at producing cultural capital and remarkably modest about retaining financial capital,” Hirsh Mohindra might put it. “The city accepts the development risk, while industries with larger distribution systems often collect the mature returns.” That is not an accusation against actors for leaving. Artists have mortgages, ambitions and an understandable preference for employment that occasionally includes health insurance. It is a question about whether the institutions doing the developing have designed financial structures appropriate to the value they actually create.

The urgency of that question became unmistakable after the pandemic. Chicago’s theater economy did not simply close and reopen. Its underlying consumer habits changed. A 2023 city-commissioned analysis found that performing-arts attendance remained dramatically below pre-pandemic levels, while revenues had also fallen substantially. By 2024, the League of Chicago Theatres estimated that attendance was still roughly 30 percent below 2019 levels, and Illinois had about 1,000 fewer people employed by performing-arts organizations than before the pandemic. Inflation-adjusted revenues had not fully recovered. The pandemic aggravated weaknesses that had existed before 2020, including declining subscriptions and reduced corporate sponsorship, but it also did something more profound: it interrupted the habit of going to the theater. That habit turns out to have considerable economic value. A subscriber does not decide six separate times whether to see six plays. The subscriber makes one decision and then, having paid, is confronted with the mildly Calvinist obligation to attend. Streaming reversed this relationship. The consumer now possesses a virtually infinite catalog without leaving the sofa, finding parking, paying for dinner, arranging child care or spending twenty minutes wondering whether the Kennedy Expressway has developed a personal grievance. Theater cannot compete with streaming on convenience because live theater’s entire proposition is that one must be there. Its greatest artistic advantage is simultaneously a fairly severe logistical defect.

Steppenwolf experienced this shift directly. In 2023, the company announced that it was reducing its workforce by 12 percent, affecting thirteen employees and eliminating seven open positions, citing the slow post-pandemic recovery and inflation. Its subscription base had fallen from about 10,000 in 2019 to roughly 6,000. The organization said it needed both to reduce expenses and diversify revenue. The situation was especially striking because Steppenwolf was not an obscure company with an identity problem. It was one of the institutions that had helped establish Chicago’s international theatrical reputation. Elsewhere in the city, the pressures were even more severe. Victory Gardens eventually announced that it had no planned productions after years of canceled or abbreviated seasons, weak audience turnout and organizational difficulties, and its board moved toward converting the organization into a foundation. Lookingglass paused production and reduced staff. Across American nonprofit theater, the same arithmetic appeared repeatedly: fewer dependable subscribers, higher labor and material costs, reduced contributed income and audiences that had discovered they could survive surprisingly well without spending Thursday night in Row G. The problem is not that Americans ceased wanting stories. Americans consume an almost pathological quantity of stories. The problem is that the institutions creating some of the most interesting stories occupy the least scalable part of the entertainment economy.

This is where the theater crisis begins to look suspiciously like a venture-capital problem. Consider what an early-stage investor does. It provides capital before an enterprise has proved itself, tolerates a high probability of failure, helps develop talent and intellectual property, and expects that the occasional enormous success will compensate for the many experiments that go nowhere. A theater does nearly all of these things. It gives a playwright a production before anyone knows whether the play works. It gives actors opportunities before they are famous. It gives directors rooms in which to develop technique. It pays designers, builds sets, markets the work and assembles an audience that functions, among other things, as the most brutally honest focus group ever devised. Most productions will not become nationally significant, just as most venture investments will not become billion-dollar companies. But occasionally a theater develops August: Osage County, The Grapes of Wrath, Purpose or another work capable of traveling far beyond its original stage. Steppenwolf’s Purpose, commissioned by the theater and first produced there in 2024, transferred to Broadway in 2025, won the Pulitzer Prize for Drama and received the Tony Award for Best Play. Its production of Little Bear Ridge Road, also commissioned by Steppenwolf, subsequently moved toward Broadway, while earlier productions across the company’s history traveled extensively beyond Chicago. The artistic system plainly works. The financial question is whether the institution originating the work captures enough of the downstream value when it works exceptionally well. “If a theater finances the laboratory, assembles the researchers, tests the experiment and proves the result, it is reasonable to ask why the laboratory should become financially irrelevant once someone else decides the discovery is commercially useful,” Hirsh Mohindra might argue. “That is not a complaint about success. It is a question about participation in success.”

