What a “1 for X” Deal Means In Broadway Investing & Producing.

You’ve heard it before.

But maybe you haven’t quite understood it.

And don’t worry, you’re not alone.  I’d bet a “1 for 1” deal on Hamilton that a huge percentage of people who HAVE “1 for X” deals on Broadway as an Investor or Producer don’t quite understand what they mean or how they’re calculated.

What further complicates it are the different ways they are offered.  

It took me a long time to get it.  And sometimes I still have to sit down and draw pictures and do old fashioned algebra to figure it out.  

That’s why I decided to break down for you (and me!) in this article.  (I tried this once before in this video – watch it – if only to see Baby Ken’s first “How To” video with black hair and all.)

AND, since Baby Ken’s first video, I’ve come up with a much simpler way to explain this to anyone considering investing in a Broadway show.

Here we go . . .


A “1 for X” (e.g. 1 for 1, 1 for 2, 1 for 6) is a deal offered to Co-Producers or Investors in Broadway show (or Off Broadway, West End or other commercial production) in exchange for investing or raising a larger amount of capital than a typical investment.  

It is a preferred rate of return.  

Lead Producers reward those who invest or raise larger amounts of capital for taking more risk and for doing some of their work for them!  (Someone who invests or raises $500,000 saves the Lead Producer a lot of time.)


Before I explain what a “1 for X” deal gets, it’s important to understand what a traditional investor gets.  

An investor who invests $50,000 in a Broadway show is entitled to their share of 100% of the profits until the show recoups.  

By way of example . . .

Let’s say you invest $100,000 in a brand new jukebox musical based on the music of Taylor Swift called SWIFTEES!  SWIFTEES has a capitalization of $20,000,000  That means, you invested .5% of the capitalization (100,000/20,000,000). 

If, in its first week, after all expenses, royalties, theater rent, etc, SWIFTEES made $1,000,000 of PROFIT (it would!), then that full $1,000,000 would go towards paying back the investors.  

Therefore, your share of that $1,000,000 would be $5,000.  That $5,000 represents .5% of that pre-recoupment profit of $1,000,000.

20 more weeks like that and you would have your full investment back.  


After a Broadway show (or Off Broadway show, etc.) recoups its investment, the profits are split between the Investors and Producers.

On Broadway and in the US, that split is 50/50 or 50% of profits going to the Producers and 50% going to the Investors.  (In the West End, that split is 60/40 in favor of the Investor.)

Using the above example, if SWIFTEES! recouped (it would), and earned $1,000,000 in profit, after all expenses, royalties, net profit participants, etc, then $500,000 would go to the Producers and $500,000 would go to the investors.

Your share of that $1,000,000 is now $2,500.  You receive your .5% share of the $500,000 the investors receive, rather than the pre-recoupment .5% share of the $1,000,000.  


Produces offer these deals to incentivize larger investors or Co-Producers to invest or raise (sometimes referred as aggregating or “bundling”) larger amounts of money.  These deals are commonly referred to as “entitlements” and are usually given to potential investors or Co-Producers on an Entitlement Sheet. (See below on how to get a sample entitlement sheet.)

The “1” in the phrase “1 for X” is always constant.  The X is the variable.  I have never seen or heard of A “2 for X” or “3 for X” deal.  Sometimes, people reverse the “1 for X” in their description and refer to the “1 for X” deal as a “X for 1”.  However, this is not the norm or industry standard.  (Even though it may make more sense, as you’ll see below.)

Common “1 for X” deals are:

1 for 1

1 for 2

1 for 3

1 for 4

. . .

1 for 7

A deal higher than 1 for 7 is exceptionally rare.  The thing it remember is that as the X gets larger, the enhancement or premium you receive gets smalle.r

In the simplest of terms, what the 1 for X deal means is that . . . for every X dollars you receive or investors receive in profit POST RECOUPMENT, you shall receive an extra 1 dollar in additional profit.  This additional profit comes from the Producer’s share of profits. This is why these deals are only POST recoupment, because prior to recoupment the Producer has no profit to share. 

Since this additional profit is coming from the Producer’s share of profits, it does NOT reduce or dilute the regular investor’s share.

Using the example above, let’s say you invest $1,000,000 in SWIFTEE and were given a “1 for 4” deal for your larger investment.  

$1,000,000 represents 5% of the capitalization ($1,000,000/$20,000,000).

Using the example above . . .

If SWIFTEE earned $1,000,000 in profit after all expenses and any net profit participants (often key creatives or personnel receive a piece of profit off the top), $500,000 would be allocated to the investors and $500,000 to the Producers.

You would receive 5% of the $500,000 or $25,000 for your investment.

In addition, you are entitled to a 1 for 4 deal, or 1 dollar for every 4 dollars your investment generated. 

So in this case, you would ALSO receive $6,250.  This amount would be deducted from the Producer’s $500,000 share.

Your total return would be $31,250.  ($25,000 plus the entitlement return of $6,250.)

NOTE:  Co-Producers who raise money can earn a 1 for X deal even when they do not invest in the show directly.  

