Budgets and Breakevens (2023-2024)

[ErmengardeStopSniveling]

Posted: 8/27/23 at 1:42pm

Per a new piece by Philip Boroff, which will help inform people as the weekly grosses come out.

Generally wise to add 10% to the weekly expenses from what's included in the investor paperwork.
 

HERE LIES LOVE
$22 mil capitalization / $803K breakeven (excluding the added musicians; probably closer to 850 now)

BACK TO THE FUTURE
$23.5 mil cap / $1M breakeven. "If it maintains its $1.35 million average gross, it needs to run for at least another 65 weeks to recoup its $18.8 million in production costs. Recouping the entire $23.5 million capitalization, which includes nearly $6 million in cash reserves, would take closer to two years at this rate."

ONCE UPON A ONE MORE TIME
$20 mil cap / $900K breakeven

JUST FOR US
$2.25 mil capitalization. "made distributions to investors. Backers may be fully repaid should their lauded shows receive a New York State theater production tax credit of up to $3 million. Introduced in 2021 and recently extended to 2025, the state credit is a major subsidy, particularly for modest productions."
 

...and a few from last season:


SWEENEY TODD
"could earn back its $12.7 million in production costs by November, according to my calculation based on its recoupment chart"

INTO THE WOODS
$4M; recouped

NEW YORK, NEW YORK
$25M cap / $1.1M breakeven

Updated On: 8/27/23 at 01:42 PM

[bear88]

Posted: 8/27/23 at 2:31pm

Just a dumb question regarding recouping: I always assumed recoupment means recouping the full capitalization costs. Do investors get a dime if a show recoups its production costs but not its full capitalization?

[EDSOSLO858]

Posted: 8/27/23 at 3:37pm

I thought Thomas Kail had said his Sweeney has a $14 million budget - it was in the NYT when the production was first announced. 

 

[ErmengardeStopSniveling]

Posted: 8/27/23 at 3:46pm

bear88 said: "Just a dumb question regarding recouping: I always assumed recoupment means recouping the full capitalization costs. Do investors get a dime if a show recoups its production costs but not its full capitalization?"

The capitalization is the production cost. But that BTTF situation is confusingly worded: if it can recoup the $18M of hard costs without dipping into its reserve, it can then just return the ~6M reserve to investors. If it starts losing money, or if it had other non-budgeted production expenses that needed to be accounted for, that's why the reserve exists. The point is, it's a healthy reserve and though the show is doing well right now, we don't know what kind of legs it will have and may need that contingency come wintertime. (The above is true of most shows, whether their contingency is $300K or $6 million)

RE: Sweeney, it may be that it was capitalized at up to 14M and they only needed the minimum instead of the max. But I'm only going by the numbers presented here.

Updated On: 8/27/23 at 03:46 PM

[rubytuesday]

Posted: 8/27/23 at 4:50pm

ErmengardeStopSniveling said: "bear88 said: "Just a dumb question regarding recouping: I always assumed recoupment means recouping the full capitalization costs. Do investors get a dime if a show recoups its production costs but not its full capitalization?"

The capitalization is the production cost. But that BTTF situation is confusingly worded: if it can recoup the $18M of hard costs without dipping into its reserve, it can then just return the ~6M reserve to investors. If it starts losing money, or if it had other non-budgeted production expenses that needed to be accounted for, that's why the reserve exists. The point is, it's a healthy reserve and though the show is doing well right now, we don't know what kind of legs it will have and may need that contingency come wintertime. (The above is true of most shows, whether their contingency is $300K or $6 million)

RE: Sweeney, it may be that it was capitalized at up to 14M and they only needed the minimum instead of the max. But I'm only going by the numbers presented here."

Ah. Thank you. I was just about to ask that very question: what if they do not dip into the cash reserves.

[BJR]

Posted: 8/27/23 at 7:38pm

It's wild that SWEENEY was only $12-14 million, given its scale. I mean, compare it to the cheap-as-hell-looking ...ONE MORE TIME, and I guess it's a lesson in taste.

But looking at those first few, I couldn't but think how broken the model is if every musical is $20-25 million. To think FUTURE has to sell $1.35 million for 2 years? That's, again, wild.

[jkcohen626]

Posted: 8/27/23 at 7:55pm

Sweeney seems to be the lesson for how to do a show in the post-COVID environment. So many of these shows are way too expensive and don't even look like they are. 

Into the Woods probably recouping seems like a pretty big deal. I'm surprised it was never announced. Any Sondheim recouping seems like a HUGE deal. And the fact that we're probably heading for back-to-back and maybe even back-to-back-to-back Sondheim recoupments (when you consider Merrily) is INSANE. If only Steve was around to see it. 

