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CHICAGO — In June, in an attempt to take the fall for internal turmoil, Andrew Alexander, the longtime co-owner of Second City, announced plans to remove himself from the famed comedy theater and put his share up for sale. On Tuesday, a Los Angeles-based investment bank put the whole institution up for sale. Second City is a mainstay of Chicago’s famed theater scene but also is a for-profit, live-entertainment operation devastated by a forced closure.
“What we are seeking is critical reinvestment in the business that will allow us to continue to grow in the right ways and with the right resources while remaining an oasis of speaking truth to power and providing vital human connection in an increasingly complex world,” Alexander said in a statement released by the bankers, Houlihan Lokey.
“I do think the plan to sell the whole company presents the opportunity for Second City to continue to succeed well into the future, ensuring financial stability,” he told the Tribune.
Stability has hardly been Second City’s byword, of late. In June, a group of alumni and former staffers took to social media and released an “open letter” to the comedy theater that issued a series of demands mostly relating to issues surrounding Second City’s relationship with racial equity, diversity and inclusion. Alexander’s exit was part of the theater’s coordinated response to that letter, although he also had many supporters among Black alumni of the theater, some of whom said they had not been heard. In recent weeks, the theater has cast itself as having learned from past mistakes. The statement put out in support of the sale reflects such language.
Privately held throughout its 61-year history and located at 1616 N. Wells St., Second City is co-owned by Alexander and D’Arcy Stuart, although its president, Steve Johnston, also has a small equity share.
In essence, Alexander and Stuart have decided that rather than try to sell about half of the institution, it makes more sense to market the entire operation, especially since Alexander has exited the business and moved out of state.
A source close to the theater said that such an arrangement was logical, given the theater’s ongoing closure due to the pandemic and the consequent total collapse in box office revenue (and many continued expenses) now falling on one main owner. It remains possible, the source said, that only Alexander’s share will sell. But that would depend on the desires of buyers.
No price has been formally mentioned but a source said informal internal conversations have focused on the region of $50 million.
Second City has several arms beyond its mainstage theaters, including a long-standing comedy training school, a film school and a successful corporate division that has maintained much of its revenue by offering online training and education to clients.
In a meeting held Monday, Alexander told Second City employees that the decision to sell would mean “In the short-term, not a whole lot,” saying that he expected the process to take “many months.” Staffing has been drastically reduced in recent weeks, with many furloughs turning into permanent layoffs.
Second City, which does not disclose its annual revenues, has been sold before in the years since Bernie Sahlins, along with Howard Alk and Paul Sills, launched the comedy theater in 1959.
Alexander bought the theater from Sahlins in 1984 with a silent partner, Len Stuart, whom he had met when Stuart invested in the Canadian TV show SCTV, Alexander’s most prominent project outside the illustrious Chicago-based comedy theater.
Stuart died in 2016 at the age of 73; D’Arcy Stuart is his son.
Potential buyers for the project logically would include local entrepreneurs interested in tending to (or reinventing along activist lines) a beloved if sharply divided Chicago institution. Famous alumni like Tina Fey or Stephen Colbert could have the means and interest. And along with all late-night TV comedy producers, “Saturday Night Live’s” Lorne Michaels has benefited greatly from the theater’s singular, if recently diminished, ability to nurture national comedic talent in its eight-show-a-week crucible in Chicago’s Old Town neighborhood. Michaels and Alexander both share Canadian origins.
The theater, which also offers classes in Los Angeles and has a famed outpost in Toronto that has reopened for business, might also fit in the portfolio of Netflix, Amazon’s Audible, ViacomCBS’s Comedy Central, NBCUniversal or, really, any other content-hungry media giant hoping to control a relatively inexpensive pathway to future talent, raised and nurtured in Chicago.
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