(SOUNDBITE OF MUSIC)
STACEY VANEK SMITH, HOST:
Lee, we are standing in - this is, like, the heart of Times Square.
LEE SEYMOUR: This is the heart of Times Square, yes.
VANEK SMITH: There is the TKTS sign right there, and everybody's taking selfies.
SEYMOUR: Of course.
CONSTANZA GALLARDO, HOST:
Lee Seymour writes for Forbes magazine. He covers theater and Broadway, and he has even produced some shows.
VANEK SMITH: And Constanza, we met Lee at 47th and Broadway. And everybody really was taking selfies.
VANEK SMITH: And we were right by the iconic TKTS booth, where people can buy discount tickets for plays and musicals. And you know, we're just standing there. There's all this noise and these cars and these people everywhere. And we are just surrounded on all sides by these towering buildings.
GALLARDO: And these huge ads for, like, alcohol, clothing lines, stores and, of course, Broadway shows.
VANEK SMITH: So if a show is advertising in this space, is it like...
SEYMOUR: It means they have money to advertise in Times Square.
VANEK SMITH: How much is, like, one of these billboards?
SEYMOUR: That, I honestly don't know.
VANEK SMITH: Tens of thousands?
SEYMOUR: Oh, easily tens of thousands.
GALLARDO: Everything about Broadway is big, including all the costs. This week, the Tony nominations were announced. And Stacey, we started talking about it.
VANEK SMITH: Yes, we did.
GALLARDO: And we were like, wait. We work, like, five blocks away.
VANEK SMITH: I know.
GALLARDO: This is big business, and it's right down the street.
This is THE INDICATOR FROM PLANET MONEY. I'm Constanza Gallardo.
VANEK SMITH: And I'm Stacey Vanek Smith. Today on the show, me and Constanza go to Broadway.
VANEK SMITH: We look at how much it costs to launch a show, how much it costs to run a show, how much it costs to get tickets for a show and why we're starting to see a lot of musicals that are kind of like - I don't know - a not-obvious idea for a musical that people would want to see...
VANEK SMITH: ...Ever.
VANEK SMITH: "Beetlejuice."
CONSTANZA GALLARDO AND STACEY VANEK SMITH: Beetlejuice, Beetlejuice, Beetlejuice.
(SOUNDBITE OF BROADWAY MUSICAL, "BEETLEJUICE")
UNIDENTIFIED ACTOR #1: (As Beetlejuice) It's showtime.
UNIDENTIFED ACTORS: (As Mourners, singing) Welcome to a show about death.
UNIDENTIFIED ACTOR #1: (As Beetlejuice) I'm going to need some help.
(SOUNDBITE OF MUSIC)
GALLARDO: So first off, we asked Lee Seymour about the economics of Broadway that hits closest to home - buying tickets.
VANEK SMITH: I've stood in line for discount tickets. I've, you know, done all the things to get tickets for Broadway shows. And I'm always thinking, when I get the tickets, that they feel expensive. You know, they're like 60 bucks, 70 bucks - a lot.
SEYMOUR: The average ticket price for a Broadway show now is 122, I think, last week...
VANEK SMITH: That's - really?
SEYMOUR: ...Which is wild. Yeah. I mean - so 60, 70 bucks - you're getting a good deal unfortunately, as crazy as that sounds.
VANEK SMITH: I had no idea. I should have been grateful.
VANEK SMITH: Instead, I was complaining about my own good fortune.
VANEK SMITH: It's really $122?
SEYMOUR: It is, and we can get into why that's the case.
GALLARDO: That's today's INDICATOR - $122, the average price of a seat in a Broadway theater last week.
VANEK SMITH: And there are a lot of seats. A typical theater will have between 500 and 2,000 seats and often around, like, eight shows a week, which just becomes an insane amount of money really fast. Right? I mean, you could easily - pretty conservatively, even - bring in, like, a million dollars a week.
