Filed at 9:21 a.m. ET
NEW YORK (Reuters) - Broadway producers are finding it tough to attract
investors for new productions as the global financial crisis begins to take a
toll on the Great White Way.
And sluggish tickets sales have caused the closure of shows, adding to the
sense of gloom on Broadway.
While several shows traditionally close at the start of the year to make way
for new productions ahead of the Tony
Awards, more than usual are taking their final bow -- 12 shows have finished
and another four are due to close by February 28.
The economic turmoil "certainly had an impact on my show and on a number of
shows that might have made it through this coming summer," said producer Margo
Lion, whose show "Hairspray" closed on January 4 after more than six years on
Broadway.
Several shows could not secure the financing needed to open in the coming
months -- "Godspell," "Vanities" and "For Colored Girls" -- and producers blamed
the economy, said Charlotte St. Martin, executive director of trade group The Broadway
League.
"It's not uncommon for shows not to get financing if they're not sure-fire
hits in tough economic times," St. Martin said. "Even in great times, a lot of
shows don't get financed."
"Hair" was a hit on Broadway and London's West End in the 1960s, but Andrew
Hamingson, executive director of New York's Public
Theater, which will bring "Hair" back to Broadway in March, said lining up
investors for the show was difficult.
"At the time we were out looking for investors for the show it was at the
same moment ... when all those companies (like Lehman Brothers and Merrill
Lynch) either disappeared or they were acquired by other companies," Hamingson
said.
"People are participating in smaller amounts than previously ... It basically
takes more people to get a show on its feet," he said, adding that he was still
finalizing the last 10 percent of investment for "Hair."
LONG ODDS
St. Martin said, "A lot of the investors in Broadway shows come from the Wall
Street arena and if they have lost a lot of their money, there may be less money
for productions.
"That being said, we had a couple of shows open this past season in the early
fall that got financing at the last minute and recouped their investment," she
added, citing "All My Sons" and "The Seagull."
Broadway hit "In the Heights," which won the 2008 Tony Award for best new
musical, recently announced it had recouped its $10 million investment since
opening in March.
Twenty shows are due to open in the coming months and the industry will be
watching for signs of how the 2009-2010 season, which starts on June 8, is
shaping up.
History shows that four out of five shows do not return on their investment,
St. Martin said.
"Reality is people invest for reasons other than just a return on
investment," St. Martin said. "Nobody says I'm definitely going to lose money on
this, but they know that the odds are not in their favor."
A Broadway play tends to cost up to about $4 million, while a more elaborate
musical can cost well over $10 million, but the returns on a musical are usually
higher.
When it comes to audiences, Broadway had 2008 calendar year gross earnings of
$941 million, up from $938 million, although theaters were dark for 19 days in
2007 by a stagehand strike, figures from The Broadway League showed.
The League also said 37 shows closed in the 2008 calendar year, five more
than 2007, but the same number as 2006.
Maria Somma of Actors Equity said the financial crisis has not effected work
for actors and stage managers, with the number of Broadway contracts signed
holding steady.
"There are a lot of stories out there about the death of Broadway and I think
that is very premature," Hamingson said.
"Theater is a living thing, there are good shows and there are less good
shows," he said. "What happens is sometimes you have a season that doesn't have
a lot of very strong shows, so one can't always attribute it to the economic
climate."
Lion said when U.S. President-elect Barack
Obama takes office, it might restore some confidence to consumers.
"I don't know if we will bounce back completely in the coming months, but we
should have a revitalization of the Broadway scene," she said. "If people feel
more sure-footed then they will be more willing to invest in new projects."