Broadway Theater Owner's Profits

https://jharbour.substack.com/p/the-residual

On one hand, this is way over-written and a lot based on estimates, and on the other hand it all seems pretty accurate as to where we likely are at the moment. We've heard a lot about how unions have driven costs up, but how out of whack has THIS become?

It's a good piece, whether it's 100% accurate or only 70% accurate. The theater owners have gotten away with a lot for a long time.

A new musical or a play without stars should be paying a much lower level of rent/landlord royalty for the first ~6 months of its run until it can find its footing, and there may even be a reckoning to be done about reducing the # of house crew/ushers/staff on a show's payroll without sacrificing safety or quality.

I don't intend the following as a defense of the landlords, but I think Shubert does a lot of good for the industry since it is a Nonprofit Foundation and not owned by individuals (Nederlander) or private equity (ATG). But they can still afford to be more generous to new shows.

• The Shubert Foundation is one of the most generous nonprofit performing arts funders in the country.
• Shubert is probably spending half its profit each year on renovations, whether it's big projects (JEJ, Imperial) or more modest ones (Majestic). I think Broadway's houses are in far better shape for 21st century audiences than a lot of the houses in London and even places like Carnegie Hall (which is beautiful but has cramped seating, bad sightlines/sound, and confusing lobbies - and it rarely sells out).
• Projects like taking over Sardis is a great thing for them to do. That restaurant might never turn a big profit, but it is important that there's a consistent theatre industry steward of it.

I also don't think there should be too much focus on concessions, merch, and landlords becoming co-producers. As a co-producer, a landlord gets the same terms as any other investor, and it would be ideal if they invested in EVERY show as a gesture of good faith. Sometimes for trusted producers the landlord will also cover union bonds.