Could Bonuses Work on Broadway?

One of the common gripes amongst Producers like me is the high costs of labor on Broadway.  And it’s easy to point the finger at the unions for driving those salaries way up (in my opinion – why things get expensive are not the rates themselves, but the work rules that govern those rates – and the benefits . . . oy, the benefits!).

But no griping here . . . yet.  In fact, I’m going to start this blog from TheUnionsPerspective.

Here’s why the rates are what they are . . .

First, this is the Major Leagues of Theater.  We’ve got the best in the world at what they do in our theaters.  So yeah, when you’ve got the best you gotta pay for the best.

Second, when a show makes money on Broadway, it makes a lot of money.  And unions have to negotiate rates for their members that take the biggest hits into account, so their members don’t feel like they’re gettings @#$% if they’re working on a show that is making $3mm+ per week.

Isn’t that how you’d negotiate too?  I would.

But there is a problem with this perspective.  It doesn’t take into account the majority of the market.  The majority of the shows are NOT making that kind of money.  And the “middle of the market” is paying first class rates, when their income may only be second.

This is the problem with fixed rates across the board.  In some cases, union rates don’t take into account play or musical, revival or new, star or not.

So to use an example . . . if you’re opening a new restaurant that serves casual American food, you might have to pay the same for your kitchen staff as the fanciest of French places in town.

Some might have read this far and say, “That’s Broadway, Ken, you hit it big or you’re out.”  Ok, maybe.  But I think that’s sad, because it means that more original shows by unknown authors with no stars may not get a chance to penetrate the market because they can’t attract enough of an audience fast enough to cover the higher costs.

What to do?

Well, I wondered . . . what if there was a bonus system?  Over 50% of all companies out there in the world pay end of year bonuses . . . why not Broadway?  What if shows that fit a certain classification got a reduced rate on a weekly basis but had a guaranteed bonus built in based on gross (not even on profit!).  This might allow shows to run longer, gain traction and build an audience instead of closing before their time.

A similar model is working in the touring industry, why not here?

Something should be done because I worry that Broadway will become a place of only theme park-like juggernauts someday unless we do more to allow the middle of the market a better chance at being seen.


  • Question says:

    You seem to have disdain for what you refer to as “theme park juggernauts,” and I think it’s misplaced. Julie Taymor’s direction of THE LION KING is nothing less than an absolute masterpiece. The artistry in CURSED CHILD? The magic of the carpet scene in ALADDIN? It’s not a coincidence when shows make a lot of money and run for years, it’s because of the quality. Was SPIDERMAN a juggernaut because of its title? How many other big name shows with massive investment have flopped because of quality? Many! It comes back to the content. Audiences want great content on stage, and it doesn’t matter how it gets there, for the most part. I don’t understand the disdain for “juggernauts,” as the reason these shows are making $2MM+ a week is because they have something that makes them very good. The press those shows generates for the industry is massively beneficial, especially to the subscription levels in touring markets. DEAR EVAN HANSEN, HAMILTON, THE BAND’S VISIT, are all shows that make a lot of money and have name value from San Francisco to Schenectady, and that only helps everyone.

  • Do you think the actors would be willing to go for a deal like this? I think what Hamilton did regarding their bonus was really wonderful and I wish more entities were taking that approach, but even in looking at what took place with #fairwageonstage obviously a lot of artists feel under-appreciated and that they’re working for wages that aren’t livable in New York City. I fear that this method would leave those same amazing artists and performers between a rock and a hard place; one which would leave us deprived of their artistry and them turning their sights firmly to tv and film as opposed to the swivel that seems to currently exist.

  • Jay says:

    @Question- I cannot pull this punch because there are so many points that you are missing a larger picture on and what I see is indicative of larger problems in the industry

    These shows are great, but their ticket prices are high. The problem with that is that we price out locals and younger 20/30s consumers. This means the industry could see itself (and I’d argue already is) becoming like opera was in the 50s-present, an expensive spectacle that people don’t bring their kids to. When kids don’t see theater often, they don’t get in the habit of seeking entertainment there. We’ve already seen the local crowd decline. Having an industry that is reliant on people coming in to see it is not a sustainable model. So while tourists may love Lion King, it does mean one more theater is tied up, not bringing new work through. Additionally, while Audiences want great content, I’d argue that pricing that great content at 250+ is destructive long term. Your comment is blind to the many 20 somethings that may like the shows, but don’t go because theater is a luxury for them when they’re barely making 75% of what the previous two generations made for equivalent work and hours.

