How often do plays recoup?
How often do plays recoup?
#1How often do plays recoup?
Posted: 3/23/08 at 10:27am
As a disclaimer, I am not well-versed in Broadway production finances, although I am trying to think more about it. It surprises me how long it takes many shows to recoup their initial investment. Profit margins, even when the show is drawing well, seem to be slim, causing it to take a long time--seems like close to a year for most--for most larger productions to break even.
Given how few shows last longer than a year (for every Wicked, there are 20 Cry-Babys), I guess producers are risking losing money on most productions to occasionally hit it big with a cash cow that will line their pockets for years.
That said, given how short most runs of plays (as opposed to musicals) are, especially shows that are considered limited engagements before they start, how often do they recoup their initial investment? Granted, I would think that plays tend to have both smaller initial costs (smaller sets, less rehearsal time, no composer) and smaller marginal costs (smaller casts, no orchestra, less sound/special effects). However, I doubt you'll ever see a play that packs a Broadway house for years like the top musicals do.
That said, how often do plays recoup, and how are they a sound investment for almost any producer?
Yankeefan007
Broadway Legend Joined: 3/20/04
#2re: How often do plays recoup?
Posted: 3/23/08 at 10:30am
When you have a celebrity in the lead role and a sold-out run entirely made up of starfu**ers, then it'll recoup quickly.
But when you have a show like DOUBT, it could take 6 months to a year.
Smaxie
Broadway Legend Joined: 9/26/05
#2re: How often do plays recoup?
Posted: 3/23/08 at 10:39amDoubt recouped in under four months. I remember that The History Boys recouped in six weeks.
Begin at the beginning and go on till you come to the end: then stop.
#3re: How often do plays recoup?
Posted: 3/23/08 at 10:43am
Butley recouped before its run was over.
Cyrano recouped.
So yeah, its all about the stars.
Though August is set to recoup very easily, is it not?
But recouping is uncommon these days...
I mean, look at THE HOMECOMING.
Even with a great cast and great reviews, its not doing very good business.
Although I'm sure no one expected it to in the first place- it's an artistic venture.
#4re: How often do plays recoup?
Posted: 3/23/08 at 10:46am
Totally depends on the play, the theatre, the length of the run, the marketibility of the actors, etc. As Smaxie noted, THE HISTORY BOYS recouped its entire investment in six weeks; PROOF did it in ten weeks. LIFE x 3, playing at the 700-seat Circle in the Square, recouped by the end of its almost four month run. It took THE PILLOWMAN its entire engagement (nearly six months) to recoup; BUG, playing Off-Broadway, took eleven months (its entire run) to recoup an investment of less than $300,000.
THE VERTICAL HOUR recouped its $3 million investment on the strength of its names, whereas shows like PROOF or THE HISTORY BOYS did it through great reviews and word of mouth. (This is, of course, partly conjecture on my part) This isn't a science; shows recoup for different reasons, at different paces. It's amazing that, in the last 3-5 years alone, so many plays have recouped, let alone made a profit.
"You travel alone because other people are only there to remind you how much that hook hurts that we all bit down on. Wait for that one day we can bite free and get back out there in space where we belong, sail back over water, over skies, into space, the hook finally out of our mouths and we wander back out there in space spawning to other planets never to return hurrah to earth and we'll look back and can't even see these lives here anymore. Only the taste of blood to remind us we ever existed. The earth is small. We're gone. We're dead. We're safe."
-John Guare, Landscape of the Body
#5re: How often do plays recoup?
Posted: 3/23/08 at 12:21pmWould it be accurate to say, though, that a much higher percentage of musicals recoup than plays, despite their higher costs?
#6re: How often do plays recoup?
Posted: 3/23/08 at 1:18pm
There are no hard and fast rules when it comes to recouping an investment. THE DROWSY CHAPERONE recouped an $8 million investment in seven months. It took AVENUE Q nearly a year to make back $3.5 million. WICKED took fourteen months of 100%, full-price capacity to recoup $14 million. Still, all of these shows managed to make a tidy profit, regardless of how quickly (or not) they recouped. On the other hand, a show like SUNSET BOULEVARD never recouped, despite running for nearly four years on Broadway.
It's not a science. You can never really know in advance what will fly and what will fail.
"You travel alone because other people are only there to remind you how much that hook hurts that we all bit down on. Wait for that one day we can bite free and get back out there in space where we belong, sail back over water, over skies, into space, the hook finally out of our mouths and we wander back out there in space spawning to other planets never to return hurrah to earth and we'll look back and can't even see these lives here anymore. Only the taste of blood to remind us we ever existed. The earth is small. We're gone. We're dead. We're safe."
