The Business of Broadway

An Insider?s Guide to Working, Producing, and Investing in the World?s Greatest Theatre Community

Mitch Weiss, Perri Gaffney

• Publisher: Allworth
• Year: 2015
• ISBN:
  9781621534761
• Topic: Media & Performing Arts
• Subtopic: Performing Arts & Business

New York's Broadway theatre scene has long been viewed as the "top of the heap" in the world theatre community. Taking lessons from the very best, this innovative guide delves into the business side of the renowned industry to explain just how its system functions. For anyone interested in pursuing a career on Broadway, or who wants to grow a theatre in any other part of the world, The Business of Broadway offers an in-depth analysis of the infrastructure at the core of successful theatre. Manager/producer Mitch Weiss and actor/writer Perri Gaffney take readers behind the scenes to reveal what the audience—and even the players and many producers—don't know about how Broadway works, describing more than 200 jobs that become available for every show. A variety of performers, producers, managers, and others involved with the Broadway network share valuable personal experience in interviews discussing what made a show a hit or a miss, and how some of the rules, regulations, and practices that are in place today were pioneered. Allworth Press, an imprint of Skyhorse Publishing, publishes a broad range of books on the visual and performing arts, with emphasis on the business of art. Our titles cover subjects such as graphic design, theater, branding, fine art, photography, interior design, writing, acting, film, how to start careers, business and legal forms, business practices, and more. While we don't aspire to publish a New York Times bestseller or a national bestseller, we are deeply committed to quality books that help creative professionals succeed and thrive. We often publish in areas overlooked by other publishers and welcome the author whose expertise can help our audience of readers.

PART 1

WHAT MAKES BROADWAY TICK

Chapter 1

The Danger Is Thinking You Know More Than You Do

There is great danger in thinking you know more about Broadway than you do. Broadway theatre can provide one of the most exhilarating of experiences, whether you are in the audience, or one of the two hundred people who help to create each fabulous musical or riveting play.

Most of us fall in love with theatre working in our first school production. It’s the teamwork, everyone working individually and collectively toward one goal, the results of which are actually attained in a short period of time and enjoyed together. It creates goodwill and camaraderie, a sense of major achievement, and a pride in self and others. In many ways, it’s similar to a school sports team. No matter how depressing the team scores, or how mediocre the school production, the pride we garner in that joint accomplishment often lasts a lifetime.

The business aspects of Broadway are as impressive as the production values and technology that are unquestionably second to none. The quality and standards of a Broadway production are beyond the scope of theatre most anywhere else because the pool of talent vying for the Broadway stage has no comparison.

Yes, London, England, can boast that the West End in Piccadilly is the breeding ground for transfers to Broadway. Chicago’s nonprofit Steppenwolf Theatre Company, or Seattle’s Seattle Rep, or Washington DC’s Kennedy Center can prove a long history of superior productions, many of which have moved to Broadway and have deservedly received Tony Awards. But only New York City’s Broadway district has forty live theatres that earn over a billion dollars annually, entertaining diverse audiences of almost 13 million people from every corner of the globe for all fifty-two weeks of the year.

This is where a playwright knows that his or her work has the best chance to reach the largest audience and receive the best production in the hands of caring and skilled talent. And this is where regional and community theatres, high schools, colleges, and touring venues will find their next production to entertain, educate, and stimulate their audiences.

Only Broadway productions have enough money behind them to sink the Titanic on stage, or fly a helicopter into Saigon, or burn down a house, or fly Spiderman and his nemesis in an aerial chase around the theatre, every night. Only Broadway can afford to bring celebrity film and television stars up close, live, and personal for an extended period of time.

Broadway remains the goal of every new play or musical. Once you’ve played Broadway, you are suddenly a part of theatre history. That’s why thousands continue to flock to New York in the hope of being a “Broadway baby.” And after film and television personalities perform on Broadway, they are regarded as serious actors.

Broadway is the Holy Grail for producers around the world. Without inhabiting an official Broadway theatre, no show can call itself a Broadway show. The Tony Award–eligible Broadway district runs north from West 40th Street to West 54th Street between Sixth and Ninth Avenues with only one exception, the Vivian Beaumont Theatre at Lincoln Center for the Performing Arts at West 66th Street. The smallest Broadway theatre has 597 seats (Helen Hayes Theatre) and the largest has 1933 (Gershwin Theatre). In past decades there were Broadway theatres with as few as five hundred seats but it is difficult to pay Broadway wages and expenses with so few seats today. Theatres in Manhattan with less than five hundred seats are considered Off Broadway (99–499 seats) or Off-Off Broadway (generally under 99 seats).

