5 Signs that Broadway is becoming more like Vegas.

I’ve been in New York for just shy of two decades now, and to say things have changed in the theater district is as obvious as saying Wicked is a big hit.

The transformation of Times Square into a Vegas Strip-like scene seems to have had an effect on what’s happening inside our theaters as well.

Here are 5 things I’ve noticed that indicate we’re getting Vegas-ized:

1.  WHO IS THE HEADLINER?

We’re becoming increasingly dependent on the names in our shows, just like the casinos have depended on Wayne Newton and friends for years.  In some cases (A Steady Rain, anyone?), Shakespeare has gotten a rewrite because now, “the star’s the thing.”

2.  A TRIBUTE TO TRIBUTES.

When Love Never Dies canceled its Fall NYC opening, the show that took its place wasn’t a limited run play revival.  Instead it was Rain, a Beatles tribute show that has been touring the nation.  If it succeeds, expect more of this type of entertainment to be coming down the long and winding road.

3.  BROKERS ARE NOT GOING BROKE.

In Vegas, the Brokers mean business.  If you don’t have them on your side, you’re gonna get Bugsy Siegeled in no time.  In NYC, they don’t wield that much power . . . yet.  But as they continue to out-spend us on advertising, and continue to organize, we may find ourselves not wanting to sit with our backs to the door, if you know what I mean.  My suggestion?  We all have a sit-down.

4.  PARDON ME, I DON’T SPEAK AMERICAN.

International audiences have been slowly increasing here in NYC, with the Broadway League reporting that 21% of our audience was from around the globe in 2008-2009.  21%!  That means more than 1 in 5 people that see a show many not speak English as their first language!  You’d have to be high on glue to not think that stat has an effect on what runs.  If it increases, expect more and more non-verbal entertainment or spectacular events to take over our boards, like, oh, I don’t know, Spider-Man?

5.  ADVANCE = DAY OF.

It used to be that our tourist audiences picked up a paper before they came into town and bought their tickets in advance.  When my Mom bought my fam Phantom tickets we waited EIGHT months. And we sat in the 2nd row from the back. (Side note: when I went to see it a second time, I bought tickets from a broker because I wanted a great seat.)  Our audiences are becoming more like Vegas audiences, and waiting until they get here to decide, causing most shows to have more availability, requiring more discounting, etc.  So much of our marketing dollars now have to be spent on converting the customer when they get here, instead of before.

Will Broadway become the U.S’s second Strip?  I doubt it.  Great plays and great musicals will always have a place here, whereas I can’t imagine that The Pitmen Painters or Next to Normal will ever play The Mirage.

But we do have more in common with Vegas than ever before.

And you can place a big bet that this trend concerns me.

I found a great writer. Now what do I do?

Yesterday we talked about where you can go to find writers who will put your idea for a Broadway or Off-Broadway (or Off-Off Broadway) show on paper.

But once you find that writer (or writers), then what do you do?  Here are four tips on what to do with that writer once you find him or her.

1.  Think twice.

The first thing you should do before jumping into bed with a writer is to give it a second thought and get a third opinion.  You’re marrying this writer.  Sure, you can always get divorced (see below), but that’s just going to make things more difficult later on (and more expensive), and more importantly, it’ll slow down the development of the piece.  You want to make sure that this writer is exactly what you are looking for. Don’t compromise, especially if the idea for the show came from your head.  It’ll drive you crazy to sign somebody up only to find out that he/she is not as passionate about the idea as you, or if they want to take it in a different direction than you do.

2.  What’s the deal?

Are you commissioning the writer?  In other words, are you paying him or her a fee to write your idea?  Upfront commission fees can range from a few hundred bucks to several thousand, depending on the reputation of your writer, and how badly they want to work on your project.  Commissions are especially common in the non-profit world, but creative commercial producers can and should use this tool as well.

When you do commission a writer, make sure you protect your creative contributions as well.  Most playwrights are going to ask that they own the final product (unless you can pay a significant upfront fee), but that doesn’t mean you shouldn’t get a piece of future income due to the writer(s) (and perhaps a credit as well) for being the creative impetus for the project.

Maybe you don’t want to commission, but instead you want to collaborate, which will put you more into the creative mix.

(Red Flag Alert:  When negotiating, be wary of writers who are only after high up-front advances or fees.  Sometimes this is a sign that they are not as interested in the project, and that they don’t believe that they will see a lot of long-term royalties (which is why they want guaranteed income up front)).

