Thirty-eight years ago this summer, Paul Sills and David Shepherd organized the Compass Players, thereby starting what is now blandly, routinely, and pretty much correctly referred to as a theatrical revolution. At a time when the American theater’s deepest thinkers were immersed in the angst of the Method, the Compass was busy pioneering a technology in which people create plays by actually playing with each other.

At the Compass, cast members built scenes and even whole plays improvisationally, using methods developed by Sills’s mother, a drama teacher named Viola Spolin. The work demanded surrender, fearlessness, and faith. Surrender, because in improv nothing can happen until you say yes to your partners. Fearlessness, because there’s no time to second-guess your choices. Faith, because you have to believe in your heart that it’s possible to create, as one book on the subject put it, “something wonderful right away.”

Like so many other theater companies, the Chicago Compass got popular and died. Former members like Mike Nichols and Elaine May went their meteoric ways. Spolin-style improv wasn’t quite finished, however. In 1959 Sills teamed up with Howard Alk and Bernard Sahlins to open the Second City.

This was not the revolutionary enterprise the Compass had been. It was a business. But a very peculiar business all the same, because it had this playful new art form at its core.

Second City domesticated the Compass revolution. It gave improvisation a job, a home, a family, and an incredibly rosy future. Current co-owner Andrew Alexander pegs his annual gross at $3.5 to $4 million–and that’s not counting television deals like the one with Disney, where veteran Second Citizens use improv to develop sitcom concepts; or with Western International Communications, which may result in a 24-hour, Second City-run Canadian comedy channel; or with the Arts & Entertainment cable network, which will air a “sketch-driven” pilot, The Second City’s 149 1/2th Edition, on November 18. In September, Alexander opened a Detroit cabaret to go with the complexes already operating here and in Toronto.

All this and venerability too. At 33 years, 11 months, Second City is the oldest off-Loop theater company going. It’s old enough, in fact, to be at the point of confronting a major institutional crisis: a transfer of power from one generation to the next. Certain long-held notions and deeply embedded personalities are losing their hold on the place.

In the process, a Chicago landmark’s been reinvigorated. It’s also been traumatized, divided, and, at times, made very very sad.

Oddly enough, the most unequivocally positive changes at Second City are the ones that have taken it backward. Back even beyond its birth, all the way to the Compass.

It’s no secret that Second City had been growing away from the old Compass ideals for years. This was partly a matter of survival–even the original Compass kids recognized that audiences wouldn’t stand for too much experimentation–and partly a matter of the personality at the top.

For more than two decades, that personality belonged to Bernard Sahlins. Both Sills and Alk had dropped out of Second City early on, leaving Sahlins in charge. Unlike Sills, who is considered a founding genius of modern improvisation (and Alk, who at least climbed up onstage at the Compass and Second City), Sahlins came to the form as a producer rather than as a practitioner. He was never much imbued with the faith of improvisation.

In fact, some consider him a bit of an apostate. Sahlins, says one longtime associate, “always hated improv, because he can’t be in control of it every step of the way.”

Sahlins doesn’t necessarily disagree. “I never thought improvisation was a form,” he says now. “Essentially, improvisation for me is a tool, like mime . . . to arrive at material in the absence of a writer. And in the absence of a writer you can only arrive at certain kinds of material–short things, things without subtext, and so forth.

“The notion of using improvisation as a presentational form, to me, is a cheat. . . . It’s interesting for a while as a game. But like all games, it’s a game.”

Certain other Second Citizens differed profoundly with Sahlins’s appraisal–among them Del Close, a Compass veteran who says he played the role of the “crazy uncle” at Sahlins’s Second City for a number of years.

Far from dismissing improv as a mildly interesting game or a writing tool, Close extols it as “a kind of meditation . . . a doorway into something. Improv isn’t a mode of writing–it’s a mode of behavior.”

And an extraordinarily noble mode of behavior, at that. Close remembers sensing that nobility on first encountering the Compass, “umpty-ump years ago.” “‘What?'” he recalls thinking. “‘Actors getting out there and making up their own words? Basically being their own director? Making their own discoveries onstage? With no scenery, no props? Boy, this is the most responsible job an actor can take on . . . ‘

“There’s a huge ethical dimension to this,” Close continues, back now in the present. “The way you treat people onstage when you’re improvising. . . . You have generosity, the almost tribal sense of taking care of each other. Respect for each other’s ideas. My job is to make you look good and to validate further your ideas, and that’s your job with me . . .

