Broadway Investing

[Daddy Warbucks]

Posted: 7/25/14 at 12:09pm

How can I find out which shows are trying to raise money for a broadway run? Is there a website or resource out there that gives information about broadway bound shows, including who to contact if an accredited investor is interested in investing? Ideally I'd like to know about EVERY show that is raising money and then try to pick and choose what I believe will be the better bets.

[Michael Bennett]

Posted: 7/25/14 at 1:14pm

The Theatrical Index is your best bet to keep abreast of shows in development for commercial production (including lead producer information). If there were a title that interested you for financial investment, I'm sure any of the lead producers would be happy to hear from you.
Theatrical Index

[TheaterBoy7777]

Posted: 7/25/14 at 1:51pm

Ken Davenport has some seminars ypu might check out
https://theproducersperspective.com/seminars-2

[Daddy Warbucks]

Posted: 7/25/14 at 6:53pm

Thank-you both for the responses. I checked out the theatrical index but couldn't find what I was looking for there. Maybe I need to do some more searching or contact them. I was only looking at the online version and perhaps the paper version has additional content.

One show I would love to invest in is the likely Miss Saigon reboot run on broadway. Does anyone know if Cameron Macintosh usually just funds these alone, or if he takes on investors?

[SomethingPeculiar]

Posted: 7/26/14 at 12:51am

Write to some of Broadway's leading producers directly and let them know of your interest. That info you should be able to find in the Theatrical Index.

I HIGHLY doubt Cameron Mackintosh is looking for investors.

[averagebwaynut]

Posted: 7/26/14 at 1:33am

You're not going to find a website or other public resource that lists the info you are looking for. I am not a lawyer but I'm nearly certain it would be illegal -- absent a public offering a la "People of Godspell" -- for producers to "advertise" for investment in that fashion.

The earlier advice is sound -- look at Theatrical Index or comb through news sources to find out what shows have already been announced for the coming season and if one of them suits your fancy, reach out to the office of the lead producer or to the GM (who can put you in touch with the producer). The contact info for most major producers and/or their GMs is in Theatrical Index. As long as you're willing to invest at least $25,000, most of them will be happy to have you (some may accept smaller investments; others may require higher minimum investments -- but $25K is reasonably typical).

[blaxx]

Posted: 7/26/14 at 4:10am

Write to some of Broadway's leading producers directly and let them know of your interest.

Unless you want to invest on Rebecca. Please, don't write them directly...

[RaisedOnMusicals]

Posted: 7/26/14 at 10:13am

This is a more complicated question than it appears to be, because we don't know the level of investment you're talking about. There are a small number of Broadway producers who bundle relatively small investments (on the order of $15-25,000 per unit)in a Broadway show, so that's one side of the story (the small investor side), and then there is the side where you'd be talking a minimum of a $100,000 investment. The groups that solicit the small investors will often send out promotional material to certain mailing lists, such as people who order full price tickets on line for several shows a year. I don't know how "major investors" are solicited other than by word of mouth.

Having said that, I have a very close friend who has invested about $100,000 over the past five years or so in small units, so it's been maybe seven or eight shows, treating it as a diversified portfolio, so to speak. He knows that I love theater, so he discussses his successes and failures with me regularly (his most recent failure being "Bullets"). The bottom line is that he's sort of come to the conclusion that "investing" in a Broadway venture is either for the incredibly rich (he's not) or for the criminally insane (no comment), as he's probably lost 70-80% of his money over this time period. Many of the shows he's put money into have resulted in a total loss. His line to me: "Why invest in something that is so high risk when SUCCESS is measured by whether or not you get your money back?"

But we've also talke about the positives, which are primarily psychological. He loves the theater also, and it's clearly exciting to be investing in a show. Most of the time, even the very small investors get to go to Opening Night parties, and they have access to house seats (at full price, of course.)

And then there's the tiny chance that you'll catch lightening in a bottle, i.e. "Wicked" for example, where investors are getting their money back every year the show is open (and no, he wasn't that lucky, obviously). But we all know how rare those raging hits are.

Specifically, there is one show that is actively soliciting small investors now as the prodcuers are trying to get it to Broadway, and that's Flashdance (I know that because my friend was solicited, and if you want more info, PM me and I'll see what I can find out, though to me, that would be about as high risk as you could go.)

Updated On: 7/26/14 at 10:13 AM

[g.d.e.l.g.i.]

Posted: 7/26/14 at 10:39am

One important thing to establish is whether or not you understand what a risk an investment in a Broadway (or Broadway-level) show may be. Currently, statistically, the rate of failure is incredibly high, with 99% of projects doomed to a void not unlike limbo. The odds are 1 in 100 that you get somewhere based on your investment. You're going to be (more than likely) kissing your money goodbye. This type of thing is defined as a "high risk investment" for a reason.

And for the love of God, don't touch Ken Davenport. I'm still shocked he managed to get away with that "People of Godspell" bull****. Nobody who's real wants anything to do with him, on that you can trust me. (And Namo will be here in three... two...)