There are a thousand different ways to get a writer on board, and I strongly recommend you speak to a lawyer or someone who has hired writers before to get an idea of what will work best for your unique situation.  At  the end of the day, you want a deal that works well for both parties.

And don’t just try and get the writer to sign on board for nothing.  Giving people a little money makes them feel better about working on a project, and also makes them more beholden to their boss (that’s you!).

3.  Set deadlines.

Establish clear deadlines from day one for the development of the piece.  When is the first scene due?  When is the first Act due?  Completed script?  First reading?  Map out a developmental course, have the writer agree to it, and then make ’em stick to it.  Sure, you may have to adjust deadlines along the way, but having a mutually agreed upon plan will guarantee that more work gets done, and faster.

4.  If it’s not working out, make a change.

If the script isn’t coming together the way that you had envisioned it in that theater in your mind, then fire the writer, and move on.  Yes, it may cost you some bucks . . . but how much will it cost you in the long run if the idea that gets on stage isn’t the one you wanted written?  Now add in the mental anguish and more you’ll experience by working with someone for years when you don’t see eye to eye.  Now that’s expensive!  This is where theater producers need to be more like movie producers.  If the writer isn’t working, then find another one.  Period.  You owe it to your idea.  If you don’t make that change, you’ll always wonder what if . . .

Finding and hiring a writer is hard.  It’s one of the hardest things that a creative producer will ever have to do.  But it should be.  Because it’s the most important thing a creative producer will ever have to do.

It’s like building your dream house.

You can find the lot, and you can list all the features that you want . . . a big porch, a 3 car garage, a jacuzzi tub.  But it’s up to someone else to build that house, make sure it’s aesthetically pleasing, and make sure it doesn’t fall down after a few months.

How does a Broadway Producer get paid?

I wrote a blog in November which stumped for the concept that Producers should receive a portion of Author’s subsidiary rights on shows that have not recouped on Broadway, since it was the Producer’s production that branded the show for subsidiary production in the first place.

I got tremendous positive response from the industry from that blog, including several Producers who said they would be willing to take more risks on Broadway if they knew they would have a guaranteed revenue stream to help keep funding their projects in the future.

I also got a lot of questions from readers wanting to know exactly how Producers were compensated for producing shows on and Off-Broadway, so here’s a blog that breaks downs the bucks (or lack thereof).

There are three main forms of traditional Producer compensation.  They are:

1.  Producer Office Fee

The Office Fee is a flat weekly amount paid to the Producer designed to cover costs associated with maintaining an office needed to run a Broadway show.  If you were the CEO of a company, then your rent, your assistant(s), your copy machine, etc. and all of the things that you need on a daily basis would be taken care of under the company’s overall operating budget.  A Producer’s overhead is not covered by the show’s operating budget, therefore the Office Fee was designed to help offset some of those expenses.  For an Off-Broadway show, the average Producer Office Fee is $1,000/week, but it can range anywhere between $500 – $1,500 week.  On a Broadway show, the average Producer Office Fee is approximately $2,000, but this can vary as well depending on the size of the production. The Producer Office Fee is usually paid to the Producers two weeks prior to the start of rehearsals.  Before that, you’re on your own.

The Producer Office Fee is traditionally split between the Lead Producers of the production.  If there are three Leads, then divide the numbers I’ve specified above by three, etc.  At times, secondary Producers (or other “above-the-title” Producers) also share in a portion of this fee.  In that case, the Producer Office Fee can sometimes be split many, many, ways.  I’ve been on shows where some Producers were getting $62.50/week.

If a show is in trouble, this Office Fee is usually one of the first to be waived.

2.  Producer Royalty

The Producer Royalty is similar to the royalty paid to the Authors or the Designers of the production.  It starts off as a percentage of the gross (customarily about 3%), but usually ends up converting to a percentage of profit through a royalty pool.  There are traditionally minimum royalties paid to everyone in the pool, and a 3% Producer Royalty would usually mean about $702 Off-Broadway and about $3,000 to $4,500 on Broadway per week.  The hope, of course, is that the show is constantly in profit, and that everyone in that pool is paid more than the minimums.

The Producer Royalty is split between Lead Producers as well, just like the Office Fee.  Three Lead Producers who are treated evenly on a $3,000 royalty would get $1k each.  And, usually on the bigger musicals, a portion of that Producer Royalty is split between a bunch of those other names above the title as well.

