In 1990, Larry Clausen was among those who brought two struggling ballet companies together and led them down the road to fiscal responsibility as the "reborn" Alberta Ballet.

During three terms as board chair, Clausen seems to have done a good job of keeping Canada's third-largest ballet troupe on its toes. To supplement his sweat and tears, he has also chipped in an estimated $500,000 in donations, tickets and purchase of merchandise at fund-raisers through the years.

Despite peaks and valleys along the way, Clausen considers it money well spent, including his farewell gift of $1,558, which is how much it took to balance last season's $5.2-million budget.

About a year ago, he announced his decision to move on. In retrospect, that looks like a masterstroke of good timing because there may be a bad moon rising.

Larry MacDougal, Business Edge
Larry Clausen helped the ballet troupe adapt a stronger business model, including cutting operating costs and reducing risks.

Early in August, executive director Ann Lewis quit, after what arts journalists termed a disagreement with the board about long-term direction. The company is trying to recruit a replacement.

Meanwhile, 16 administrative staff have been granted permission to seek union representation, in apparent response to persistent low morale and conflicts with the artistic director.

These are hardball issues, no question.

But at least they can be addressed in an atmosphere of relative fiscal stability - something Clausen and board colleagues worked hard to achieve through the better part of two decades.

"I think we set up a good (business) model," he says. "We learned to be more responsible to a larger market, we cut operating costs and generally learned to be more prudent with our money."

A lifelong music lover who joined the Calgary City Ballet board in the late 1980s, Clausen picked up the phone shortly thereafter to take a "good-news, bad-news" call: "They said, 'Here's the good news: You're the chairman.' " The bad news: 'We're bankrupt.' " Meanwhile, the rival Alberta Ballet company was also bleeding all over the stage floor, running unacceptable deficits.

Under a financing arrangement with the provincial government, the two companies negotiated a merger, pledging future revenues as security to reduce debt.

"The first rule of thumb adopted by the board was that we would not support a deficit budget," Clausen remembers. "That didn't mean every production had to make money. But the collective effort had to make money each year."

Most years, that's the way it's worked out. Last year's near-miss can actually be regarded as a triumph, given that renovations to the company's two venues - the Jubilee Auditorium in Calgary and its Edmonton counterpart - killed traditional presentations of The Nutcracker, which always translate to big box-office returns.

Of course, reliance on external funders and a commitment to balanced budgets can lead to artistic compromise, at least on some levels. Major funders such as the provincial government ($700,000 annually) don't toss around their largesse without imposing strict conditions.

While penalizing funded groups that lose money, the Alberta Foundation for the Arts insists on an annual budget review and requires Alberta Ballet to maintain an emergency reserve fund of $350,000.

And, since last season's gate receipts ($1.7 million) represented nearly a third of total revenues (and since this is Alberta, not Paris), the company tends to avoid excessive chance-taking when it's time to choose repertoire.

"Artists like to do avant-garde productions. They call it challenging the audience," Clausen sets up the punchline with a chuckle. "More often, it challenges your pocketbook."

Result: Meat-and-potatoes crowd pleasers such as Cinderella and Romeo and Juliet tend to dominate. Not completely, however.

"What we have found out is that we can generally afford to do one production a year that's a bit more on the edge," Clausen adds.

And although he's leaving Alberta Ballet, Clausen isn't giving up the fight for additional support for the arts. He plans to become an outspoken advocate for his favourite cause, calling on:

* Schools to restore arts training in the classroom.

* Corporations to consider allocating 10 per cent of community investment budgets to the arts.

* Canada's wealthiest province to increase its annual funding allotment (currently stalled at an embarrassing $19 million) for support of the fine arts.

As for Alberta Ballet, Clausen is confident he's moving on at the right time.

"Everything we need as far as obligated reserve funds are now in place. The company's in good position to move forward," he says, adding a farewell message to the troupe: "You have a good artistic vision in mind. Go forward and make it successful."

(Tom Keyser can be reached at keyser@businessedge.ca)