Should the critics have reviewed Spiderman?

I don’t know about what happened at your home, but as soon as that first review of Spider-Man hit the ‘web’ Monday night, my phone started ringing, my twitter started tweeting, and things I didn’t even know I owned started buzzing.

It was a social media cyclone.

And unfortunately for Spider-Man, that cyclone did some serious damage.

But the big question on everyone’s tweets was not how a $65 million dollar musical got such bad reviews, but should the critics have thrown their stones now, or should they have waited?

There has always been a gentleman’s agreement in the theater that reviewers don’t come until they are invited.  And that agreement has held up over the years, except for a few instances, mostly involving high profile out-of-town productions.

But not this time.

Why?

Well, come on Spider-Man, you’ve got super-human powers.  Surely, you had to see this coming.  You’ve been in previews longer than it takes an actual spider to spin a web.  Did you expect them to wait much longer?  Especially with rumors circulating that you were never going to open, and especially since the business you were doing didn’t seem to incentivize you to open any sooner.  When you’re doing 1.2+ million, who cares if you’re open or not, right?

Well, the critics do.

And Monday, they had enough.

And I can’t blame them.

I give them a lot of credit, actually.  Instead of just a free-for-all of reviews starting to come out randomly, they obviously got together and orchestrated this release together.  It was a calculated strike (which is the kind that does the most damage).  And the reviews came the day after the show was last supposed to open, which is a logical, rational, and defensible date to use.

So, good for them.

If I was a Producer, I might not like it, but I had to expect it (and evident by the typical post-opening radio spots and other media that ran this morning, these Producers did expect it).

All that said, you know what the real question I was asking after I read the reviews?

It wasn’t how a $65 million dollar musical could get such bad reviews.

It wasn’t whether or not they should have been reviewed it or not.

It was, “Will the reviews matter?”

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PLAY “WILL IT RECOUP?”  CLICK HERE!  PLAY TODAY!  WIN A KINDLE!

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The “Will It Recoup” winner announced! Did you win a Kindle?

Last Sunday saw the closing of Lend Me A Tenor, our last hold-out of the limited-run plays from this Spring season.

Sadly, my sources tell me that Tenor didn’t manage to turn to profit.

The only good news is now that we know, we can finally crown the winner of this year’s Will It Recoup!  (If you’re new to the blog and don’t know what-the-fiduciary-responsibility we’re talking about, click here for the original post.)

Someone is taking home a Kindle.  Is it you?

Here’s how the final profitability tally looks:

A View from the Bridge: RECOUPED!
The Miracle Worker: Did NOT recoup.
A Behanding in Spokane: Did NOT recoup.
Next Fall: Did NOT recoup.
Looped: Did NOT recoup.
Red: RECOUPED!
Lend Me A Tenor: Did NOT recoup.
Fences: RECOUPED!
Enron:  Did NOT recoup.

THREE winners in the bunch out of nine entries!  A 33% success rate this Spring!

Who says Broadway is a risky place?  You just gotta know how to pick ’em right?

And you certainly do.

A total of NINE of you scored a 100% in this year’s contest (boy, would you made some bank if this wasn’t a virtual-investment game).

The winner of the Kindle can down to the tiebreaker question:  Which of these shows would win the most Tony Awards?  (Answer:  Red)  After adding that criteria, the nine were cut down to a field of TWO.

So, we’re going to pull a Solomon and cut the Kindle in half to see who really wants it.

Naaaaah.  We’re going to give away TWO!

Congrats to Howard and Zach on their play.jpgckin’ prowess!  You’ve both won a Kindle!

Look for an email from me with details.

And for the rest of you . . . well, there’s always next year.  Picking winners isn’t a one season game.  There’s always another year . . . whether you’re playing a game, or producing for reals, yo.

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.

How does a Broadway Producer get paid? (Updated 2018).

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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If you enjoyed this talk about producing, read my post How to Lead an Army of Producers for more depth into the producing field!

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Stock and Amateur is the way to a “living” . . . but for whom?

There was a great article on the front page (!) of Variety this week (it’s rare that a theater story gets the cover) about the life after Broadway for musicals that may not have been so well received by The White Way.  (To be honest, the article seemed like a byline from a Dreamworks exec, because the article began by stating how DWorks was set to recover a chunk of their $26 million capitalization through national tours and high schools, therefore not making the past year and a half a total loss.)

The article went on to give specific examples of how a bunch of theatrical writers have earned a great deal of cash from shows that, for lack of a better word, flopped on Broadway.  Some of the shows mentioned were All Shook Up, Footloose, Seussical, and The Wedding Singer. 

Apparently, the success of the post-Broadway life of these shows has afforded the very talented writers of these musicals to keep on keeping on as theatrical writers.  Let’s all be thankful this Thanksgiving week for that!  Good writers writing is better for all of us.

But there is one thing about the article that bugged me a bit.

In the third paragraph, the author writes . . .

Community theaters and high school productions don’t produce the instant big bucks of Broadway and tours, but the royalties paid to creatives, producers and investors are pure profit . . .

Uhhh, hold up.

Profit to Producers?  I’m not so sure about that.

Let’s break down how this works a little more specifically.

Producer finds show.  Producer produces show.  Show fails on Broadway for what could be one or several of a billion reasons:  bad show, bad producing, bad timing, bad whatever.  Whatever the reason, investors lose millions.

There is much sadness.

(Now here’s where the Variety article comes in.)

Stock and amateur rights are sold to a company like Samuel French or MTI.

In most cases, the Authors receive 60% of all monies.  The show receives the other 40%.  (Sometimes this can be 70/30 or 50/50, depending on the number of years this agreement is in place.  At some point, however, the Authors will receive 100%).

So where does that 40% go?  Well, if the show has not recouped, then it goes straight to the investors in an effort to get them paid back.

In the case of most flops, as evidenced by the article’s description of the current financial situation of Footloose (hasn’t recouped despite healthy licensing), the shows still never recoup.

Since Producers only really make money when the shows recoup, this means that despite taking the risk in the first place, despite mounting the production that got the Stock and Amateur companies interested in the first place, the Producers get zip.

Doesn’t that seem a bit counter-intuitive?

And what if I added to this fact that it has become more traditional lately that Directors (on original musicals, mostly) get a piece of the S&A for their contribution to the long term viability of the show?

So here’s my question . . .

It truly is fantastic that the S&A money can keep our writers writing by helping to pay their rent or buy a 2nd home.  I want these guys working on shows so I can produce them.

But if the Producers aren’t getting anything to help pay their rent after a show flops, what is keeping them Producing?

Is this one of the main reasons why there are more career writers than career Producers?

Here’s my proposal:

Producers should get a small negotiated percentage (the exact number to be determined based on who originated the project, how much was completed before the Producer came on board) of all monies received by the Authors from stock and amateur . . . until recoupment.

I don’t want it forever.  If a show recoups, I’m good.  Keep it.  We’re all gonna be ok.

But if it doesn’t, Producers deserve a small piece to help keep them in the game.  Just like we are all better off with writers writing, we’re all better off with Producers producing.

Otherwise, Producers who produce shows that cost them money, time and investors (ever tried to raise money from a group of people after a show flops?), aren’t going to be too happy reading articles like this one.

If you were a Producer on one of the shows mentioned, how would you feel?

 

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