Stock and Amateur is the way to a "living" . . . but for whom?

There was a great article on the front page (!) of Variety this week (it's rare that a theater story gets the cover) about the life after Broadway for musicals that may not have been so well received by The White Way.  (To be honest, the article seemed like a byline from a Dreamworks exec, because the article began by stating how DWorks was set to recover a chunk of their $26 million capitalization through national tours and high schools, therefore not making the past year and a half a total loss.)

The article went on to give specific examples of how a bunch of theatrical writers have earned a great deal of cash from shows that, for lack of a better word, flopped on Broadway.  Some of the shows mentioned were All Shook Up, Footloose, Seussical, and The Wedding Singer. 

Apparently, the success of the post-Broadway life of these shows has afforded the very talented writers of these musicals to keep on keeping on as theatrical writers.  Let's all be thankful this Thanksgiving week for that!  Good writers writing is better for all of us.

But there is one thing about the article that bugged me a bit.

In the third paragraph, the author writes . . .

Community theaters and high school productions don't produce the instant big bucks of Broadway and tours, but the royalties paid to creatives, producers and investors are pure profit . . .

Uhhh, hold up.  

Profit to Producers?  I'm not so sure about that.

Let's break down how this works a little more specifically.

Producer finds show.  Producer produces show.  Show fails on Broadway for what could be one or several of a billion reasons:  bad show, bad producing, bad timing, bad whatever.  Whatever the reason, investors lose millions.

There is much sadness.

(Now here's where the Variety article comes in.)

Stock and amateur rights are sold to a company like Samuel French or MTI.

In most cases, the Authors receive 60% of all monies.  The show receives the other 40%.  (Sometimes this can be 70/30 or 50/50, depending on the number of years this agreement is in place.  At some point, however, the Authors will receive 100%).


So where does that 40% go?  Well, if the show has not recouped, then it goes straight to the investors in an effort to get them paid back. 

In the case of most flops, as evidenced by the article's description of the current financial situation of Footloose (hasn't recouped despite healthy licensing), the shows still never recoup.

Since Producers only really make money when the shows recoup, this means that despite taking the risk in the first place, despite mounting the production that got the Stock and Amateur companies interested in the first place, the Producers get zip.

Doesn't that seem a bit counter-intuitive?

And what if I added to his fact that it has become more traditional lately that Directors (on original musicals, mostly) get a piece of the S&A for their contribution to the long term viability of the show.

So here's my question . . . 

It truly is fantastic that the S&A money can keep our writers writing by helping to pay their rent or buy a 2nd home.  I want these guys working on shows so I can produce them.

But if the Producers aren't getting anything to help pay their rent after a show flops, what is keeping them Producing? 

Is this one of the main reasons why there are more career writers than career Producers?

Here's my proposal:

Producers should get a small negotiated percentage (the exact number to be determined based on who originated the project, how much was completed before the Producer came on board) of all monies received by the Authors from stock and amateur . . . until recoupment. 

I don't want it forever.  If a show recoups, I'm good.  Keep it.  We're all gonna be ok. 

But if it doesn't, Producers deserve a small piece to help keep them in the game.  Just like we are all better off with writers writing, we're all better off with Producers producing.

Otherwise, Producers who produce shows that cost them money, time and investors (ever tried to raise money from a group of people after a show flops?), aren't going to be too happy reading articles like this one.

If you were a Producer on one of the shows mentioned, how would you feel?