Post 561 - January 16, 2024

Just for the heck of it, I went onto the website for the Broadway musical Merrily We Roll Along to see how they were selling their tickets. What I found, unfortunately, didn’t surprise me. The top price for a seat at a performance next Saturday night was $549.00. Then there was the added service charge, per ticket, of $50.00. Then, if that wasn’t enough, at the checkout they add in a $3.00 processing fee bringing the total cost, for each ticket, to $602.00. EACH.

The way that finances work on Broadway, and I am over-generalizing and simplifying this, is that each week tickets are sold for a show, in this case, Merrily. That money is held in an account until that performance. It costs a certain amount of money to run a show for any given week. There is the rental of the theatre, the rental of the equipment, the upkeep of the costumes and the set, the salaries of everyone involved, the advertising, and a host of other varied expenses.

Say your show costs $600,000 a week to run when all is said and done. Say for one week, you bring in a million dollars at the box office. That means that for that week you have a gross profit of $400,000. Generally, what happens next is that the profit is split in half. 50% goes to the theatre owners and 50% goes back to the company. The company then takes its share of the profits and then either puts it toward paying off the original investment or distributes it among the investors and other royalty participants. If the show had an initial cost of say ten million dollars, in this scenario, and if the costs and income stayed the same, and there was a clean profit of $200,000.00 to the producers for the show itself every week, the investors could eventually recoup their initial investment in fifty weeks. Starting with week 51, they would then start making a profit. It’s never that neat, but that’s the idea.

The theatre owners pay salaries and taxes, but, in theory, those costs should be covered in the rental fee that they get which is included in the operating costs that are deducted from the gross. The owners aren’t paying off investors so their $200,000.00 is already profit.

Ticket sales from week to week are, unfortunately, variable. If our hypothetical Merrily production only brought in $600,000 in ticket sales one week, there would be no profit at all. The investors wouldn’t see a dime. Everyone would be paid, and the theatre would still get its rent but there would be nothing extra to distribute. A show could run for years, even win the Tony Award and never make its money back. Titanic, the Musical is a perfect example of this. It won the Tony Award, ran for a few years, but is considered a financial failure because its investors lost all their money.

The Hudson Theatre, where Merrily is playing, has its own in-house ticketing service. Therefore, the $50.00 service charge and the $3.00 processing fee that audience members are paying per ticket go directly to the theatre and fall outside the overall gross.

If I wanted to get the same level of ticket for the musical, Six, on the same night, the base price of that ticket would be $249.00. That’s the amount that would be added to the week’s gross receipts. The fees added onto each sale are $94.62 bringing the total price that an audience member pays for an orchestra seat up to $343.62. Six tickets are sold through a third-party broker, in this case, Broadway.com. That $94.62, well more than an extra third of the original ticket price, goes directly to Broadway.com. For all I know, they then have a deal with the theatre owners for some sort of sharing of that, but they may not.

Broadway.com does not have anywhere near the overhead that the show, itself, does. Everything about their ticket system is completely automated. That chunk of money, per ticket, is largely profit. Bizarrely, if you go directly to the box office where a salaried flesh and blood person is sitting there and buy a ticket directly from them you can often avoid most of those fees. Sometimes, there’s still a facilities charge added on. That goes to the theatre, too. Often, though, dragging one’s ass down to the box office in the cold just seems like it’s going to be a pain in the ass. It is far easier to grit your teeth and pay the extra from the curled-up comfort of your couch.

Broadway.com is owned by John Gore Organization who present, distribute, and market Broadway shows worldwide. They are one of the producers of SIX.

The prices that I am quoting here are for the best seats in the house, what they call premium seats. Ticket prices go down the farther back you sit. Theatres will sometimes sell you a cheaper seat from which you will not be able to see part of the show. If you are willing to sit in a seat with an obstructed view, you can save even more. When we saw Merrily We Roll Along, we had seats in the front row of the front mezzanine. They were well off to the side, so we paid far less than their top price. There were moments in the show when the actors were standing all the way stage right and we could only hear them. We couldn’t see them. The theatre didn’t consider these seats obstructed because it only happened a few times over the course of the performance, so too bad.

It used to be that a wide variety of people could afford to sit in the center of the orchestra section. At $1206.00 for a pair of tickets to see Merrily We Roll Along on a Saturday night from good seats, however, you now need to be a part of the top part of the top 1%. You need to be part of the super-rich elite.