    Secondly, Those juggernauts are great for sure, but they also choke out other smaller shows. It now takes 7+ years to do a broadway show because everything has to be great and raise that much more money to get to broadway, there was a time with Porter and Rogers and Hammerstein etc, where people brought major shows into town in less than a year. Making something good doesn’t require a ton of money, making broadway shows does.

    The third problem is that by tying up theaters we impede new work, bringing the next Lion King in. Those theme park shows take away space from a market that is already only 41 theaters wide. So with so many season on season shows, we end up making it harder for anyone but Disney and a few select producers to make money by having shorter runs on Broadway. London does a ton of limited run shows and I think its good for tourism (means that you always have fresh good content), and good for the business by spreading space and opportunity down. London seems to be doing capitalism and our idea of equal opportunity (as opposed to equal outcome) better than us right now.

    Overall, your point is myopic, not only discounting the historical precedence of lower great work that didn’t need 12-21M to come into town, but also discounting great shows that close because they don’t quite have a large enough audience, Indecent to name one. By increasing how much money you need to bring in a show up against Disney/Harry Potter money, you end up squeezing out great art that would succeed, but needs a lower capitalization.

    A bonus system would help bring some equity there and also help actors in the long run. Perhaps the carrot is that it helps everyone in the end that smaller, more artistic shows can flow in and out and not have to capitalize as highly due to smaller initial salaries, but that if they reach benchmarks, actors are given large bonuses in excess of current minimums. Could be a useful tool. Look at London, thriving scene, lower salaries. Costs double to bring shows here, something that should be addressed in the biggest market in the world.

    • Neal says:

      The reason ticket prices are rising – the COST of the production is rising, and anything over $15 mil will take (average) a minimum of two-plus years, just to recoup! So the only way to alleviate that long wait: RAISE TICKET PRICES! The only way to keep (ticket) prices at a sane level, is to keep the overall budgets at a more reasonable level (For a B’way musical: between $8 & $15 mil, max). As Ken mentions, using a tiered approach to salaries/costs could very well ensure a show doing “marginally” well, to have a longer shelf life, thus allowing a steadier paycheck AND, hopefully, the show gains traction, putting them in a higher tier, subsequently giving cast & crew a raise! It’s a win-win! I’d definitely try to negotiate w/ the unions, using this tactic/incentive.

  • Carvanpool says:

    Ye gads, what schlock idea.

    No, no, and no.

    Just produce. This is Broadway, not the sticks.

  • Kristi RC says:

    When there is a significant amount of original creative input – as there was with the Hamilton cast – it makes sense for those who have created that to share in the royalties.

    But for your crew members, it’s the same work whether it’s a musical, straight play, or variety show. They’re going to show up at hour before half, go through the pre-show checklist, and deliver an off-stage performance that is as close to perfect as humanly possible 8 shows a week regardless of content, length of show, length of run, or who the star is or isn’t. None of that matters to them; they take great pride in doing their job well whether the show is a top seller or some new thing no one has ever heard of. Their reward for working on a successful show is job security – knowing that there will be another 8 shows to do next week and the week after that and the week after that.

    One reason the benefits are as costly as they are is that NYC is extremely expensive to live. Another is simply because insurance costs are high all over and for every industry; that’s not unique to theatre. And we’ve lost a lot of good folks because they can’t earn enough to be able to qualify for insurance coverage, even through the unions.

    In the non-theatrical business world, a bonus is over and above a decent wage and benefits package. Everyone appreciates recognition for a job well done and savvy producers have always provided some perks such as gift cards, company dinners, or upgraded travel arrangements when someone has done something deserving. In the end, we’re all just trying to make a decent living doing something we love. If producers want to reward the crew members who’ve helped the show to be a success, no one will turn down the money, but providing constant work – and great shows to work on – will make them just as happy.

  • Debbie Saville says:

    New ideas and change is the past, present and future of creative arts and Broadway is no exception. Many of us reside in the “sticks”, have entertained audiences for decades, are taking new concepts to theater stages and bringing in new audiences along the way. For someone to say to Ken “just produce” does not sit well me. He not only successfully produces, he has created an open community that builds confidence, opens doors to better understand the business of theater and as he continues on his innovative path he genuinely supports all who are taking their creative dreams into reality. You never know the next great Broadway production may rise up from the island if misfit toys. And as far as the business of Broadway goes lean events should be considered to lessen non-value added costs of production. A round table discussion regarding bonuses could be included in this platform having both creative minds/business analysts represented to keep a balanced discussion.

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