The Biggest Threat to the Broadway Business.

We live in interesting times on Broadway. 

It has been four years since the shutdown.  We are no longer in “recovery mode”.  We are in our new normal.  

What we’re seeing right now is our new starting point.

The audiences that haven’t returned . . . some of them will never return.

But the audiences that are coming more often than they did . . . they’ll bring others. 

Inflation will slow, but costs won’t go the other direction.  

So, rather than complain about them, it’s time for us to realize this is not just a new hand we’ve been dealt . . . it’s a new game. (I write this line as a direct message to my OWN brain, to be honest, as I’ve been stewing over this for a while – and I need to tell myself this message – not necessarily you!)

Now . . . as I look to the future, here’s one thing that is looming that could change the game again.  It was in a NY Times article a few weeks ago – one quote that made my pandemic scars burn all over again.

It’s one of the biggest threats to the Broadway business.

It was in this article . . . about the $3mm tax credit that was afforded to productions post-Covid.  It was designed to reduce the costs of Broadway production coming back at a time when:

  • Fewer people were coming (and still are – to the tune of 18% down since pre-pandemic)
  • Costs were higher than ever (and still are – to the tune of 10-30%)

Every Broadway budget I’ve seen contemplating new productions includes the assumption that the show will receive the tax credit.  Yet still, even with that $3mm credit, the recoupment schedules are more challenging than they ever have been.  

So what’s the threat?

Well, Governor Hochul, the angelic force who delivered this tax credit to us . . . one of the few politicians over the years who has acknowledged the importance of Broadway to the economic engine of the entire state, not just the city . . . was quoted twice in the article.

First, about where the industry is right now, she said . . . 

“We are still in a crisis situation, and I’ll do whatever it takes.”

And she has.  (Her reversal on congestion pricing . . . even if it’s only short-term . . . was an example of that.)

She went on to say this about the tax credit, which is what shook me:

“This is not a permanent situation.  It is a temporary assistance to make sure that one of our most iconic industries never fails.”

Not permanent.


Yet, right now, every budget we’re creating IS dependent on it.  And yet recoupment rates are slower than they were pre-pandemic. 

So what happens IF it’s not extended . . . or better yet, made permanent?

First, it should be.  And I’m not only praying, but I’m going to do everything I can to help let everyone know that it should be.  (And if you’re a Broadway fan, you should too – tax incentives and credits aren’t about making money – they are about reducing risk to make more art – so that we can TAKE more risks – and do shows that might not normally be done.)

Second, as much as I’m about positive thinking and acting like something is FACT even when it isn’t . . . our industry needs to stop depending on the tax credit to create reasonable budgets.  We have to assume that it is going to go away. Which means we have to find a way to make our numbers WORK based on what we have.

Otherwise, if the tax credit rug gets pulled out from under us . . . the shock might be too much for our shows to handle. 

The threat is real.  The tax credit has an expiration.  It’s been extended once, but it’s not guaranteed to get extended again.  And every year it’s going to get harder to get an extension . . . and our Governor has said it’s a bandaid, not a stitch. 

So let’s not operate that way with our operating budgets.  

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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.