“You pretend to be a saint for between 25 minutes and two and a half hours.”

Sahlins’s less romantic view of things held sway, however–especially after Close left Second City and Sahlins began directing shows “out of necessity.” What’s more, it seemed to be the view of things validated by the numbers. Apostate or not, Sahlins ran one mighty successful nightclub.

Still, the hazards of seeing improv narrowly, as nothing more than a source of revue grist, became apparent over time. The work became repetitive, and therefore dull. By 1984 even Sahlins was bored. He allowed himself to be bought out by Alexander and Alexander’s partner, a bingo card mogul named Len Stuart–and went on to become the Chicago theater community’s number-one neomedievalist, creating, among other things, the short-lived Willow Street Carnival (a sort of a cross between a commedia troupe and a morality play) and two genuine morality plays, The Creation and The Passion.

While Sahlins was losing interest, Del Close was busy going back to first principles. One of the early dreams of the Compass founders had been to improvise entire evening-length plays. This dream was discarded quickly when it proved at once more difficult and less popular than the short skit format. Close returned to it, however; after he left Second City, he and Charna Halpern founded what is now called the ImprovOlympia and started teaching his own long-form improv technique–which, for lack of a better name, he called Harold.

Second City began its own de-Sahlinization process, its own return to the faith, in 1986, when the company expanded its perfunctory old workshop system into a five-tier, year-long professional training program under the guidance of Sheldon Patinkin–a director, educator, and onetime Second City co-owner who’d been a teenaged disciple of Paul Sills back in the 50s. Patinkin eventually turned the artistic direction of the Second City Training Center over to Martin de Maat, a self-described improv “fundamentalist.”

Between ImprovOlympia and the Training Center, Chicago was suddenly producing an entire generation of improvisers inculcated with anything but a narrow view of the form. Improvisers like Mick Napier, a Close student who went on to lead the Annoyance Theatre–famous as the birthplace of Co-ed Prison Sluts, The Real Live Brady Bunch, and gonzo improv in general.

Like Napier, members of the new generation have started their own improv companies. And like Napier too, many of them have found their way back into Second City as teachers, directors, and performers. The result has been, first, an explosion of pure, exuberant, no-net improv throughout the city, and next, the reinfusion of Compass-era values into the oldest off-Loop theater company going.

Perhaps the best evidence of a renewed spirit is the fact that so many local companies are experimenting with the possibilities of long-form improv. The ten masterful young members of Jazz Freddy, for instance, are able to create an hour’s worth of communal, continuous, interconnected, and very funny riffings out of just two words solicited from an audience; the artists who gathered from time to time as Ed built whole evenings of ambitious, often intensely cerebral improv theater from an elaborate set of rules.

This focus on the long form is significant not so much because it vindicates Del Close or fulfills the Compass vision as because it suggests an appreciation for what improvisation might do and be, given the chance. The willingness to try something as mentally, physically, and spiritually demanding–as risky and potentially mortifying–as the free-fall of an hour-long public improv indicates a deep confidence that the rewards are profound enough to justify the stress. And in fact, stress notwithstanding, the exhilaration of the free-fall itself is one of those rewards.

Second City doesn’t do free-falls. Not yet, anyway. Though based on improv, the skits you see onstage there are still finished pieces performed more or less verbatim at each performance.

Still, the post-Sahlins sea change has opened the old place up a bit. For one thing, an unorthodox concept show, The Heliotrope Players’ Production of Thornton Wilder’s American Classic, Our Town, as Directed by d’Eric Blakemore, was staged last year by E.T.C., Second City’s second company. For another, even conventionally structured Second City shows seem to make more room now for genuine improv and for a kind of physicality that Sahlins’ improv-as-writing-tool approach tended to discourage.

