Jeffrey Seller, a Broadway producer famous for Hamilton and Rent, teams up with Hal Luftig, known for Kinky Boots, and Stacy Wolf, a theater professor at Princeton. They explore the unpredictable nature of Broadway productions, delving into the financial risks producers face. The hosts discuss how a guaranteed hit can emerge unexpectedly while others flop, and the importance of balancing artistic integrity with commercial pressures. The conversation unveils how theater economics shape audience experiences and highlights the cultural significance of musicals beyond Broadway.
The unpredictable nature of Broadway productions means that while hits like 'Hamilton' can emerge, financial risks often lead to significant losses for investors.
The dynamic relationship between theater producers and investors is crucial, with holistic support fostering both financial backing and creative development for successful shows.
The ongoing economic pressures faced by live theater, exemplified by 'cost disease', challenge the sustainability of productions due to rising labor and operational expenses.
Deep dives
The Theater Universe and Its Challenges
The theater industry is compared to a parallel universe that, despite its immersive nature and extensive projects, remains significantly smaller than other entertainment sectors such as television, film, and video gaming. This makes it challenging for theater to maintain its relevance and audience engagement, especially as live productions often compete with flashier forms of entertainment. However, dedicated artists and producers continue to passionately pursue their craft, contributing to the vibrant yet precarious nature of the theater world. An example is the remarkable rise of Lin-Manuel Miranda, whose production 'Hamilton' reinvigorated Broadway and drew fresh attention to the medium.
The Risks and Costs of Theater Production
Producing theatrical productions involves substantial financial risks, with shows often costing millions to mount despite the inherent unpredictability of success. In Broadway, the likelihood of a production turning out to be profitable is low, as failures are more common than hits, leaving a trail of potential regret among investors and producers. The story behind Miranda’s earlier production, 'In the Heights,' illustrates this risk, requiring innovative fundraising strategies and the support of accessible productions to bring it to fruition. The trend indicates that while smash hits can generate vast income, the industry is heavily marked by the costs of labor and production, which continue to escalate.
The Role of Investors and Producers
The relationship between theater producers and investors is nuanced and essential for the survival and growth of theatrical productions. Holistic producers not only contribute capital but also play critical creative roles in shaping a show's development, as exemplified by Jeffrey Seller's support for Miranda’s work. The investment climate fluctuated over the years, with a decline in Broadway investors during the late 20th century, only to witness a resurgence fueled by those passionate about the arts in recent years. This evolving dynamic showcases how vital both financial backing and creative vision are to navigating the competitive theater landscape.
Economic Pressures and Cost Disease
The economic theory of 'cost disease' comes into play with live theater, where the unique nature of productions makes it difficult to reduce labor costs, resulting in continuous financial pressures. As affordability for production inflates due to rising costs of labor, venue rentals, and operational expenses, it becomes increasingly challenging for theater companies to sustain profitability. This theory, initially proposed in the 1960s, accurately reflects the ongoing struggles faced by the performing arts today, echoed by producers who describe how their costs continue to climb as they aspire to produce engaging content. Consequently, labor remains one of the largest expenses, limiting operational viability.
Broader Impacts of Theater Beyond Broadway
Beyond Broadway, the theatrical ecosystem thrives, especially at the grassroots level where community and educational theater play a crucial role in sustaining the art form. High schools alone produced around 37,000 productions in one year, significantly outpacing Broadway in audience reach, proving that local productions contribute immensely to the theater landscape. Successful shows often transition from Broadway to local stage adaptations, amplifying their cultural impact and accessibility. The continued interest in musical adaptations for school productions highlights their educational importance and how they resonate with broader societal themes, cementing theater as an essential part of cultural discourse.
A hit like Hamilton can come from nowhere while a sure bet can lose $20 million in a flash. We speak with some of the biggest producers in the game — Sonia Friedman, Jeffrey Seller, Hal Luftig — and learn that there is only one guarantee: the theater owners always win. (Part two of a three-part series.)
SOURCES:
Debby Buchholz, managing director of La Jolla Playhouse.
Luis Miranda Jr., political strategist, founding president of the Hispanic Federation, the Northern Manhattan Arts Alliance, Viva Broadway, and The Public Theater.
Michael Rushton, professor of arts administration at Indiana University.