[ScottK]

Posted: 7/26/14 at 10:58am

First off--99% do NOT lose money
80% fail to recoup--which means that tho you many not get back ALL of your money, you might get back SOME of your money.
It is a highly risky investment.
I've been investing for over 10 years--mostly on bway, with a few off bway.
My track record is about 50%--yes Ive been fortunate to catch the "lightening in the bottle" a few times.
Right now, the minimum investment seems to be $25k for most shows. Occasionally a producer has a smaller piece of $12.5k. For "big" shows that seem like "slam dunks" you might be asked for $50k. The 100k level brings you close to associate/producer level--not investor level.
Since you already know you want Miss Saigon--contact the office directly.
There have been numerous times, I've been told "we dont need/want your money."--tho it stings, it certainly is understandable--so just be prepared for it.
For upcoming shows, get the Theatrical Index, read playbill.com, and the various message boards--and contact the producers directly.
If you want to be truly proactive--contact the producers NOW of shows you've liked in the past, and ask if they have any upcoming projects in the near future.
Also, be prepared to get hooked on this TRULY--it IS addictive.
Start saving your $$--Welcome to the club!
And feel free to PM if you'd like

[AntV]

Posted: 7/26/14 at 11:01am

How can I invest in It's Only a Play, The River, The Elephant Man, and A Delicate Balance? Basically, shows that are guaranteed to recoup.

[ScottK]

Posted: 7/26/14 at 11:04am

Tho I realize your post is meant for "fun", you'd prob need to have been investing a while
I was asked for 2 of those shows.
I was turned down for 1 of those shows.
I did not have enough brains to consider 1 of those shows.

[Daddy Warbucks]

Posted: 7/26/14 at 11:08am

These are fantastic responses. Thank-you everyone. I do understand the high risk of not just losing money, but losing all the money. I'm looking to (via an LLC or series of LLC's I am creating) invest, along with friends of mine, initially $25k per show, but eventually $100k+ per show, and hopefully do about 5-10 shows a year. Goal #1, have a good time being involved in something I love. Goal #2, network and perhaps eventually get into lead producing shows myself or getting my personally written musicals produced. Goal #3, break even (mainly so that I can keep investors on board and having fun -- like a sport, it sucks to be on a team that loses every time they play). Yes, I realize the odds of breaking even are not good, but (a) I am going to do everything I can to invest in shows that I believe in that will be winners, and (b) I believe I know what makes a successful musical.

So my major concern is that I am going to get derailed on Goal #3, because I am only getting access to the super high risks that no one wants, and I'm not hearing about the more "surer" bets. It sounds like I need to get in touch with producers via the theatrical index and get my name out there so I get on more of these email lists and will be contacted when opportunities arise.

[g.d.e.l.g.i.]

Posted: 7/26/14 at 11:09am

@ScottK: I didn't say 99% lose money. I said 99% never happen, period, for a variety of reasons. Hell, maybe they don't even get to a stage where they can make money, let alone lose it (or at least more of it than is already lost on the developmental phase).

@Daddy Warbucks: If you're looking for a "sure thing," theater is not the place for you. As William Goldman famously said of Hollywood in his book Adventures in the Screen Trade, "Nobody knows anything...... Not one person in the entire [...] field knows for a certainty what's going to work. Every time out it's a guess and, if you're lucky, an educated one."

Updated On: 7/26/14 at 11:09 AM

[Daddy Warbucks]

Posted: 7/26/14 at 11:17am

@g.d.e.l.g.i., regarding "sure things" I put it in quotations as more tongue in cheek than anything. You have to admit that there are some things that are higher risks and some things that are better risks. I'm looking for the latter. Your 99% number might be right if I were looking to invest in the small time development projects that may never go anywhere, but I'm ONLY looking to invest in shows that are just a half step from broadway and needing to raise the $8-15m. Those ones, I hear, are more like ScottK's experience, where you sometimes lose it all, sometimes get something back, maybe one in five recoup, and once and a while you might get lucky and find the next Wicked.

[Michael Bennett]

Posted: 7/26/14 at 11:48am

Warbucks -- those are indeed the heavy, high risk projects and if those are the ones that appeal to your sensibilities, than I saw God love you and go for it. Just to reiterate what others have said - there really are no sure bets on Broadway - the possible exception being the $3.5 million dollar capitalization for a limited run straight play starring Al Pacino or Hugh Jackman - and those are going to be for the most part 'closed' club - meaning lead producers are going to give the option of investing in those projects pretty exclusively to their loyal, long term investors.

But none of the big musicals are a sure bet. Not even a revival of MISS SAIGON.

[Daddy Warbucks]

Posted: 7/26/14 at 12:39pm

Thanks MB, that makes sense. I guess a goal would be to get involved enough that I eventually get on the short list of those invited to invest in shows that are perceived to be less risk. Surely we can all agree that even if ALL shows are very high risk, that some shows present higher risk than others.

