What is the recoupment rate of REVIVALS in the last ten years? Part III

When I first started producing shows and had to talk to potential investors, I put musicals into two different metaphorical buckets to make the risk levels easier to understand.

I described the two categories of musicals (original and revival) like this:

New musicals were like stocks.  More risk, but a potential for a greater return.

Revivals of musicals were like bonds.  Less risk, but the upside was limited (lack of subsidiary rights participation, shorter runs, etc.)

Since then, I’ve produced new musicals and three revivals (Godspell, Spring Awakening and Once on This Island).

My experience with these shows as well as watching what has happened with the other revivals over the past few seasons has given me that reach-for-the-Tums uneasy feeling.

So, for this third blog in our three-part Recoupment Study (See Part I and Part II here), I decided to dig into the recoupment rate of Broadway musical revivals over the last ten years.

Here’s what I found out.

In the past ten seasons on Broadway, the recoupment rate for Broadway musicals is . . . drumroll please . . . 18.52%.

Did you pop a Tums yet?  Cuz I just downed four.

See, we know that the average recoupment rate on Broadway is 20% . . . and sure, sure, this revival recoupment rate isn’t that much under 20%, but it is under!  And we’re talking about revivals!  The “bonds” of Broadway!  A revival has brand awareness!  It also has a limited upside!  So it should be less risky.  But, in the past several years it has been more difficult to get your money back on a revival than a new musical.

Argh.

I wasn’t satisfied with just this info, so I decided to dig into this subject a little shallower . . . meaning I examined the data over the last 5 years to see if I could see a trend from the 10-year span to the five-year span.  What did I discover?

In the past five seasons on Broadway, the recoupment rate for Broadway musical revivals is . . . drumroll please . . . 16.67%.

That’s right.  It’s getting HARDER for revivals of musicals to get their money back on Broadway . . . despite their limited upside.

What does this mean?

It doesn’t mean that we should stop producing or investing in revivals.  But if we are going to produce a revival or invest in one, it does mean that we need to structure our deals with the Authors, Stars, Vendors, etc. differently, because the safety of a pre-existing theatrical brand isn’t enough anymore.  Based on this data, Producers and investors are going to need more of a reason to jump into a revival, or they will only focus on new shows . . . and leave the revivals to the Non-Profits.

Or maybe, as Little Shop and Fiddler have proven, the way to produce a revival today is to do it Off Broadway and not on.

But we need to do something, because while I am so proud of the three revivals I produced, one of which got me a Tony Award, the numbers have spoken and they are saying to this Broadway Producer, “Don’t produce another one.”

It’s hard not to listen to numbers.

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Want to learn more about investing in Broadway, including how it works and tips on how to pick a “winner”?  Read the only book ever written on the subject.  Click here.

 

Free Webinar Alert: The Ins-and-Outs of Co-Producing on Broadway.

There are two kinds of Producers on Broadway:  Lead Producers and Co-Producers.

Do you know the difference?  (This is a quiz.)

A simple analogy might be that the Lead Producer is like the Chairman/woman of the Board of a Non Profit . . . and a Co-Producer is like the Board Members.

But it ain’t so simple.

Co-Producing on Broadway has become an important niche in our industry.  It’s where most Broadway Investors graduate to, and it’s where most Lead Producers come from.

The Lead Producing Path often looks something like this:

Broadway Investor -> Broadway Co-Producer -> Broadway Lead Producer

Since Broadway shows have become more expensive over the years, Lead Producers have “sub-contracted” out the financing to more “Board Members” than in previous decades.  That’s why I get so many questions from readers and podcast listeners like, “How do Broadway Co-Producer deals work,” or “Who are the other names above a show’s title,” and “How do I become a Broadway Co-Producer?”

And, as I said on a recent “Office Hours” call for my PROs, if I get the same three questions on the same subject from three different people, then I know I haven’t done my job in getting people the info they want.

That’s why, next Wednesday, February 7th at 7 PM EST, I’m teaching a FREE webinar entitled . . . “Co-Producing on Broadway:  So You Wanna Be a Broadway Bundler.”

During the webinar, I’ll break down . . .

