Why Broadway Is Betting on Big Stars
This story first appeared in the May 18 issue of The Hollywood Reporter magazine.
Fifteen years ago, the Broadway theatrical world was in such dire straits that a group of theater veterans turned for help to Bain & Co. -- now famous for its ties to Mitt Romney. In a dire report, the consultancy noted that the cost of producing a show had risen 400 percent during the previous 30 years while ticket prices had climbed only 80 percent. They recommended a very Republican course of cost-cutting measures, concluding, "If the issues are not addressed … Broadway will dwindle to five or 10 theaters filled with musicals."
The gloomy prognostication turned out to be false. In its most recent research report, The Broadway League, the industry's trade association, revealed that Broadway shows grossed more than $1 billion during the 2010-11 season, drew record-breaking attendance and included 14 musicals, 25 plays and three specials.
Broadway producers ignored the consultants' designated plan of action in favor of a more liberal course of recruiting Hollywood stars. Just look at the Tony Award nominations announced May 1, where the nominees for best actor in a play included James Earl Jones in The Best Man, John Lithgow in The Columnist and Philip Seymour Hoffman in Death of a Salesman. (The snubs were equally illustrious, ranging from Samuel L. Jackson in The Mountaintop to Ricky Martin in Evita.)
Luring stars to Broadway requires a sizable investment. The typical payday for a big-name actor who can draw audiences is $25,000 to $75,000 a week, according to sources. Several actors recently have topped $100,000 a week, including Hugh Jackman and Daniel Craig for A Steady Rain, Nathan Lane for The Addams Family, Daniel Radcliffe for How to Succeed in Business Without Really Trying and Harry Connick Jr. for On a Clear Day You Can See Forever.
"Plays are more dependent on stars these days, and revivals are rarely done without a star," says Ken Davenport, whose productions have included Godspell with Weeds' Hunter Parrish and Blithe Spirit with Rupert Everett and Angela Lansbury. Salaries have escalated, he explains, with the recent Broadway arrival of "three-lettered agencies" such as CAA and WME. Theatrical producers will entertain practically any financial arrangement if it means securing a box-office draw for the marquee. "We'll get creative," says Davenport. "A percentage of post-recoupment, a percentage of gross …"
But by betting on stars, producers might have made a Faustian bargain that ensures the survival of Broadway at the limitation of their own profit. A Broadway play costs about $2 million to $3 million to produce. About $750,000 of that is devoted to advertising. A good portion then goes to operating expenses like theater rental, insurance, union benefits and technological needs. Adding a star packs the house, allowing producers to command top dollar for tickets, but here's the rub: Most stars can agree only to limited engagements because of film and TV commitments. And when a star departs, attendance generally dips.
"Having a star usually provides real downside protection, but you lose the upside," says Seth Gelblum, an attorney at Loeb & Loeb and perhaps the top dealmaker on Broadway. "The real difficult thing is to make the property still seem like a real attraction when the star is gone."
Still, many veteran producers are happy to accept the trade-off. Putting an A-list star in a play with a limited run of 16 weeks has become the financial model of choice for producers such as Scott Rudin, who consistently has used the strategy on shows like the current Salesman, Fences with Denzel Washington and The House of Blue Leaves with Ben Stiller.
Some remain skeptical that "star insurance" guarantees a healthy run. After he headlined the 2006 revival of The Pajama Game, Connick was seen as a sure thing. He commanded a six-figure salary plus a percentage of box office when he returned to Broadway in a revamped revival of On a Clear Day. But despite a nice first-week gross of nearly $750,000, the musical couldn't escape poor reviews, closing in January after only 29 preview and 57 regular performances.
Charlotte St. Martin, executive director of The Broadway League, has doubts about whether all those stars are worth it. "I can't see any direct correlations between stars and financial performance," she says, noting that the long-lasting rule of thumb that only one in five productions recoup their costs still holds. Plus, she notes that the most profitable shows -- from the long-running musical Wicked to the more recent drama August: Osage County -- have something in common: "Tell me, who are the stars in that?"