What troynow said is about right, but I’m just going to explain more of the basics, in case that’s helpful.
The EXTREMELY OVERSIMPLIFIED version is:
If an average-sized musical is making around $1M per week, there’s a good chance it’s doing well.
If a smaller play is making around $700k/week, there’s a good chance it’s doing well.
If any show is making $1.5-$2M+ a week, they’re pretty much crushing it.
Everything in between really depends, and takes a little more parsing out.
So, the less simplified version is:
Whether or not a show is doing well depends on the running cost: how much it costs to run each week (I.e. employee salaries, theatre rental, replenishing supplies, etc. - and depending on how you count it, you could also lump the advertising budget in there, and the royalty percentages)
If the weekly gross is above the running cost, then the show is probably comfortable. If the weekly gross is below the running cost every week, or most weeks, that’s bad news, and grounds to close the show.
Unfortunately, we rarely ever know what that number is, so it requires speculation/estimation (see troynow’s post above).
The other number to consider is the capitalization - the upfront cost of putting the show on its feet (building the sets, developing the show, etc). It can range from $5M for small plays, to $15-20M for large musicals - sometimes more.
Each week, after they’ve paid all their weekly expenses, salaries, royalties, etc. - any leftover money from the gross goes toward paying back the investors for those upfront costs. Once they’ve fully paid that money back (recouped) they’re considered a financial success. And any extra money from the weekly gross now goes back to the investors as profit. And if it’s an open run, they’ll just keep running as long as the don’t fall below the running cost too frequently.
For a limited run, it’s a tighter turnaround. So even if a limited run is making more than their running cost, they still might end up a financial failure, if their margins aren’t good enough to recoup in that short amount of time.
Clear as mud?
