Financial successes, closing as financial losses?
Financial successes, closing as financial losses?
#1Financial successes, closing as financial losses?
Posted: 2/15/19 at 5:30pm
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 our millions, in our billions, we are most powerful when we stand together. TW4C unwaveringly joins the worldwide masses, for we know our liberation is inseparably bound.
Signed,
Theater Workers for a Ceasefire
https://theaterworkersforaceasefire.com/statement
#2Financial successes, closing as financial losses?
Posted: 2/15/19 at 7:57pm
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
Broadway Legend Joined: 2/10/11
#3Financial successes, closing as financial losses?
Posted: 2/16/19 at 12:40am
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.
#4Financial successes, closing as financial losses?
Posted: 2/16/19 at 12:55am
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.
SomethingPeculiar
Broadway Legend Joined: 6/15/14
#5Financial successes, closing as financial losses?
Posted: 2/16/19 at 1:07am
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.
