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Sample Broadway Budget?

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It's All Good
Chorus Member
joined:2/5/06
Sample Broadway Budget?
Posted: 10/20/11 at 04:34pm
Anyone have an example of a Broadway budget they'd be willing to share? Its strictly for educational purposes.

Thanks!
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TheatreFan4
Broadway Legend
joined:8/12/09
Sample Broadway Budget?
Posted: 10/20/11 at 05:12pm
It's never same... It can range from less than $5 Million to over $75 Million (With Spiderman, without the max I've heard is around $30)
"Hi there, we represent The Broadway Better Business Players for a Better Tomorrow. We're trying to start a petition to get second rate shows taken off the marquee and with your help we can stop Mamma Mia from ever playing again." -Brad Jones in Suburban Knights

"Is it true you have Ralph Jr at the bottom of your purse in a jar of formaldehyde?" - Felicia
"No, but I wish I did so I could shove it down your throat!" - Bernadette

"This play is sh*t! This play is sh*t! F*CK YOU TERRENCE MCNALLY!!"- Patti LuPone as an angry theatre goer at 'Master Class'

"Being normal is VASTLY overrated..."
- Aggie Cromwell
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It's All Good
Chorus Member
joined:2/5/06
Sample Broadway Budget?
Posted: 10/20/11 at 05:42pm
Sorry, I should have been more specific. I mean an actual budget, as in the physical pages of the document someone drew up with line items and pre-production costs laid out.

Thanks!
temms
Broadway Star
joined:7/21/04
Sample Broadway Budget?
Posted: 10/20/11 at 06:01pm
Every show has two budgets - a Production Budget and a Weekly Operating Budget.

Production costs cover everything up to the first performance (plus some reserve) and Weekly costs cover what it takes to run a show week to week.

Items usually in a Production Budget:

Physical Production - includes all the materials to build the set and install it plus the salaries of the people working in Carpentry/Electrics/Props/Costumes/Automation and so forth. Usually runs in the 1-2 million range, or often higher.

Fees - these are upfront costs for people who are not paid a weekly salary, but a general fee for their work on the production. Director, Choreographer, Scenic Designer, and all their assistants. Usually runs to around 500K-750K.

Rehearsal and Audition Expenses - just what it implies, studio rental, script duplication, odds and ends. Around 100K-200K.

Rehearsal Salaries - everyone that's not paid a fee and works for the production. Actors (everyone gets minimum for rehearsals, generally - salaries bump up once performances start), Stage Management, musicians, PAs, General Manager, Company Manager, etc. Around 500K-750K.

Advertising/Publicity - spent at the discretion of the Ad people. A lot of leeway in this number, but it's usually in the 1.5-3M range.

Administrative - Legal fees, accounting fees, insurance, payroll taxes, office charges, Opening Night Party, etc. Around 1M.

Add all those up, and you have direct production costs - anywhere from 5-8M. That's how much money is spent to get the show to a performance.

In addition, you budget in Advances (for authors, directors, designers) which get deducted from future royalties so it's not money that's technically spent, it's money that's forwarded and will be recouped. You also have to post Union Bonds which cover two weeks of salary if you close the show and skip town; again, you get that money back presuming you pay everybody. You also budget in a reserve of anywhere from 750K - 2M to cover shortfalls that might come up. Again, that's not money you're technically spending, but you need to have it available just in case.

Add the advances to the direct costs, you end up with the total amount of money you need to capitalize a show, which could be anywhere from around $7M to $14M and beyond.

Then, you have your Weekly Operating Budget, which is a whole other budget. Headings in that budget:

Salaries - cast, stage management, and anyone hired by the production to work crew (there is a minimum number of "theatre crew" which comes under a different heading.) You also figure Health & Pension into all these salaries. It's a flexible number, in the $150K - $400K range.

Departmental Expenses/Maintenance - a small number that's added each week to Stage Management, music, costumes, etc. If you don't use it it accrues because some weeks nothing needs repairing and some weeks everything does. Usually in the $5K-$10K range weekly.

Weekly Advertising/Promotion - as much as you can afford. Figure $75K- $300K a week. This also accrues, so some weeks you might spend less and some weeks more. But it gets budgeted for every week.

Theatre Expenses - rent, utilities, Front of House, house crew, musicians (which are paid by the theatre and not the producers for complicated reasons), insurance, payroll taxes, etc. The theare (Jujamcyn, Shuberts or Nederlander) pay these expenses directly and are reimbursed by the producers. This number is usually in the $150K-$250K range.

Fixed fees - people who get a weekly fee, like the Music Supervisor, orhcestrator, set designer, casting director, etc. Whatever their agents have negotiated. Not a huge number, probably around $5K-$10K a week.

Administrative & General - things like the producer's office charge (money they get to cover running the production office), accounting, legal, insurance, postage, copying, phone bills, etc. $25K-$75K a week.

Total that up and you have your total expenses before royalties, which is usually in the $400K-$700K range.

Then you add in Royalties. Those are generally paid on net profits (however much you sell each week minus whatever your weekly expenses are.) There are minimum royalties if your grosses are bad. Most shows operate on a Royalty Pool - the Net Profits are split (40-60, maybe 35-65) between the Royalty Pool and the Investors. Royalty pool participants (authors, director, choreographer, producers, Equity Actors who participated in workshops) split the royalty pool money according to how it's been negotiated for that show - the only guideline is that the authors must receive at least 15.56% of the Net Operating Profits, regardless of how the pool is otherwise allocated.

