Ask any business question

Goodness me. Thank you. Yes, the questions make sense, although I am not sure its possible for the answers to!

Replace the word ‘shows’ with ‘restaurants’.

‘Expecting’ hits is not very usual. Hoping. Praying. Thinking. Believing
/ but ‘expecting’!

It’s too difficult. Some producers (restaurant owners) can make a very good living without ever creating KFC or The Ivy.

Some producers make one show and personally make (gross - pre tax) £200m…..then do another 20+ years later and it doesn’t work…oh well.

Some producers (most actually) never on average over a 30 year career earn and net more than a partner in a legal firm of big 6 accountant. But its often more fun. But just as often requires huge personal risk and sacrifice.

Most of the mid range 20 UK producers who are not theatre owners would basically work to 1/2/3. Although they would not admit it. Half wont quite make a profit. (3). 40% will make a little (2) and one will make big (1)….now ‘big’ is all relative…Six will make more than Hairspray. All over the world…but is Six a bigger ‘hit’…I say yes..but not everyone would….The Producers didn’t really make the original ‘producers’ much real money…but of course it was a hit…Jersey Boys…prints the stuff…so do the Wrong shows…so many factors… mostly what are your deals with investors and what are your deals with royalty earning creatives…Woman in Black will make far more % return on its original investment than Dear Evan Hansen….but…well, i wont got on…

Most investors that I know and have experience with and of WANT to make a little money…or a lot of money…the smart ones…actually do-they get with 2 or 3 of the smartest-most commercially savvy producers, they negotiate improved terms, build a relationship-learn and grow together-like any business relationship - they demand more ££$$ in the more obvious commercial (?) ones and agree to reluctantly put in the vanity ones….its possible to make 10-20% a year. It’s a lot easier to lose 40-50% also. Sometimes you get very very lucky and make 500%. Bitcoin anyone….

I wonder if Harry Potter and the Cursed Child had many investors, I assume it would have been really easy to raise money for that show.

Not sure cutting back on opportunities to make money makes good sense. But maybe it’s about a 5 v 6 day work question. Theatre generally need to be open as long as possible to pay the bills. Commercially remember most shows fail and lose money every year. So people aren’t desperate to do fewer shows. Be better if we could have 5 day working weeks and still make the numbers work but maybe 1 in 100 could. Don’t know.

HP had 3 main producers. 1 wrote check for whole amount. Two shared opportunity with investors, on very tight terms mind. Those two also, correctly and deservedly put decent % in themselves. I cant think of a more attractive proposition-almost ever, than HP. Might not work out to be the % return of. POTO, Les Mis, or Hamilton etc in the global outlook but will be at least 7 or 8 times profit-only in the UK that is….although that’s a total between investors and producers-so-investors make 3 or 4 times money over 6-9 years. Great! Not Tesla or Apple from their early days but pretty good compared to almost all ‘new’ plays!

Thankyou for your answers so far. I have some questions about the different returns for producers vs investors.

I'm assuming the producer gets thier operating costs (running office etc) as part of the cost of the show before profits are calculated. Do they award themselves extra above that and on what basis. I.e. a percentage of costs on top as profit like other business? We know Cam Mac had made loads of money. Will his investors have made the same proportional profit on thier investment as he will on his?

You talked about "tight terms" for an expected huge hit like Harry Potter. What do you mean by that?

The theatres are planned to go to his foundation so I would assume that some of his fortune will be given to the foundation as well. 

I imagine Cameron will have written in his will about where the assets will go.

Does anyone how the Adelphi came to be jointly owned by both LW Theatres and Nederlander and why neither party has bought the other's stake in the theatre? I know when ATG bought the Live Nation theatres years ago, Live Nation's stake in the Dominion was bought by Nederlander who owned the other stake.

I have this recollection that the Adelphi, previously owned outright by Nederlander, became the sweeter that secured the rights for Sunset in both London and New York. Nederlander probably thought, or hoped, it was going to be as successful as Phantom, which by 1993 had already been running for seven years. You win some, you loose some!

Then again, even I am wrong sometimes, so may be misremembering.

Eddie would be outside of the normal A Lister status as it was his mission to make this happen and the producer had to invest so much money in the venue. It literally doesn’t make any financial sense unless the venue can be rented in the same format for future shows. Cabaret wont run more than 2 years-even with star casting every 20 weeks..as eventually proper stars wont want to take over…
A major star ‘normally’ works for 7-10% of the box office. Give or take-depending upon venture and length of run. But the vast majority of A listers actually ‘lose’ money by taking theatre rather than tv or film, so its all about how much they really want to do it and then where the precedent is within their agency (CAA/ICM/UNITED/PARADIGM/WME etc) no one within the same stable is going to accept less than one of their acting peers. Eddie will be earning c£10k a week. Same as Jessie. He would insist they get paid the same. She wouldn’t argue!
But normally, an A Lister would get a %. Which could be tens of thousands a week…always less for their time than a movie or TV.

Potter will run for 15+ years. Of course.

Don’t know about the Adelphi ownership structure.

Most subsidised theatres do invest or raise investment from their trustees for transfers, but they agree with the commercial partners that they don’t have downside risk beyond the initial investment.

Mostly the salaried staff like Longhurst or Goold or Warchus etc would earn a royalty if shows transfer.

What would happen if the female lead was almost completely unknown. Yet the male lead was a movie star ? Would equality legislation mean that the female lead has to be paid the same as the male lead (star). (And vice-versa of course).

How much does it cost to hire a theatre for something like An Audience with Adele? They did a fair bit of work to remove the stall seats and adding tables and the staging so assume it wasn't cheap.

No insurance anywhere for anyone. The landlords and the conglomerates are fine-they can ride the storm-those owned by banks like Sonia F will be fine. Those clever ones with big hits earning millions like Six will also be fine-its the other independents that will be having terrible pain. Friend. Pugh. Lloyd. Etc. All the subsidised houses will be OK..not great-we are talking mass redundancies and cutbacks. It’s lockdown by stealth with no recovery fund and no furlough. 30-40% of those with transferable skills have left or are looking to leave. West End is dead. Half or more than half are closed tonight. Of course a huge number of fit healthy negative testing actors are having to isolate as they have chose not to be vaccinated. Which means the shows cant go on if there are too many of them in the company/crew. Landlords will give Indepedent producers a big break-its all coming-they have to…remember all of them are owned by Billionaires…Max W at Nimax is worth more than ALW and CM combined so dont believe the ‘poor me’ from certain places….its the workers and the crews and the freelancers that will lose and leave and the half dozen independent producers still left in the west end will have to take enormous debts to get through the next 2 months. The inequality in the business has never been so obvious.
Please buy tickets for January-February. If you can. Support the independents where you can.
It’s awful.