[bear88]

Posted: 8/27/23 at 9:54pm

Sweeney Todd controlled costs, used its stars well, and has raked in money from the start with a revival that emphasized entertainment value. Given that I assume the revival will close in January, it’s impressive that it’s on pace to recoup.

Into the Woods was a wildly entertaining and smartly-directed revival, a star-laden show (even on tour) that didn’t use or really need fancy sets.

We’ll see what happens with Merrily We Roll Along, but advance sales, positive reviews, and those sky-high ticket prices suggest a big financial success. It’s a hit, indeed. Given the show’s famous failure in its first Broadway incarnation, I would guess Stephen Sondheim would have been most pleased about this one if it plays out well.

The lesson? Keep costs down, deploy stars intelligently.

[ErmengardeStopSniveling]

Posted: 8/27/23 at 9:58pm

Should also be noted the astounding cheapness of WOODS is an exception, not a norm, since so many of its upfront expenses (such as building costumes) happened at City Center without Enhancement from the commercial producers, and it didn't need an exorbitant amount of pre-previews advertising.

SWEENEY'S lean capitalization make sense to me considering what's onstage (which, to be clear, looks great). Its design doesn't have the opulence of a DOLLY or MUSIC MAN, and the real expenses come in the operating expenses (salaries & orchestra). And when doing a new musical, there are costs absorbed into the capitalization from enhancements and out of towns and author payments and upfront royalties and greater advertising costs and sometimes a dozen+ workshops or readings or producer-paid author work sessions (all of which have expenses -- actors, space rentals, printing, musicians, management fees, etc).

Updated On: 8/27/23 at 09:58 PM

[HogansHero]

Posted: 8/28/23 at 2:19am

A couple of points to add here.

What makes a production expensive is not always that obvious. The difference between set costs is not huge, but one's approach to advertising embedded in capital is not uniform and neither is the overall expense. Jeffrey Seller does not spend lavishly on either. His model is to put on shows that he thinks have what it will take to attract audience and he is right more often than not and certainly more often than many to whom folks are comparing Sweeney to. 

The other point is that it is not especially enlightening to look at offering papers that were drawn up (generally) well before the first real production meeting and often by folks that are not really in a position to do a great deal more than guess. This can mean that actual costs can exceed those early budgets, but it can also means that the guess - generally overstated some on the theory that having too much money in the bank produces better outcomes than having too little. But by any reasonable financial analysis, having $6mil in reserves is inexplicable. I enjoy guessing as much as the next person, but it is important to accept that it is nothing more. 

[chrishuyen]

Posted: 8/28/23 at 11:30am

I'm a bit shocked at some of these numbers, I knew BTTF and HLL would be expensive shows, but the breakeven of OUAOMT seems quite high (especially when compared against HLL) and I wonder how much the light up bracelets factored into that (a gimmick I actually thought would've worked better for HLL), though I'm sure a lot of it is royalties.

It's been talked about before but NYNY also has startlingly high costs, both in capitalization and weekly breakeven, and it's all the more stark when compared to the other shows on this list.

[BroadwaysBroad]

Posted: 9/12/23 at 11:18pm

What is shucked costs?

I hope when shucked closes, we finally get a revival of rent. It’s past time.

[quizking101]

Posted: 9/13/23 at 6:53am

BroadwaysBroad said: "What is shucked costs?

I hope when shucked closes, we finally get a revival of rent. It’s past time."

I remember it being discussed long ago when the “preview pricing” marketing strategy was implemented that one of the producers mentioned something along the lines of $600-650K, which it’s been doing pretty consistently. 

As for the suggestion of a RENT revival…I don’t think anyone other than you is asking for that.

[pablitonizer]

Posted: 9/13/23 at 8:09am

BroadwaysBroad said: "What is shucked costs?

I hope when shucked closes, we finally get a revival of rent. It’s past time."

Rent revival? Groundbreaking!

 

Updated On: 9/13/23 at 08:09 AM

[LuckyDipster]

Posted: 9/14/23 at 6:14am

Shows like Back To The Future which are simultaneously playing in the West End and on Broadway - do they balance each other out at all or are they treated as completely separate entities?

[ErmengardeStopSniveling]

Posted: 9/14/23 at 7:14am

LuckyDipster said: "Shows likeBack To The Futurewhich are simultaneously playing in the West End and on Broadway - do they balance each other out at all or are they treated as completely separate entities?"

Separate entities. But the “mother company” (the first entity for the show) gets a royalty from subsequent companies, and investors in London probably had the option (not requirement) to invest X% in Broadway. The same will now happen as they prep the tour. 

Updated On: 9/14/23 at 07:14 AM

[RaisedOnMusicals]

Posted: 9/14/23 at 7:45am

Everything I’ve heard about BTTF has indicated a weekly break even of about $850K, not $1 million. It likely won’t make all that much difference one way or the other.