Want to see a Broadway show? How about invest in one? SmartMoney reporter Anna Prior stops by Mean Street to discuss the risk and reward of raising the curtain on an investment. Photo: Reuters.
It could be a dream role (or possibly a nightmare) for profit-seeking theater lovers: Broadway investor. The average buy-in for a Broadway production is around $25,000, says veteran producer Ken Davenport, though it's sometimes possible to get in for as little as $5,000. The initial investment covers costs leading up to the first paid show, ranging from salaries to rent, which typically run $2 million to $4 million for a play and upwards of $10 million for a big-budget musical. Weekly box office receipts should cover operating expenses if the show does well and, if it's a hit, start generating profits. But that's a big if: According to Davenport, only about one in five shows at least breaks even. (Others say the odds are even lower.)
Broadway BoomBroadway box office sales have spiked by more than 15% since the onset of the recession. See our infographic here for more.
Infographic by Emily Cooper for SmartMoney
For a little less drama, some folks invest in a touring production of a Broadway show, since they're already proven hits. Getting in is the challenge; first crack at the Wickeds of the world goes to the original investors, says John Gore, CEO of Key Brand Entertainment, which runs a touring company. Still, there may be openings at lesser-known shows, he says. Just don't expect every investment to bring in encore-worthy profits, says Tony-winning producer Andy Sandberg: "There's a saying that goes, 'You can make a killing, but it can be hard to make a living.'"
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