GALLARDO: But Lee says there's a really good reason for that. It just takes an insane amount of money to put on a Broadway show.
SEYMOUR: So there's two ways of looking at the cost of producing shows. There's the initial capital that you have to raise just to make sure that you cover all of your initial costs, and then there's the weekly operating costs.
VANEK SMITH: So first up, initial capital you have to raise from investors - to put on a musical, Lee says, this just makes a crazy amount of money - between $9 million and $30 million, like, upfront.
GALLARDO: And Stacey, a big factor in those upfront cost - location, location, location.
VANEK SMITH: We are on Broadway.
SEYMOUR: The theater district of Manhattan, basically, like, 40th to 55th, 56th. There are 40, 41 Broadway theaters right now.
VANEK SMITH: That's not very many.
SEYMOUR: Real estate is very limited. Broadway is, on a certain level, a real estate business. And a good chunk of that real estate is taken up by long-running shows like "Lion King" and "Wicked" and now "Hamilton," which will be running forever. So if you're a producer and you're looking to bring a show into the next Broadway season, you're really looking at between 20 and 30 venues.
VANEK SMITH: So once you spend all the money to lock down one of these scarce spaces, get your show set up, hire your cast, maybe hire musicians, get the sets ready, you know, to spend all the money for a billboard in Times Square - basically spend all of the millions that it takes to get your show up and running, you're not done.
GALLARDO: Oh, no. You're not done. Now comes the second group of expenses. You have to pay to run the musical.
VANEK SMITH: Yeah, operating costs.
GALLARDO: Operating costs.
SEYMOUR: If you've got a big musical and you're running at between 500,00 and 600,000 a week, you are in great shape.
VANEK SMITH: Wow. How does anyone make money? That's - I - that's so expensive. On top of, like, the tens of millions to start the show...
VANEK SMITH: ...How hard is it for a show to make money?
SEYMOUR: There's - rough rule of thumb - it sort of changes season to season - but usually, about a third of the shows - a quarter to a third of shows in any Broadway season recoup, or make the money back.
VANEK SMITH: Oh, really? Just make their money back.
SEYMOUR: Yeah, yeah, yeah. So...
VANEK SMITH: So most shows don't.
SEYMOUR: ...You're not even talking about a profit.
VANEK SMITH: Most shows lose money.
SEYMOUR: Most shows lose money.
VANEK SMITH: What is, like, a disaster - like, how soon would a disaster close?
SEYMOUR: I mean, the week after it opens. It happens.
VANEK SMITH: Does that - really?
SEYMOUR: "High Fidelity" - again, talking of beloved movies...
VANEK SMITH: Oh, no.
SEYMOUR: ...That closed the week that it opened, I think. They ran for, like, 14 performances.
GALLARDO: So "High Fidelity" apparently cost about $10 million...
VANEK SMITH: Upfront.
GALLARDO: Basically, all the money was just gone - bye.
VANEK SMITH: Yeah. Broadway's a risky business. But Lee says if you hit it right, you can make so much money.
SEYMOUR: So the saying goes, you can't make a living on Broadway, but you can make a killing.
VANEK SMITH: "The Lion King" has grossed over a billion dollars. "Wicked" has reportedly grossed more than $3 billion. That's between tickets and merchandise and everything. "Wicked" is the property of Universal Studios. And that Broadway hit, "Wicked," has reportedly brought in more money than any movie that Universal Studios has ever made.
GALLARDO: Lee says movie studios have become a really big presence on Broadway. And he says that's part of why we've started to see a certain type of show.
VANEK SMITH: It feels like they are just reviving every - I don't want to say bad '80s movie...
VANEK SMITH: ...But like, every '80s movie that, like, I loved as a kid. But it - like, OK. So there's, like, "Pretty Woman."
(SOUNDBITE OF BROADWAY MUSICAL, "PRETTY WOMAN")
UNIDENTIFIED ACTOR #2: (Singing, as character) I see you walking on Rodeo Drive, turning...
