Question about capitalization for Broadway transfers

First of all, when a show transfers from, say, London or Off-Broadway, I imagine that the financials of the Broadway production are considered separate from those of the original production. Especially if the original mounting was not created with the intention of moving it to Broadway. Is that correct?

If so, my main question is this: if a production like this is being directly transferred from a financially separate run, wouldn't that drastically lower the capitalization cost for the Broadway production? I.e, if the show is cast, the set is already built, the props and costumes have been gathered/made, the show has already been developed, rehearsed, and mostly teched through (though adjustments would obviously be needed), etc. etc.

And if all of that is the case, wouldn't that give the production in question a big leg up on recoupment?

I'm thinking in particular of Betrayal and Sea Wall/A Life. Both of which seemed to be very smooth, direct transfers. I'm also thinking of shows like Constitution and The Ferryman, both of which did announced recoupment after originating at non-profit theatres.

Updated On: 8/18/19 at 01:12 PM

There are still minimum rehearsal periods required, the sets often don't transfer, (because they were built in a non-union shop, weren't built to be moved, aren't the right dimensions for the theater, etc.) To Hogan's point, if a transfer was planned from the outset, those costs usually become part of the Broaway capitalization. You'll always need to re-tech the show because a new theater will have different acoustics, lighting positions, stage dimensions etc and you'll likely want to make improvement on everything too.

Thanks for the responses:

So I guess this begs the follow-up question: where does most of the money go when it comes to capitalization? I would be curious to see a pie chart of sorts. It seems like a lot of the high expenses of Broadway shows involves labor and theatre rentals, both of which are included in the weekly running cost, not the capitalization. So how exactly do shows (particularly plays) rack up mid-six-figure production costs? I would have guessed that most of that money goes toward acquiring and fabricating all of the physical production elements and equipment. But I see now that may not be the case. So where does most of it go? Or is it a pretty even distribution through all the many expenses?

Hogan, I see you mentioned marketing - do you know roughly what kind of marketing budget range most Broadway shows have?

Updated On: 8/18/19 at 10:09 PM

The hesitance expressed below is well founded, and the numbers are pretty meaningless. There are just too many variables. Aside from existential differences in marketing budgets for what's being sold, there are dramatically different styles of marketing and advertising. Want a multi-page color spread in the Times? That's gonna blow a small fortune. Some producers do it; some, you'll notice, don't. So how do you generalize? Got high paid actors? How do you compare that with a show that is paying mostly close to the minimums? Got a large cast? Got foreign actors (or domestic ones) you are giving apartments to? No comparison. You get the idea.

For in depth, nothing can beat the Commercial Theater Institute. In terms of books etc, I have not looked or noticed in years but probably the best is Donald Farber's book on producing theatre. I don't know if it has been updated and I am sure the copy I had would be over 20 years old by now, so if you find it, realize it may be seriously outdated in many ways but the basic contours are mostly still in place. Re what Davenport writes, I would take that with a grain of salt too, bearing in mind that he is an unsuccessful producer and also that (so far as I can tell) most of what he does is geared to ensnaring people in his enterprises. Another resource mentioned here some is Playbill which will occasionally do articles answering specific questions.

My go to is "The Business of Broadway" by Mitch Weiss and Perri Gaffney https://www.amazon.com/business-broadway/s?k=business+of+broadway