How did new Broadway musicals gross last year?

It’s check-up time!  Get out your thermometers and stethoscopes, it’s time to give our ol’ Broadway market a budgetary check-up . . . so that we can learn something to help us build our next budgets.

I promise this won’t hurt a bit.  (And just like a real doc, I’m probably fibbing just a little.)

I’m a big fan of what I call “backing-in” to budgets. (By the way, you can do this for any business – and your own personal budget as well.)

Step 1 is simple:

1. Look at what the market is bearing.  What is the average that your “product” is earning in your industry?  In this case, that means, what is the average gross of a new musical on Broadway?

Step 2 is more complicated.

2. Build a product (in this case a new musical) that costs less to operate that what the market is bearing.  In this case, that means making a new musical that costs less than the average gross of a new musical.  (Why less?  Because after you pay off your weekly expenses, you’ve got to use what’s left to pay back some of the capitalization of your show.)

If you can do that, then you should have a good shot at recoupment, or at the very least, minimizing your risk, and protecting your downside.

So, let’s tackle step one . . . first!

We (and when I say we, I mean, my new crackerjack executive assistant, Annie – who you met in this video) dug through the annals of the Broadway grosses for last year, and pulled out the weekly grosses for all 9 new musicals.  (We eliminated the first week of performances and the last, to adjust for any non-full performance weeks, and any scarcity-lift from a closing show (that a non-closing show wouldn’t have).  Oh, and if a show is still running, we used the gross up until w/e 9/3).

Then, we took these individual weekly grosses to calculate the average gross of a new musical from the 22-23 season.

Want to know what it is?

The average gross was . . . . 

Wait.  Before we tell you.  GUESS.

Go ahead.  Guess.

And then . . . scroll down . . .

The average gross of a new musical in the 2022-23 season is . . . $717,541.

Yep, that is what the market is bearing right now for a new musical.  

Well?  Were you close?  Did you estimate higher?  Lower? 

Now comes the hard part.

Step 2.

To produce the most economically sound new Broadway musical, you’d want an all-in operating expenses for LESS than $717,541.

How much less?

Well, that depends on how fast you want to pay back that capitalization.  If your “nut” is $100k less than your operating expenses, some quick math will tell you that if you maintained that average gross you’d earn back $5,200,000 per year.  That means, it would take about 4 years to get your money back.

But wait – what about the 30-40% of that profit that goes to royalties!  

Now look, no one wants to be average.  And honestly, these days, getting your average weekly operating expenses UNDER $717,541 is  . . . well . . . challenging.

And for so many shows, it may not even be what you want to do (big shows demand bigger budgets, and often do bigger numbers at the box office – it’s no coincidence that Wicked, Phantom, and Lion King are three of our biggest hits and three of the biggest spectacles that have been produced).

We are a high risk industry, and we always will be a high risk industry.  

So an average “nut” of less than $717,541 with room to pay back the capitalization may not be possible for most shows right now or ever. 

But knowing what the market is bearing at least gives us something to aim for.  And since our audience is only 83.17% back from pre pandemic levels, it’s more important than ever to control these expenses, in order to mitigate risk.

Otherwise, that age old stat of 1 out of 5 shows recoup, may turn into 1 out of 10.  

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Ken created one of the first Broadway podcasts, recording over 250 episodes over 7 years. It features interviews with A-listers in the theater about how they “made it”, including 2 Pulitzer Prize Winners, 7 Academy Award Winners and 76 Tony Award winners. Notable guests include Pasek & Paul, Kenny Leon, Lynn Ahrens and more.