Has/When will Wicked Recoup?

[sndtrklvr]

Posted: 10/4/04 at 6:59pm

Noticed they are at 100% again. With the show coming up on a year is it close to recouping? I had heard they had a large nut (600k plus)? anyone know?

[MargoChanning]

Posted: 10/4/04 at 7:06pm

They haven't announced anything yet, but considering it's been soldout and earning huge weekly profits for months, I would think that it has to be very close to recouping even with that high weekly nut and the large initial capitalization ($14 million or so, wasn't it?).

[NoDayButToday2]

Posted: 10/4/04 at 7:12pm

Kinda weird when people start wondering what is wrong with a show when its -dropped- to 100%...

Not sure what's up, but Wicked is not even remotely close to closing.. Though we'll have to see what happens after Idina leaves.

[MargoChanning]

Posted: 10/4/04 at 7:18pm

Closing? We were talking about it recouping its initial investment. Idina leaving will have zero impact on its soldout status (just as Chenoweth leaving had zero impact) -- 99% of the tourists flocking to the show have never heard of Idina Menzel and don't care if she's there or not (the three weeks she was out and Espinosa took over for her, attendance held steady at 101%).

Wicked won't be going anywhere for many years (and I say that even though I'm not a particular fan of the show -- business is business and Wicked looks pretty indestructable for many years to come).

[mywonderwa11]

Posted: 10/4/04 at 8:12pm

now what exactly is "recouping," Margo?

[corfriends]

Posted: 10/4/04 at 8:23pm

there is no 101% for wicked. there is no standing room only, therefore the highest it could be is 100%.

[MargoChanning]

Posted: 10/4/04 at 8:43pm

"Recouping" is paying off a show's initial investment. Wicked had an initial capitalization of roughly $14 million that was provided by its investors. The show costs approx. $600K weekly to run. It grosses around $1.1 million every week. That leaves (and understand this is just an estimate and guess -- there may be other factors and expenses not being counted here) roughly $500K in profits every week, which is paid back to the investors. The show opened almost a year (almost 50 weeks) ago. The show has been sold out almost every one of those 50 weeks (and at full price -- discounts haven't be available for quite some time). Now -- and mind you, this is a very very rough estimate -- 50 times $500K equals $25 million. Yet, there's been no announcement that they have recouped.

Even taking into account discount ticket offers (when they were available), extra advertising expenses for tv etc. which aren't counted in the weekly nut, the Tony presentation (which comes out of the profits and can cost producers hundreds of thousands of dollars), other special promotions, and other stuff I'm forgetting or don't know about since I don't work for the show, I'm not sure how they haven't managed to pay back that initial investment of $14+ million out of the $25 million (or $20 million or $15 million, or whatever the actual number is) yet. Either there are a LOT of expenses we in the public aren't being made aware of, or the show cost a LOT more than we were told, or they HAVE recouped and simply haven't announced it yet (unlikely -- it's the sort of thing producers LOVE to brag about), or perhaps I'm just an idiot who doesn't understand how these finances work as well as I think I do.

Updated On: 10/4/04 at 08:43 PM

[Jess1483]

Posted: 10/4/04 at 9:04pm

Margo--if you're an idiot, then what does that make the rest of us??

Thanks for the info!

[badkarma719]

Posted: 10/4/04 at 9:09pm

I know fg
Margo is the greatest
and always can answer anything

[Michael Strathmore]

Posted: 10/4/04 at 9:31pm

Margo, or anyone for that matter...

How does the production costs of a tour differ (if at all) with that of the original production?

Would the weekly nut be more or less or about the same?

Any insight would help. I frequent Toronto, so I am looking forward to the show on the first stop of its tour.



--M--

[Michael Strathmore]

Posted: 10/4/04 at 9:41pm

That is the official gross as reported by Variety for Wicked, to date.

No word on the actual nut amount, but if it is $600K, and the show has been around for about 47 weeks, that should put its expenses at a cost of $28.5 mil for that run. Even with all the extra possible costs associated with the show, it seems a little odd that they wouldn't have turned a profit by now...

--M--

[MargoChanning]

Posted: 10/4/04 at 9:55pm

I'm not the one to answer this, because tour costs are more complicated given actor per diems, transportation costs etc.....

The initial capitalization costs for a touring version of a Broadway musical are generally much less than for the original Broadway production of the show. Sets will necessarily be less elaborate and complicated (and expensive) because they are designed to be more easily broken down and moved city to city, than the Broadway version which is designed to be in place "permanently." There are exceptions for, say, the LA production of a really big show which may have an open-ended multi-year run and thus may have a set that is more or less the same as the New York version.

