Hamilton's 10M Advance

[neonlightsxo]

Posted: 3/19/15 at 4:01pm

I think this quiets everyone who said it wasn't commercial enough.
http://artsbeat.blogs.nytimes.com/2015/03/19/hamilton-off-to-hot-start-at-broadway-box-office/?_r=1

Way to go.

[Just_John]

Posted: 3/19/15 at 4:16pm

That is insane! I was just about to post this. I remember after In the Heights had announced a broadway transfer it was still super easy to get a rush ticket at the last minute. Really happy for Lin, he deserves this success. He should write a score for a Disney movie!

[Bwaydide92]

Posted: 3/19/15 at 4:19pm

So the show has nearly recouped its investment and it hasn't even started rehearsals? That's pretty incredible.
Updated On: 3/19/15 at 04:19 PM

[Kad]

Posted: 3/19/15 at 4:22pm

Nothing has been mentioned about recouping yet.

[GilmoreGirlO2]

Posted: 3/19/15 at 4:26pm

Really thrilled for them – this show deserves it and I hope it will be seen by many in its Broadway run. I’m sure it’s a wonderful feeling to be preparing for a Broadway transfer and already have that much financial success ahead of time.

I imagine the sales will only get better as it gets closer to its opening and the tourist season takes off.

[Sutton Ross]

Posted: 3/19/15 at 4:27pm

A MAH ZING!

[dramamama611]

Posted: 3/19/15 at 4:32pm

I think many of the people claiming it wasn't commercial enough were referring to a 10 year run. But, let's remember, people weren't HOPING for it to fail.

[SonofRobbieJ]

Posted: 3/19/15 at 4:34pm

10 million is still kind of shocking for a show that's still running off-Broadway for another month and a half.

I'll be there on July 20 with my 15 year-old-niece. I'm pretending she's more excited than I.

[Pootie2]

Posted: 3/19/15 at 4:43pm

Has there ever been a show that recouped via advance before it even opened on Broadway?

[neonlightsxo]

Posted: 3/19/15 at 4:48pm

I tried to find the discussion thread but gave up after a few pages of searching. Dramamama, I'm pretty positive people were saying Hamilton couldn't fill a Broadway house, that it wouldn't be a hit in a large theater. Nothing about the length of the run.

I don't think it's possible to "recoup" before performances begin. There are always additional costs, and running costs, etc.

[WOSQ]

Posted: 3/19/15 at 4:50pm

Recoupment cannot really begin until they start playing uptown.

An advance sale cannot be 'spent' until the ticket bought in advance is used.

All these numbers are for example. I have no idea what the real numbers are.

Let's say Hamilton costs 10 mil to move and open uptown.
Breakeven each week is 600k against a potential of 1.2 mil per week.
That first 600k goes to pay the operating costs to keep the show running each week. Any amount taken over that is profit and is eventually distributed to the investors toward recoupment of that imaginary 10mil. Using these numbers (and there is always a grey area because some people are on percentages), if Hamilton sells out, it will recoup its investment in 20 weeks give or take or about 5 months and then it will be in the black.

An advance of 10 mil is impressive, and shows everyone that there is sizable interest in the show, but it in no way can be counted as recoupment until the dates sold have passed, and a lot of that will go toward operating costs.

[indytallguy]

Posted: 3/19/15 at 4:50pm

And several million in group sales which bodes well for the run also.

[Kad]

Posted: 3/19/15 at 4:51pm

It's an impressive advance for a show without much name recognition for the country- plays like Fish in the Dark or Betrayal with bankable screen stars drew advances of around $13 mil.

I can't find much about musicals with the largest advance prior to previews, though.

Updated On: 3/19/15 at 04:51 PM

[Just_John]

Posted: 3/19/15 at 4:52pm

Motown re-couped before opening I believe.

[Mister Matt]

Posted: 3/19/15 at 4:54pm

I have to admit, the buzz on this show really has sparked my enthusiasm to see it. I just hope On the Twentieth Century extends so I can these and Fun Home in the same trip.

[Pootie2]

Posted: 3/19/15 at 4:55pm

Thanks for the detailed explanation, WOSQ!

[Bwaydide92]

Posted: 3/19/15 at 4:56pm

Just John. Motown recoup just before it closed. Not before opening.

[neonlightsxo]

Posted: 3/19/15 at 4:57pm

Just_John, not true at all. Motown barely recouped---right before it closed. It was a very expensive show to run.

[WOSQ]

Posted: 3/19/15 at 5:00pm

In about 1975-77 a play by Bernard (Same Time, Next Year) Slade paid its investors off on opening night.

The producer had a second play by a star writer and a huge movie star, Jacvk Lemmon, appearing on stage for the first time in maybe 15 years.

This producer was also pretty tight with a nickel and also over capitalized his shows. Tribute did not need a big reserve fund for instance. They tried out in Toronto and sold out to the rafters, moved to New York with a hefty advance and opening night the investors were handed back their money which came from unspent funds and tryout profits. And stinginess where he could get away with it.

Also some shows played long out of town tours and made their money back that way.

[macnyc]

Posted: 3/19/15 at 5:09pm

Most of that $10 million is from me. Or at least it feels that way!

Updated On: 3/19/15 at 05:09 PM

[JayG 2]

Posted: 3/19/15 at 5:33pm

Everyone is so thrilled that they are selling their $140 tickets. You must all be investors.

[Pootie2]

Posted: 3/19/15 at 5:36pm

Supply and demand.

[MOUSTACHA]

Posted: 3/19/15 at 5:49pm

Hold the phone. If we are all citing the times article, it's a $6.5 million dollar advance with $4 million in pending group orders:

"...has sold $6.5 million worth of tickets in its first 11 days of Broadway availability, and has orders from groups for another $4 million worth of seats, according to Jeffrey Seller, its lead producer."

As those group orders are paid, the advance will likely reach $10 million (and continue on up), but until the money is in the bank, it's not part of your advance.

Sorry to be the stickler, but $10m of actual sales would be much more impressive than $6.5m (which is still quite impressive, and far and beyond the norm).

EDIT: FYI: Current availability goes until November 21st.

Updated On: 3/19/15 at 05:49 PM

[Liza's Headband]

Posted: 3/19/15 at 5:54pm

You always include A/R (Accounts Receivables) of group sales in your advance. So, it is $10 million.

[MOUSTACHA]

Posted: 3/19/15 at 5:58pm

Including pending groups in an advance is just bad business, and doesn't represent how much money you've actually taken into your show.

I can book a group for 500 tickets at $100 each ($50,000) for November 20th, with a cutoff pay period of 60 days prior (lets say).

I, as a producer, look at the advance (assuming you're right and the unpaid groups number is included) and make budget decisions on marketing, sales pacing, revenue management, etc. I say, I can afford that commercial for $50,000 and spend the money.

Comes around that my group check bounces and you never get that money. Where does that $50,000 come from?

You don't count money you don't have yet. Ever.

EDIT: This really comes down to liquidity for the show. You may very well factor unpaid groups into your running of the business, but I have never worked with a producer or general management office that INCLUDES the unpaid groups into the advance. They are always intentionally separated.

Updated On: 3/19/15 at 05:58 PM