What’s the average cost of putting on a Broadway Show?

The subject of this blog is from an email I got from a reader just last weekend, and wouldn’t you know it, two days ago the Broadway League’s Economic Impact report arrived on my desk and had the quantitative answers this reader was looking for.

So I thought I’d share it with all of you!

If you recall yesterday’s entry that detailed the economic impact of Broadway on the city, 2.2 billion doubloons came from direct spending on shows.  Let’s see how that breaks down so we can also calculate the average costs of producing a Broadway show.

The report indicates that in the 2010-11 season, there were 43 shows produced for a total of $209.7 million, or an average of $4,876,744.

Now, there are musicals and plays muddied in that mix, so that figure is a bit hard to do anything with.  So, for the rest of this entry and analysis, we’ll separate the plays and the musicals.  I’ll also be excluding any so-called “Special” productions (as classified by the League which refers to productions that don’t fall under the definition of either Play or Musical).

So, drilling down now.

In ’10-11, there were 15 new musicals produced for a total of $144,900,000 or an average of $9,660,000.

That same season, there were 25 new plays produced for a total of $60,200,000 or an average of $2,408,000.

Now that’s the “production budget”, or capitalization.  What about the second component of every Broadway Budget?  What about the “operating costs”, or how much it costs to keep the show going each week?

Here’s more . . .

In ’10-11, the total spent to operate musicals over 1142 playing weeks was $673,500,000 or an average of $589,754.

In ’10-11, the total spent to operate plays over 426 playing weeks was $118,500,000 or an average of $278,169.

And there’s your answer.

Buuuuuut, let’s just keep going.  Because now I have a question.

Just how do these numbers compare to years past?

Thankfully, the Broadway League published the prior years of stats in addition to the most recent years so we could . . . oh, I don’t know . . . graph out how costs have escalated over the last decade.  And those charts are below:

So there you have it, James K from Illinois . . . the answer to your question.

And for all of you non-James Ks out there . . . there are answers to your questions in this blog as well.  For example, if you’re budgeting a play or a musical, where should you look to land?  Well, the numbers above give you guidelines as where you need to be.  Certainly some shows are going to draw outside those lines in either direction, and being average certainly doesn’t mean being successful.

But when building a model of anything, it’s important to understand what the market is bearing so you can see where you fit in the market . . . so you can market your show to the best of your ability for your investors.

If you’re interested in learning more about the economics of putting on a Broadway show, pick up this book:  Stage Money:  The Business of the Professional Theater.  

(Got a comment? I love ‘em, so comment below!  Email subscribers, click here then scroll down, to say what’s on your mind!)

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Comments
  • Dean says:

    . . . and the most important number, that a $967.1 million outlay generated that $2.2 billion of economic impact. Assuming I did my math right.

  • John says:

    Ken – Do you have any data on how these capitalization and operating costs compare with “off broadway” and institutional theater mounting costs? I’ve been told recently that these other categories have costs not too much lower than Bwy. Any thoughts?

    John

  • Kevin says:

    Great info! I wonder if off-Broadway keeps these stats.

  • Kevin says:

    Great info. I wonder if off-Bway stats are available.

  • Rich says:

    I think these numbers (at least for B’way Musicals)may be misleading. Remove Spider-Man’s reported $75MM capitalization from the 2010-2011 list and the average capitalization for the rest drops almost in half, to $5MM. There may have been some additional outliers over the years (Shrek comes to mind).

  • Douglas Hicton says:

    $9.66M (avg.) seems to me an almost obscenely overinflated and downright wasteful amount to spend on a single musical, especially when it often looks and sounds as if nothing resembling that amount has made its way onto the stage and into the pit–although it definitely has made its way into ticket prices. Why Broadway audiences aren’t shocked and offended by this combination of factors, I have no idea; perhaps after years of this less-for-more, they have seriously lowered expectations; maybe they’ve forgotten how Broadway musicals are supposed to look/sound/cost and don’t know any better; or it could be just a status thing and they’ll attend a Broadway musical simply because “it’s Broadway”.

