www.broadwayworld.com: If you were to ask practically every current Broadway producer, they would tell you that initial capitalization costs (that is the cost of a show to open on Broadway before a single ticket is sold) are way out of control. And they have a point, last season was the most expensive season on record, with the average initial capitalization of a new musical crossing over $19 million.
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Recently in my Foundations of Drama class we were discussing the fact that though Aristotle wrote in Poetics that spectacle should be the least important element of a show, it is now more respected and sought after than it was in the past. The modern all-out Broadway show like Wicked or MJ exemplifies this shift, I think, which of course accounts for some of the rise in the average initial capitalization of these shows. I was more surprised to read about the fluctuations in the price of lumber in recent years! I had no idea that between 2019 and 2021 the cost of lumber rose over $1000 per thousannd board feet (though it has fallen back down significantly since then). The increase in the cost of labor was also interesting to see, especially since real wage growth has stagnated so severely in many industries (I’m wondering if it has truly caught up in theatre).
It always amazes me how much money it takes to put on a Broadway musical or play. The article put an emphasis on the cost of wood increasing 50% since the pandemic. While Broadway shows are large and have high end technology and automation, it is still hard to conceive where $30 million goes for a single production. Obviously the shows have to rent the Broadway theatres, pay their employees, and advertise on a large scale to get the word around. This article really puts the frame of reference on CMU where we're not paying for each show to rent venues and probably 80% of the labor on each production is by a non-paid school of drama students. It’s crazy that the expected chance a Broadway production will make back their money is 1in 5. However this industry being not only wasteful in environmental resources but also in money does not surprise me at the end of the day.
I think one of the most interesting things this article says is that because of the increase in employee salaries rehearsals have also increased. I was very puzzled by this possible parallel because logic may have you believe that if you pay people more you want them to be in office less in order to cut costs. But I think this parallel could be the result of trying to justify how much a show might cost by raising the quality of the production. Broadway has always been known for majestic and jaw dropping performances and that quality only continues to rise. Most people believe the quality has risen primarily thanks to new technologies allowing the magic of theater to seem more and more real. But with that increase in technology actors and technicians need to be more aware of what might be automated. I feel as though this requires an increase in rehearsals to guarantee that everyone is safe.
I have to say I learned a lot in reading this article. The fact that only 1 in 5 productions make their money back is absolutely astonishing to me. When you are putting millions of dollars into a production, 1 in 5 are not great chances that you make that back. The article stated that one of the biggest reasons for this increase is increased lumber costs, peaking at $1.4k per thousand board feet in 2021, and settling in at $550 now. I'm pretty sure that this increase is due to the Russian invasion of Ukraine, and the effects that that had on trade. I know that steel went up because of this reason, given that the majority of Americas steel imports comes from that region. However, materials are not everything. Wages have also gone up, meaning each rehearsal costs more. I think that this is good though, because if professionals can be paid more, they should be paid more.
Up until this year, I never really understood what the role of a producer is. In this article, they prove how important producers are. Without them, there would be no shows with huge sets and crazy production value, like Les Miserables or Wicked. For me, I’m kinda saddened to know how expensive Broadway has become. I think it’s crazy that only 1 in 5 Broadway shows make their money back. There’s so much talent and stories that deserve to be seen by Broadway enjoyers, regardless of how much money the production has. I also never realized how much of an impact Covid had back in 2020-2021. When people would talk about the price of lumber going up, I didn’t realize how much it went up. It makes sense, with everything the industry has been through, why it’s so expensive, but I wish there was something like Broadway, that was as well known, for smaller productions.
While this article isn’t incredibly insightful into its solutions for decreasing initial capitalization of Broadway musicals (it simply suggests that continuing to bring in audiences will eventually allow them to offset their initial capitalization costs), it is interesting to hear the financial constraint that many major Broadway shows are under, and it presents questions on how those in charge of the financials may look to alter production processes in order to save on their expenditure. With rising labor costs, I wonder where producers may look to cut - whether that be shortening the overall rehearsal time (also how does this work for Broadway? Does the director request a certain amount of time? Or are they simply given a set amount of time and need to create their work within that time frame), or minimizing support staff as far as they’re willing, or even looking to shows with fewer performers. As scope based on materials is more quantifiable and they can pose more explicit limits on the design, I wonder how the rehearsal room might change as a result of higher financial constraint.
I knew broadway shows are expensive, but I hadn't realized how much more expensive they have gotten in recent years. One thing that stands out to me is the monopoly identified in the article- the fact that the 41 broadway theatres are mainly owned by just three companies. In my intro to film studies class we were discussing how in the early 1900s Edison formed a trust with a bunch of other filmmakers to control the film industry, only for LA to spring up as the nations' cinema capitol as creators sought to escape the monopolized prices. I wonder if this issue will contribute to some sort of similar evolution in theatrical ownership. The price of wood more than tripling was incredibly staggering, even if it has ultimately fallen to half of that now. Unfortunately it doesn't surprise me that that can have such a huge effect, my high school company struggled with that as well.
These numbers are shocking to me because I never really put any thought into just exactly how much putting on a musical costs. It is insane to me that most musicals on Broadway lose money and will never be able to make profit because of how much their initial costs are. Seeing just how much goes into a production, it makes sense why so many shows are constantly in previews and avoid actually opening until they are sure that they will sell tickets because if they end up opening and don’t sell out shows every night, then opening means that they will close almost immediately. I feel like something else that makes making profit so much harder is that there is always new materials and new plays being worked on and vying for a spot on Broadway so one show leaving means another show gets a chance to make it.
Reading this article made me see just how expensive it is to bring a Broadway musical to life. I didn’t know the average capitalization of a new musical is over $19 million. Like, that is freaking crazy, and I've contemplated whether or not I want to pursue a career in producing, but also to hear that so few shows are able to make that money back is kind of scary. I feel a mix of awe and frustration thinking about the amount of work, creativity, and money that goes into productions, only for most of them to lose money.
I love Broadway. I live in Manhattan. It's always been a dream of mine to work down there, so it’s hard to see how rising costs for things like lumber, advertising, and labor are putting so much pressure on the industry. At the same time, I find it amazing that some shows, like Death Becomes Her, are still able to break through and find success. Despite the challenges, I feel hopeful for the future of theater because it always seems to prevail and adapt through anything that gets thrown its way.
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