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Financial successes, closing as financial losses?

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Call_me_jorge
Broadway Legend
joined:1/9/15
Broadway Legend
joined:
1/9/15
Im curious about examples of musicals making back their initial investment, but ended up losing it by the time they closed.
I could see mamma Mia being a prime example of this. Im sure that theatre change didnt come with a low cost.
??Jack-o-lanterns are just pumpkins who majored in musical theatre??
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HogansHero
Broadway Legend
joined:2/26/12
Broadway Legend
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2/26/12

I cannot think of a single example, and I don't know how it would come about. If a show recoups and returns its capitalization to the investors, then that money is gone. If the show subsequently starts losing money but continues to run, it would normally finance the losses through priority loans. It is possible for a show to succeed on Broadway and fail on the road, but generally that's a separate entity. 

Jarethan
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joined:2/10/11
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Call_me_jorge said: "Im curious about examples of musicals making back their initial investment, but ended up losing it by the time they closed.
I could see mamma Mia being a prime example of this. Im sure that theatre change didnt come with a low cost.
"

In no way did Mamma Mia offset years of huge grosses after moving to the Broadhurst.  Even if it lost some money post move, it had made and distributed so much to its investors that they became richer.

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GavestonPS
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joined:6/10/12
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Hal Prince was rather famously caught running the original FIDDLER at a loss (and misreporting the grosses to VARIETY) for many months so it would become the all-time longest running musical over HELLO, DOLLY!

I don't know how that was financed, exactly, but as Jarethan points out, Prince had made his investors rich many times over so I doubt they were quick to complain if they lost a little ground in the last year of the run.

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SomethingPeculiar
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joined:6/15/14
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6/15/14

There have been situations where shows stayed open longer than they should have and burned through profit that hadn't yet been returned to investors (either pre-recoupment or post-recoupment). That's why some shows close before things get really dire. Band's Visit seems like one of those. Other shows try to ride it out and hope that biz improves, dipping into profit to cover losses as needed.

But, like Hogan said, once the money has been distributed to the investors, the production can't take it back. Money gets distributed at the discretion of the lead producer/general manager. Pre-recoupment, often in ~ 20% increments. Post-recoupment for a running hit, 4-6 x/year.

Updated On: 2/16/19 at 01:07 AM