While Equity costs are still considerable for a first class tour, stagehand and other "back of the house" costs are much less because most touring houses don't have contracts with Local One (the stagehands' union) and some of the other unions which means considerable savings on wages, benefits and overtime.

Also, many of the large touring houses are twice, if not three times the size of the average Broadway house, so while expenses can still be high in certain areas, grosses and profits can be very considerable for the bigger, popular shows.

I know that many shows that never recouped on Broadway or barely broke even have been able to make up for any losses during the subsequent national tour due to lower costs, but larger grosses.

All that said, anyone who knows this area better, please feel free to correct anything I've said here.

[sndtrklvr]

Posted: 10/5/04 at 6:26am

Margo,

Thank you. I had done some rough math in my head saying they must have recouped, but you laid it all out in clear fashion. I do wonder if the costs of the show were much more than they said. Or it could be they are waiting to announce it at the first anniversary.

[jonartdesigns]

Posted: 10/5/04 at 2:04pm

so am i the only one that gets the feeling a mysteriously placed staircase will be on the set for defying gravity i accomidate the flying platform. (similar to how the tour of the wizard of oz had a turret for the witch to melt into

[WOSQ]

Posted: 10/5/04 at 2:41pm

Everyone ought to reread Margo's postings on expenses and recouping. They're basic and good.

Let me add a bit about that "gray" area between weekly breakeven and profitability.

[N.B. - All numbers are theoretical.]

Let's say the breakeven for Wicked is 600. After rock bottom breakeven some royalties rise dependent on how much the weekly gross is. These include authors, directors, choreographers, producers, theatre owners.

Again all figures are theoretical! An example might be that Joe Mantello would get 3% of the gross up to breakeven (3% of $600k is 18k). He might then get 5% of any monies over breakeven (let's say 500k or 25k) making his weekly royalty for a 1.1 week 43 thousand big ones.

These sliding royalties could raise the "full-out" breakeven another 100-125k.

Also it is common for producers to hold some of the operating profits back for contingincies. Addition advertising for sluggish periods comes to mind. This is a comparatively small piece of change (200k let's say), but still is money.

Sometimes although rarely, the reverse happens. In order to keep Gypsy open last spring for 3 months longer, all the royalty people took cuts and/or waivers and that included the Shuberts. In addition Bernadette took a salary cut. This lowered the breakeven considerably so that they needed less money to meet weekly expenses and/or they could spend more on advertising.

[MargoChanning]

Posted: 10/5/04 at 2:56pm

Thanks so much for that, WOSQ. I forgot about factoring the sliding scale royalties into it (which can be considerable).

Also, I wonder whether Idina Menzel has a compensation package which includes a percentage of profits -- she's probably not a big enough star for that yet (it's normally only included in the contracts of proven stars such as Peters, Lane, Broderick, Neuwirth et al), but perhaps she has a really good agent.

[WOSQ]

Posted: 10/5/04 at 3:23pm

I cannot imagine Idina having a percentage. Straight salary. Although (and here's the agents at work) did you note the original billing and their original curtain call when they entered together and bowed together--neither getting final bow? I wonder if that has changed like the billing?

Percentage against guarantee types could be: solo shows like I Am My Own Wife and Mario Cantone, and then maybe (a big maybe) Tovah, Alfred Molina and the cast of Night Mother who are probably on a Favored Nations contract. (I wonder if Naughton and Thomas are on a Favored Nations for Democracy--but still a salary and not a percentage) I don't see anyone playing in a regular show who might be on a percentage on Broadway right now.

Often a solo show will sign the actor to a very low salary if not Equity minimum on the contract (for whatever reason) and pay them the difference off-contract.

[MargoChanning]

Posted: 10/5/04 at 3:56pm

Whoopi and Billy Crystal are probably also getting considerable percentages against guarantee deals.

I know that Dame Edna is self-producing her/his current tour as well as the Broadway run -- the mind reels at what Humphries weekly take will be.

I doubt Falco and Blethyn are doing a favored nations deal considering how much bigger a star Falco is these days because of the Sopranos (she's HUGE, name-recognition-wise). Blethyn's been nominated for a couple of Oscars, but she's only known to the art house crowd and never been part of a mainstream hit of any kind -- her name means zilch at the box office. My guess is that Falco is getting $40+K plus a percentage, while Blethyn is getting $20K or 25K straight salary (at most), no percentage.

I've long wondered what kind of deal Jefferson Mays might have considering he was a total unknown before this play -- though obviously his negotiating leverage was considerable (especially when they realized they couldn't even find a standby for him after several rounds of auditions). Definitely a percentage against guarantee, but what's the guarantee? (15K? 20k?).