-John Guare, Landscape of the Body
#7re: How often do plays recoup?
Posted: 3/23/08 at 8:17pm
You can't predict attendance with science, but isn't recouping going to be
Pre-opening investments / (weekly revenue - weekly costs) ?
I guess that means Sunset Boulevard had high weekly costs (an expensive cast, lots of staff, etc) such that it had high enough grosses to stay open for so long but still didn't recoup, so its weekly marginal profit was low?
I still don't see how any entrepreneur would want to invest in a Broadway show. For any other investment, unless you beat the stock market index or at least the risk free interest rate, you've failed. On Broadway, if you get your initial investment back (0% return) a year or more after you initially funded the project, it's considered a financial success, as most don't even reach that point.
Yankeefan007
Broadway Legend Joined: 3/20/04
#8re: How often do plays recoup?
Posted: 3/23/08 at 8:33pm
People do it out of love for the theater.
And then there are the ones looking for a tax write-off.
And the others who have so much dispensible income that they can lose pocket-change like $20,000 every now and then.
Updated On: 3/23/08 at 08:33 PM
keen on kean
Broadway Legend Joined: 12/1/06
#9re: How often do plays recoup?
Posted: 3/23/08 at 10:53pmI think it has been a rule of thumb for years that about one production in five recoups. I have never seen comparative numbers for plays vs. musicals. Plays are (generally) cheaper to mount but also rarely draw large consistent audiences - with the star-power exceptions like CYRANO. I would not consider any Broadway production a "sound investment" because there are so many easier ways to make money.
#10re: How often do plays recoup?
Posted: 3/23/08 at 11:02pm
I guess that means Sunset Boulevard had high weekly costs (an expensive cast, lots of staff, etc) such that it had high enough grosses to stay open for so long but still didn't recoup, so its weekly marginal profit was low?
for Sunset, didn't some of the legal troubles affect its gross? or did that money come from...somewhere else?
I also didn't realize Drowsy recouped after only 7 months; not bad!
When I see the phrase "the ____ estate", I imagine a vast mansion in the country full of monocled men and high-collared women receiving letters about productions across the country and doing spit-takes at whatever they contain.
-Kad
#11re: How often do plays recoup?
Posted: 3/23/08 at 11:42pmAlthough investing in shows is not necessarily the most rational investment, it is not completely crazy either. It is high risk - high reward. If you are savvy enough (or lucky enough) to invest in big hits like Jersey Boys or Wicked, your return is immense. For plays, you aren't going to get that same kind of return, but most plays nowadays are financially structured around short runs, so if you are savvy/lucky, you can get a return faster than you could for a big-budget musical.
"What was the name of that cheese that I like?"
"you can't run away forever...but there's nothing wrong with getting a good head start"
"well I hope and I pray, that maybe someday, you'll walk in the room with my heart"
East Village
Featured Actor Joined: 9/23/07
#12re: How often do plays recoup?
Posted: 3/24/08 at 12:48am
High risks, high rewards are for hedge funds.
Once you have money, then you want power and fame. Most investors on broadway are in it just to join the club
#13re: How often do plays recoup?
Posted: 3/24/08 at 8:37amIn another thread, someone said that Curtains hadn't recouped yet, and wouldn't by the time it closes. Considering how long it has been running, why would this be?
winston89
Broadway Legend Joined: 6/18/06
#14re: How often do plays recoup?
Posted: 3/24/08 at 11:55am
Curtains no t recouping has to do a lot with several different things. One is how full the house is and another major one is how much they are getting for tickets and other things like that.
There are shows that have ran for five years and still didn't recoup. Remember a show is only considered a hit if it recoups. It can run for years on end and still not recoup thus not be considered a hit.
"If you try to shag my husband while I am still alive, I will shove the art of motorcycle maintenance up your rancid little Cu**. That's a good dear"
Tom Stoppard's Rock N Roll
#15re: How often do plays recoup?
Posted: 3/24/08 at 12:56pmI'm sure the large cast and crew doesn't help. Plus DHP's headliner contract, although that's pure speculation.
Smaxie
Broadway Legend Joined: 9/26/05
#16re: How often do plays recoup?
Posted: 3/24/08 at 1:08pmRecoupment on Broadway though is not the end all, be all. We do get bent out of shape classifying productions by Variety's definition of hit/flop status. Some shows - like say the original Sweeney Todd as an example - eventually did pay off their initial investments, albeit years later. Even though the original Broadway production failed to recoup its investment while it ran, does it still classify as a flop if it eventually returned its investors' investment? I'm not sure.
Begin at the beginning and go on till you come to the end: then stop.
