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how to invest in broadway

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The Business Of Broadway

Broadway is a part of the entertainment business. Business is the key word. The entertainment business has many facets, from film and Broadway producers to costume design companies to choreographers and actors. Understanding the entertainment business is important if you were ever to make an investment in a show or movie.

 

Understanding Profit Versus Non-Profit

Productions are typically funded by a production company or theater. Some theaters self-produce and may even have subscriptions for their theater members. The theaters may be non-profit, meaning their purpose may be more aligned with supporting the arts and bringing live theater to the public, maybe through grants. 

 

The vast majority of productions are for profit ventures. There may be partners or shareholders and the goal is to put on a profitable show to generate revenue. The profits can then be rolled into other productions and ventures, including national tours or international productions, or can be used to pay investors on the investment.

 

Licensing Revenue

Shows may have special exclusive rights, called copyrights, which they can use to increase a show’s revenue. A show can sell or license the right to merchandise, for example, where a separate company invests in their own business to offer show related merchandise. They may then have to pay a percentage or set amount to the production company.

 

A show may also license rights to secondary productions of the show. Whenever Annie Jr. is performed, there is a strong likelihood that the original Annie production company is making some money. These rights may be managed by licensing companies like Theatrical Rights Worldwide or MTI.

Touring Productions

A goal of many Broadway shows is to tour while still running a show on Broadway, or after the closing of the Broadway show. There are a couple of major touring companies in the US who may license the show from the producer in exchange for a flat fee or percentage of the tour revenues.

 

TROIKA Entertainment, for example, represents several major tours, including Kinky Boots, School of Rock and Love Never Dies.

 

NETworks Presentations has several shows on tour, including Elf, Phantom of the Opera and Finding Neverland.

 

There are also international tour possibilities, like the Big League tour of Legally Blonde.

business of broadway

Casting Directors

Casting directors are often crucial behind the scenes players in the business of Broadway. Their experience, connections and keen eye for putting the casting pieces together make their role extremely valuable in the production. From an investor perspective, knowing who is casting the production may help to assess the caliber of actors the show may get.

 

There are many casting directors, and not being known as a top agent should not minimize their ability or experience to cast an amazing show. However, seeing an experienced casting office like Telsey and Company, Tara Rubin, Michael Cassara, Stewart Whitley, Stephanie Klapper, Nora Brennan, Bob Kline, or Alison Franck, for example, may tell you that the production is of a certain quality.

 

Job Creation

Producing or investing in a Broadway show often creates many jobs. There may be more than 200 employees or workers involved in a given production, from the art department to hair and makeup to costume design to stage management to musicians to actors to set designers and builders to choreographers to production assistants to directors to marketing to legal and much, much more.

 

Investing In The Business of Broadway

Choosing to invest in the business of Broadway may be both risky and rewarding. As with any business an investor may get involved in, it is important for an investor to understand the business or align with someone who does. An investor should approach each theatrical investment with an understanding of their expectations. These expectations can help the investor make better business decisions, and hopefully lead to a more profitable experience.

There are many more components to the business of Broadway than can be covered in this short article, but understanding the business can help an investor make a better informed decision.

ABOUT THE AUTHOR

Jason Turchin is an attorney, entrepreneur, producer and owner of InvestingBroadway.com.

Interested in Broadway investing?

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