Last week Variety debunked the myth that bad times are good times for showbiz. The article, Showbiz not always recession proof had a great overview of Hollywood and Broadway’s financial performance during major recessions in recent history. It provides some very intriguing insight about the past, and some interesting and/or scary facts about what is happening currently.
Interesting fact and reality check – despite the great number of wonderful productions this year, profitability is down. I don’t think many folks will be shocked by this. Without question the last 12 months have offered a wonderful array of great productions, especially straight plays, but good reviews aren’t turning into full houses. (Check out my May post Are there too many good shows and not enough audience members).
Like many observers, legit lawyer-turned-producer John Breglio calls the 2008-09 season exceptional from an artistic standpoint — "which is what made it different from seasons past," he says. "The high quality of the plays, revivals and new ones, and the high-profile stars is (why) we had a good season."
What many now fear is that what the legit gods gaveth —well-reviewed plays — they can taketh away in the new season.
And from an economic point of view, Breglio is unenthused about recent tuners: "For musicals, it was not a good season," he says. The only certifiable recouped hit is the low-budget "Hair," capitalized at $5.75 million.
"Billy Elliot," which opened more than eight months ago, has yet to return its reported $20 million investment and did not begin to sell out on a regular basis until after the Tony noms were announced. The $16 million "West Side Story" is months away from recoupment. So, while box office may be up a little, profitability is way down, with enormous losses tallied on failed shows, beginning with "A Tale of Two Cities" early in the season.
Scary(?) Fact Number One – It’s all about the stars baby! Look there have always been stars on Broadway. The relationship between Hollywood and commercial theater has always been important. But over the last few years we have come to see more and more limited run, star vehicles that have ushered in the era of “event theater”:
As for plays, with the exception of the occasional blockbuster like "God of Carnage," which just went on a six-week hiatus, the new paradigm appears to be the star-driven 12-week run where investors "just want to get their money back," says Breglio. "That’s just going to get worse and worse."
Stars like Hugh Jackman, Daniel Craig and Jude Law look to turn the incoming "A Steady Rain" and "Hamlet" into immediate hits. It’s only for 12 weeks — "but just when we need them most, in September," says Shubert CEO Philip J. Smith, referring to the worst B.O. month on the legit calendar.
This certainly isn’t going to go away anytime soon mostly because it works – more often than not. And, I have to say, if the casting is done correctly is this such a bad thing? Of course there are a lot of great stage actors out there who are struggling, but the star vehicles end up making more work happen don’t they? Without question the star studded 08-09 season raised the profile of Broadway. I am sure when we see full audience analysis, we will learn that the stars also drew in new audiences. Isn’t that a good thing? If someone comes to New York to see their favorite celebrity maybe they will have a great experience and end up checking out their local theater scene. I know some folks would argue that some of the film stars who hop on the boards really don’t have the chops to do eight live performances a week, but that is why I said the casting has to be correct. Let’s also not forget there are plenty of actors who aren’t stars who get onto the stage and can’t really hack it either. Of course it is wonderful to see a show like August Osage County make stars out of an ensemble of fabulous actors, but it doesn’t make God of Carnage any less enjoyable.
It is commercial theater after all. Producers need to keep their investors happy, excited and engaged. Let’s look at Hamlet – lead producer Arielle Tepper Madover also produced Mary Stuart. You have to imagine that she will have some of the investors on both shows. I am excited to see Michael Grandage’s take on one of the greatest Shakespeare plays – Jude Law is just the icing on the cake. And if that is the price you have to pay to get a great piece of theater like Mary Stuart to New York City, I am all for it. Some of the limited runs have provided the best theater experiences of the last year – The Seagull and Equiss come to mind immediately.
So I don’t find think that we have become more event driven as a scary fact but more of a refinement of an old tactic to make things more interesting. Of course it will be overdone (soon likely) and we will see something ridiculous production with outrageous celebrity stunt casting.
This brings us to Scary(?) Fact Number Two:
But there’s another key factor that has made Broadway this season very different from that of previous recessions: the new premium-price ticketing system.
