EXCERPTS FROM THE Business of Broadway:
Excerpts from four of the twenty-six chapters, not to be reprinted without express written permission by Allworth Press.
FROM CHAPTER 1
You can bring book-learning and the love of theatre to the job, but you will never know all you need to know about putting on a Broadway show before you study and work under someone else.
This is especially problematic for new investors who, due to success and experience in other businesses, want to contribute to a show and add the title “producer” to their credits. They may be the sole decision-maker for their own businesses, and not used to conferring with people who know as much or more than they do. It’s hard to step back, listen, and follow when it’s your money being spent, and you are accustomed to leading.
While studying Broadway management at NYU, two adult students introduced themselves as having been Broadway producers. They explained, “This time, before investing in a second production, we would like to know what a General Manager is supposed to do.” This book is written to offer an opportunity for would-be-producers and investors to learn about all of the people their money will hire, and what these people do.
The famous Harold Prince won a record twenty-one Tony Awards for West Side Story, Company, Cabaret, Sweeney Todd, and dozens more. The infamous David Merrick won more than ten Tony Awards for the hit musicals and plays, 42nd Street, Mame, Travesties, and Hello, Dolly among others. They were “lead producers,” the sole decision-maker for their shows. Every producer is not a lead producer. Your producing title may not entitle you to make any decisions at all. As a producing novice, you might want to first learn from the successes and mistakes of others.
A Broadway investment is riskier than Wall Street or a Las Vegas gamble. Almost 80 percent of all Broadway shows lose every penny of their investment. Some of the other 20 percent of shows pay only a slight profit, and an even smaller percentage hit the jackpot. A major hit can pay a whopping 250 percent annual profit on its original investment for decades. No stock future or derivative can match that. But before you leap, the rule of thumb for Broadway investors is that you need to be able to lose your entire gamble without flinching, or you should not invest at all.
Most Broadway investors admit that they want to be involved in the excitement. They want to go to an opening night party, meet the stars while they are in rehearsal, brag to their friends that they are part of a hit Broadway show, and have the connections to buy “house seats” (the best seats in the theatre) at a moment’s notice. That’s a very expensive piece of excitement in most cases.
Some Broadway shows are produced by non-profit theatre organizations or a combination of investors and non-profit producers. The monster hit musical A Chorus Line was produced on Broadway by creator Michael Bennett and Joseph Papp’s non-profit New York Shakespeare Festival. It was funded by a single donation from the Chair of the Board, LuEsther Mertz, heir to the Reader’s Digest fortune and beloved philanthropist.
Costing $500,000 to transfer from the N.Y. Shakespeare Festival’s Off Broadway’s Public Theater venue to Broadway’s Shubert Theatre in 1975, A Chorus Line became Broadway’s longest-running musical by 1983 and ran until 1990. At that time no show had earned as much money, hundreds of millions of dollars. The Supreme Court had recently declared that as long as the profit did not benefit anyone’s personal pocketbook, but instead returned to the stated purpose of the non-profit institution (in this case, the production of theatre, education, and the arts), then profit was a glorious result of non-profit work.
The largest loss in Broadway history began in 2010. The musical Spider-Man: Turn off the Dark raised a reported $75 million to open its production on Broadway. Most of its investment was lost by the time it shuttered in early 2014. The production needed to credit more than twenty investors, including major corporations, as producers in order to fund the massive production.
FROM CHAPTER 4
There are as many as eighteen unions and one very influential guild overseeing the work rules, minimum salaries, and benefits for every Broadway show. The rules were negotiated over many decades between an association of experienced producers and theatre owners called The Broadway League (formerly The League of American Theatres and Producers), and each individual union.
The most important difference between non-union and union work is that union workers receive vacation pay, sick pay, health insurance, pension, and sometimes annuities (hereafter called “benefits”) along with their salaries. Otherwise, it is possible, but extremely rare, that a Broadway salary may be less than that offered in a non-union regional theatre or touring show. The pensions for Broadway’s union workers are paid through an extremely unique and complex system, described at the end of this chapter. Some of the rates used in this book expire in 2015, but it is generally safe to expect a 2 to 3 percent cost-of-living increase from year to year.
Broadway unions require each production to pay “bonds” before the show begins hiring. As a general rule, these bonds are equal to two weeks salary and benefits for every employee. Before the bonding rule, actors and crew were at the mercy of a producer’s code of ethics and ability to pay. Broadway producers have skipped town without paying final salaries as recently as the 1990’s. Today, once a union verifies that everyone has been paid through their final day of work, the union returns the entire bond to the producer who usually uses it to pay for a portion of closing costs.
Once accepted in a union, members are charged initiation dues, from $1,000 to $3,500 depending on the union. Many unions will provide a payment plan if the applicant is not able to pay upfront. The purpose is to discourage new applicants who are not serious about making a career in the union’s jurisdiction, and to keep the number of workers from overwhelming the number of available jobs. In addition, there are working dues between 2 and 4 percent of income deducted from each paycheck. These dues allow the union to provide services and maintain an office and staff.
In no particular order, union workers are: …
FROM CHAPTER 6
The Tony Awards are not what they seem. While there are many other theatre awards, the Tony Awards offer the most prestige and bragging rights on Broadway. One reason is that it is televised on CBS-TV, a major national television network.
The quiet secret behind the Tony Awards telecast is that it can close the doors on one show as often as keep the doors open on another. It is extremely expensive to perform on the award telecast and productions that have small budgets or are struggling at the box office wrestle with the risk of losing its last dime versus losing a national audience.
