Just how much are producers spending these days to open a musical on Broadway? That question, always interesting to me because of my years as a show producer, recently came up again as I wrote about the musical Scandalous opening on Broadway this October.
It’s well known that backing a Broadway show is not for the light of wallet or faint of heart. Case in point: the musical Leap of Faith whose investors quickly and painfully lost faith due to poor reviews and lousy ticket sales. They shuttered it in May after only 24 previews and 20 performances, losing their entire $14 million investment. Ouch!
Fourteen million dollars is on the high side for a Broadway musical, but not all that high. In a recent analysis of new musicals that opened in the 2010-11 Broadway season, New York producer Ken Davenport concluded that $9.7 million was the average capitalization. Capitalization refers to the money needed to open; it doesn’t include ongoing operating costs. Davenport found the average weekly operating costs were $278,169. If ticket sales don’t at least equal operating costs, backers have to dig even deeper in their pockets to keep those marquees lit.
If about now you’re thinking Broadway is a high-risk investment, you’d be right (and that didn’t earn you Mensa designation). An estimated four out of five Broadway shows fail to make their money back.
The backers of Scandalous declined to tell the New York Times the capitalization for their musical but the Times estimated it to be “in the high seven figures,” which would place it in the $9 million neighborhood identified by Davenport.
Scandalous has gone further afield than most musicals to raise its money. The Times reported that its lead producers include newcomers Dick Devos, son of Amway founder Richard DeVos, and his wife Betsy. Presumably an appeal for them was the show’s subject matter – the fall and redemption of famous Christian evangelical Aimee Semple McPherson. The DeVoses have a foundation that funds primarily religious groups and organizations that promote free-market economic policies. Kathie Lee Gifford’s involvement also certainly would have been a plus.