To that uber-expensive ticket outlay, you still need to add in the cost of transportation and possibly childcare and a meal out to complete the evening. If you want a drink at intermission, a 6 oz. glass of wine could run you $30.00. Of course, it probably goes without saying, the profit from the bar also goes back to the theatre owners.

Now, add to that, that sometimes the theatre owners will also produce or partially produce some of the shows appearing on their stages. That means that they also receive producing fees as part of the operating expenses as well as sharing in the producing side of the profits.

There are currently forty-one theatres that are defined as Broadway theatres. The majority of them are owned by only three corporations. The Shubert Organization owns seventeen of them. The Nederlander Organization owns nine and Jujamcyn owns five. Jujamcyn just merged with a British corporation called The Ambassador Theatre Group or ATG for short. ATG controls ten West End Theatres in London but also has two in New York, the Lyric and the Hudson.  The latter, of course, is where Merrily We Roll Along is playing. A decade ago, controlling interest in ATG was bought by an American financial company called Providence Equity Partners.

The Shubert Organization, in addition to its Broadway theatres, owns two Off-Broadway Theatres as well as the Forrest Theatre in Philadelphia and the Shubert in Boston. They also own Telecharge, a ticketing agency that sells seats to seventy different theatres across the country.

Last year the Shuberts took in $520,000,000.00 in revenue. (They have 1600 employees).

The Nederlander Organization is a family-owned company. In addition to their New York holdings, they also control theatres across the country. They even have a stake in the Drama Book Shop in Manhattan and own the physical property in which it is housed. In 2022 they bought a ticketing company called TixTrack with an eye to increasing their revenue. They, too, produce some of the work in their houses.

Jujamcyn’s estimated annual revenue stood, pre-merger with ATG, at $48,500,000.00. They had 215 employees. Ambassador Theatre Group, in addition to its West End and Broadway holdings, controls fifty other theatres around the world. ATG’s annual revenues stood at about $550,000,000.00 per year pre-merger.

Providence Equity, who controls ATG, according to what my morning’s dive into the internet has turned up, manages assets valued at $32 billion dollars.

Of the remaining Broadway theatres, six are owned by not-for-profit companies (Roundabout, Lincoln Center, Manhattan Theatre Club, and Second Stage) and one is Independent. The Disney Corporation owns the final theatre, The New Amsterdam, where its Aladdin is currently playing.

Last year, the Walt Disney Company generated nearly ninety billion dollars in revenue. That means that they earned an average of $47,000,000.00 every day.

What does this all mean for the art?

The young, impoverished playwright sitting alone in their fifth floor-walk-up, tapping away at their second-hand computer that might not last another month, hoping to get the story that just won’t get out of their head down onto paper has a long road ahead of them.

Gone are the days when your aunt or uncle could lend you a barn to put on a show. Gone are the days when your friends would happily chip in for free. Now, there is an army of people in suits armed with spreadsheets and projection analyses lying in wait for you in offices all over the world. You had better write something that they think they can sell or all the work you are doing will be in vain.

Say you want to tell a simple story about a woman trying to figure out who she is and break free from the constraints that society has imposed upon her. It had better have a hook that corporate bosses can understand and exploit or else it will never see the light of day.  

The toy company, Mattel, sold over 86 million Barbie dolls in 2021. That means that, on average, 164 of their plastic dolls were sold every minute. It is in the nature of corporate entities to continually grow. Anything else is seen as failure. So, how could Mattel sell more Barbies? They decided to generate a movie based on their product line. By setting that simple story of the woman trying to break free from those societal constraints in the world of Barbie dolls, the bean counters went from disinterest to elation. A movie about a globally popular doll, they could market.

The Barbie movie has generated worldwide ticket sales of nearly one and a half billion dollars. In addition to that, Mattel announced that since the release of the movie sales of their doll have increased by 16%. Success.

The irony is that Barbie dolls are maybe the perfect embodiment of the unreasonable expectations placed upon women the world over. Children are given the toys and are, thereby, charged with trying to emulate them. Tall, slender, and white with blond hair and a big bust. Whatever pigments they might add to the other characters, Barbie stays the same. The story of the movie is about a single doll trying to escape from that limited worldview. She eventually does. She becomes a tall, slender, white, blond woman in the real world.

