Theater things that don't make sense: Vol. 5. Regional theaters as authors.

The regional out-of-town tryout is a popular way to develop new works headed for Broadway, especially expensive musicals.

Shows like Jersey Boys, Thoroughly Modern Millie, Light In The Piazza, Color Purple and more, were all incubated out-of-town.

So how does this work?

Traditionally, Producers of shows with commercial dreams cut deals with these theaters to put them on their season. 

The deal usually includes an up-front "enhancement" payment for line items that are above and beyond the regional theaters customary budget (most wouldn't normally do musicals of such size and scope, so they may need costume help, additional sets, per diem for creatives, etc.).  This fee can easily be several hundreds of thousands of dollars if not more.  But, it makes sense that the Broadway producers would pay for it.

In addition to this fee, it is also customary that the theater gets a royalty, usually between 1 and 1.5%. (To put that in perspective, the minimum for an author of a musical (bookwriter, composer, etc.) according to the APC is 1.5%.)

This is what doesn't make sense to me. 

As producers we're forgetting the incredible value we're giving these theaters.  We've gotten desperate looking for development deals, and we're giving away what little we have left of the store, before the store has even opened.

A world-premiere of a brand new musical on its way to Broadway is of tremendous value to a regional theater.  It brings audiences, subscriptions, fund raising opportunities, publicity, and more.  Think about it:  if you were the AD of a regional theater, what would you rather have . . . a self-produced revival of No, No, Nanette, or a brand-spankin' new musical on its way to Broadway?  You'd pass on the "Tea For Two" in two seconds.

Yet not only do we enhance the production (making the show more attractive for the theater's subscribers), we also pay them like they were an author for the rest of the run of the show?

It's like someone inviting you to their house dinner.  You bring the wine, like a good guest should.  Yet, after you leave, they expect you to send them a bottle every week until you move away.

Yes, the development work done at regionals is crucial and at a lower cost, but it's costing us too much to do it.  It seems that even the theater owners out of town have found a way to squeeze us content providers.

The good news is that there are almost 2,000 regional theaters around the country.  We just have to do the work to find the ones that want us, instead of the ones that just want to make money off us.

Comments

[Rayburns]

Generally on an enhancement deal, the commercial producers and the nonprofit agree on a fixed amount, say $500,000. For that, the producers get to use the relatively cheap infrastructure of the regional theater to see what show will look like fully produced. The regional takes on all of the risk above the $500k. If the show goes over budget by 100 or 200k (that ever happen?) the regional has to take on that financial burden.

Often, much of the creative work happens during that rehearsal period. For the risk and the creative expertise they put in a show, they should get their 1.5%. By the way, since most commercial shows are financial failures, royalties often get subject to the profit pool and the creatives (including the regional) usually get very little.

[Scott]

Good points, but doesn't the regional theatre also have some expense involved in "hosting" an out-of-town tryout? Unless a production is bringing a full crew with them, doesn't part of that "royalty" go toward crew and front of house staffing as well as local marketing costs, etc? Sometimes a visiting show such as this can really stretch a small, possibly non-profit regional theatre's resources, so shouldn't they be compensated for that?

[Joseph Millett]

On some of this topic, I do agree with you. Producers are getting squeezed, by materials costs, by labor costs and by the fact that there really is no good way to do your work quickly. But producers aren't alone. As a stage manager in a LORT, I'm getting squeezed by the fact that my salary has never increased in three years (not even a cost-of-living adjustment; such is the joy of seasonal work). And, sadly, when I stage manage a new show for my company, nobody attaches me to the project, regardless of how good I make the production look. I'm not weeping. That's just the way it is.

But in defense of my bosses (and it's rare that I do this), the risk they take on a new show is just a large as yours. Regional theatres take a hit on subscriber numbers when they put on a flop, new musical or not. It's a crapshoot for everybody. For every "Hairspray" there are half a dozen "Glory Days" (or "Doctor Zhivago"s, that don't even make it out of the barn). One mistake and you can subtract thousands of repeat customers.

And if I read your blog right, the fees you pay are above the theatre's customary budget and unique to this kind of project. In my experience, when a theatre spends its own money on a production, they are producing it, regardless of how the material comes their way (and who comes with it). Steppenwolf gets royalties for "August: Osage County". Shouldn't they?

All this aside, I think it's a valuable discussion, and I look forward to reading more from you.

[isaac]

Ken,

I think you might be selling the value of the non-profit theater a bit short. Don't forget,amongst other benefits, in addition to producing the show you're enhancing, they're giving you a built in test audience (Their subscribers) and allowing you to get a tax deduction for the money you're spending on enhancing the show since technically you are donating to a nonprofit.

[Jay]

"We just have to do the work to find the ones that want us, instead of the ones that just want to make money off us."

Isn't that the biggest thing motivating Broadway producers?...making the most money? Why is it such a shitty thing for these regional theatres have a bit of that same attitude?

[RLewis]

Who the heck is doing No, No Nanette in a regional theater? They surely are not a candidate for a new musical yet to prove itself on Broadway, or anywhere else for that matter. (you picked a bad example, dude) Say what you want about those Regional Theaters, but for the most part their audiences do not go to the great unknowns (that's for nyc audiences). Did you just all of a sudden lose your marketing survey savvy for this topic?

I'd guess that not-for-profit ADs would look at commercial producers' options and figure you can't afford to go back to the out-of-town road tryouts. Why spend all that $$$ traveling through Chicago, Boston, Pittsburg, Detroit, Syracuse, and Philly, when the show can relax at the sunny Old Globe home to work out the kinks? Bringing wine to someone else's dinner is still much cheaper than eating out again and again.

And by your own math, 1.5% is far from a sure thing when most shows flop on Broadway. The Signature Theater might think that you risk over estimating the value of what commercial producers have to offer and underestimate the Glory Days risk that they take on your behalf.

Aren't those 2,000 regional theaters just hoping to find a fat-pocket producer that wants them - a mutual self-importance circle? This current state of dependency didn't come out of nowhere. I'm sure it was the shewd planning of commercial producing professionals. Or not. Nice try.

[Scott]

While I can't comment on the percentage point for the regional theatre (maybe that's your real gripe), isn't the investment they are making on a new musical a risk that should be rewarded to some degree? For every "safe" proven show like Nanette, or Fiddler, where they know their audiences will come, what guarantee is there that the subscription base won't suffer by a bad Broadway-bound new show? Regional audiences are very loyal but can turn on a dime. People still walk out on, or are shocked by The Full Monty! (personally, I cancelled my Roundabout subscription after 3 lousy shows - 2 of them new) Regionals aren't usually there to make a profit so what real "plus" is there for them? The way I read it, you're saying "We will fill a slot in your season. We give you a new show. We'll pay for the things that won't fit into your budget. We walk away with a potential profit-making show and you just continue on with your next subscription show in the season." Why should a regional theatre in this economic climate take a risk with no reward? I'm not defending the process but it would be interesting to hear the other side's POV.