Anyone with a passing interest in theatre will probably have thrown around terms like “big-budget musical” at least once in their life, and anyone who’s borne witness to the staggering successes (few) and spectacular flops (many) on Broadway will wonder just how much money was made or lost in the process. From Hamilton to Honeymoon in Vegas, there’s no telling how the story will end—will you walk away with millions, or write off a colossal loss?—but there’s always one common denominator amidst the vicissitudes: these shows all got up and running thanks to a tried-and-true financial template, more commonly known as a budget.
It’s important to note that every show has two primary working budgets: a production budget and a weekly operating budget. A production budget encompasses everything needed to arrive at the first preview performance (usually from the stages of development, which can involve readings and labs, through the end of the rehearsal period), while a weekly operating budget covers the maintenance of the show on a week-by-week basis. Also typically included in this packet is a recoupment schedule budget, which tries to anticipate how long it will take for the show to recoup (i.e. pay back its initial capitalization) based on how well it sells—so if a show runs at 60% of gross sales potential every week, for example, it might recoup in 120 weeks, whereas 20 continuous weeks of selling out at 100% of gross potential might very well break even.
Because a thorough elucidation of all three budget types would take quite a long time, in this post we’ll examine the production budget, which materializes first in the course of a show’s development.
A typical production budget for a Broadway musical will fall anywhere from $8-12 million, while a play might cost $3-6 million and a fairly lavish off-Broadway musical might capitalize at $2 million. FX-heavy shows will fall higher on the spectrum (Spider-Man: Turn off the Dark reported a figure of $75 million), as will musicals with a large cast and many musicians; conversely, a two-hander play with a very sparse unit set will cost much less. (Remember, this is just to get the show underway and rehearsing.)
In a typical production budget, you’re likely to see these categories, along with some sample line items and a ballpark cost for each category:
- Scenery (materials, hardware, paint, labor, automation, rentals, hauling): $600,00
- Costumes (fabric, shoes, hair, wigs, rentals, jewelry, hats, accessories): $300,000
- Lighting (electric prep, color/gel, practicals): $150,000
- Sound (prep, permissions, music): $250,000
- Music (instruments, rentals, copying): $350,000
- Creative fees (director, choreographer, scenic designer, costume designer, lighting designer, sound designer, hair designer, music supervisor, music director, vocal arranger, casting director, dialect coach): $700,000
- Artistic salaries (actors, stage management, rehearsal musicians, music prep, orchestrations, benefits, union health/welfare dues, pensions, per diems): $2,000,000
- Management salaries (general manager, company managers, child wrangler): $350,000
- Production salaries (stage crew, wardrobe crew, production assistants, benefits, payroll taxes): $250,000
- Rehearsal expenses (audition space, rehearsal space, script copies): $300,000
- Advertising (print, TV, radio, outdoor, front-of-house, direct mail, internet, graphic design, group sales): $150,000
- Publicity (press agent, photographer, opening night party): $300,000
- Administrative (producer fee, general manager fee, legal services, accounting services, payroll services, insurance, transportation, box office): $1,000,000
- Advances (playwright, composer, lyricist, director, choreographer, set designer, costume designer, lighting designer): $1,500,000
- Bonds & deposits (to unions like Actors’ Equity, Local 1 [stagehands’], Local 764 [wardrobe], Local 802 [musicians], and ATPAM [managers and press agents]): $700,000
- Reserve (anywhere from 10-15% of the total production budget that will be not spent; reserved as a safeguard against weekly losses after the show opens): $1,000,000
These estimates give us a show that capitalizes somewhere around $10 million, which—like I mentioned earlier—is a pretty ordinary figure for Broadway production budgets. To pay back this initial capitalization to investors, the managers of the show will try to keep the weekly running costs as low as possible while maximizing ticket sales, a tricky bit of calibration that fails far more often than it succeeds. In my next post, we’ll dissect the weekly operating budget to ascertain just how much it costs to keep a Broadway show afloat week by week.
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