Ken, excellent video, highly instructional & informative!!
A few questions arise:
1. How much does the LEAD Producer make if the show doesn’t recoup? What are the possible components of her pre-recoupment compensation?
2. How commonplace is the 1 for 4 arrangement? In practice can it be more or less, and what determines this?
3. From an individual investor’s perspective, with a $10MM show cap and incremental investment of $25K, this would imply that a post-recoupment (& after ongoing operating costs) total cumulative profit of $16.6 MM would be needed for investor to realize a 100% ROI (i.e., doubling her money, or making $25K in profit). Is this correct?
Any idea of the range of total cumulative profit generated by recouping Broadway Musicals?
Excellent explanation. I read about this in Guide to Producing Plays and Musicals (think that’s where I read about it) and found it confusing. You’re a good teacher, Ken!
Your explanation is so helpful! Thank you!
Very helpful. So, just to be clear, if every money raiser gets a 1:4 deal and they raise all the dough, then the most the main producer has to pay out is 1/4th of his “half” of the profits, right?
Allow me to expand on my prior question: You’ve mentioned many times that the number of b-Way plays/musicals that recoup on average ranges somewhere between 20%-30% (probably skewered toward the lower number). However, nowhere in you numerous blogs do I recall your ever mentioning an average investor’s ROI for those shows that Do Recoup. Let me go out on a limb & suggest this should be a critical part of an investor’s decision to put money into a show, and that this issue needs substantial data & elaboration.
Thanks for clearing that up. More videos please.
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Tony Award-Winning Broadway Producer
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