    I’d like to see a cost breakdown showing what chunks of this invested $9.66M end up where. After that, it would be wise to look for ways to do more with less. Once we learn to use our imagination to squeeze every milligram of value out of every buck, once we get into that habit and make it a regular routine, THEN we can throw more money at a show and that money will actually mean something and do something.

  • James Armstrong says:

    As Douglas Hicton points out, ticket prices have gone up considerably since 2000, but according to the charts, production costs and operating costs seemed to have held pretty much steady. So where is all of the money going?

  • kevin davis says:

    wozapolloza! that’s a lotta lettuce!

  • Madeline says:

    WOW! I was thinking of what the operating costs would be in my head the other day and my numbers weren’t even close. The grosses published by the broadway league… are those after the operating expenses are deducted?

  • Jay Z says:

    What I’m most shocked about is how extremely difficult it is to actually make any money here. Yes, the $10 million or more capitalization is insane, but also the running costs. Check my math — If the average operating cost of a musical is $600,000 PER WEEK, with 8 shows a week, that means each performance costs $75,000 to put on. With the average theater having about 1200 seats, that means each seat needs to generate $62.50 just to pay the rent, actors, staff, etc. Then ON TOP of this, add the 10 million capitalization, and you’ll see why most shows lose money or need many years of profit just to pay back the expense.

    Guess this is why the little things matter: every contract, every extra seat, every perk to encourage a premium sale. That’s the only way to pass breakeven and turn a profit.

    • Rich says:

      Jay Z,

      Great job with the math, but your analysis really points to the folly of focusing on ‘average ’ B’way Musical operating costs & capitalization. Rest assured, the weekly operating costs for G-Spell are less than $600K, otherwise our favorite show would have closed long ago. While there is undoubtedly less variability in oc’s than capitalization, it just takes a few high-expense shows to badly skew these averages.

      • Jay Z says:

        Thanks Rich. Any way to find out the specific operating costs? Or another way to look at it beyond ‘average’? Maybe looking at shows that recouped, or generating a “typical musical” model…if there is such a thing.

  • Mike C. says:

    I find it counter-intuitive and counterproductive to keep production costs so high.

    Most musicals show a loss at the end of their run, even some you might consider “successes.” The reason why? Much of the Broadway audience is comprised of tourists, and the producers want to give them spectacle, which entails enormous cost for sets, costumes, and lights, to name the basic production aspects of a show.

    In addition, the weekly running costs have soared for two main reasons:

    1) THE UNIONS, whose contracts stipulate you must pay four people to screw in a light bulb.

    2) SET, COSTUME, and LIGHTING DESIGNERS are now DEMANDING AND RECEIVING ONGOING ROYALTIES. (They historically were paid a one-time flat fee, since they only render their services the one time, at the outset. There is no rationale or justification for them to receive royalties.)

    Nowadays, the only saving grace for most musicals is the “afterlife” – stock and amateur rights, cast albums, music rights, sheet music, publication rights, and subsequent domestic and foreign productions.

    Anyway, that’s what I believe to be the germ of the problem on Broadway. What says you guys?

  • Abigail says:

    I wonder if the increased use of many Hollywood A-listers on Broadway and their presumably higher price tag contributes to the jump in the cost to mount the ‘average’ play/musical.

  • Mike says:

    Shows play catchup after opening night. Paying the operating costs each week and paying down the original production costs is an uphill battle, and unless a show can sell most of its tickets at close to full price it’s almost impossible to catch up. With 40 theaters filled, plus all the high profile, midtown ‘off broadway’ houses showing popular, tourist oriented shows there is just not enough elasticity in the theater going market to absorb all these costs.

  • Ben says:

    wait so… 96,000?

  • Jane says:

    hmmmmmmm…..

  • Ire says:

    Hi I want to know the average production cost to produce a US tour? A Musical or Play?

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