The $30 Million Musical Trend

[GottaGetAGimmick420]

Posted: 1/6/25 at 9:35am

https://www.broadwayworld.com/article/The-30-Million-Musical-Trend-20250106

"If you were to ask practically every current Broadway producer, they would tell you that initial capitalization costs (that is the cost of a show to open on Broadway before a single ticket is sold) are way out of control. And they have a point, last season was the most expensive season on record, with the average initial capitalization of a new musical crossing over $19 million.

Maybe even worse, due to increases in running costs, only a small handful of the 15 new musicals have even made a dent in their initial capitalization costs, and fewer still are on the road to recouping that initial capitalization. This means that very likely over $200 million was lost on new musicals last season. The three remaining shows from the 2023-2024 season, The Outsiders, Hell’s Kitchen, and The Great Gatsby, will all have to make back their investments at least a couple times over to put a dent in that season wide loss, a tall order given that none of them have recouped their initial investment yet. "

Updated On: 1/6/25 at 09:35 AM

[BJR]

Posted: 1/6/25 at 9:57am

Great article, and interesting how it ends: if Outsiders, Great Gatsby, and Hells Kitchen recoup, it'll be the usual 1 out of 5. In fact, even if only 2 recoup, it'll be just under 20%.

[GottaGetAGimmick420]

Posted: 1/6/25 at 10:17am

I still think it's weird letting a college student nowhere near NYC be the new voice for producer finances, but what do I know?

edit: I would love reporting by someone just a liiiiiittle more legitimate and experienced TBH

Updated On: 1/6/25 at 10:17 AM

[Kad]

Posted: 1/6/25 at 11:19am

GottaGetAGimmick420 said: "The three remaining shows from the 2023-2024 season,The Outsiders,Hell’s Kitchen, andThe Great Gatsby, will all have to make back their investments at least a couple times over to put a dent in that season wide loss, a tall order given that none of them have recouped their initial investment yet. ""

This is a weird observation. Nobody expects the handful of shows that recoup each season to erase the losses incurred by every financial flop in a season.

The article even manages to answer its own question by showing that capitalization costs for shows like Wicked and Phantom are, when adjusted for inflation, comparable to what is being paid today.

[Bwaygurl2]

Posted: 1/6/25 at 11:28am

Kad said: "GottaGetAGimmick420 said: "The three remaining shows from the 2023-2024 season,The Outsiders,Hell’s Kitchen, andThe Great Gatsby, will all have to make back their investments at least a couple times over to put a dent in that season wide loss, a tall order given that none of them have recouped their initial investment yet. ""

This is a weird observation. Nobody expects the handful of shows that recoup each season to erase the losses incurred by every financial flop in a season.

The article even manages to answer its own question by showing that capitalization costs for shows like Wicked and Phantom are, when adjusted for inflation, comparable to what is being paid today."

That's exactly what I was thinking when I read this.

[kdogg36]

Posted: 1/6/25 at 10:31pm

Kad said: "Nobody expects the handful of shows that recoup each season to erase the losses incurred by every financial flop in a season."

Actually, I'm kind of naive about these things, but I definitely assumed that Broadway productions overall made money for the investor pool. Being a (mostly) commercial venture, I can't see how Broadway could possibly survive otherwise. Of course, the long runners might contribute more to the positive column than the new hits.

[ErmengardeStopSniveling]

Posted: 1/6/25 at 11:21pm

The 1-in-5 stat is nothing to celebrate when budgets are this high.

Some of those shows that recouped also barely crossed 110%. Sure, it's nice for the investors in Enemy of the People or Appropriate to get their money back, but if one of those people lost $100K on Lempicka, the profit will not put a dent in that.

Development costs have also gone up. Beyond out-of-town tryout and Enhancement costs being higher, many shows are now workshopped to death (some of those workshops are investor presentations to raise money) and if it takes a show 5-8 years to get to Broadway, that means it opens with 5-8 years worth of expenses ---- none of which is "money that you can see on stage."