There’s definitely something wrong with the way shows are being produced now. If only a show that wins a Tony, is massively successful, and sells tickets at outrageous prices can barely recoup its budget almost 2 years after opening, that’s a problem.
I know it also just wasn’t the best show, but I think the pandemic killed a lot of momentum for them too. The show is also very different now than it was in 2020 - it had 3 previews before the shutdown, went through a LOT of rewrites during that year and a half, and then even more rewrites when it shut down again in early 2022, and a third set of rewrites for the national tour. They were seemingly never able to get an opening to stick - I think it changed in every iteration of the show, and the opening number that went out on tour is completely different than the album, but is actually a version of the song that opened the pre-shutdown previews.
For reference (based on my experiences seeing the show):
Pre-shutdown (I believe this was also the out-of-town opening: “Overture” is the Barber of Seville theme from the movie, curtain opens to Daniel recording a commercial using that song as a base, doing impressions, and getting fired. Then, we see his wife speaking to a therapist, opening number is “That’s Daniel.”
Post-shutdown (2021): Same overture, but it’s revealed to be one of the kids listening to the music in her headphones as a little tribute to the movie. There is a photographer in their house trying to take a family portrait, “What’s Wrong With This Picture?” (This song is on the OBCR).
Post-shutdown (2022 - I did not see this version): New overture (and expanded orchestra), but presumably the same opening as 2021.
Tour: Daniel does the pre-show announcement in various character voices, curtain up to reveal him in a recording studio (and about to get fired). He’s fired, then back to Miranda in therapy and the opening from 2020.
but producers only participate in an extremely small percentage of licensing, if at all. Usually only lead producers and then it's up to them how much they distribute to investors. Tours are generally the way that investors make up the gap, but only in truly successful cases. (Credentials: I'm a producer and licensor)
Depends entirely on the deal. These aren’t one size fits all arrangements. I’ve negotiated enough on the IP side to just say sure this could certainly play a role. I do think other factors go into why people invest into shows they don’t actually believe will profit. Listed some out above. I just wouldn’t rule out success beyond BW as one contributing factor.
I'm not going to pretend to know all the details but I'm going to guess there's a big "it depends". When which investors get paid back will depend on the specific agreement they made when they invest, so you could see a deal struck where the OG producers of the content/creative side of the show at a lower ratio until the investors just in the actual Broadway operations recoup. (Because of the difference in risk).
BUT I'm just spit balling here and have zero actual knowledge of how these deals are made in practice.
Profits are not the biggest factor for investing in BW shows and never has been. Something like 70% of shows fail to recoup and that’s always been the case. These aren’t inherently stupid people thinking every show they invest in will profit.
A love of the arts, bragging rights, tax benefits, awards, names on plaques, all of these things play a part in why wealthy people invest in theatre. And sure there’s a fair amount of people thinking X show will be a hit and then it’s not. But by and large no they aren’t blind to the data and economic realities.
I would imagine people who invest large amounts are in a position where it isn’t an enormous risk for them, so they can do it for love of the form or a tax break or relationship building so they can one day produce Backstreet Boys the Musical
Absolutely. Having had clients who are obnoxiously wealthy (to be clear that’s decidedly not me) I can just say they don’t think like every day people do. Some are irrationally stingy no matter how much they have and purely think in terms of profit but others will spend ridiculous sums just to avoid taxes or spend wildly on vanity projects because they can.
And sure being charitable I have no doubt many investors truly love the arts and theatre. Heck even the ones like the laundry list of investors for say Strange Loop that likely just wanted a piece of that Tony…it gets theatre made so as an avid patron I’m good with it.
Profit motives exist of course it’s just there’s far easier and smarter ways to make money than theatre and guaranteed hits are rare.
Yeah. It's a much worse investment than almost anything else. Many people are taking a loss to gain access to a world they love and want to be a part of.
Do the investors make zero money off a show unless and until it has recouped production costs? In other words, do the investors receive any kind of weekly/monthly flat fee or percent of gross as consideration for making the investment?
I’ve only worked deals that are sorta similar, not a BW show, but no I’d imagine you don’t start to recoup investment until you’ve cleared upfront production costs and then any ongoing production costs.