"It really only has a significant effect on four or five shows," Breglio says. Regardless of how many shows actually benefit, the pricey tix have increased the overall Broadway cume "by at least 10%," says Jujamcyn’s producing director, Paul Libin, who also believes they’ve increased attendance. "You used to have to go through a broker. They were harder to acquire. People didn’t know how to do it. Now you just walk up to the box office or make a phone call."
Libin also mentions the computerization of ticketing as a major benefit over the old mail-in system, which may have stymied ticket sales in the 1970s and 1980s recessions.
According to Smith, premium tix can add as much as "$100,000 a week to the gross, if you’ve got a hot musical. A hot play, could be $50,000. An average musical you could expect $10,000 to $20,000," with an average play benefiting much less.
Whatever. It is millions of dollars that used to flow outside the theater and now goes to investors and royalty holders and helps to buoy the overall Broadway tally.
"But the economics of the premium seats is a temporary fix," says longtime producer Emanuel Azenberg. "Ultimately the theater will be a luxury, because at some point you hit a ceiling. It’s why you have 38 producers on a show, because you need $20 million to do a musical and $3 million to do a play."
Azenberg may be right about the long-feared ticket-price ceiling. The late Beverly Sills maintained she watched the balcony, not the orchestra, to see if an opera was selling well. Her thinking is no longer viable. Just last season, the Met Opera, with its top-priced ticket of $320, felt the need to institute a donor-sponsored rush program to sell some of its orchestra seats at $25 a pop.
Breglio says $300 tickets on Broadway or at the Met "aren’t selling like they were three years ago."
Now this is a SCARY fact. No discussion needed to confirm that. It is scary because as Azenberg stated it is a temporary fix. It would be nice to think that demand based ticket pricing might make a dent in the situation, but something has to be done to reconcile expenses so ticket prices do not continue to rise.
Scary(?) Fact Number Three:
Nonprofit theaters have also worked magic to make the 2009 recession look like no other. As Lincoln Center Theater‘s Bernard Gersten points out, "Three nonprofit theaters (LCT, Roundabout, MTC) now have Broadway-size houses. That’s a huge shift from 25 years ago," when even Lincoln Center’s Vivian Beaumont was dark during the early 1980s recession.
Only five new productions were offered by the nonprofit sector in 1982-83, the same number offered in the 1990-91 season. Last season, that number topped 10.
"Our grosses are part of that Broadway cume," Gersten says of the nonprofits. "Also, we bring at least half a dozen plays to the list, which helps fill up the (Tony) slots."
In the 2009-10 season, the overall B.O. tally should benefit from two nonprofit tuners, the Roundabout’s "Bye Bye Birdie" revival this fall and LCT’s new "Women on the Verge of a Nervous Breakdown" in the spring. Add to that at least eight plays.
Those productions will add dollars that have nothing to do with profits, and should push Broadway’s total tally to more than $1 billion for the first time ever — making the ongoing recession look a lot kinder than it really is.
Everyone in the business is certainly aware of the growth of the nonprofit theater movement in New York over the last 25 years. Nonprofits have had a huge impact (some might say have taken over) off-Broadway. Now, FIVE Broadway houses are populated exclusively by nonprofits – and at any given time you are likely to see one or two more with a Lincoln Center or Roundabout show. All of those subscribers certainly help add to the grosses. (As for the impact of nonprofits on commercial theater note that this doesn’t even factor in transfers like Next To Normal, Hair, Avenue Q.)
Is the fact that nonprofits will bring 10+ productions to Broadway this season scary? Is it a good thing? I don’t think it is scary, but that doesn’t mean it is a good thing. It is really difficult to gather perspective without the budget details for the individual theatres. I don’t know whether M.T.C., Roundabout, or L.C.T. will have deficits this year, but I would imagine they are like most theaters and therefore they will, but from the outside, I don’t think anyone can say whether this is because of the Broadway productions – for all we know the Broadway shows are helping the bottom line.
All in all it looks like Broadway is finding a way to cope with the economy, but I think this season’s new reporting of grosses will have more to do with breaking the billion dollar mark than the above.
Again check out my May post which also addressed most of the issues in this discussion Are there too many good shows and not enough audience members.
