What causes shows that have recouped to close?

kade.ivy
Understudy
joined:7/28/13
POTENTIALLY STUPID QUESTION ALERT

I realize that this may be a stupid question, but it's something I've been wondering. Why do shows that have recouped their investments and run for years eventually close? Do the running costs become too much? Do the producers want to move on to something else? Thanks!
dramamama611
Broadway Legend
joined:12/4/07
Producers usually have many things going on at once, it's not like a long running show needs constant supervision.

A re-couped show closes for the same reason ANY show closes: it fails to make money. Usually that means the grosses drop low enough that they aren't covering their expenses. No one wants to put money BACK into a show. If it can't pay for itself, it closes.

Remember, the producers don't look just at the current few weeks, they look at their advance as well.



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Updated On: 12/26/13 at 07:49 PM
kade.ivy
Understudy
joined:7/28/13
That's what I figured. So even after it pays back its investors, it has to make enough money to run each week. Thanks!
dramamama611
Broadway Legend
joined:12/4/07
It's more than paying BACK their investors, those investors want to make a profit, too. It's not a benovelent enterprise.
If we're not having fun, then why are we doing it? These are DISCUSSION boards, not mutual admiration boards. Discussion only occurs when we are willing to hear what others are thinking, regardless of whether it is alignment to our own thoughts.
nosmallparts
Swing
joined:12/27/13
Perhaps more than the producers decision, especially for a long running show, it is the THEATRE OWNER that activates the clause if the show falls below a minimum gross to push the show out--to make way for a show that the theatre owner thinks/hopes will gross more.
felipenor
Chorus Member
joined:11/23/13
So the theater earns according to the number of tickets sold, instead of a fixed amount every month?
dramamama611
Broadway Legend
joined:12/4/07
There is a fixed minimum. Most agreements state that if they fail to meet that minimum for (any) two weeks, they can be evicted. It doesn't automatically happen, however, it is at the management's discretion.
If we're not having fun, then why are we doing it? These are DISCUSSION boards, not mutual admiration boards. Discussion only occurs when we are willing to hear what others are thinking, regardless of whether it is alignment to our own thoughts.
GavestonPS
Broadway Legend
joined:6/10/12
The posters above are right, but there have been exceptions: Hal Prince kept FIDDLER ON THE ROOF running at a loss for a couple of years in order to surpass HELLO, DOLLY! and become the longest running musical up to that that date. Prince even went so far as to report false earnings to VARIETY to cover up what he was doing.

I assume his investors didn't notice because they had made so much money on the show.

Obviously, it is a very rare show that would run long enough to even be in such a position.
broadwaydevil
Broadway Legend
joined:2/16/11
It's actually fairly common for theatres to choose not to exercise the stop clause if shows aren't paying the full fixed minimum because as long as it's meeting the theatre's costs, it's better than nothing when the alternative is to sit empty. In busier seasons with shows looking for theatres like this one, I'd imagine it's more common that a show failing to meet its minimum will be forced to close with the hope that they'll get a booking and fill it with something that's more profitable.
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HogansHero
Stand-by
joined:2/26/12
Devil is correct that stop clauses are rarely invoked. For one thing, producers don't want to run shows at a loss (at least rarely) although there are times when there are legitimate disagreements about a show's future prospects-never more so than right at this time of year. For another thing, because most producers want to get a theatre again, they are reluctant to overstay their welcome, without the need of exercising the stop clause. Lots of times, though, shows that are marginal end up closing because of casting: the successful cast leaves, the replacement cast is ok but not as strong, and then you are facing recasting yet again, and it just feels like the wind has come out of the sails.