Broadway Grosses: Week Ending 5/15/22 — Page 4

HogansHero said: "@OhHiii Again, Disney does not "capitalize" a show and thus it does not "recoup" (or not). When you rest your post on infirm foundations, it obviously discredits even that which might be accurate."

Even if Disney does not "capitalize" its productions, each show still has an individual P&L with all of the upfront costs that most would consider capitalization costs, included. The Corporate finance team at the mouse house is still defining whether Frozen and Disney's other productions as hits or flops by the same standards as other commercial producers. Only productions that play The New Amsterdam would have a financial advantage, as since Disney "owns" the theater they do not need to turn a profit as landlord. Therefore rent is significantly reduced since its allocated at cost. As such if Disney were to close a show that was playing The New Amsterdam, Disney needs to do a cost benefit analysis on how much they are loosing per week by having a show run but still getting some revenue from ticket sales to cover corporate operational costs, vs how much they'd loose by keeping the house dark between shows.

This is the main reason why Aladdin won't close without either Disney having a production waiting in the wings to open within a few months or another show open on Broadway and operating at a profit so The Lion King, isn't solely responsible paying to keep the lights on at 2 Broadway theaters.

HogansHero said: "@OhHiii Again, Disney does not "capitalize" a show and thus it does not "recoup" (or not). When you rest your post on infirm foundations, it obviously discredits even that which might be accurate."

Always a pleasure to interact with you, Hogan. An initial investment in a production is an initial investment. The Broadway run of Frozen did not earn back the $25-$30M that is on record with the SEC as being the cost to cover mounting the show. My point was clear.

JBroadway said: "OhHiii said: "The Broadway run of Frozen did not earn back the $25-$30M that is on record with the SEC as being the cost to cover mounting the show. My point was clear."

Are the show’s returns reflected in the SEC info, or just the “capitalization” (or whatever one wants to call it)?

Also, does the $30MM include the theatre renovation or would that have been added on top? If it’s the former:

The show grossed a total of $155MM during its run, over 107 weeks. Even if its accumulated running costs were $1MM a week, wouldn’t it still have “profited” (or whatever word you want to use) almost $50MM? Again, I know Disney wouldn’t consider that a success due to their unusual model – but if one were comparing their financial income vs. output to that of a normal show, wouldn’t this have been the case?

"

The theater refurbishment was likely an additional accrual paid to Jujamcyn that went into their operating costs/rental agreement. Likely, those sorts of things behave like a priority loan and must be paid back first. None of the theater owners do that sort of overhaul for free. They even make a resident show pay for installation of digital marquees if they want them and then subsequently charge future tenants a fee to even have their marquee up, which should be criminal. The one exception may be Harry Potter's restoration of the Lyric since ATG is owned by the same private equity firm as Sonia Friedman's production company, so that may be a special arrangement.

I wouldn't be surprised if total weekly running costs were much higher than $1M for Frozen, they weren't concerned with making money, on paper it was a surefire hit. And a lot of weeks in 2019, the show grossed less than $1M a week, losses that stronger-week grosses would have to cover. It's still widely agreed in the industry that Frozen was a flop on Broadway. And a lot of that is probably exacerbated by the expectations people had for its success.

Updated On: 5/19/22 at 12:02 PM

@bdn223 The mechanics of Disney is different from other shows which are "each tub on its own bottom." As I explained, there are no investors, and while there is obviously internal accounting, it is not at all the same thing. There are many costs that are different for Disney beyond the ownership of the venue because, as I explained, people work across multiple projects etc. It is not a distinction without a difference.

@OhHii Where is this "record" with the SEC of which you speak? lol

@OhHiii For some reason, you don't have an interest in understanding basic concepts of Broadway finance. Enjoy. Oh, and note that you did not answer my question. Understandable.

BTW I am not a "jerk" to anyone but I do call out people who don't know what they are talking about and pretend that they do. Want me to be nice to you as I am to so many people on here? Don't pretend to know what you don't and especially don't throw faux umbrage my way when I call you out because of it.

Hogan, maybe you can explain HOW this distinction you’re trying to convey actually alters the point of this discussion. How does the lack of traditional “investors” affect whether or not Disney saw this as a profitable venture for their bottom line? What is the functional difference, for the purposes of this discussion, between (a) Disney spending $30MM and not netting $30MM back, vs. (b) investors fronting $30MM and investors not netting $30MM back?

Updated On: 5/19/22 at 01:53 PM

JBroadway said: "Hogan, maybe you can explain HOW this distinction you’re trying to convey actually alters the point of this discussion. How does the lack of traditional “investors” affect whether or not Disney saw this as a profitable venture for their bottom line? What is the functional difference, for the purposes of this discussion, between (a) Disney spending $30MM and not netting $30MM back, vs. (b) investors fronting $30MM and investors not netting $30MM back?"

Disney is a going concern, a moving picture if you will. An LLC that produces a single show is more akin to a snapshot. A going concern is of course interested in whether any given venture it undertakes turns out to be a good one or a bad one, but if Frozen does not recoup, Disney marches on (at least until it goes bankrupt as a company and shuts down which, obviously, is not likely). Also, Disney gains other benefits from a flop production. It gains institutional knowledge, which has value; it develops relationships, which has value; and it covers overhead and keeps its team employed, which has value. In an LLC, while a lead producer may gain some of these benefits, the investor does not. In a total loss, an investor gets nothing. In a partial recoupment, the investor may get some of their equity back, sooner or later, but it's quite different than the cash flow that Disney sees when it gets its wire every week. (Note also that, while a show has a fixed capitalization (see Garth's monkey business that was in the press this past week), Disney can add or subtract to its budget at any time, and can utilize cash flow for whatever it chooses.) Perhaps these are distinctions of little interest to some people, but for those focused on the financial end of things, it's important.

@OhHiii well, one thing we can say for certain is that you are defiant in your misapprehensions.

Go back and read #69 and #70. (Or better yet, don't.) In #78 , you say "An initial investment in a production is an initial investment." But you refuse to recognize that Disney does not "invest" money in a production; it spends it. Until it is spent, it is available for other purposes (the point being, not so for an investor). And the cash flow from the box office is also available to it for whatever purpose (in contrast to an investor, who must await profit [and then some, often a big some] before seeing a penny, if they ever do.) It's apples and oranges, my friend, whether you want to elide it or not. It's clear, as I said, you have no interest in understanding so I'm done here. If others want to discuss, I am happy to respond if I can.

Oh, and the only crickets are in your yard. Still waiting for an answer to my question. lol.(Or better yet, don't.)

Wow. The claws are out!

hogan are you a producer? General manager?

lawyer?

Fosse76 said: "soulmistin said: "And to think y’all were predicting the cancellation of Come From Away."

I can't tell if you're being sarcastic or not. While the numbers this week don't seem to be much worse than last week, they aren't really better either. It seems to be a relatively cheap show to run, so my guess is they're breaking even, or close to it. (Someone on last week's grosses thread claimed it costs under $500,000 a week to run - not sure where they got that info, but I hope it's right). Fingers crossed that things will pick up during the summer tourist season and beyond, because it definitely deserves to stay.

Papi2013 said: "Baranski is a TV name and would sell tickets. Jean Smart is based in the West Coast and has young children in school. I doubt she would be interested in uprooting them."

Her biological son is 33.

Her adopted son is 13; it would only be this one son she would have to be concerned with in this situation.