'Hamilton': Who's Making Millions Off Broadway's Hottest Show
THR analyzes the revenue from sold-out shows, music and even books related to New York's most in-demand ticket in years.
This story first appeared in the April 22 issue of The Hollywood Reporter magazine. To receive the magazine, click here to subscribe.
The fine print on the investors’ agreement for The Public Theater’s spring 2015 musical warned that backers likely wouldn't see a return on their money unless the show eventually enjoyed a successful Broadway run – the chances of which were “impossible to project or predict.”
That disclaimer seems hilarious in hindsight. The show, Hamilton, is the hottest ticket in New York in years. Through April 3, the hip-hop musical about the "$10 founding father" has grossed $61.7 million at the box office since its Broadway previews began last July. Shows are sold out, with premium tickets selling for $549 each (and scalpers asking double and triple that price).
So who's raking in all those 10-dollar bills? Hamilton grosses about $1.5 million weekly in ticket sales while it costs about 40 percent of that to rent the Richard Rodgers Theatre, pay salaries and cover other expenses, according to the show's early financial statements obtained by THR. (The documents revealed that Hamilton spent $100,000 a week on advertising and promotion during previews.) What's left: $900,000 before royalties are paid. “Any producer on Earth would be thrilled,” says Franklin Weinrib theater lawyer Elliot Brown, who has represented the producers of Billy Elliot and The Producers but isn't involved in Hamilton.
Investing in Broadway musicals is risky. Many fold without backers recouping, like the $75 million Spider-Man: Turn Off the Dark. On the other hand, Wicked producers announced March 15 that the show had reached the $1 billion threshold in a record 12½ years. As for Hamilton, those who sunk money into Lin-Manuel Miranda's innovative chronicle of America's first Treasury secretary reportedly already have been made whole. Here's how the numbers break down:
The Public Theater receives a weekly royalty of 1 percent of the adjusted box-office gross. As the sole author, Miranda, 36, gets a 7 percent cut – which means that in a typical week of eight shows he can make about $105,000 in royalties. (That's on top of his negotiated salary for starring as Alexander Hamilton.) Both parties get an extra 0.5 percent once the show is 110 percent recouped. Miranda also pays the underlying rights owner (author Ron Chernow, whose Hamilton biography served as the musical's source material) from his share. Producers Jeffrey Seller, Sander Jacobs and Jill Furman split a 3 percent share, plus a weekly $3,000 administrative office fee. Director Thomas Kail (2 percent), choreographer Andy Blankenbuehler (1.5 percent) and other key creatives also are part of the royalty pool.
Brown says that it is unusual for shows nowadays to pay weekly royalties on gross, rather than based on a different share of net weekly operating profits. "Only the biggest hits would elect to do so," he says. Indeed, Hamilton's operating agreement allowed the option of paying Miranda 18.15 percent of the operating profit, but the show's massive success means that would have upped his weekly royalty to around $160,000.
After royalties are paid, the remainder — around $600,000 a week — returns to the investors until their $12.5 million capitalization is fully recouped. That apparently has happened, according to a March report on the website Broadway Journal (producers have not confirmed it). Sources had previously said that Hamilton was 25 percent of the way to recoupment in October, just five weeks after opening night.
After recoupment, Miranda gets 3 percent of the net profit (on top of his weekly royalty), the Public gets 5 percent (upped to 6 percent once Hamilton reaches double its capitalization) and Kail (1.5 percent), Blankenbuehler (0.5 percent) and even Miranda's father, political consultant Luis Miranda Jr. (1 percent), get a cut. As the lead producer, Seller also gets 5 percent off the top (a share known as "torchbearer points"). The remainder is split 50-50 between the producer and investor pools.
And as Hamilton expands beyond Broadway, more revenue streams will open. Producers will charge licensing fees from road productions: Chicago gets an open-ended run starting Sept. 27, and a national tour kicks off in San Francisco in March 2017 before hitting L.A. and other cities. In addition, the Hamilton cast recording has generated a surprisingly strong $6 million in revenue in the U.S., according to Billboard, which Miranda and Co. split with label Atlantic Records, music publishers and the album's producers, who include The Roots' Questlove and Black Thought. And the windfall should last years. Explains Brown: “You’re going to have sources of income from stock and amateur [productions], like when your high school does the show, and from the movie of Hamilton, which we certainly can expect to get done.”