'The Outsiders' and 'Stereophonic' are big Tony Award winners as Broadway struggles at the box office

By Charles Passy

Investors in shows could easily be looking at a combined $200 million loss

Will the Tony Award winners see an uptick at the box office?

That's the immediate question theater insiders are likely asking following Sunday night's awards show, which was held at New York City's David H. Koch Theater at Lincoln Center. The big winners included best musical honoree "The Outsiders," a show based on the 1967 S.E. Hinton novel and the 1983 Francis Ford Coppola film adaptation, and best play winner "Stereophonic," a drama that chronicles the inner workings of a rock band and features songs by Arcade Fire's Will Butler.

Other productions recognized with awards include "Hell's Kitchen," a musical featuring the songs of Alicia Keys, which garnered two acting trophies: for Maleah Joi Moon for leading actress in a musical and Kecia Lewis for featured actress.

The cast of "Hell's Kitchen" also got to showcase their stuff near the start of the show, which was televised on CBS (PARA), with a high-profile segment that also featured Keys and Jay-Z performing "Empire State of Mind." (Never mind that Keys and Jay-Z do not appear in the Broadway production itself.)

Typically, shows that are recognized at the Tonys reap some benefit in terms of ticket sales, but the question remains as to how much. And this is a time when just about every Broadway production could use a sales boost.

The industry has yet to regain its prepandemic box-office form, with sales for the past season totaling $1.5 billion - or 15.8% below sales for the 2018-19 season.

Some shows have already closed, and others are barely skating by. Given the costs to mount a production, which can run more than $20 million for a musical, the losses can be staggering. Several industry professionals who spoke with MarketWatch said the total hit for investors in various productions could easily top $200 million as more shows are shuttered.

"It's a mixed bag," Broadway producer Lamar Richardson said of the industry's current state of affairs.

Richardson might consider himself one of the fortunate ones. He's involved in two shows - a revival of the musical "Merrily We Roll Along" and a revival of the play "Appropriate" - that have been among the few new productions to draw consistently solid audiences. "Merrily," in fact, has already recouped its $12 million production investment.

Both shows were also among the big winners on Sunday night. "Merrily" was recognized as best revival for musical and also earned wins for two of its cast members: Jonathan Groff for leading actor in a musical and Daniel Radcliffe for featured actor. Similarly, "Appropriate" was honored as the best revival of a play, and its star, Sarah Paulson, was recognized as best lead actress in a play.

But such examples are more the exception than the rule. Consider the case of "The Heart of Rock and Roll," a musical featuring the hit songs of Huey Lewis and the News.

Despite the fact that the show has a brand name attached to it and has garnered glowing reviews from even some of the most hardened theater critics, it didn't garner a single Tony nomination and is playing to audiences barely above half capacity. Reflecting the dismal demand, "Heart" has an average ticket price under $60, one of the lowest on Broadway.

As Lewis himself recently told MarketWatch of the show's situation: "It's a winner-take-all business. There's only room for so many at the top."

What is stopping Broadway from fully regaining its prepandemic form? Lots of factors, say industry experts.

Begin with the fact that shows are getting more expensive to produce because of inflation and other factors - so unless you have a runaway hit, you may not be able to keep the show going.

Labor costs are particularly high, owing to the fact that Broadway is a heavily unionized industry. But even the price of lumber - and lots of lumber is needed to build those extravagant Broadway sets - has become a significant cost since the pandemic.

"It's everything," said Philip Boroff, who writes the Broadway Journal newsletter.

And while tourists, a key Broadway constituency, are returning to New York City and helping to fill theaters, shows are having difficulty wooing another important audience base - residents of New York's suburbs.

'We need that blockbuster.'veteran Broadway producer Ken Davenport

Broadway insiders say that concerns about a postpandemic uptick in crime have been a factor in that regard. Plus, there's the fact that more suburbanites are now working partly or fully from home, so it's less convenient to catch a show at the end of the workday.

It's also hard to ignore another reality: While the season has seen some critically acclaimed shows, it hasn't had a megahit on the order of "Hamilton" or "The Book of Mormon."

"We need that blockbuster," said Ken Davenport, a veteran producer who was behind "Harmony," a musical by pop great Barry Manilow that opened and closed this season.

As insiders explain, a megahit not only sells lots of tickets on its own but also draws attention to Broadway as a whole. In effect, it's the theatrical equivalent of the rising tide that lifts all boats.

Broadway's current challenges could have repercussions next season and beyond. Producers say it may be harder to attract investors, the true lifeblood of the industry. In turn, investors who do come aboard may demand better terms.

More producers may also consider developing shows outside the U.S. - in London, especially - as a way to save on costs.

"A lot are starting to look at other places," said Jason A. Sparks, senior executive creative director at RWS Global, a prominent producer of live events.

Still, it's hardly as if the Broadway pipeline is slowing down. Already, several shows have been announced for next season - ranging from a revival of "Gypsy" featuring Audra McDonald to "Good Night, and Good Luck," a new play based on the 2005 film co-written and directed by George Clooney, who will also star in the stage adaptation in his Broadway debut.

Damian Bazadona, founder of New York-based entertainment-marketing agency Situation Group, said any concerns about Broadway's future should be put into context. He noted that Broadway has always been "a boom-or-bust business" with hits and misses aplenty.

Plus, Bazadona added, you can't expect an industry that had to fully shut down for more than a year because of the pandemic to recover overnight.

"Broadway is in a growth phase again," he said.

-Charles Passy

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06-17-24 1352ET

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