In May 1977, in response to a request from Congress, the National Endowment for the Arts contracted for a study of the condition and needs of the live professional theatre in America. The study was to be made in two phases. The first phase report was delivered to the Endowment in March 1978. It included four volumes:

1. the compilation in narrative and tabular form of the data collected, plus an analysis of the data;
2. a collection of statements prepared by varied theatre interest groups;
3. edited transcripts of four roundtable discussions with theatre professionals from around the country; and 
4. an executive summary of the total Phase I report.

Phase II of the study called for recommendations by an Advisory Group appointed by the National Endowment for the Arts.

Theatre in the , in contrast to the live performing art forms of dance, opera and symphony, has strong for-profit and not-for-profit sectors. Because of the existence of the well-known for-profit sector of theatre (Broadway), because of the existence of the commercial motion picture and television industries, because the public knows that substantial amounts of money may sometimes be made within these media, the public generally perceives theatre as a potential money-making operation which should pay for itself. A common belief is that if theatre is good, it will not lose money. This attitude about theatre applies to the not-for-profit professional theatre as well as to the for-profit theatre. Hence, the belief is that all theatre should be able to at least pay for itself, if not make money. In contrast, the general public accepts the premise that symphony, opera, and dance need contributed support in order to survive. It is accepted that these art forms cannot pay for themselves through earned income.

The Advisory Group believes the Federal Government can and should take a strong lead in helping change this perception. It should take a lead in providing additional substantial new fiscal support. It should take a lead through corrective Federal legislation to provide direct and indirect increased public support to professional theatre, and it should encourage appropriate legislative action by non-Federal centers of government.

CONTENTS
A. Introduction: 

1. Background.
2. The scope of our enquiry.

B. Recommendations: 

1. Professional Theatre Institutions.
2. Professional Theatre Personnel.
3. Increased accessibility.
4. Taxation.
5. Federal leadership.
6. Further studies.

In May 1977, in response to a request from Congress, the National Endowment for the Arts contracted for a study of the condition and needs of the live professional theatre in America. The study was to be made in two phases.