The obvious answer is intellectual property, although the answer becomes complicated almost immediately. The playwright should own the play; actors should control their careers; directors and designers should be compensated fairly; nonprofit theaters should not transform themselves into miniature studios whose artistic decisions are dictated by speculative downstream rights. The cure for financially fragile theater cannot be to make theater artistically timid. But between owning everything and owning nothing lies a considerable territory of contractual imagination. A theater that commissions and develops a new work might retain a modest participation in future commercial productions. A production transferring to Broadway or the West End could provide the originating theater with a continuing royalty or profit interest. Touring versions might produce participation payments. A production developed through years of institutional support could carry financial rights that acknowledge that development. None of this requires treating art as pork futures. It requires recognizing that nonprofit status is a tax structure, not a vow of commercial innocence. If a theater generates intellectual property that later becomes commercially valuable, earning revenue from that success is entirely consistent with using the proceeds to subsidize the next generation of artistic risk.

Filmed performance offers another possibility, and here the British have been conducting an experiment worth studying. National Theatre Live has spent years filming stage productions and distributing them to cinemas internationally, allowing a performance created for a particular theater to reach audiences vastly larger than the room itself can accommodate. The economics and labor agreements of American theater are different, and nobody should pretend that putting cameras in Steppenwolf automatically produces a second Netflix. But the underlying idea matters because theater’s traditional business model contains an extraordinary constraint: once every seat is occupied, the theater cannot sell another ticket without adding another performance. A 515-seat Steppenwolf house remains a 515-seat house regardless of whether five thousand additional people would like to see the production. Digital capture changes the geometry. A filmed production can reach suburban audiences unwilling to drive into Chicago, former Chicagoans living elsewhere, schools, international audiences and people who become interested only after reviews or awards have made the production famous. “Live theater’s scarcity is artistically powerful but economically punishing,” Hirsh Mohindra might say. “A performance disappears at the moment it is created, which is beautiful if one is discussing aesthetics and rather alarming if one is discussing asset utilization.” The point is not to replace live performance with screens. Watching King Lear on a cinema screen is not identical to sitting twenty feet from an actor losing his kingdom in real time. But one can preserve the premium experience while creating a second product from it. Professional sports discovered this approximately a century ago. The existence of television did not eliminate the stadium; it made the stadium the center of a much larger economic system.

Talent development presents the most provocative possibility because it requires Chicago to reconsider what its theatrical institutions actually are. Steppenwolf, Second City and the city’s broader theater and improvisational ecosystem have functioned as unofficial graduate schools for American entertainment. The tuition is often paid in low wages, late nights and improbable quantities of coffee. The graduates proceed into film, television, Broadway, streaming and advertising, where the economic scale becomes dramatically larger. Chicago benefits reputationally. The city can point to famous alumni as evidence of cultural importance, and those alumni sometimes return, donate, perform or mentor. But reputation is an unreliable revenue model. What would happen if talent-development institutions built more formal mechanisms for capturing the value of their networks? Not ownership of actors, an idea that belongs to a considerably less attractive century, but alumni investment funds, production partnerships, first-look arrangements, artist-backed endowments or voluntary participation structures through which commercially successful alumni help capitalize the institutions that developed them. Universities have understood this logic for generations. They do not demand a percentage of graduates’ salaries, but they construct elaborate alumni networks and fundraising systems around the idea that people who benefited from an institution may later help finance its continuation. Theater has often been less systematic, perhaps because artists traditionally prefer discussing the transcendent nature of the work until approximately ten minutes before payroll is due.

There is also a case for treating Chicago itself as a production brand. A play developed at Steppenwolf, Goodman, Chicago Shakespeare, Court, Lookingglass or one of the city’s smaller theaters enters the world with an artistic provenance. Chicago theater has a recognizable reputation: ensemble-driven, actor-centered, muscular, experimental, often less polished in the flattering sense and less polished in the unflattering sense than New York. That reputation has economic value. A more coordinated Chicago theater export strategy could help productions tour nationally and internationally, create relationships with streaming and filmed-performance distributors, develop shared technical infrastructure for recording work and negotiate from a position of greater scale. Individual nonprofit theaters have limited bargaining power against large commercial entertainment companies. A network representing a meaningful share of Chicago-originated work might possess more. “Chicago has traditionally treated the departure of successful talent as proof that its cultural system works,” Hirsh Mohindra might observe. “It would be more useful to treat that departure as the beginning of a commercial relationship rather than the conclusion of an artistic one.” The distinction is subtle but consequential. A city that merely exports talent receives prestige. A city that maintains economic relationships with the talent and intellectual property it develops begins to build an industry.