The Tony’s are a mixed blessing, at best. The CBS broadcast has the lowest viewership of any television special on the major networks in any given year. The program does well in New York City and Los Angeles, but garners little interest elsewhere except theatre fans. Less viewership means less income from commercials. Less income for CBS means a smaller programming budget and higher costs to the nominated shows.
Each Broadway musical trying to make an impression on television wants the biggest splash, as does CBS. An average musical may have twenty performers but they don’t show up alone. Wardrobe people are needed to handle the costumes. The scenery and lights are not moved from the theatre to the broadcast stage, but re-designed and built from scratch in a union scene shop, as are any large props. The show’s musical supervisor preserves the quality of the music performed. When the Tony’s are broadcast from a Broadway theatre, there aren’t enough dressing rooms for all the cast and backstage staff from so many shows, so each show’s theatre must be opened on a usually dark (closed) night. This requires a doorman, security, house management, theatre crews, and additional utility charges such as air conditioning.
Each Broadway show’s managers and press representatives are also working additional hours on a night off, coordinating the event from start to finish. The director and choreographer usually have to adapt and re-stage the musical number to fit the television timeframe and format and that requires rehearsal time, studios, and other costs. And everyone must be transported from the show’s theatre to and from the CBS-TV venue.
The entire event has its own budget created by each show’s managers. Even the cost of backstage refreshments at the Tony Awards are charged back to the Broadway show. Total cost for a Broadway musical to perform on the Tony Awards can reach over a quarter of a million dollars. It is sometimes suggested that it would be cheaper and more effective to use that money to broadcast a new TV commercial instead.
FROM CHAPTER 12
SOME FUNNY UNION RULES
The house manager pays the stagehands and the musicians before the evening show on Wednesday. The company manager pays the cast and other crew on Thursday evening before the show. That’s just the way it is.
The theatre workweek begins on Monday and ends on Sunday…except for stagehands and musicians who work from Sunday to Saturday. That’s just the way it is.
SCENIC MISHAPS AND TRAGEDIES
Scenery is not always perfect. Poor Murderer, written by Pavel Kohout (who later became the President of Czechoslovakia), had one large semi-circular wall pieced together across the entire stage. Measurements were wrong and it curved so much it blocked the audience’s view from one side of the stage. Rather than rebuild it, stagehands overlapped sections of the wall and braced them from behind. The show ran for months, but closed before the set was fixed.
The musical Titanic had to tilt and sink their ship onstage at every performance. For weeks, the elevator under the stage that allowed the ship to sink failed to work properly. Opening night was postponed until they got it right.
For composer Andrew Lloyd Weber’s musical Starlight Express, the Broadway Theatre was reconfigured with a circular roller-skating racetrack. Known for its many skating injuries, one performer tragically lost a limb.
During previews of Julie Taymor’s Spider-Man, Turn Off the Dark, Spiderman leapt off a platform but did not fly as planned and wound up in the hospital for weeks. He recovered and the jump sequence was redesigned with extra safety features.
A featured performer in Disney’s The Little Mermaid plunged twenty feet through an open trap door in a boat overhead. While the actor thankfully survived, a wonderful career was ended.
Twenty-plus skates were custom-made for each dancer in a roller skating number in Sugar Babies, starring Mickey Rooney and Ann Miller. The skate’s special ball-bearings didn’t prevent one dancer from rolling off the stage into the orchestra pit. The dancer recovered. The number was cut and the skates were sold off. (This book’s author bought a pair.)
FROM CHAPTER 24
Each Broadway show operates with two budgets created by the general manager. The production budget lets the producer and investors know how much money will be needed to get the show from inception to the official opening night. This may include preview performances lasting a few days or a few weeks.
The operating budget computes an average week of expenses and royalty payments. Many expenses are unknown at the time the budget is created, so budgets rely on the experience and expertise of the general manager.
To paraphrase Mark Twain, Nostradamus, and a handful of others: “Forecasting is difficult, especially in regard to the future.” That’s why a theatre budget is considered a living thing. It will, by necessity, change over time. However, while money can be moved from the costume line to the scenery line, the total must be carefully determined and considered gospel. New York State law requires a producer to lock in the capitalization (total money to be raised). This budget and capitalization amount is the jurisdiction of the general manager (GM). The GM’s experience with budgeting can make or break a show’s profitability and longevity.
Below are the categories in a production budget along with monetary allotments for an imaginary $15 million dollar musical, compiled from three actual musicals. Below that is a weekly operating budget for the same musical. Each general manager may work with a different template and certainly every show has slightly different categories. Some shows will have special effects (the flying actors in Spider-Man: Turn Off the Dark), or walls of video (the 2008 revival of Sunday in the Park with George), or an entire cast playing musical instruments on stage (Once). The stage elevator that sunk the Titanic every night (in the musical Titanic) cost more than $1 million alone. Foreign plays, Shakespeare, and other classic plays may require dialect coaches. The 2013 revival of Pippin hired circus consultants, and many shows from Hamlet to Rocky employ fight choreographers.
It is considered average to spend 20 percent of the pre-contingency budget totals on advertising and promotion but each show either raises or lowers that amount based on the producer’s plan. For big musicals, physical production elements (set, lights, and costumes) can eat up 50 percent of the entire budget. Each budget has a contingency since no one can be absolutely sure about the expenses. Some producers anticipate a contingency of 20 percent and others feel secure at 10 percent. Contingency monies are also important as a buffer against anticipated losses in the early weeks of a run before the reviews kick in and audiences, hopefully, start buying tickets in droves.
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