Unlike the other creatives, however, there is no advance paid on a Producer Royalty and the royalty begins with the first performance.

If the show is in trouble, creative royalties to all participants, including Authors, etc. are usually reduced, waived or deferred pretty quickly.

3.  Profit after Recoupment

This is the proverbial pot at the end of the rainbow for Producers.  Before a show has recouped, 100% of its profit (after the royalties specified above) goes to its investors.  After a show pays back its investors in full, profit is treated differently.  First, some folks usually take a sliver off the top (some General Managers, Stars, Authors, etc.), and then the remaining profit is split in two . . . half of which goes to the investors, and half of which gets paid to the Producers.  However, once again, this profit that gets paid to Producers once again gets divvied up, first to the Lead Producers, and then each Lead Producer pays a portion of his or her profit to all of the other big money raisers on the show.  Because the cost of producing Broadway shows is so great, Lead Producers usually “sub-contract” some of their financing, and in exchange for that, they have to give up some of their profit.  But this is the profit that all Producers are praying for, because if you can get a show to recoup, and run for years and years, and spin-off tours and subsidiary companies for years and years, this profit can help provide a financial foundation for your office and help you get future shows off the ground.
In all of the above, you can see how quickly Producer compensation can get diluted, especially if you’ve got a bunch of Producers helping you get your show up (which is becoming more and more the norm).  Now you know why so many Producer’s offices are smaller than the offices of their own vendors!

This dilution has caused the creation of a sometimes utilized fourth income stream known as the Executive Producer Fee and/or Royalty.

The EP Fee is a lump sum payment paid in production to cover the work on a project before it opens.  It can be $10k or $25k on a Broadway show, or whatever is appropriate and “budgetarily” responsible.  The argument for the EP Fee is that every other person on the production team is paid up front, from the Authors to the Director to the Production Assistant . . . so why shouldn’t the Producer be paid?  A CEO is paid, right?  A Managing Director?

The EP Royalty is usually a fixed amount that is paid directly to the Producer during operating weeks that was created in response to the fact that so many Producers had to give up their standard Producer Royalty to their major investors or other above-the-title Producers on the show.
It’s becoming more and more challenging to make money on Broadway as a Producer, as it gets harder and harder to recoup because of escalating costs, and because the traditional compensation streams are being tributized to so many other players.

But it still is possible.

But seriously, I don’t know a single Producer that is in it for the money, and you shouldn’t be either.

I laugh whenever people say that Producers are greedy, and money grubbing, etc.  That is an old stereotype that just doesn’t apply anymore.  Sure, there have always been a few bad eggs in any chicken coop, but if we were really in it for the money . . . we’d be in movies.

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“How much should I pay for an option?”

A great question comes from one of my readers on the left coast.

What do you do when, after spending years reading every script that comes across your desk and attending every festival in the free world, you finally find the holy grail of new shows!

Clear off your calendar, because you’re ready to sink the next few years of your life (and the next few years’ salaries) into getting this show off the page and onto the stage!

But before you book a theater, you better make sure you have the right to book a theater.  Time to option the property.

But how much do you pay?  Is there a third party appraiser?  A blue book for scripts?

The antiquated APC from The Dramatists Guild sets the first option for a new musical at $18,000.  Is that appropriate for you?

I don’t know.

It’s up to you to decide the value of the script and make an offer to the author or the author’s agent.

I’ve paid everything from $1 to $1000s when optioning material.  The answer to the question from the other coast is that the option amount differs depending on so many things, like:

  • What is the project?
  • Is it completed or just an idea?  A commission?
  • Who is the author?  What have they done?
  • What do you have planned for the project?  Broadway?  Off-Broadway?  Tour?  Foreign?
  • What is the potential commercial viability?
  • How many people are interested in it?
  • Was it your idea?
  • Etc.

I will say this when you’re thinking about what to pay.  Front money or seed money is hard to raise in the theater.  Unless you’re sitting on some giant corporate development fund, getting people to pay for early readings, workshops, etc. is hard, but that’s the money that is oh so necessary.

I often tell my authors and creatives that I try to keep my advances low so that I have more money to put into the shows themselves.  The hungrier authors are usually more than happy to forego a few bucks if it means a few more readings, or a few more rehearsals, or few more musicians.

We’re all making an investment in the early stages, and we’re all better served in having early money go into the show, instead of into a pocket.

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