How long does it take a show to recoup its investments?

[ace33]

Posted: 9/3/10 at 1:47am

Another familiar topic but what the hey...

Now i know it obviously depends on how much was initially invested, but seeing shows grossing from $1mil plus to shows making $300k... ive always wondered at what clip level a show needs to run in order to be paying back its inital investment.

Spiderman comes to mind with its reported $50m+ investment, does it need to sell out the thearte for the next 3 years to recoup?!

[Taryn]

Posted: 9/3/10 at 2:45am

It can vary pretty widely. Shows can have vastly different running costs, which affects how much profit they're making.

[nobodyhome]

Posted: 9/3/10 at 3:54am

Yes, there's just no way to give a single answer that would apply to all shows.

If a play truly sells out, it can pay off in two or three months, while a really big musical can take over a year to pay off, even selling out.

And some musicals run two or three years without paying off or just barely pay off in that time.

[dramamama611]

Posted: 9/3/10 at 7:29am

Spring Awakening recouped in less than a year. It's widely speculated that if/when Spiderman opens it could more than FIVE years at sold out crowds to break even.

We often get info that suggests the "nut" of a show. That's basically the amount a show needs each week to BREAK EVEN for the week. Monies over that go to the "investment" and then, hopefully become profit. So, a show like N2N that has a small cast and band in a smallish theater has a much lower nut than does Billy Elliot.

There are lots of shows that run well over a year that are still "flops". Regardless of awards, accolades or fabulous reviews -- shows are either "hits" or "flops" strictly based on whether or not it recoups at the box office.

[Drunk Chita Rivera]

Posted: 9/3/10 at 8:10am

In The Heights recouped within just a year. Hair recouped within a few months.

It all depends on the show and how much they invested and how much of a profit they are making.

[RaisedOnMusicals]

Posted: 9/3/10 at 11:55am

All of the reponses ahve been accurate, but sometimes it's easy to understand by giving examples. Take two shows, one a play with a $3 million capitalization, and one a musical with a $10 million capitalization. Now say that each show is making a profit of $250,000 per week. The play will recoup in only 12 weeks, and it will take the musical 40 weeks to recoup. Now, in the real world, it's not easy to generate a profit of $250,000 a week. But as a matter of interest, when investors are solicited by producers, what they get are projections of exactly how long it will take for a show to recoup making different assumptions as to the percentage of gross capacity a production generates per week. I have actually seen those numbers for one currently running musical. For this show, potential investors were advised that the show would recoup in 22 weeks at full capacity, in 35 weeks at 80% capacity, and in 51 weeks at 65% capacity, and that those time periods could be reduced significantly should there be a substantial sale of premium tickets. So, that's a look at a bit of the real world.