Broadway producers are finding it tough to attract investors for new productions as the global financial crisis begins to take a toll on the Great White Way.
And sluggish tickets sales have caused the closure of shows, adding to the sense of gloom on Broadway.
While several shows traditionally close at the start of the year to make way for new productions ahead of the Tony Awards, more than usual are taking their final bow — 12 shows have finished and another four are due to close by February 28.
The economic turmoil ”certainly had an impact on my show and on a number of shows that might have made it through this coming summer,” said producer Margo Lion, whose show Hairspray closed on January 4 after more than six years on Broadway.
Several shows could not secure the financing needed to open in the coming months — Godspell, Vanities and For Colored Girls — and producers blamed the economy, said Charlotte St. Martin, executive director of trade group The Broadway League.
”It’s not uncommon for shows not to get financing if they’re not sure-fire hits in tough economic times,” St. Martin said. ”Even in great times, a lot of shows don’t get financed.”
Hair was a hit on Broadway and London’s West End in the 1960s, but Andrew Hamingson, executive director of New York’s Public Theatre, which will bring Hair back to Broadway in March, said lining up investors for the show was difficult.
”When we were out looking for investors for the show it was at the same moment … when all those companies [like Lehman Brothers and Merrill Lynch] either disappeared or they were acquired by other companies,” Hamingson said.
”People are participating in smaller numbers than previously … It basically takes more people to get a show on its feet,” he said, adding that he was still finalising the last 10% of investment for Hair.
Long odds
St. Martin said: ”A lot of the investors in Broadway shows come from the Wall Street arena and if they have lost a lot of their money, there may be less money for productions.
”That being said, we had a couple of shows open this past season in the early fall that got financing at the last minute and recouped their investment,” she added, citing All My Sons and The Seagull .
Broadway hit In the Heights, which won the 2008 Tony Award for best new musical, recently announced it had recouped its $10-million investment since opening in March.
Twenty shows are due to open in the coming months and the industry will be watching for signs of how the 2009-2010 season, which starts on June 8, is shaping up.
History shows that four out of five shows do not return on their investment, St. Martin said.
”Reality is people invest for reasons other than just a return on investment,” St. Martin said. ”Nobody says I’m definitely going to lose money on this, but they know that the odds are not in their favour.”
A Broadway play tends to cost up to about $4-million, while a more elaborate musical can cost well over $10-million, but the returns on a musical are usually higher.
When it comes to audiences, Broadway had 2008 calendar year gross earnings of $941-million, up from $938-million, although theatres were dark for 19 days in 2007 due to a stagehand strike, figures from The Broadway League showed.
The league also said 37 shows closed in the 2008 calendar year, five more than 2007, but the same number as 2006.
Maria Somma of Actors Equity said the financial crisis has not affected work for actors and stage managers, with the number of Broadway contracts signed holding steady.
”There are a lot of stories out there about the death of Broadway but I think that is very premature,” Hamingson said.
”Theatre is a living thing, there are good shows and there are less good shows,” he said. ”What happens is sometimes you have a season that doesn’t have a lot of very strong shows, so one can’t always attribute it to the economic climate.”
Lion said when US President-elect Barack Obama takes office, it might restore some confidence to consumers.
”I don’t know if we will bounce back completely in the coming months, but we should have a revitalisation of the Broadway scene,” she said. ”If people feel more sure-footed then they will be more willing to invest in new projects.” — Reuters