It is significant, moreover, that Second City has snapped up several Jazz Freddy members, starting with Miriam Tolan and Dave Koechner, who joined the touring company last winter. Imbued with the free-fall, leery of Second City’s institutional weight and commercial clout, people like Tolan and Koechner are sure to provide an element of healthy subversion. And frankly, that’s a big part of what they’ve been hired to do. “These guys have a fresh approach to the work,” says Kelly Leonard, Second City’s 26-year-old associate producer, “and I want them to infuse Second City with a lot of that approach.” Already, Leonard reports, “We have battles about form over there constantly.”

As Koechner said soon after he was hired, “I don’t know if I want Second City or Second City wants me.”

The most important aspect of all this from an audience member’s point of view is that the shows have come out of their stupor. They express more variety, more vitality, more playfulness overall. Something’s changed when cast members suggest a jungle trek by leaping from table to table across the cabaret.

Poised against this drama of artistic renewal is another drama, much less pleasant but equally grounded in the changing culture of Second City–a story of what’s lost in the transit between generations.

Like many things at Second City, this story revolves around Joyce Sloane. A presence at the theater for 32 of its 33 years, a consummate fixer, Sloane is almost as much a part of the Second City gestalt as the revue skit itself. She produced the shows, negotiated the contracts, settled the itineraries, hired the players, made sure there was pizza, wine, and cake for the birthdays. She is continuity personified: her late Aunt Nettie did the company books for years; her daughter Cheryl quite literally grew up backstage.

In the context of Second City family life “Joyce was the invaluable den mother,” remembers Bernard Sahlins, who hired Sloane to sell theater parties back in the spring of 1961. “Joyce took care of the external bookings that we did. Joyce took care of a lot of the details–the contracts and so forth. Joyce, in effect, acted as a coproducer to me. We shared duties. Her strengths were with people and getting things from the outside and schmoozing. And she was very good.”

Second City teacher/performer Frances Callier puts it a little more succinctly: “Joyce is the mother of the place. When I think about it I imagine her building it brick by brick.”

No one’s ever doubted Sloane’s contribution to Second City. Everyone concedes her loving and absolute commitment to it. And yet, over the last year and a half matters reached a point where neither she nor anyone else associated with the place can guarantee her future there. On June 29, 1992, Andrew Alexander walked into Sloane’s office and handed her a three-page letter that sent a cold shiver through the Second City family, raising questions about just what kind of family it is and what kind it means to be.

Delivered on the day after Sloane’s 62nd birthday, the letter shared certain “decisions and conclusions” Alexander had come to in consultation with his partner. The crucial decision was that Sloane–who’d suffered a serious heart attack over the Memorial Day weekend, just a month earlier–would “give up the day to day running of the theater” and take on the role of a “senior advisor” with the title “Producer Emeritus.”

The letter was respectful but unambiguous. Sloane would keep her office and the remaining half of her 15-year contract, she would have a voice in the “growth and development” of the theater, and she would continue “to represent The Second City to the Chicago community.”

What she would no longer do is run the place. The universally well liked Kelly Leonard (who also happens to be the son of WGN personality Roy Leonard) would assume the nitty-gritty administrative tasks.

Though Alexander justified it as “the best thing for her, healthwise,” his letter to Sloane was widely seen as an attack on the recuperating matriarch. Two talented Second City directors walked out over it. Several others say they thought “long and hard” about doing the same. Second City alumni in California considered expressing their disgust through an ad in Variety, but backed off for fear of making Sloane’s position even more difficult. Sloane herself began negotiations to redeem her stake in the company. It was as if not just Sloane but the entire institution had had a heart attack.

Alexander’s move was not an isolated crisis but the culmination of conflicts that go back at least as far as 1984, when he bought Second City.

A theatrical entrepreneur who ran the Canadian Second City outposts and helped produce SCTV–the near-legendary comedy show that launched talents like John Candy, Andrea Martin, and Martin Short–Alexander had long made it plain that he’d like to buy if Sahlins cared to sell. Sahlins, meanwhile, found Alexander “unflappable, personable, persistent,” and “respectful of the art.” After a long period of ambivalence, Sahlins finally sold out to Alexander for “over” $1.5 million.

Which was fine as far as it went, only it didn’t go as far as Joyce Sloane. Sahlins did not inform her of the deal until it had been concluded. “I didn’t know about [the negotiations],” Sloane recalls. “Bernie never told me. And then Bernie said, ‘I’d like to talk to you.’. . . And he came and told me in this office, and we both cried.”

