So much for the Tony Awards hoopla: Broadway investors face a potential $200 million loss
So much for the Tony Awards hoopla: Broadway investors face a potential $200 million loss
As the Broadway community prepares to honor its top shows and performers at Sunday night’s Tony Awards, it indeed has much to celebrate.
The past season, which concluded at the end of May, saw nearly 40 new productions and featured such boldface names as Daniel Radcliffe, Jessica Lange and Jeremy Strong, all of whom have been nominated for acting awards. Among the buzziest shows: a revival of “Cabaret” that stars Eddie Redmayne and Bebe Neuwirth, among others, and “Hell’s Kitchen,” a new musical featuring the songs of Alicia Keys.
But if you look beyond the starry hoopla, the numbers tell a somewhat different story. The industry has yet to regain its prepandemic box-office form, with the sales for the past season totaling $1.5 billion — or 15.8% below the sum for the 2018-19 season.
Some shows have already closed and others are barely skating by. Given the costs to mount a production, which can run more than $20 million for a musical, the losses can be staggering. Several industry professionals who spoke with MarketWatch said the total hit for investors in various productions could easily top $200 million as more shows shutter.
“It’s a mixed bag,” Broadway producer Lamar Richardson said of the industry’s current state of affairs.
Richardson might consider himself one of the fortunate ones. He’s involved in two Tony-nominated shows this season — a revival of the musical “Merrily We Roll Along” and a revival of the play “Appropriate” — that have been among the few new productions to draw consistently solid audiences. “Merrily,” in fact, has already recouped its $12 million production investment.
Another success story is the “Cabaret” revival, which has been playing to sold-out crowds and has a current top ticket price of $699.
Such examples are more the exception than the rule. Consider the case of “The Heart of Rock and Roll,” a musical featuring the hit songs of Huey Lewis and the News.
Despite the fact that the show has a brand name attached to it and has garnered glowing reviews from even some of the most hardened theater critics, it is playing to audiences barely above half-capacity. Reflecting the dismal demand, “Heart” has an average ticket price under $60, one of the lowest on Broadway.
As Lewis himself recently told MarketWatch of the show’s situation: “It’s a winner-take-all business. There’s only room for so many at the top.”
What is stopping Broadway from fully regaining its prepandemic form? Lots of factors, say industry experts.
Begin with the fact that shows are getting more expensive to produce because of inflation and other factors — so unless you have a runaway hit, you may not be able to keep running.
Labor costs are particularly high, owing to the fact that Broadway is a heavily unionized industry. But even the price of lumber — and lots of lumber is needed to build those extravagant Broadway sets — has become a significant financial burden since the pandemic
“It’s everything,” said Philip Boroff, who writes the Broadway Journal newsletter.
And while tourists, a key Broadway constituency, are returning to New York City and helping to fill theaters, shows are having difficulty wooing another important audience base — residents of New York’s suburbs.
Broadway insiders say that concerns about a postpandemic uptick in crime has been a factor in that regard. Plus, there’s the fact that more suburbanites are now working partly or fully from home, so they’re less readily able to see a show at the end of the day.
It’s also hard to ignore another reality: While the season has had some critically acclaimed shows — one new play, “Stereophonic,” has been a particular favorite and garnered a record 13 Tony nominations — it hasn’t had a megahit on the order of “Hamilton” or “The Book of Mormon.”
“We need that blockbuster,” said Ken Davenport, a veteran producer who was behind “Harmony,” a musical by pop great Barry Manilow that opened and closed this season.
As insiders explain, a megahit not only sells lots of tickets on its own but also draws attention to Broadway as a whole. In effect, it’s the theatrical equivalent of the rising tide that lifts all boats.
The consequences of Broadway’s current challenges could have repercussions next season and beyond. Producers say it may be harder to attract investors, the true lifeblood of the industry. In turn, investors who do come aboard may demand better terms.
More producers may also look to develop shows outside the U.S. — in London, especially — as a way to save costs.
“A lot are starting to look at other places,” said Jason A. Sparks, senior executive creative director at RWS Global, a prominent producer of live events.
Still, it’s hardly as if the Broadway pipeline is slowing down. Already, several shows have been announced for next season — ranging from a revival of “Gypsy,” featuring Audra McDonald, to “Good Night, and Good Luck,” a new play based on the 2005 film co-written and directed by George Clooney, who will also star in the stage adaptation in his Broadway debut.
Damian Bazadona, founder of New York-based entertainment-marketing agency Situation Group, said any concerns about Broadway’s future should be put into context. He noted that Broadway has always been “a boom-or-bust business” with hits and misses aplenty.
Plus, Bazadona added, you can’t expect an industry that had to fully shut down for more than a year because of the pandemic to recover overnight.
“Broadway is in a growth phase again,” he said.