Looking at the city details, it appears Shakespeare's Theatre converts 16 unhappy citizens, assuming red shirts linearly count as two.
total citizens = 17
-3 from military suppression, temple = 14 unhappy
+5 red shirts = 19 unhappy
2 + 1 unhappy after Shakespeare = 3
19 - 3 = 16
This doesn't seem right, though. I thought the wonder could handle mega-cities under normal circumstances. Maybe there's a government multiplier.