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FROM "THE BUSINESS OF BROADWAY" (Allworth Press)

Chapter 1: The Danger is Thinking You Know More Than You Do

 

     There is great danger in thinking you know more about Broadway than you do. Broadway theatre can provide one of the most exhilarating of experiences, whether you are in the audience, or one of the two hundred people that help to create each fabulous musical or riveting play.

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     Most of us fall in love with theatre working in our first school production. It's the teamwork, everyone working individually and collectively toward one goal, whose results are actually attained in a short period of time and enjoyed together. It creates goodwill and camaraderie, a sense of major achievement, and a pride in self and others. In many ways, it's similar to a school sports team. No matter how depressing the team scores, or how mediocre the school production, the pride we garner in that joint accomplishment often lasts a lifetime.

 

   The business aspects of Broadway are as impressive as the production values and technology that are unquestionably second to none. The quality and standards of a Broadway production are beyond the scope of theatre most anywhere else because the pool of talent vying for the Broadway stage has no comparison.

 

     Yes, London, England can boast that the West End in Piccadilly is the breeding ground for transfers to Broadway. Chicago's non-profit Steppenwolf Theatre Company, or Minneapolis' non-profit Guthrie Theatre, or Washington DC's Kennedy Center can prove a long history of superior productions, many of which have moved to Broadway and have deservedly received Tony awards. But only New York City's Broadway district has forty live theatres that earn over a billion dollars annually, entertaining diverse audiences of almost 13 million from every corner of the globe for all fifty-two weeks of the year.

 

     This is where a playwright knows that his or her work has the best chance to reach the largest audience and receive the best production in the hands of caring and skilled talent. And this is where regional and community theatres, high schools, colleges, and touring venues will find their next production to entertain, educate, and stimulate their audiences.

 

     Only Broadway productions have enough money behind them to sink the Titanic on stage, or fly a helicopter into Saigon, or burn down a house, or fly Spiderman and his nemesis in an aerial chase around the theatre, every night. Only Broadway can afford to bring celebrity film and television stars up close, live, and personal for an extended period of time.

 

     Broadway remains the goal of every new play or musical. Once you've played Broadway, you are suddenly a part of theatre history. That's why thousands continue to flock to New York in the hope of being a "Broadway baby." And after film and television personalities perform on Broadway, they are regarded as serious actors.

 

     Broadway is the Holy Grail for producers around the world. Without inhabiting an official Broadway theatre, no show can call itself a Broadway show. The Tony Award eligible Broadway district runs north from West 40th Street to West 54th Street between Sixth and Ninth Avenues with only one exception, the Vivian Beaumont Theatre at Lincoln Center for the Performing Arts at West 66th Street. The smallest Broadway theatre has five hundred ninety- seven seats (Helen Hayes Theatre) and the largest has nineteen hundred thirty-three seats (Gershwin Theatre). In past decades there were Broadway theatres with as few as five hundred seats but it is difficult to pay Broadway wages and expenses with so few seats today. Theatres in Manhattan with less than five hundred seats are considered Off Broadway (99-499 seats) or Off-Off Broadway (generally under 99 seats).

 

     Mentoring is the backbone of the Broadway community. 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...

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     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.

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     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...

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     An experienced general manager, the most important advisor to a lead producer, will know how to balance potential income with probable costs as determined by the artistic needs of the script.

 

     Let's not forget that the entire project hinges on the quality and success of what has been written and/or composed. Often we read how film actors and film directors use improvisation in scenes, re-writing lines and sometimes entire scenes. A film script is often just a well-designed guidepost at best, or a vague suggestion at worst. That is almost never true on Broadway.

 

     The script is the primary reason why a lead producer decides to raise funds. S/he believes that the script has the potential to become art and change the world, or at least make a lot of money. Hopefully both. Raising funds for a gamble like a Broadway show is very difficult. It takes major talent to be a lead producer and raise millions of dollars when there is about a 20 percent chance that the money will be returned.

 

     New York State and its Attorney General's office regulate the raising of these funds. These laws are found nowhere else in the world. The rules are strict. The rules protect the investor, not the producer. These laws change depending on how many investors you have, and in what states or countries they reside. These laws dictate how and when funds must be paid back and the conditions under which the lead producer must also apply to the Federal government for approval. Specialized entertainment lawyers prepare the required prospectus given to every investor. It is detailed and brutal in some cases, listing the success rate of the lead producer and sharply warning against the risk.

 

     Being a lead producer does not mean that you know what you are doing. It's about finding the script, falling in love with the script, and raising funds. It's the general manager who turns the lead producer's wishes into reality. General managers are hired for their personal contacts, knowledge of union rules. budget expertise, personality, and negotiating experience. The lead producer and general manager should feel comfortable with each other and respect each other. This does not always happen, so big problems often start here.

 

     General managers are best friends for hire. Even an alcoholic, obnoxious lead producer can find a general manager to work with, as long as the checks don't bounce. Right or wrong, it's a tough business to make a living and every project has the potential to provide long-term employment for the general manager and many others. If the project is interesting and seemingly worthwhile, a problematic boss may have to be tolerated, like any other business.

 

     At this point, the new show has a great script, a lead producer, an entertainment law firm, and a general manager. We are now at least six months to two years away from opening the show on Broadway and we've already paid upfront fees to the playwright, composer, and lyricist, the law firm, and general manager, perhaps exceeding $150,000. The lead producer needs deep pockets, and there's no income stream in sight at this point.

 

     Welcome to Broadway... 

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