ScottK, on the shows you have invested in, how often have you followed up your investment by investing in the national tour? Do you find the tour's that you've chosen have been more or less likely to recoup than the broadway run investment? I have heard that investing in the tour is viewed as slightly less risky, but also doesn't have the same potential upside. And yes, I realize that it's harder to get in on a tour if you weren't one of the investors in the initial run.

Updated On: 7/26/14 at 12:39 PM

[ddenoff2]

Posted: 7/26/14 at 12:46pm

Feel free to send me a private message.

[Michael Bennett]

Posted: 7/26/14 at 1:11pm

Warbucks -- one last parting thought -- I think what is an equally (or perhaps) more important mantra for an aspiring investor - rather than trying to predict "less risk" : pick shows you believe in. Pick writers you believe in. Pick producers you believe in. Especially if you are trying to build a long term career as a producer/investor. I think that will ultimately serve you better than anything.

Broadway is an elusive beauty. On paper, what could seem less risky than BULLETS OVER BROADWAY? Or the latest musical from Andrew Lloyd Webber, or Disney? Or a revival of THE SOUND OF MUSIC or OKLAHOMA? And yet...Flops...

Trying to predict 'lightning in a bottle' is impossible. Nobody thought WICKED would run six months, let along ten years. JERSEY BOYS came in completely under the radar. CHICAGO was a revival of a border-line flop from the 1970s. Nobody in their right mind would think (on paper) material for a musical like ANNIE, CATS, EVITA or LES MIZ could possibly succeed. If you had said, 'sure bet' at the early investment level of any of these projects, most would have laughed in your face.

Just go for what you love. That way you can live with yourself whatever fate the show receives.



Updated On: 7/26/14 at 01:11 PM

[HogansHero]

Posted: 7/26/14 at 1:45pm

Daddy-be careful. The LLC you are describing would require securities law compliance.

Scott-re wins vs losses. For fairly broad based investing on Broadway, the upside has no limit and the downside does. Although, obviously, you always want to pick the winners, one can afford a large number of losses if one picks the BOM's and Wicked's. As you note, of course, the more sure things are the ones where larger minimums and more selective producers are going to be in evidence. Once again proving the rich get richer etc

[RaisedOnMusicals]

Posted: 7/26/14 at 2:22pm

Read what Michael Bennett says again and again. Every word is true.

And when you invest in a show, it's not like investing in a stock, where you can "stop loss" your investment at any level of risk you can tolerate. In other words, if you don't want to lose more than 20% of your money, you can sell at around that point should the need arise. But with a show, in for a penny, in for a pound. You risk your entire investment, period. You can't cut your losses.

So MB is correct--if you're gonna invest, invest because you love something (or lots of things)about the project, because no matter how good it looks on paper, sadly, one devastating NYT review can turn everything around in a heartbeat.

[ScottK]

Posted: 7/26/14 at 6:25pm

Going back to the tour question/aspect:
These days most tours are separate corporations and are offered to the original investors first. There are some tours that are part of the original Bway corp and you'd be automatically "invested."
As for the bway shows that I invested in, that had tours as addl investments, I have invested in all of the tours--all of those investments recouped, made money.
I am in a current Bway that has announced a tour--and it may actually be the first one I will not invest in. The bway show has been slow to recoup, and I'm a bit leary.
However, I did just invest in a tour of a Bway show that I declined (it was more of a timing/$ availability issue).
It is all a big "crap shoot."
Topic--your investment LLC--as someone clearly said BE CAREFUL--there are many laws governing such an enterprise--and I hear it is quite onerous.
BTW, one of my "sure bets" this season has only returned 40%--and I hope to get to 50% once the dust settles.
NONE of this is to dissuade you.
It is fun, challening, and again, ADDICTIVE.
Also, since you seem to aspire to Lead Producer status, Id HIGHLY suggest you take the 3 day CTI producing seminar, so once you graduate that, you can proceed to take the 14 week CTI course, where you can network your brains out (which was immensely helpful TO ME).

[ScottK]

Posted: 7/26/14 at 6:32pm

You might also consider the classes/events at TRU (Theatre Resources Unltd)
and join the theatre investment groups on LinkedIn

[Daddy Warbucks]

Posted: 7/26/14 at 7:17pm

@Scott, great suggestions. PM'ed ya (let me know if you didn't get it). Curious to hear about the recent tour you declined and the thought process there, given your other successful experiences with tours.

In terms of securities laws, I'll have to do some research. Obviously my plan would be to only bundle with accredited investors. But is it still a landmine even when exclusively dealing with accredited investors?

[HogansHero]

Posted: 7/26/14 at 8:13pm

Daddy-Everything is a landmine if you do things without planning and advice. Almost nothing is as long as you get someone competent to guide you. When I said be careful, I just meant don't do what lots of people do and just assume all you need is a do-it-yourself LLC kit and you're good to go.