Mentoring is the backbone of the Broadway community. You can bring book-learning and the love of theatre to the job, but you will never know all you need to know about putting on a Broadway show before you study and work under someone else.

This is especially problematic for new investors who, due to success and experience in other businesses, want to contribute to a show and add the title “producer” to their credits. They may be the sole decision-maker for their own businesses, and not used to conferring with people who know as much or more than they do. It’s hard to step back, listen, and follow when it’s your money being spent and you are accustomed to leading.

While studying Broadway management at NYU, two adult students introduced themselves as having been Broadway producers. They explained, “This time, before investing in a second production, we would like to know what a General Manager is supposed to do.” This book is written to offer an opportunity for would-be-producers and investors to learn about all of the people their money will hire, and what these people do.

The famous Harold Prince won a record twenty-one Tony Awards for West Side Story, Company, Cabaret, Sweeney Todd, and dozens more. The infamous David Merrick won more than ten Tony Awards for the hit musicals and plays 42nd Street, Mame, Travesties, and Hello, Dolly among others. They were “lead producers,” the sole decision-maker for their shows. Every producer is not a lead producer. Your producing title may not entitle you to make any decisions at all. As a producing novice, you might want to first learn from the successes and mistakes of others.

A Broadway investment is riskier than Wall Street or a Las Vegas gamble. Almost 80 percent of all Broadway shows lose every penny of their investment. Some of the other 20 percent of shows pay only a slight profit, and an even smaller percentage hit the jackpot. A major hit can pay a whopping 250 percent annual profit on its original investment for decades. No stock future or derivative can match that. But before you leap, the rule of thumb for Broadway investors is that you need to be able to lose your entire gamble without flinching, or you should not invest at all.

Most Broadway investors admit that they want to be involved in the excitement. They want to go to an opening night party, meet the stars while they are in rehearsal, brag to their friends that they are part of a hit Broadway show, and have the connections to buy “house seats” (the best seats in the theatre) at a moment’s notice. That’s a very expensive piece of excitement in most cases.

Some Broadway shows are produced by nonprofit theatre organizations or a combination of investors and nonprofit producers. The monster hit musical A Chorus Line was produced on Broadway by creator Michael Bennett and Joseph Papp’s nonprofit New York Shakespeare Festival. It was funded by a single donation from the Chair of the Board, LuEsther Mertz, heir to the Reader’s Digest fortune and beloved philanthropist.

Costing $500,000 to transfer from the New York Shakespeare Festival’s Off Broadway Public Theater venue to Broadway’s Shubert Theatre in 1975, A Chorus Line became Broadway’s longest-running musical by 1983 and ran until 1990. At that time no show had earned as much money—hundreds of millions of dollars. The Supreme Court had recently declared that as long as the profit did not benefit anyone’s personal pocketbook, but instead returned to the stated purpose of the nonprofit institution (in this case, the production of theatre, education, and the arts), profit was a glorious result of nonprofit work.

The largest loss in Broadway history began in 2010. The musical Spider-Man: Turn Off the Dark raised a reported $75 million to open its production on Broadway. Most of its investment was lost by the time it shuttered in early 2014. The production needed to credit more than twenty investors, including major corporations, as producers in order to fund the massive production.

Over the decades, the stakes have gotten higher and the number of investor virgins has had to increase due to the cost of producing on Broadway. Corporations like Disney and Paramount have changed the “mom and pop” nature of Broadway into a corporate world of bureaucratic committees.

Dramas, comedies, and small musicals are less costly because fewer performers are needed. Actors are not by themselves expensive, but more actors mean additional salaries and costumes to design and maintain. Smaller productions usually involve less complicated sets and lights. Fewer stagehands are needed to run and maintain these shows. Wireless microphones may not be needed for amplification in smaller theatres, and both rent and utility bills are reduced. Writers and directors are paid less up-front fees and advances. All of this has been predetermined by nineteen unions and associations, and their rules negotiated and developed over time.

While an average big musical in 2014 might cost around $12 to $16 million, an average nonmusical can cost around $3 to $6 million. Smaller costs sometimes allow lower ticket prices, but the lower prices translate into less profit potential. Nothing is easy.

An experienced general manager, the most important advisor to a lead producer, will know how to balance potential income with probable costs as determined by the artistic needs of the script.

Let’s not forget that the entire project hinges on the quality and success of what has been written and/or composed. Often we read how film actors and film directors use improvisation in scenes, rewriting lines and sometimes entire scenes. A film script is often just a well-designed guidepost at best, or a vague suggestion at worst. That is almost never true on Broadway.

