I just came back from Seattle where I saw a developmental
production of the new Mark Shaiman, Scott Whitman, Terrence Macnally
musical Catch Me If You can. (Great performances and terrific
music!) Seeing the show got me
thinking about the development process and the relationship between the
commercial producer and the not-for-profit theaters.
Developing a new musical is not easy. The process needs time and commitment to have the best chance for success. The most essential part requires the greatest risk - the first production in front of an audience.
Developing musicals need theaters for their first
production. The cost of
self-producing the first production of a new musical is high and very risky so
producers look to regional theaters with audience subscriptions to house their
new shows. The idea is that both
parties win from the partnership.
The benefits to each side are numerous and seem obvious.
The theaters get a new ‘Broadway Bound’ musical with a
top-notch creative team and often New York/Broadway actors. This helps the local theater build an
audience and enhances the local arts community. The theaters are also able to use these high profile
productions to increase their visibility and boost their ability to raise
capital to fund their operations.
In turn some self produce other new works and productions that might not
otherwise have an opportunity to be produced.
The commercial producers and creators of the new show get to
see their production on stage and learn from the audience reaction. The actors get to experiment and grow
their characters without the pressure of a New York audience’s
expectations. The designers
get to see their work onstage and are able to save the production money by
building the sets and costumes locally.
To facilitate this relationship, many regional theaters
require some form of enhancement money to put up a new production. The money allows the theaters to
substantially enhance the production values of a new show. The idea is that everyone wins. The producers of an upcoming commercial
musical get to see their production fleshed out with high production
values. The theater gets a show
with higher production values than it could afford and their audience gets to
be part of the development process of a new show. Sounds like a fair and balanced trade.
From my point of view, it is not. The ‘developing’ theaters also receive a percentage of
profits of future productions of the show for their mounting the first
production on their stage. This
participation comes in some form of gross or net profit sharing. Again, this money helps them continue
to operate and produce other theater as well. However, they are getting a great deal in the form of
enhancement money. And for a major
musical the enhancement money is in the millions of dollars. So why do I think the profit sharing
tilts the balance towards the theaters in this type of arrangement? Let’s look at what that money goes towards.
It might seem like the money is only going to costumes and
sets. However, there is a lot more
to it. Money spent on building sets and costumes locally, creates jobs for the
community. It also feeds money
into the local economy through purchasing of materials from local vendors. Furthermore the enhancement money
allows the production to hire a larger cast, add additional musicians to the
orchestra and, hire a larger running crew than the theater could normally
afford. The money is a mini
stimulus package for the local economy of the theater.
As I understand it, profits are shared amongst partners who
also share another important element of any entrepreneurial venture –
risk. The imbalance for me comes
from the fact that the risk is tipped heavily towards the enhancing producers and
not the theater. In most, not all,
of these enhancement deals, the theater does not share the box office with the
producers. So yes, while the
theaters are taking a risk that people will not buy tickets and they will lose
money, they do get to keep all the box office proceeds to offset their costs.
(Although the benefits outlined above still stand even when the show does not
sell well, since in a theatrical production, most of the budget is spent before
the show starts its first performance.)
The producers are putting up money and receiving some tangible assets,
sets costumes etc, but mostly the intangibles gained from audience
participation. And the producers
are exposed to greater risk in that once the first production is over there is
always a chance that it will not have a life afterwards. So the theater gets to build their
audience, stimulate their local economy, boost their fundraising potential and
increase their visibility, often giving them national exposure due to the high
profile of the production, creative team and actors. And then they get future profit participation! The producers get to continue in the
process of refining the show and end up with both tangible and intangible
assets after the production ends.
They, however, must then spend more money, and incur further risks, to
make the production a commercial success.
To me, this relationship favors the theaters.
What do you think?