In the case above, if you RAISED the $1,000,000 from other investors and didn’t invest in SWIFTEE! personally (How dare you), you would only earn the 1 for 4 entitlement of $6,250.  But you would not have risked any capital.  


What makes these deals more confusing than they are on their own, is that “1 for X” are often described in other ways.

The two ways you may hear these deals pitched to you as a potential Broadway Investor, or how they may appear on an entitlement sheet are as follows:

“Additional Percentage”

A “1 for X” deal is also a way of describing a Broadway Investor or Co-Producer receiving an additional percentage of profit based on their investment, or as my lawyer likes to say, “an percentage enhancement of your ordinary investor share.”

A 1 for 4 deal represents 1 additional dollar for every four dollars the investment returns, or, an additional 25% (1 divided by 4).  

A 1 for 6 deal represents 1 additional dollar for every six dollars the investment returns, or, an additional 16.67% (1 divided by 6).

A 1 for 1 deal represents 1 additional dollar for every 1 dollar the investment returns, or, an additional 100% (1 divided by 1). (1 for 1 deals are the “best” deals usually offered to investors and they are usually reserved for early stage investments in Broadway shows, often referred to as Seed Money in other industries or “Front Money” in ours.

In the example above where your $1,000,000 earned you a 1 for 4 deal, you would be entitled to an additional 25% of what the Investment returned.  In the $1,000,000 profit scenario above, you would receive 25% of your $25,000 investment return, which is the aforementioned $6,250.  ($25,000 x .25).  Total return is again $31,250.

“On XX Terms”

“1 for X” deals are sometimes referred to as “On XX Terms,” especially in the West End.  The West End does not use “1 for X”.  

In an “On XX Terms” deal, the XX stands for the percentage or total profit that your investment and entitlement returns are entitled to.

So, if you receive an offer for a “On 75% Terms”, you are entitled to your pro-rata share of 75% of the profits after all expenses, NOT 50%, as is traditional.

Back to our SWIFTEE example, if you invested $1,000,000 on 75% terms of a $20mm capitalization, and there was $1,000,000 in profit, you would receive 5% ($1mm/$20mm) of $750,000 (75% of the $1mm) or $37,500.  

QUICK QUIZ:  A 75% terms deal is the equivalent of what “1 FOR XX” deal?  

(Answer at end of post!)

Most find this description of Producer and Investor deals the most confusing, but if you plan on investing in West End, then get ready to see a lot of terms deals!


The above describes the technical definitions or examples of the “1 FOR X” deal.  

And I still think it’s too complicated.

That’s why when I’m offering entitlement deals to potential Broadway investors or Co-Producers, I describe it in a much simpler way, using actual dollar figures instead of “1 for Xs” or “XX% Terms” or numbers that I find confuse Broadway Investors and Producers!

What I do is take the additional percentage that the investment would receive and add that to the investment amount.  

For example, if a $1,000,000 investment earned a 1 for 4, that is the equivalent of an extra 25% in profit.  I calculate 25% of $1,000,000, which is $250,000.  I then add the $250,000 to $1,000,000 to get $1,250,000.

My description of how the 1 for 4 deal would be, “Investing $1,000,000 in this production at a 1 for 4 deal would be the equivalent of investing $1,250,000 in terms of the profit you receive.  You get the profits as if you invested $1.25mm rather than $1mm.  Your money is working harder for you than it does for a “regular” investor.”

Again, to our SWIFTEE example.

In the week of $1,000,000 of profit POST recoupment, the investors receive $500,000.  A $1,000,000 investment would receive $25,000 from the investment side.  A 1 for 4 deal on the $25,000 would be an extra $6,250 or a total of $31,250.

Now, a $1,250,000 investment would be entitled to 6.25% of the investor profit, or in this case 6.25% of $500,000.  

6.25% of $500,000 is . . . $31,250.  🙂

In my thousands of asks of investment from Co-Producer and larger investments, this description has by far been the easiest for all of us (including me) to understand and calculate.  

– – – –

I hope the above helps you understand and evaluate any Broadway investments that you may be considering as a “regular” investor or a Co-Producer.  And if you are a Producer raising money, I hope it helps you raise money easier and faster. 

If you are interested in learning more about the mechanics of Broadway investing and producing, including strategies I use to evaluate Broadway opportunities, as well on tips on raising money, I wrote the book on Broadway investing, called Broadway Investing 101.  It has a bunch of five star reviews on Amazon.  And if you get it now, it comes with some bonuses including actual offering documents, budgets and more. Click here to get it now.


A “On 75% Terms” deal is the equivalent of a 1 for 2 deal.

In the example above, if the $1mm were invested in “traditionally,” you would be entitled 5% of 50% of the profit (5% of $500k) or $25,000.  For every two dollars you received as an investor, you’d receive $1 dollar as a producer, or 50%.  $50 of $25,000 is $12,500.  Add that to the $25,000 and you receive a total of $37,500 . . . the same as an on a 75% terms deal. 

Hope you got it right!  For more quizzes, click here.

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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.