Add the Royalty Expenses to the Weekly Operating Costs and you get your Weekly Breakeven. Royalties change from week to week depending on Box Office.

Leftover profits get distributed to the investors up until the entire Production Costs have been recouped (including advances and bonds and other "non cost" expenses). After 110% recoupment, 50% of each week's profits (after royalties) go to the investors, and the other 50% to the producers.

There is a third budget called a Recoupment Schedule that lays out all the variables, shows how much a show can potentially gross in a theatre, and how many weeks it will take to recoup based on sales (considering that theatre rent and royalties fluctuate weekly depending on sales.)

A budget packet will include all three - the Production Budget, the Weekly Operating Budget, and the Recoupment Schedule.

Then you have to actually raise the money, which is a whole other can of regulatory worms.

Hope that helps - I've never actually produced commercially, only studied it (I highly recommend the CTI Seminars on Commercial Producing, they're excellent and taught me the bulk of what I know) so if anyone wants to chime in and tell me how I've gotten everything wrong, feel free.

(My sample numbers may be a little low since I've not seen any recent budgets and I'm looking at old materials.)
LegallyBroadway2
Broadway Star
joined:8/19/10
It's All Good Profile Photo
It's All Good
Chorus Member
joined:2/5/06
Sample Broadway Budget?
Posted: 10/21/11 at 12:45am
Tha's an incredible link. Thank you!
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brettarnett
Stand-by
joined:5/2/09
Sample Broadway Budget?
Posted: 10/22/11 at 03:03am
temms you said, "Most shows operate on a Royalty Pool - the Net Profits are split (40-60, maybe 35-65) between the Royalty Pool and the Investors. Royalty pool participants (authors, director, choreographer, producers, Equity Actors who participated in workshops) "

What do you mean when you ay equity actors who participated in the workshops? So the actors who were in a workshop of Wicked gets royalties? Does the actor have to be a part of the final workshop, or the first? Or does it matter? I know it depends on which show, but ballpark, how much could an actor get from being in the workshop, in terms of royalties? If you could expand a little more on this it would be greatly appreciated!

ps. Clearly my mind is blown that an actor can receive royalties from a production they were never in, only a workshop.
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allofmylife
Broadway Legend
joined:3/8/05
Sample Broadway Budget?
Posted: 10/22/11 at 03:05am
Temms, you mentioned that all shows have two budgets. Please remember that all Garth Drabinsky shows allegedly had three budgets.....
http://www.broadwayworld.com/board/readmessage.cfm?thread=972787#3631451 http://www.broadwayworld.com/board/readmessage.cfm?thread=963561#3533883 http://www.broadwayworld.com/board/readmessage.cfm?thread=955158#3440952 http://www.broadwayworld.com/board/readmessage.cfm?thread=954269#3427915 http://www.broadwayworld.com/board/readmessage.cfm?thread=955012#3441622 http://www.broadwayworld.com/board/readmessage.cfm?thread=954344#3428699
temms
Broadway Star
joined:7/21/04
Sample Broadway Budget?
Posted: 10/22/11 at 11:53am
If the workshop is an official, by-the-contract Equity Workshop (and not a 29-hour reading that producers call a "workshop"), then it is stipulated that all the actors who participate share in a royalty. If "Wicked" did a workshop (or multiple) under the Workshop Contract, then yes, all of the actors who participated receive a small royalty whether or not they continued on with the show. I'm not sure about "Wicked"'s development so I don't know for sure, but I think they did.

I believe that the number falls somewhere in the 2.5% range of the net profits (usually 1% of the royalty pool), and it's split equally among all participating actors. It goes for as long as the original producers' rights on a show (generally for 10 years past the closing of the original production.)

It's not very much, usually, but it's nice for actors to receive a little bit of continuing compensation if something they were involved with for little pay early on while it was being developed goes on to be a success.

But again, a lot of people call something a "Workshop" that isn't really. A workshop is a 4-week process that culminates in presenting the show staged, off-book, with no physical production and actors are paid a nominal salary. A 29-hour reading means the entire process (rehearsal and presentation) cannot last more than 29 hours and actors receive a $100 stipend plus transportation reimbursement.

I had producers do a reading of my show, and then try and claim that they had done a Workshop and should receive royalties. My lawyer shot that one right down, but they're far from the only producers who have tried to pull that trick.
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gvendo2005
Broadway Legend
joined:5/1/05
Sample Broadway Budget?
Posted: 10/22/11 at 11:58am
Drabinsky's third budget could be labeled "Never Show to the Tax Authority."
"There is no problem so big that it cannot be run away from." ~ Charles M. Schulz
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allofmylife
Broadway Legend
joined:3/8/05
Sample Broadway Budget?
Posted: 10/26/11 at 11:42pm
It had two titles. The second was "NEVER SHOW TO THE TAX AUTHORITY!!!!!"
http://www.broadwayworld.com/board/readmessage.cfm?thread=972787#3631451 http://www.broadwayworld.com/board/readmessage.cfm?thread=963561#3533883 http://www.broadwayworld.com/board/readmessage.cfm?thread=955158#3440952 http://www.broadwayworld.com/board/readmessage.cfm?thread=954269#3427915 http://www.broadwayworld.com/board/readmessage.cfm?thread=955012#3441622 http://www.broadwayworld.com/board/readmessage.cfm?thread=954344#3428699

 
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