In what is an obvious effort to get out in front of a brewing (ice) storm, Disney Theatricals just informed the actors participating in the upcoming Frozen lab that they’d be getting a piece of the profits.

According to The Wall Street Journal, anyone in the show from the lab through opening night will be entitled to receive a piece of 0.5% of net profits from the first three English-language productions for the first 10 years of profitability.

Pretty sweet, right?

Well, the ripple effects of this decision will go well beyond the actor’s bank accounts.  This precedent is about to cause an avalanche of changes in how our industry develops its material.

Obviously, the reason this issue is front and center is because of The Hamilton Effect.  I’m sure I don’t have to tell you that after Hamilton‘s place in financial history was secure, the actors, who helped shape the piece throughout its many readings and labs, held their own revolution off the stage and asked for a piece of profits in exchange for their creative DNA, which was undeniably all over that stage.

The issue was eventually settled (after some Shakespearean-like drama which was just revealed two weeks ago), and I wrote about it here.

Fearing that if super-profitable Hamilton was a target then the execs at uber-profitable Disney wisely decided to get out in front and give the actors in Frozen an offer that they did not have to make (that offer was half of the 1% that the Hamilton actors got, btw).

Smart.  Because at the end of the day, .5% of net profits (which is money AFTER recoupment) isn’t going to be noticeable on a p/l like Disney.

But it will be noticed by the rest of the industry.  And I wonder how much of this was done unilaterally, or if they had the support of other Producers and the Broadway League.  It’s no secret that there have been a lot of conversations with Actors Equity and the League over this issue, with Equity looking for this kind of profit sharing across the board (can you blame them – listen to Steven Pasquale talk about why it’s deserved on his podcast here).

I’ve always been in favor of a little profit sharing . . . provided however there is a bit of a give on some of the more financially challenging aspects of the lab contracts (most specifically, the right-of-first-refusal, as I wrote here).

And on shows produced by non-corporate entities, it’ll be individual investors who have to share their profits with the actors as a thank you for helping to create the show.  Shouldn’t the authors pitch in as well – since the actors are helping to develop the creative?  Isn’t it risky enough for our investors?

But it’s not clear whether Disney asked for, or got anything, in exchange for what they gave.

Now the question will be whether this precedent will make this profit participation status quo . . . or whether it’ll only apply to shows like Hamilton and Frozen, when the Producers know they’re going to be swimming in money.

Once again, Disney gives us a master class in producing, and keeping up company morale (every actor in town is gonna want to develop shows for them now), but will their model work for everyone else?

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