It saddens me when a Broadway show fails and is forced to close - especially when I enjoy the show as was the case with the recent freak show musical Side Show. Sitting in the audience, it is so so easy to see how much effort goes into the productions - the scenic design, lighting, the stellar acting, and of course the writing and composing.
Back in January, there was an article in the NY Post - 4 out of 5 Musicals Failed Their Investors. Shows may take years to produce and cost millions to mount, but few will recoup (or profit).
Yet, season after season, shows continue to be mounted on Broadway.
I've always wondered why?
Yeah, yeah, I know that investors can make a killing (did someone say Wicked), but chances are they won't.
So why continue to invest?
A recent Forbes article by Lee Seymour - How To Lose Money And Stay Happy attempts to answer this question. It turns out that Broadway investors are pretty satisfied and tend to invest over and over. Even though a show may not fully recoup, a portion of the investment is typically returned, and most of all investors..."do it to be a part of something bigger than themselves, and to foster new pieces of American culture." It's experiential.
Last year, I checked out the Broadway investment platform Maxolev when they were campaigning for On the Town. The opportunity to invest in an upcoming Broadway musical peaked my interest. The site offered investors an opportunity to diversify their portfolios, extolled that a successful musical could produce a return in six months, but warned that Broadway investing is risky. I deflated though when I realized that I did not meet the definition of an accredited investor.
It is easy for any theater aficionado to see that producers have been playing it safe on Broadway for years, shunning plays (check out Terry Teachout's WSJ article - Trying To Get on Broadway? Don’t Write a Play) and opting for jukebox musicals and Hollywood stars to minimize losses. And frankly, had I been qualified and invested in On the Town, I would see that despite decent reviews the musical is not doing well financially, grossing only about 30% of its potential these days.
Yet, in the past month alone, I have been running back and forth to Broadway to experience musicals such as Gigi, Something Rotten and Doctor Zhivago while they are in previews.
I simply cannot imagine a life without Broadway. Maybe one day, in addition to being a devoted fan in the audience, I can also be an investor. I've saved the Maxolev link, modified my budget...who knows...
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Robert Anderson ~ "You can make a killing in the theater but not a living"
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