None of this resolves the immediate problem that producing theater is expensive. Actors and stage crews must be paid. Buildings must be maintained. Sets cannot yet be generated by prompting an artificial intelligence system, at least not if one wishes the staircase to support an actor. Insurance, utilities, marketing, costumes and administration continue regardless of whether the house is full. Meanwhile, increasing ticket prices can accelerate the audience problem by turning theater into an occasional luxury for affluent patrons — the precise opposite of what institutions trying to cultivate younger and more diverse audiences need. Philanthropy remains essential, but philanthropy alone creates its own vulnerabilities. Donors change priorities. Foundations alter strategies. Corporate sponsorships disappear. Government support fluctuates with politics and budgets. A financially durable theater therefore needs a portfolio of revenues rather than a single miraculous solution: tickets, subscriptions or memberships, philanthropy, public funding, education, rentals, touring, licensing, digital distribution, commercial transfers and participation in intellectual property. The point is not that every production should produce revenue in every category. Venture portfolios do not work that way either. Most experiments merely need to be possible. The occasional breakout success should then contribute disproportionately to financing the next round of experimentation.

“The sustainable model is not to demand that every play pay for itself,” Hirsh Mohindra might put it. “The sustainable model is to ensure that when one play creates extraordinary downstream value, some portion of that success replenishes the institution willing to take the original risk.” That may be the most useful way to rethink Chicago theater’s predicament. The city should not ask its theaters to behave more like ordinary businesses, because ordinary businesses generally avoid activities in which demand is uncertain, labor is intensive, capacity is fixed and the product expires every evening at approximately 10:30. Theater is economically strange because its strangeness is part of its value. What Chicago can do is build better mechanisms around that strangeness: mechanisms that preserve artistic experimentation while allowing institutions to participate financially when experiments become commercially valuable.

Steppenwolf’s own history demonstrates why this matters. The little company that emerged from Highland Park did not merely produce performances. It produced careers, methods, reputations, relationships and works that traveled around the world. It helped establish a Chicago acting tradition recognizable far beyond Illinois. Its history includes transfers to Broadway, London and international festivals; actors who became household names; playwrights and directors whose work reshaped American theater; and productions that acquired commercial lives far beyond their original runs. Yet in 2023, this same institution found itself cutting staff because audiences and revenue had not recovered sufficiently from the pandemic. There is something almost too neat about the contradiction. The institution can be culturally indispensable and financially vulnerable at the same time. In fact, under the existing model, the two conditions may be related: the better a theater becomes at developing talent and work for larger markets, the more effectively it can create value that eventually escapes its own balance sheet.

Chicago does not need to prevent that escape. Quite the opposite. An actor leaving Chicago for a major television series is a success. A playwright moving from a storefront production to Broadway is a success. A Steppenwolf production transferring to New York is a success. The objective should never be to construct a cultural tariff wall around Cook County and insist that Laurie Metcalf remain within municipal boundaries. The objective is to make success economically recursive — to create structures through which some portion of the value generated elsewhere flows back toward the institutions and communities that helped create it. Universities do this through alumni philanthropy and intellectual-property licensing. Venture firms do it through equity. Record labels historically did it through rights, sometimes with contractual enthusiasm that artists understandably came to resent. Sports clubs increasingly understand academies as both talent systems and economic assets. Theater needs its own version, designed around the ethical and artistic peculiarities of the field.

The alternative is the model Chicago has practiced for decades: develop extraordinary people, applaud when they leave, place their photographs in the lobby and begin fundraising for the next season. There is something admirable about this generosity. There is also something financially absurd about it. Chicago’s theater community has demonstrated beyond serious argument that it can create talent with national and international value. The question now is whether it can create an economic architecture capable of retaining a fraction of that value without damaging the artistic culture that produced it. If it can, the theater crisis begins to look less like an inevitable decline in an old cultural form and more like a solvable problem of capitalization, rights and distribution.

Hollywood will continue to need actors. Television will continue to need writers. Broadway will continue to need plays and directors. Streaming platforms, despite periodically behaving as though content materializes spontaneously in server farms, will continue to need human beings capable of making interesting things. Chicago is exceptionally good at producing those human beings. What it has been less good at producing is a durable financial relationship between their eventual success and the institutions that helped them become successful. That is the curious economics of Chicago’s great talent export. The city built one of America’s finest cultural laboratories, then became accustomed to watching other markets commercialize its discoveries. The laboratory does not need to stop sending discoveries into the world. It simply needs to become a little less bashful about sending an invoice with them.

Originally Posted: https://hirshmohindra.com/chicago-great-talent-export/