Try to remember a more Fantastick investment.

Most articles about investing in the theater are all about how bonkers one has to be to put money in a Broadway or Off-Broadway show. Well, imagine my surprizzle when I read this article in the NY Times about the fantastic returns investors in the original Fantasticks have received over the last fifty radish-filled years.

The Times article details how the return of The Fantasticks has beat the S&P 500 over the last half-a-century, and helped one investor “put our three children through college.”

Some of my other favorite points in the article:

  • Smaller shows may make less in dollars than bigger shows, but the percentage return can be greater and the risk is lower.
  • The Fantasticks, one of the most successful shows of all time, had trouble finding investors, and struggled to get off the ground.  Its Producer almost closed the show on several occasions.
  • The original investors did it for love, not expecting great returns, just hoping “to earn our $330 back and get free tickets to a couple of performances.”

As I often tell my investors, goldmines like The Fantasticks are hard to find, but they are out there.  There is another Fantasticks, another Wicked, another August: Osage County being written right now (hopefully by one of you!).  If you learn the ins and outs of the numbers, only invest in what you love, and stay in the game for the long term, you’ll find one sooner or later.  (That’s the same advice famed mutual fund manager, Peter Lynch, would give you for picking stocks, by the way.)

Is investing in Broadway and Off-Broadway shows risky?  Yes.  I’m sure those original fantastic investors did what most producers encourage all their investors to do:  write a check that you don’t expect to see again.  But as I like to say, investing in shows is the riskiest investment you’ll love to make.

Congratulations on the anniversary, Fantasticks.  And thanks for being part of the data that demonstrates why entertainment should be considered its own asset class in everyone’s portfolio.

To read the NY Times article, click here.

5 Things I learned about South American theater.

For those of you who follow me on Twitter, you know that I took a trip way south of the border last weekend to South America.  I stopped in Santiago, Chile and Buenos Aires, Argentina to see productions of My First Time.

One of the coolest things about getting to travel to see these productions (besides seeing how each culture tackles this sensitive subject – and yes, there was full-on nudity in the Buenos Aires version of My First Time), is that I’m able to learn a little bit about how each corner of the world tackles theater production.

There are a few things that every country has in common:

  • Producing theater is expensive.
  • It’s hard to get the young audiences to come to the theater.
  • Actors are exactly the same, no matter where you are.  🙂  (And I mean that in the best way possible, I really do).

Here are five things I learned that are more specific to South American theater.

1.  Shows start late.

They eat dinner later then we do in South America, and they sure as churros start their shows later, too.  Most shows start at 9 or 9:30 PM.  And on 2 show days?  Expect that second one to start between 11:30 PM and midnight!  Afternoon matinees are rare.

2.  I saw advertising before I saw my show.

My host and I sneaked into a theater that was showing a Vegas-style Argentinean revue (with more full-on nudity), and right before the show started, about 5 ads played on a giant screen on the stage . . . just like at a movie!  While I was assured this was not the norm at all the theaters, I did notice a lot of in-theater advertising (liquor promotions…etc.).  You don’t see any of that in our theaters . . . mostly due to the contracts the theater owners have with Playbill, which prevents advertising anything other than what is in Playbill’s pages.

3.  Don’t want to pay rent?  Pay a percentage.

Flat rents for the performance spaces in Chile are unheard of.  Instead of paying a base rent and a small percentage, Producers get the space for free and then pay the owners 40% of the box office and keep 60% for themselves.  In Argentina, you have a choice between a flat rent and a percentage (which most producers opt for) which was closer to 70/30.  These percentage deals are why so many “Off-Broadway” shows are able to be produced in Buenos Aires and in Santiago.

Perhaps our theaters here could provide this option rather than sit empty?

4.  Sponsors are everywhere.

This isn’t new. Sponsors are a key part of commercial theater production in every other city around the world, except New York City.  But you know what was new?  American companies were sponsoring these shows in South America!  I saw 7-Up sponsoring an Off-Broadway venue.  Citibank paid for the naming rights to one theater and was a sponsor of several other shows.  Hey guys in ties . . . uh . . . have you tried looking in your own backyard if you want to sponsor theater?

5.  Why do 8 shows?

The standard number of performances for a big show down yonder averages about 6. They don’t have the audiences for 8, so they don’t do 8.  Some do 5.  Some do 6.  They shake it up depending upon demand.  Funny, isn’t it?  A country that has had one of the most fragile economies in the world, knows more about supply and demand than we do.
In addition to learning a lot about the theater in South America, I managed to squeeze in some sightseeing as well.  Can anyone name the building in the pic in this blog that has musical historical significance?

Ken Davenport
Ken Davenport

Tony Award-Winning Broadway Producer

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

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