Media Center

Below its signature red steps, the TKTS booth that sells discounted day-of tickets to plays, musicals and dance performances celebrates a milestone on Wednesday: 40 years in Times Square.

While theater-goers file in the long line every day, this hasn't been the best of years for the Theatre Development Fund, the nonprofit that operates the booth, as well as outlets in downtown Brooklyn and at the South Street Seaport (the latter reopens in July after closure due to Sandy). Sales across the TKTS booths dropped to about 1.6 million tickets this season from last year's record 1.87 million, and TDF will run a deficit for the first time since the 2002-03 season.

To be sure, disaster is not at hand, and the $170,000 deficit can be closed with fundraising. But the situation illustrates the close relationship between this nonprofit and the overall health of the theater industry.

Founded in 1968 to support Broadway and off-Broadway at a time when the Theater District was less than tourist-friendly, TDF initially started developing audiences by giving away free tickets to students. The plan evolved to offering discounted tickets, and the TKTS booth was opened in 1973. Over the years, TDF's mission has expanded; today, with a budget of $13 million, its programs are also aimed at reaching audiences that are unfamiliar with theater and making shows accessible for those with physical disabilities, hearing or sight loss and autism.

Keeping the cycle going is more challenging when Broadway has a season like it did in 2012-13, which saw a 6% drop in the number of playing weeks (the total weeks onstage of all new and continuing productions) from last season, according to statistics collected by the Broadway League, the industry's trade association. The drop can be attributable to early closures, such as of "Scandalous" and "Hands on a Hardbody."

"For us, it's about total playing weeks. The less shows there are, the less inventory," said TDF's executive director, Victoria Bailey.

The total number of playing weeks in the 2012-13 season was 1,430, down from 1,522 in 2011-12.

A show's producers and management determine the number of tickets available at TKTS and the discount, which can run 20% to 50% of the face value. The average price of tickets at 50% off are $65 to $80 for Broadway shows and $40 to $50 for off-Broadway.

"It has become an obvious choice because, at some point, every show needs help selling tickets," said publicist Keith Sherman. "If it's a new work by an untried artistic team, you have to get the word out."

Before computers, TDF sent runners to the box offices to pick up physical tickets; now, shows can input what's available with five electronic ticketing systems.

The entire cost of a ticket goes back to the show, but the $4 service charge goes to TDF for the expense of operating the booths, which this year was about $4.2 million (through June 30). A portion of the fee, 75 cents, goes to a joint marketing fund of TDF and the Broadway League. Whatever is left goes to TDF to offset other programs and administrative costs.

In addition to the drop in tickets sold, TDF suffered the closure of its South Street Seaport booth, which sold about 5,000 tickets a week. "The loss of South Street was hard. We're also impacted by some of the same things that all performing arts institutions are—anything that affects people's interest, willingness and ability to go out," said Ms. Bailey. "Sandy didn't help."

Because TDF has so many ongoing outreach programs—such as Stage Doors, which serves 6,000 students in 80 public schools—maintaining them financially is a necessity; support comes from sources including the booth fees, contributed income and its $30 membership program that has about 80,000 participants who, if eligible, get deeper discounts. (Mr. Sherman calls this list "astonishing" in its ability to move tickets: "These are the multi-buyers. Many are not well off, but they're looking for deals because they go to great quantities of cultural attractions.")

TDF's budget shortfall will be made up through fundraising. It shops for support by finding out what donors feel connected to. "We have an underlying theme that we are making it possible for all these diverse audiences to get to the theater," said Director of Development Joy Cooper.

Although it has an annual gala, which netted $320,000 this year, TDF is not trying to be the splashiest charity party-thrower in town. As Ms. Bailey puts it: "We're here for people who can't afford to go to the theater."