I would bet that Naughton and Thomas are Favored Nations, but no way that they're getting a percentage (neither is a big enough name anymore, if they ever were). Same with the cast of Twelve Angry Men.

Mary-Louise Parker may have a percentage against guarantee deal for "Reckless." I know she had one for "Proof," which was also produced by MTC.

And what about Nathan Lane and Roger Bart for "The Frogs?" Brooke Shields for "Wonderful Town?"

[Jon]

Posted: 10/5/04 at 4:11pm

I don't think the non-profit Lincoln Center offers gross points to acotrs. However, Nathan Lane would get a percentage of the gross for being the author of the book of FROGS. Typically, authors' royalties are 6% - divided up among the composer, lyricist and librettist in the case of musicals - so Sondheim gets 4% of the weekly gross for writing music and lyrics. Lane either gets 2%, or shares that with Burt Shevelove's estate - I don't know how much of Shevelove's work remains in the hsow.

So, we're talking at least another $5000 a week to Lane - and he will continue to get royalties if any regional theatres do the show in the future.

[robbiej]

Posted: 10/5/04 at 4:14pm

Would MLP get a percentage while the show is playing it's 'non-profit' run?

[theatreguy]

Posted: 10/5/04 at 4:21pm

Although (and here's the agents at work) did you note the original billing and their original curtain call when they entered together and bowed together--neither getting final bow? I wonder if that has changed like the billing?

Idina still shares the final bow with Jennifer Laura Thompson just as she did with Kristin.

[Jon]

Posted: 10/5/04 at 4:22pm

So called "stars" typically work for much less than their usual salaries when doing shows for Roundabout, MTC or other non-profits.

[WOSQ]

Posted: 10/5/04 at 4:28pm

You're probably right about Falco but I bet she may be on a percentage against a guarantee, but not both. I also bet her percentage rises upon recoupment. I seriously doubt sh'e getting 10%. They'd have a problem recouping in the alloted limited run.

The favored nations might be for fringe and everything but money which sounds contradictory.

Whoopi and Billy are probably being given the moon. I wonder if any of their own money is in the show. Barry Humphreies will probably draw most of his salary as either a producer or a writer, but not an actor making the bottom line less at least on paper. I would not be surprised if he is signed to 1500/wk as a performer.

I have always felt Mays is getting a nominal salary (5k/wk) plus a percentage over breakeven, but still not a major piece of money since everyone knew that this was a marginal production. This salary also kept the breakeven way down which is one reason they have been able to run so long with such a low gross. I'd say that post-Tony he got a raise and that his salary will increase for the tour although they are booked into small regional houses.

Mary Louise Parker and Nathan are on salary and not huge ones either. These non-profits won't give a percentage. If the productions were to convert to an open end run then the salaries would rise. I'd be curious to see what Nathan's author and star dollar package totals. I still do not think it is stratospheric. He will make a chunk of change from regional productions--not a lot, but enough.

Brooke may have a percentage against guarantee, but she ought to be very happy that she has a job and that the show lasts until Thanksgiving. (Meow.)

[MargoChanning]

Posted: 10/5/04 at 4:40pm

I know Roundabout, MTC, and LCT have special agreements with Equity to be able to operate under a LORT A contract for a limited period of time in their Broadway houses (10 weeks, I believe). After that, if they wish to extend that limited engagement into an open-ended run (as Roundabout did with Cabaret, for example), then they have to switch to the standard Equity agreement.

Proof ran at MTC's City Center Off-Broadway space, before moving to the Walter Kerr. I suppose if "Reckless" takes off, MTC might consider moving it from the Biltmore to another Broadway theatre (highly unlikely) since Brooklyn Boy is scheduled to start at the Biltmore in January. If such a move were to happen, I suppose then Parker (and her agents) would look towards negotiating a substantial salary increase.

[sabrelady]

Posted: 10/5/04 at 5:24pm

I am enjoying this discussion very much. I am curious tho, in film essentially you NEVER break even(there really are 2 sets of accounting done here) What happens is that the studio charges the development co interest from the time the $ is advanced. This can be years ( i like to refer to this as the vigourish) B4 ther is any return @ all and the interest roles on & on... Also the studios charge the film for everthing Oh like a share of the buildings taxes heat etc and of course there is MORE interest. Of course for shareholders in the studios there is ANOTHER accounting which shows record profitability. Sounds like Bway has to play fair w one set of books ( not to mention a limited # of seat/ showings . BUT could producers on Bway start doing something like this so essentially a show never really recoups?( Spring Time for Hitler and Germany...)