The movie has increased sales of the doll which has, in turn, increased the pressure on kids to fulfill that unreasonable expectation inherent in the toy. Brilliantly, that increases the need and desire for these kids to watch the movie. Speaking from a corporate revenue stream perspective it is a work of utter financial genius. It is a self-generating money machine.

I guarantee you that there is now a Broadway musical version in the works. I don’t even need to google it. The worldwide financial possibilities are endless. OK, I wasn’t going to look it up, but I couldn’t help myself. There’s, indeed, already plenty of chatter about making one. Oftentimes, that kind of chatter is encouraged by the parent companies to test market reactions and, hopefully, start a groundswell of interest in an upcoming project. The money machine seems to be working just fine.

What is happening with our entertainment is happening with everything we buy and consume.

We all live under an economic system called capitalism. Contrary to what you might think, capitalism hasn’t been around all that long. Its origins stretch back maybe 500 years at the most.

In Europe, half a millennia ago, the European feudal structure had begun to fall apart. Resources were running dry. In England, the great forests had largely been chopped down. They were running out of building supplies. Precious metals were few and far between. Private people started looking elsewhere for them.

In 1600, the first corporation was created – the British East India Company. I’ve written about this before (and I will write about t again, I am sure). For the first time, though, ordinary people could invest, anonymously, in a group financial effort, and share in a percentage of the profits. You could invest according to your comfort level. If you put in a small amount and the company failed, you wouldn’t bankrupt yourself.

The British East India Company, followed closely by the Dutch East India Company in 1602, opened new markets in the East and began to bring wealth into Europe. That they basically just took what they wanted regardless of the consequences is a story for another time.

The Encyclopedia Britannica defines capitalism as the economic system wherein most of the means of production are privately owned and production is guided, and income is distributed largely through the operation of markets. This means that what is made and sold is based upon what the expectation is of its eventual sale value.

Adam Smith, the Eighteenth-Century economist, and philosopher famously wrote that economic decisions should be based on the free, self-regulating changing tides of the markets.

Karl Marx then predicted that the natural course of capitalism would end up concentrating wealth in the hands of the few and eventually lead to its collapse.

In the 1990s a Marxist literary critic named Frederic Jameson wrote that he believed we were entering into what is called “late capitalism.”  As an article on Sydney University’s website states, “In Jameson’s account, late capitalism is characterized by a globalized, post-industrial economy, where everything – not just material resources and products but also immaterial dimensions, such as the arts and lifestyle activities – becomes commodified and consumable.”

That is clearly happening. I’m not sure anybody really knows what comes after late-stage capitalism. I’m not sure I really want to know.

Our ex-45^th President is the living embodiment of late-stage capitalism. He is a firm believer of wealth and power being concentrated in the hands of a very select few. Evidence has recently emerged that foreign powers paid money into his corporations while he was in power. Under his leadership, the office of President of the United States became something that he could financially exploit.

He just won 51% of the vote in the Republican Iowa primary. 51% of the Republicans who voted are opting to allow the control over their lives to be placed in the hands of a very select group of wealthy white men. While he was in office the first time, Number 45 began dismantling the regulations that had kept large corporations in check.

It was Ronald Reagan who started this in the 1980s by trying to gut the unions. Number 45 is merely his far more ambitious grandchild. This has been the driving force behind all legislation passed by the Republican party for forty years.

We, the people, stopped this relentless onslaught, briefly, in 2020. We are going to need to rise up and do it again in 2024.

Mark your calendar.

In the meantime, if you can score a cheap ticket to Merrily We Roll Along, you should go. While I have plenty of issues with the production, there is a lot to recommend in it.

There has always been a tug-of-war between art and commerce on Broadway. Shakespeare had to navigate between the two in his day as well. Write something nice about the Queen or risk being shut down. He learned to kowtow to the throne and, at the same time, express his true self.

Similarly, however corporatized the shows on Broadway become, there are still artists, craftspeople, and workers out there giving it their all. Whoever is profiting off it, there will always be that immediate connection between the audience and the people onstage telling you the story.  More than ever, these days, we may need to dig down beneath some of these stories being told to us to see where their truth lies.

Given my fellow theatre artists who are a talented and sneaky lot, I can assure you, that it’s there somewhere.