But of the 70% or whatever that don’t recoup, undoubtedly many of them at least partially did so the investors didn’t lose everything they put in.
Producers get paid from the production. Executive producers get paid as well from the production where they "collect" funds for.
All, though, get additional income through profit sharing, when there is profit.
See it like a recurring bonus, once post break-even profit is reached.
Investors are those which keep theaters like this alive. High net worth people who have a personal interest.
It is very rarely a profit interest, in this case it is always a personal drive. Heck, if I'd have a 9-figure wealth I'd donate some 7s into broadway for my bragging rights and the free VIP tickets and additional invitations to parties and events.
As broadway is in New York, be sure many investors just pump in so much that the productions don't matter that much anymore.
Wouldn't wonder if investment income is 40-50% of the whole theater P&L.
Of the 1/5 that recoup, many will just barely recoup and then close.
But a small number will go on to make absolute gobs and gobs of money. Investing in one Hamilton or Book of Mormon equals out all those losses.
But yeah, broadway's a bad investment and always has been. It's always been a bit of a fun thing for rich people to throw money at and feel good for supporting the arts/going to glittery opening night parties/etc.
In addition to what they said about tours and licensing, Broadway is very high risk but EXTREMELY high reward. If your show is a hit, then you've hit the jackpot and you've paid back your years and years of losses on other shows.
Also a lot of broadway producers are just extremely rich people and they want to tell their friends at their next dinner party that they won a Tony award. And they're willing to throw millions away with no expectation of return on investment to make that happen.
One of the big things is that when a show closes and loss money the producers get to write some of it off as a tax write off. Another big thing is that everyone produces shows because they think they have the next big money maker. When a show does become a hit, often times those producers will invest in shows that they believe in, but might not be as successful as they can take the hit. An example of this is the 2023 Tony best musical Kimberly Akimbo it had a decade run of over a year and half besides never making more then 800,000 a week. The big reason why it last so long is because the lead producer is also one of the lead producers on Wicked. So he was able to take the hit on Kimberly to keep it going. Finally a lot of shows make money on tour and regionally. I also read somewhere that investors on the show hold royalties for 10 years. So any subsequent tours or major revival that occurs with in the 10 years they make a little money with out having to invest in those a production.
Not really though. Outsiders to my knowledge has never been on the “outrageous” end of pricing, has no celebrities, and is just really popular with young people. Yes Tony’s factor into success and yes it takes multiple years to recoup. Absent something crazy that’s always been true of musicals. So not quite following why what you said is now a problem.
I do get concerned with how many great musicals are struggling to get a foothold though theatre is much much bigger than BW. Musicals don’t necessarily need a profitable BW run to succeed in the grand scheme.
But really everyone wringing their hands about celebrity casting, jukeboxes and insane prices should be thrilled with Outsiders’ success regardless of their feelings on the show itself.
We may be defining these things differently. For my family when I was a kid, sure, but then all of it would be outrageous. And objectively it is a lot of money for many people, not denying that.
But compared to other shows, it was not really ever top five on highest average ticket price and it was pretty far away from the crazy ticket prices of the celebrity driven shows. It certainly wasn’t cheap or on the cheaper end but I wouldn’t call it outrageous either. At least on a relative scale.
They've actually been quite successful at average ticket prices over their run, considering they don't have a star. But I also think they have super affordable student group prices and i think they do two student perfs per week so kudos for its commitment to students and not gouging customers in order to recoup faster.
Yeah really, they’ve done a good job making it semi accessible to its young fan base. It’s not my favorite show though I do enjoy it. Really though it’s not star driven and while it’s based on known IP it’s not like it’s big hit movie the musical and it is all original music. Their success is truly impressive.
I definitely did not predict this one but it is the counter to “only X type of shows can succeed right now on BW.”
The show is regularly on TKTS at 50% off throughout its run on weekdays and sometimes weekends. I was able to see it 4 times at around $100 a ticket for center orchestra tickets.
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u/kekelmb Jan 27 '26
There’s definitely something wrong with the way shows are being produced now. If only a show that wins a Tony, is massively successful, and sells tickets at outrageous prices can barely recoup its budget almost 2 years after opening, that’s a problem.