VANEK SMITH: And "Beetlejuice."
(SOUNDBITE OF BROADWAY MUSICAL, "BEETLEJUICE")
UNIDENTIFIED ACTOR #1: (As Beetlejuice, singing) Hi. I'll be your guide. I'll be your G-U-I-D-E to the other side.
VANEK SMITH: "Mrs. Doubtfire"...
SEYMOUR: Oh, right.
VANEK SMITH: ...And "Tootsie"...
(SOUNDBITEOF BROADWAY MUSICAL, "TOOTSIE")
UNIDENTIFIED ACTOR #3: (As character) Don't you find being a woman right now complicated?
UNIDENTIFIED ACTOR #4: (As character) Right now, extremely.
VANEK SMITH: ..."Legally Blonde." I don't know. What is going - like, is this...
SEYMOUR: What is happening?
VANEK SMITH: What's happening?
SEYMOUR: You are not the only person asking those questions or feeling those ways. In some ways, it's comparable to the way that Hollywood seemed to be a little bit addicted to reboots and franchises.
VANEK SMITH: Oh, like "Spiderman 28"?
SEYMOUR: Exactly. So on Broadway, I think there's a similar - it's a similar set of forces where, because it is so expensive and so risky to produce shows, there's an innate appeal of - you're a producer and you are looking to make a Broadway hit and you want to be in the game and doing the thing. The idea of a familiar, like, beloved, especially nostalgic, branded property is alluring for understandable reasons, I think. You know, there's a built-in fan base.
GALLARDO: Yeah, Stacey, when we were walking around Broadway, we saw like all these huge billboards of, like, "Waitress"...
VANEK SMITH: Oh, yeah.
GALLARDO: ..."Mean Girls," "King Kong," "Harry Potter."
VANEK SMITH: "Frozen," "Aladdin."
But you know, Lee says movie studios have a ton of money to spend on Broadway. They can better afford these expensive shows than, like, an independent producer. Also, they have big back catalogues of movies they own. So you know, a Broadway musical can be another way to capitalize on an old investment.
GALLARDO: Or not (laughter).
VANEK SMITH: Or not (laughter).
GALLARDO: A lot of them flop, actually. "The Little Mermaid" on roller skates didn't do well.
VANEK SMITH: On roller skates?
GALLARDO: Neither did "Charlie And The Chocolate Factory" and, of course, "High Fidelity."
VANEK SMITH: I'm still digesting roller skates.
VANEK SMITH: I don't know. Is the business of Broadway, like - are people figuring it out? - 'cause it was always this sort of famously mysterious business - I mean, as made famous by "The Producers," where you...
VANEK SMITH: ...Can't even figure out what's going to fail (laughter), even if you really try.
SEYMOUR: I think the short answer is no. Part of what makes entertainment, whether it's Broadway or Hollywood or TV or wherever, so risky in general is that you really don't have a sense of what's going to work until it's in front of your people.
UNINDENTIFIED PERSON #1: We're at 47th and Broadway. This is tickets - T-K - well, how do you say it? I say tickets - TKTS.
GALLARDO: And why did you come here?
UNINDENTIFIED PERSON #1: I got tickets for "King Kong."
UNINDENTIFIED PERSON #2: On Friday, we're looking at trying to get tickets to "The Lion King."
UNINDENTIFIED PERSON #3: We were looking, actually, for "Aladdin." It's not there. Between 60 to 70 and a good seat, that would be nice.
UNINDENTIFIED PERSON #4: I was checking to see "The Phantom Of Opera" (ph). But I don't see it, so maybe it's sold out. Thinking to come back.
VANEK SMITH: This episode of THE INDICATOR was produced by Constanza Gallardo, edited by Paddy Hirsch. Our intern is Willa Rubin. And THE INDICATOR is a production of NPR.
NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.