Favorite Quotes Vol. XXV: The definition of frugality.

The biz page of The NY Times had an interesting article the other day about pharmaceutical giant Teva, a company that doesn’t have the brand name of a Pfizer or a Merck, but is the biggest generic drug maker in the world.

The opening of the article described how its competitors’ (mentioned above) executives both had private planes to shuttle them on both corporate and personal trips.  The CEO of Teva, however, flies commercial flights when traveling domestically in the US and when he heads overseas?  He flies business, not first.  And Teva is a company with a market capitalization of 51.92 BILLION bucks!

There were two quotes that jumped out at me that all of us can learn from.  The first was from Ronny Gal, an analyst at Sanford C. Bernstein who said this about their travel methods: “The day they get their own plane, is the day I downgrade them.”

But it was William S. Marth, the biz class travelling CEO who said the sound bite of the article for me.

When describing the company’s incredible success over the past decade (their profits have jumped from 135.5 million to a whopping 2 billion dollars), along with his business practices up and down the balance sheet, Mr. Marth had this to say . . .

“Frugality doesn’t mean doing less.  It means doing as much or more with less.”

There’s a big difference between cheap and frugal.

You don’t want to be cheap.

But when faced with a business that has economics like ours, frugality is a necessity.

Surprise, surprise! A show recoups sans star!

Here’s something that you probably didn’t expect to hear (I know I didn’t) . . .

Next to Normal recouped its investment.

Crushing current conventional Broadway wisdom, this non-spectacle, non-star-driven musical about a woman suffering from bipolar disorder fought through a steady rain of a season and made it into profit.  Oh, and it did it in a pretty timely fashion (the recoupment was announced exactly one year from the show’s first preview).

Super kudos to everyone involved in this production who fought the biggest of uphill battles getting into the black.

How did they do it?

IMHO, there are three reasons why N2N recouped:

1.  A killer score

I’ve said it before but I’ll say it again, when the root word of musical is ‘music,’ there’s a lot riding on that score.  Normal‘s score is so fantastic and fresh, it took down the mighty Elton John and won a Tony.  Nothing spreads word of mouth faster than great tunes.

2. A “committed” team of Producers and Creatives.

Does anyone remember that in addition to trying out at the NYMF in ’05 under the title Feeling Electric, the show came into New York to soft response at Second Stage, then left New York for DC, then came back to NY?  That’s like showing up at a party underdressed, leaving, and coming back a few hours later in a new outfit like nothing happened.  But something did happen, alright.  The team worked their tails off.  It took faith and a giant set of grapes to do what they did.

3.  A low capitalization and even lower running costs.

A Broadway musical for $4 million bucks, even with all that development?  That’s the way to do it.  To tell its intimate story, N2N didn’t need a chandelier and a helicopter.  More importantly, everyone on the team obviously knew that this one wasn’t going to be easy, so they structured it to make economic sense given the material, and now everyone is making a lot more dollars and cents.
The recoupment of Normal on Broadway in this environment is a major event.  It demonstrates that smart material and smart producing can yield positive results, despite what we think is our audience’s appetite.

So when everyone is telling you that your show won’t work, you should remind them that a trend is a trend . . . until one show changes it.

And that show might as well be yours.

You can read all about the recoupment in Patrick Healy’s New York Times article here.

A fancy “futures” version of “Will It Recoup?” for Hollywood.

Cantor Fitzgerald is betting that there are a lot of people that want to be a part of the movie biz.

Last week, the New York Times announced that the financial firm is in the final stages of approval for a futures exchange on the success (or lack thereof) of Hollywood movies.

Here’s how it’ll work:

Think the new Will Ferrell movie will bring in $100 million during its opening weekend?  Buy a $100 million contract for 100 bucks.  If it does $150 million? You make $50.  If it does $50 million?  You lose $50.

Fun, right?  CF has been testing the potential interest in this market on its faux site, HSX.com, which allows you to play fantasy Hollywood with fantasy dollars. Check it out here.

Obviously the test went well, because they are proceeding full speed ahead and expect regulatory clearance on their actual exchange on April 20th.

The execs at CF expect participation from studios (a hedge against their own films?), institutions, and movie lovers who want who want to put their money where their mouth is. As Richard Jaycobs, the president of Cantor Exchange said, “I’ve worked in the futures industry for a long time and none of the products has the overall appeal that this does.  This just has a tremendous potential audience.”

Think we can get them to create a Broadway Futures Exchange next?

I’d put my money where my e-mouth is that there’s a tremendous potential audience for Broadway investment involvement as well . . . it’s just that most people don’t know how to be involved.

– – – –

Until they do create that exchange, we’ve got ‘Will It Recoup’ . . . and to give you a quick update, we did put one in the YES column when A View From The Bridge announced.  Other than that, it’s still anyone’s game (although there are a few shows out there that are unfortunately already on the brink).

What a difference a year and a half makes at Hair.

Ok, it’s time to take a scroll down blogger lane to re-read this entry I wrote in August of ’08, after I attended a production of Hair in the park, pre-Broadway.

The entry is about how I got busted by Tibor, the fascist usher, for taking a still photo on my iPhone of the post-curtain call dance party.

Read it, then come back.

Now, jump into a time machine to present day and read in this New York Times article how Hair just jumped from the ’60s to 2010 by striking a radical agreement with the unions that allows the show to shoot the dance party on video, and then post it on their website for sharing, and tagging, and more, oh my!

Unique events are what is working on Broadway.  Hair just took its most unique quality, and bottled it up for everyone to see and share.

Super shout-out to Joey Parnes, the GM who fought for this, the Unions, for understanding that giving up a little control gains us so much more in marketing and therefore future employment opps, to the Producers for the big five-figure investment, and to Damian Bazadona and the guys and gals at Situation Interactive, for continuing to push our industry to utilize technology to solve our marketing dilemmas.

Oh, and one more shout out . .

Take that, Tibor!  Na-na-na-na-na-nah!

———-

PLAY “WILL IT RECOUP” TODAY!  Only 4 days left!

Click here to play!

Ken Davenport
Ken Davenport

Tony Award-Winning Broadway Producer

I'm on a mission to help 5000 shows get produced by 2025.

Featured Program
The TheaterMakers Studio
Featured Product
Be A Broadway Star
Featured Book
Broadway Investing 101
All Upcoming Events

april, 2020

06apr8:00 pm9:00 pmTMS Coaching Call with Ken Davenport

08apr12:00 pm1:00 pmTMS Coaching Call with Valerie Novakoff

20apr8:00 pm9:00 pmTMS Coaching Call with Eric C. Webb

22apr4:00 pm6:00 pmApril Producer Pitch Night (Virtual)

Featured Webinar
Path to Production Webinar
Advertisement
X