  • Strategies for choosing the right show to Co-Pro.
  • How to negotiate the best deal (and what those deals are anyway).
  • How to be a Co-Pro without having to invest your own $.
  • The risks and the rewards (and we’re not talking just cash).
  • A Co-Producer’s role in the production before and after it opens.

And, of course, I’ll take all your questions at the end of the session.

To join me and learn more about Co-Producing on Broadway, just click here to sign up for this one hour webinar, next Wednesday night at 7 PM.  It’s free.

See you there.

WEBINAR:  Co-Producing on Broadway:  So You Wanna Be a Broadway Bundler.
DATE:  Wednesday, 2/7/18
TIME: 7 PM – 8 PM
COST:  FREE

To register, click here.

How my very first negotiation went wrong.

I was very excited when I started my very first big-time negotiation.  It was over twenty years ago now, and looking back, it wasn’t even that big of an issue.  Just a small contract with a vendor that my boss had tasked me with.  “Get a great deal,” he said.  He gave me a budget.  I wanted to come way under.

But this was my very first negotiation, so I treated it like I was arguing a case in front of the Supreme Court . . . with cameras watching.

And I thought I was ready.  I mean, I had watched enough LA Law as a kid (in fact, I wanted to be a lawyer at one point . . . so that’s all it takes to be a good negotiator, right?).

Nope.

And at some point in the negotiation, it started to go a little sideways.  I thought I was being treated “unfairly” . . . so I did what I thought I was supposed to do.  I blew up.  And I said some things that I thought would make the vendor give in.

You know what happened?  Instead of giving in, they dug their heels in . . . and while I did come in a sliver under budget, I know I could have done much better with a different approach.  And instead, I walked away with an ok deal and a vendor who didn’t like me oh so much.

Is the takeaway of this blog not to blow up during negotiations?  Actually no.  (There is a time and place for the right amount of steam-blowing depending on the issues and parties involved.)

The biggest lesson that I learned from my very first negotiation happened after the negotiation was completed.

The very next day, my boss called me into his office and said, “We’re doing a reading of a new show.  There’s no budget.  We need a favor from VENDOR.  Call them and see if they’ll help us out on this one for next-to-nothing.”

Gulp.

Here’s the thing about this industry.  It’s about the size of a pin head on a pin head.  That means you have to be very careful with how you treat people during your negotiations, because odds are, you’re going to be in another negotiation with the same parties very soon (the very next day in my case!).  And one bad negotiation with another party, can lead to a lifetime of them.

I ate major crow that day with the vendor and managed to salvage the relationship (took me about three lunches, a Yankees game and a popcorn tin at Christmas to do it), and it’s a good thing I did, because I’m still negotiating with them TODAY.

Negotiating is one of the most important skills an individual can possess.  Everything in our business (and in our lives) is a negotiation.  Whether that’s a theater deal, a deal with a writer/actor or designer, or whether that’s negotiating with an employee to make sure they finish a project by a deadline, or negotiating with a spouse on where to go on vacation, or who should walk the dog at night.

Without a doubt, a skillful negotiator can achieve success in their chosen area much faster than someone who just watched a lot of LA Law.

That’s why after my first botched negotiation, I studied the art of deal making like I was preparing for a Supreme Court case.  I read books, took seminars, engaged in live-negotiation exercises and more.  And, I’ve spent the last twenty years, honing those skills in all sorts of negotiations with agents, unions, theater owners and more, all while learning the very unique nuances of negotiating in the arts (which is different than any other industry).

Since negotiating is such an important part of what we all do, I’ve decided to make it the subject of my next webinar, The Art of Negotiating . . . in the Arts  . . . which will take place next Wednesday, January 11th at 7 PM.

During this one hour session (including a Q&A), you’ll learn:

  • The most important part of any negotiation.
  • How do deal with . . . ahem . . . “difficult”  negotiators (and we’ve got a lot of them in this biz).
  • When to walk away . . . no matter how hard that may be (this is so hard in the arts since we’re so emotionally attached to our projects).
  • The one thing you can do to get an advantage in every single negotiation you have.
  • The tricks skillful negotiators will use on you and how to avoid them.

The webinar is $149.  Click here to register now.

Or you can save over $50 and get it for free when you join TheProducersPerspectivePRO for only $97.