(For his part, Sahlins says he didn’t tell Sloane earlier because he wasn’t sure himself. As for the question, often asked around Second City, of why he didn’t let Sloane make an offer, Sahlins says simply, “I knew Joyce didn’t have that kind of money.” He calls the question itself an “underground fester” born of hindsight.)

Sloane claims to harbor no animosity toward Sahlins, commenting in good den mother fashion that “it’s hard to resent anything he does.” But others close to her confirm that in fact his silence hurt her very deeply. More than one friend speculates that Sloane allowed that hurt to express itself as resentment toward Alexander, even though it was Alexander who saw to it that Sloane received a piece of the business–something she’d never had under Sahlins.

Sloane’s hurt didn’t get much of a chance to heal over the next several years. Aware that Second City-trained artists habitually succeed in Hollywood, eager to see Second City share in that success even as it shared in the training that led to it, Alexander felt it was time to establish a foothold out west. So rather than settle in and establish himself at the home theater in Old Town, he moved to Los Angeles, where he spent $1 million transforming Santa Monica’s Mayfair Theatre into the Second City LA.

The idea was to bring the best Second City people to the coast, form them up into an ensemble, and give them two tasks: one, to mount revues for the Mayfair stage; and two, to develop half-hour sitcom concepts for clients like Ron Howard’s Imagine Films.

The idea didn’t work. In fact, as Alexander acknowledges, it “was really a disaster.” The theater failed, the Imagine deal soured, long-standing relationships were destroyed.

To recount the full nature and extent of the LA trauma would require a long and ugly digression. Suffice it to say that if Alexander blames himself for much of what went wrong, there are others who blame him a whole lot more. Three years after the events that led to her dismissal from the LA company, Jane Morris–a longtime Second City mainstay whose maneuvers with Sloane while the skeptical Sahlins was out of town helped found Second City’s edgier second stage, Second City E.T.C.–is still livid, accusing Alexander of having “humiliated me beyond cope.” The Chicago Second City, she says, was “a big dysfunctional family. Out here [in LA] it was a family that ate its young.” Even the improv cabaret Morris has since cofounded in Santa Monica testifies to her anger: in response to what she regards as Alexander’s less than forthright dealings with his LA company members, it’s called the Upfront.

The Second City LA closed in July 1990, and Alexander moved to Chicago–where, of course, Sloane had been running things all along. It’s been suggested that during Alexander’s west coast odyssey Sloane ridiculed his decisions and refused to carry them out. Daughter Cheryl denies it. In any event, Alexander and the elder Sloane couldn’t help but fall into conflict once they found themselves confined to the same building.

Not a small part of their incompatibility was a matter of personal style. Second City was founded and built mainly by Jews–tortured, funny, voluble Jews, who knew how to argue and make up (or hold a grudge, as the case may be), and whose approach to business was as intimate and improvisatory, as familial, as their art. With her haimish warmth, Sloane fit right in.

Alexander, on the other hand, is the son of English parents who came to Canada to build an airplane called the Avro Arrow. There’s no question but that he’s a good deal more reserved than his predecessors. Though one Second Citizen likens the gray-haired, fleshy 50-year-old to a Saint Bernard, he’s hardly the frolicsome, slobbery type. He doesn’t schmooze.

In fact, some complain that he barely interacts at all. A so-called communication problem often comes up in discussions of Alexander. He’s characterized as remote, taciturn, hidden behind a phalanx of newly hired administrators.

These perceptions may have less to do with Alexander himself than with the peculiar environment in which he finds himself, where everything depends on social and verbal skills–on the ability to interact and entertain. “There’s nothing wrong with him,” says Second City teacher and director Norm Holly. “He’s not cold. He just isn’t funny.”

Still, the impression of coldness hasn’t been mitigated any by Alexander’s executive choices. Far from continuing on in the established ma-and-pa mode, the man from Canada has set about corporatizing the Second City family: dividing tasks, defining hierarchies, employing controllers and spread sheets where a single checkbook once sufficed.

Among his more traumatic innovations was the decision to relieve Cheryl Sloane of the chores she was used to performing at the Old Town theater, and ship her out to the Rolling Meadows location–a move that Joyce Sloane took personally as an attempt to “get at” her through her daughter. “Joyce underwent a great deal of stress and felt very threatened a lot of the time,” remembers Mick Napier.

