Why I’m predicting a Broadway Market Correction in the next 12 months.

Unless you’ve been trapped in tech somewhere, then you probably have heard the news that the stock market has gotten hammered over the past few days.  As of yesterday, we had dropped 2,000 points in the last week.

If that’s not a market correction, I don’t know what is.

Financial pundits analyze markets all the time, trying to determine when the next one of these corrections will occur.  They look at seasons, events, and all sorts of things to try and determine a pattern . . . a pattern that they can profit from, or a pattern that can help them stem their losses.

That’s when I thought . . . I wonder if I could do the same thing?  If I took a look at the grosses over the past few decades, would I see a pattern of rises and falls and flatlines . . . and would I be able to find some sign posts that could tell me when we might be faced with a correction of our own?

So I did it.

And I found some of those sign posts.

And, well . . . . you want the good news or the bad news?

The good news is, we’ve been on a helluva run.  The bad news is . . . it’s about to end.

First, let’s look at the data.  The graph below is a chart of the grosses since 1985.  You’ll notice that we don’t see any plunges in the chart line.  Newsflash – that’s good.  In the modern age, our gross box office receipts never truly drop by significant amounts . . . but they do flatline.  And that’s what I focused on.  (The one big dip you’ll see is the season of September 11th, which is why it’s a bit of an anomaly.)

Take a look and then keep reading . . .

You can probably eyeball what I’m going to say next, can’t you?  Yep, you can see that the flatline periods are occurring at almost a regular rate since the turn of the century . . . on average, every 3.67 years.  Our last one was during the 2011-12 season.  Which was about 4 years ago.  So . . . there’s sign #1 that we’re due for a market correction.  For some, that might be enough.

But wait, there’s more.

You know what else happens every four years, and has also coincided with our last four market corrections?

If you said Presidential elections, you’d be right.

The country world becomes obsessed with who’s going to lead the US.  There’s nervousness, anger and a lot more ads on television about politics than there are about plays and musicals.  Why do people need to go to shows when there’s so much drama in elections nowadays?  They don’t.  So grosses stay flat.

And I’ll give you zero guesses as to what we have coming up next year.  Yep, a Trump-infused doozy of an election.

So there’s sign #2 that we’re due for a market correction.

But wait, wait . . . there’s even more.

There was another answer to that ‘what happens every four years’ question, that has also coincided with our last four market corrections.

If you said the Summer Olympics, you’d also be right.

The country world becomes obsessed with who is going to win the most medals in this televised and several weeks-long athletic drama.  And it just so happens that the summer is Broadway’s strongest season . . . so when the Olympics are on, it costs us business.

And that’s right, my peeps, we have a Summer Olympics coming up less than a year from now.

And there we have the power of three, and the 3rd reason we’re due for a market correction.

So, to sum up why we’re facing a bit of a downturn in the coming year, in the modern era:

  • Broadway market corrections happen every 3.67 years, and it has been about that since our last one.
  • Broadway market corrections happen during every Presidential election and we have one in the coming year.
  • Broadway market corrections happen during every Summer Olympic year and we have one in the coming year.

Oh, and . . .

  • Broadway market corrections also happen during leap years, and this coming year is one of those too.

So it’s been a good ride, but a correction is coming.

Why do I bring this up?  Is it to be a doomsayer?

No.  I’m not trying to tell you the sky is falling . . . I’m here to say that what goes up, must come down (or in our case, go flat), and the more we know and understand when these things happen, the more we can be prepared to overcome them, or avoid them altogether. (If I were a long running show, I’d start looking at more promotions during some of these big events, and even more importantly, cutting costs – you can’t out-advertise the Olympics or Elections.)

And while sure, I may be saying we’re due for a downturn, but take another look at that gross graph above.  We always go back up . . . and we always go back up pretty quickly.  Like the stock market, Broadway is about the long term.  And even if we take a few steps back this year, I’m bullish on Broadway for the future.

See you all in a year, to see if my prediction rings true.

Anyone want to lay a bet?

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