And when you join pro, you get full access to PRO including all the other webinars from this past year, contacts lists, my monthly newsletter, networking events (including one on the 21st) and more.  Click here to learn more about PRO (including video testimonials from members).

The average person will enter into thousands of negotiations every single year . . . from in-depth business negotiations (including for your own salary) to negotiating with an airline to get reimbursement when they lose your bag (I just negotiated a free ticket from a major airline when they lost my bag yesterday).

I guarantee you’ll end up getting more out of your negotiations this year when you take this webinar.

See you next Wed.

Sign up for The Art of Negotiating . . . in the Arts for $149.

 

 

 

Who is the Broadway Investor? The Infographic. Finally!

I’ll admit it.  I’m obsessed with infographics.  I like reading ’em.  And I like making ’em.  Ok, truth time, I like telling my Assistant, Dylan, to make them.  🙂

Since I got addicted, we’ve made some really cool IGs (that’s how us cool people who make their Assistants make infographics refer to them, BTW).  There was the one about Tony Award winners.  There was the one about recouped musicals.

And then there was the one about the makeup of the typical Broadway Investor.

Wait a minute.  We didn’t do that one!  Newman!

But it’s not too late, right?  No!  It’s never too late.  I just read Vera Wang didn’t enter into the fashion industry until she was 40.  Rodney Dangerfield broke through at age 46.  And good ol’ Colonel Sanders didn’t start frying chicken until he was 62.  So it’s certainly not too late to post an infographic!

A year ago we announced the results of the first ever Broadway Investor survey.  But go ahead, look at it.  The results looked so boring.  So non-info-graphic-y.

Not anymore!

Below is our Broadway Investor infographic.  Use it to help focus your search for investors for your show.

Investor Demogaphics (2)

P.S.  I’ll bet this post gets more views and shares than the previous post with the same information, just presented differently.  Remember that when you’re trying to get something out into the world.

And stay tuned for more Infographics.  I’m keeping Dylan busy this summer.

 

(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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FUN STUFF:

– 2 days left to enter my Tony Pool for the chance to win an Apple Watch!  Click here.

– Listen to Podcast Episode 22 with Broadway Producer, Kevin McCollum!  Click here.

– Win 2 tickets to Clinton The Musical Off Broadway! Click here.

So close I can taste the tax breaks.

If you asked Producers in town what they’d ask for if the genie from Aladdin came down and granted them three wishes, they’d probably say . . . lower stagehand costs, no discount tickets, and tax breaks for Broadway Investors.

Yesterday, they’d all be pipe dreams.

But today, one of them is getting closer and closer to reality.

And no, the BroadwayBox isn’t closing up its e-shop, and no, the stagehands aren’t rolling back to 1970’s wages.

But tax breaks, well, now we’re talking.

Yesterday, Sen. Charles Schumer from NY announced a bipartisan plan to get our strong-spined Broadway Investors the tax breaks they so deserve.  Schumer’s argument is the same that we’ve all been screaming for years.  “You do it for film and TV, why not Broadway?!?”

And yeah, why not?

Well, the contrarian argument against the tax break is that Broadway can’t go anywhere, so they don’t have to give a tax break . . . because there is no threat of losing the business, unlike film which can take its business and its economic impact anywhere.  Oh, and by the way, Broadway is booming, and all its theaters are full, so it’s not like we need that many more shows because we can’t even get ’em up, even if we wanted to.

That’s what Schumer’s opponents will argue, anyway.

But we know that Broadway won’t always be boomin’.  And we know we’re losing business to the UK.  And that the UK is kicking our ass in developing new, adventuresome work, because of all the money that goes to its non-profits.

If we want to stay the theatrical capital of the world, we have to guarantee that our capital stream continues to flow.  And tax breaks are part of that answer.

Support Schumer.  Send him a note on his website.  And send a note to the other Senators while you’re at it.

And I’ll keep you updated on how the bill is progressing.  I promise.

 

(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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FUN STUFF:

– Win a hot Valentine’s Day date with the NY Philharmonic!  Click here.

– Enter Will It Recoup and you could win $500 of Broadway Theater Tickets!  Enter here.

– Listen to Episode 5 of The Producer’s Perspective Podcast for an interview with marketing wizard Drew Hodges! Click here!

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