It was in the midst of all this tension and change that Sloane suffered her heart attack. No one, not even Sloane, can really say for sure what brought it on, but her meaning is unmistakable when she says, “I didn’t get a heart attack for nothing.” And Alexander himself haltingly concedes that “part of it was due just to the change–[which] maybe created a little bit of stress in her life amongst other things.”

Even Sloane’s closest partisans recognize Alexander’s proprietary right to run his business as he pleases. If they’re honest, they also recognize the wisdom of his efforts to move younger people like Kelly Leonard into positions of responsibility and to bring greater efficiency to a business that’s grown tremendously over the last 33 years. To “shake up the Etch-A-Sketch,” as Leonard likes to put it.

“Maybe I’ve got ten more years left, really sticking to it,” Alexander says. “But you know you’ve got to say, who’s going to keep the idea going beyond that? We have to be open to change and bringing people in and not letting ourselves–even myself–say, ‘It is just me.’ You have to be open to the future.”

What really worries Alexander’s critics isn’t his quest for new blood and better accounting, however; it’s something more elusive than that. Something empathic. What really worries them is the question of whether he understands the culture of Second City. Whether he values the sense of family. Or acknowledges the pressures of improvising. Or recognizes the importance of ordering pizza, wine, and cake whenever somebody has a birthday.

As I say, Second City has always been a peculiar business, rooted in improvisation: the art of creating and sharing a group reality. The communal art par excellence. Love and money have fought it out with each other at Second City since the beginning. And yet there have always been counterweights to keep money from flying away with the place. People like Sloane, minding everybody’s business.

The fear is that Sloane’s fall means there will be no counterweight to balance, for instance, Alexander’s fascination with television and film deals. No one to remind everybody that Second City remains a family. What will happen to the communal art once the community’s gone?

This is a crucial moment for an important Chicago institution: after a long transition, it’s finally passing out of the hands of the founding generation, into the hands of–whom? A guy from Toronto who spent a number of years in Los Angeles and now concedes, “Yeah, I am an outsider.”

Resentment naturally pools around a moment like this, and it can spill over at communal events. I saw it happen some months ago when, at a memorial service for a Second City bartender, a mainstage company member spoke bitter words about the loss of familial feeling at the theater. And it apparently happened again in October, at a going-away party for departing Second City E.T.C. stage manager Rob Bronstein. People who were there say that Nate Herman–a longtime Second Citizen famous as both a fine director and a loose cannon–used the occasion to taunt Alexander, rating him the second unfunniest Canadian, after Mike Myers of Saturday Night Live, and denigrating the quality of work done at the Second City under his stewardship. Angry at what he calls “an insult not only to myself but to the theater”–not to mention his “roots”–Alexander stormed out.

The set-to has since been dubbed “Nategate.”

Still, aside from the occasional outburst, a certain peace seems to have settled over the place. Sloane holds on despite her protestation that she no longer knows what her job is–and also despite an allegation last spring from Alexander’s controller, Will Graber, that Sloane pocketed $10,000 in insurance money meant for the Second City, an allegation that seems to express more about the dismal state of communications between Sloane and Alexander at a certain moment in history than about any genuine larceny on Sloane’s part. (Sloane refuses to comment on Graber’s charge, except to say, “They weren’t short any money. They have their money, so what’s there to talk about?” And though the allegation was made to me several months ago, it has not been pursued in any formal sense.)

Sloane has not redeemed her stake in Second City, and has no immediate plans to do so. In fact, she says, Alexander has told her he never intended that she should. As for the ambiguity of her current status at Second City, she has “decided to just enjoy it.”

Cheryl Sloane, meanwhile, has made a five-year deal with Alexander to run the Rolling Meadows Second City as a more or less independent franchise. And Alexander himself seems to be applying the lessons of Los Angeles: the latest Second City opened in Detroit, where it gets cold in the winter and nobody makes movie deals. His recent reading matter offers a hopeful sign, too. On his desk the other day was a book about shtetl life in Eastern Europe; the book’s title–Life Is With People.

Art accompanying story in printed newspaper (not available in this archive): photos/Jim Alexander Newberry.