The script is the primary reason why a lead producer decides to raise funds. She or he believes that the script has the potential to become art and change the world, or at least make a lot of money. Hopefully both. Raising funds for a gamble like a Broadway show is very difficult. It takes major talent to be a lead producer and raise millions of dollars when there is about a 20 percent chance that the money will be returned.

New York State and its Attorney General’s office regulate the raising of these funds. These laws are found nowhere else in the world. The rules are strict. The rules protect the investor, not the producer. These laws change depending on how many investors you have, and in what states or countries they reside. These laws dictate how and when funds must be paid back and the conditions under which the lead producer must also apply to the Federal government for approval. Specialized entertainment lawyers prepare the required prospectus given to every investor. It is detailed and brutal in some cases, listing the success rate of the lead producer and sharply warning against the risk.

Being a lead producer does not mean that you know what you are doing. It’s about finding the script, falling in love with the script, and raising funds. It’s the general manager who turns the lead producer’s wishes into reality. General managers are hired for their personal contacts, knowledge of union rules, budget expertise, personality, and negotiating experience. The lead producer and general manager should feel comfortable with each other and respect each other. This does not always happen, so big problems often start here.

General managers are best friends for hire. Even an alcoholic, obnoxious lead producer can find a general manager to work with, as long as the checks don’t bounce. Right or wrong, it’s a tough business to make a living and every project has the potential to provide long-term employment for the general manager and many others. If the project is interesting and seemingly worthwhile, a problematic boss may have to be tolerated, like any other business.

At this point, the new show has a great script, a lead producer, an entertainment law firm, and a general manager. We are now at least six months to two years away from opening the show on Broadway and we’ve already paid up-front fees to the playwright, composer, and lyricist, the law firm, and general manager, perhaps exceeding $150,000. The lead producer needs deep pockets, and there’s no income stream in sight at this point.

Welcome to Broadway.

Next will come a director, technical supervisor, and designers, each with up-front fees, negotiations, and contracts. Perhaps another $150,000 will be needed. Lead producers spend their own money up front, unless they can raise “front money.” Investors who are willing to provide front money take a big risk by allowing the lead producer to spend their investments without waiting for full capitalization of the project. If the project never happens, front money is lost. In return, these risk-friendly investors receive extra percentages of the profit, if there are any profits (see Chapter 10: Producing and Investing).

Every show has its own story and so no one path is the same. By the end of this book, we will have strolled through the preproduction, production, opening, and postproduction stages that hopefully lead to long-running profitable shows.

It’s not really a stroll. It’s a high-energy sprint during which every penny of a multimillion dollar show will have been spent, most of it within an eight-week window.

Some of the invested cash will rent a theatre. Broadway theatres do not provide lights, sound, or other equipment. This is known as a four-wall deal, meaning that rent pays for nothing but the four walls. The theatre hires its own personnel: box office treasurers, house manager, ushers, doormen, porters, and security, and their salaries are charged back to the show.

Management will also use the money to hire stars, supporting cast, understudies, stage managers, a company manager, press agent, marketing and advertising companies, musical director, stage crew, wardrobe crew, photographer, and on and on. Rehearsal studios, lighting and sound equipment, costumes, props, scenery, and union bonds must also be covered. Once a marketing plan has been developed, the cost of promoting the show will eat up considerable funds as well.

The general manager and company manager are there because they know what these things are supposed to cost and keep these expenses within budget. The goal is the creation of a great show that makes everyone proud to have been a part, with ample ticket sales and profits so that the show can run for a long time and inspire investors to invest in another show.

Of course, most of the time, the show will close quickly and lose all of its investments. Hard work will go unrewarded and hundreds of jobs will be lost. But optimism lives. The next show will be “the hit.”

The Broadway community forgets that few outsiders know the facts that we take for granted. So, let’s cover some of the basics.

Each Broadway show presents eight performances each week and is required to have one full day off in each week. Simple, it seems, except that many regional and Off-Off Broadway theatres set their calendars around weekends only, and in entertainment cities, like Las Vegas or Branson, Missouri, shows can perform as often as twelve times per week.

Historically, many stages were built on a “rake,” a slant rising upwards toward the back of the stage so that audiences could see an actor standing behind another. So “upstage” is a theatre direction meaning farthest away from the audience. “Downstage” means closest to the audience. Stage left and stage right are stage movements from the viewpoint of the actor looking at the audience, the e...