Here’s an old Broadway story, probably apocryphal, but with the ring of truth: A worried producer checks in on his ticket sales to see how his show is doing. “We had a terrible night, boss,” the treasurer tells him. “We did one penny.”

The producer sulks through Shubert Alley and runs into a rival. “How’s your show doing?” the rival asks.

“Oh, I had a terrible night,” the producer says. “I only did 2 cents.”

Inflating the grosses is a Broadway tradition that harks back to the days of the original Shubert brothers. But today it’s not necessary (well, maybe here and there), as the actual box office numbers are staggering. “Hamilton,” going into its fourth year, takes in more than $3 million a week. (It did $4 million Christmas week 2018.) “To Kill a Mockingbird” hit $1.7 million in a recent week, an astounding number for a straight play. The new musical “Ain’t Too Proud — The Life and Times of the Temptations” is bringing in $1.4 million a week and will likely hit $2 million during the summer tourist season. Even the oldest show on the street — “The Phantom of the Opera,” 32 years and counting — is on track for a strong summer that should push its worldwide gross to nearly $7 billion. 

As Broadway prepares to celebrate itself at the Tony Awards on June 9, insiders marvel at their industry’s economic prowess. Last season was the strongest in history. Attendance hit 13.8 million, while the overall gross was $1.7 billion. The Broadway League has yet to release this season’s numbers, but everyone expects them to break more records.

Broadway is in the midst, financially and artistically (with a caveat or two), of a new golden age. Every theater is booked, with up to five backup shows hoping to come in when a venue frees up. It’s possible that some musical houses — such as the Gershwin, where the 16-year-old “Wicked” could outlive its producers — may never be on the market again. As one theater owner put it to me over lunch recently, “All we do is open the door in the morning, and there’s a line of suckers — well, I should say producers — begging to get in. This business has never been better.”

Once a backwater of the entertainment industry, Broadway is now at the center of American popular culture. Lin-Manuel Miranda is an international star not because of movies or television but because of a Broadway show that has grossed more than $400 million to date. On the strength of their hit musical “Dear Evan Hansen,” Benj Pasek and Justin Paul, the Rodgers & Hammerstein of the new golden age, have become one of the most sought-after writing teams in show business. Their album “The Greatest Showman,” written for the 2017 film, has sold nearly 7 million copies. Harry Potter is on Broadway, and so are King Kong and Tina Fey (Her “Mean Girls” did more than $800,000 last week). Disney Theatrical celebrated its 25th anniversary this year and, having just acquired 20th Century Fox, is rummaging through the Fox library for titles to develop into shows. Universal and Warner Bros. have placed huge bets on Broadway; Advance Publications, looking to diversify its lagging media portfolio, recently bought Stage Entertainment, which owns theaters around the world and invested in “Anastasia,” “Pretty Woman” and “Tina: The Tina Turner Musical.”

Think about that: diversification through musicals. Broadway is practically part of a Fidelity 401K portfolio.

Those eye-popping grosses are due in part to premium pricing. Originally confined to a couple of rows, premium prices have since gobbled up the orchestra, giving the impression that Broadway, like so much else in New York, is strictly for the 1%. “Some of our prices are obscene,” one producer admits. But if the show’s a smash, the demand is there. Bette Midler had no trouble selling $998 seats to “Hello, Dolly!” “Hamilton” tickets can go as high as $1,000, and the betting on Broadway is that Hugh Jackman in “The Music Man” will reach the stratosphere.

Dynamic pricing has also contributed to Broadway’s financial growth. Taking a cue from the airlines, producers now adjust ticket prices hourly depending on demand. The perception is out there that Broadway is an extravagance. But that’s not entirely true. You can find bargains everywhere for all but the smash hits. You just have to be flexible. You’re going to pay a lot more to see a show during Christmas week than you are on a cold, dreary day in February.

“Ain’t Too Proud — The Life and Times of the Temptations,” starring Ephraim Sykes (foreground), is the latest popular jukebox musical to hit Broadway.
Courtesy of Matthew-Murphy

For all the changes in pricing and financing over the past 20 years, the ratio of hits to flops on Broadway usually comes up the same. About 30% of shows break even or make a decent profit each season. The blockbusters make the kind of money that buys private planes and yachts. But 70% of the shows do not recoup. Some might get back enough — say 75% — to make recoupment possible down the line with tours and stock and amateur. But the wipeouts will lose tens of millions of dollars.

Simply put, on Broadway today, the hits are bigger but so are the flops.

As for artistic integrity, the picture is mixed. Critics give prizes to original works such as “Dear Evan Hansen” (a hit) and “Hadestown” (remains to be seen). But Broadway is after the tourist buck, which means more jukebox musicals and musicals based on popular movies.

“Jersey Boys” once had Times Square to itself. Since then, the place has been saturated with copycats — “Million Dollar Quartet,” “Motown: The Musical,” “Summer: The Donna Summer Musical,” “The Cher Show” and “Ain’t Too Proud,” to name a few.

“Tootsie” should be a winner this season, but the list of movie titles being made into musicals is endless — and at times disheartening. I will slit my wrists when the inevitable announcement is made for “National Lampoon’s Vacation: The Musical.”

As for straight plays — which, “Mockingbird” aside, can get lost in the shuffle of big-budget musicals — they’ve done well in the new golden age, but they need one thing: a star. Nicole Kidman made “The Blue Room” a sensation in 1999. Julia Roberts sold out an indifferent production of “Three Days of Rain” in 2006. Denzel Washington won a Tony Award, and sold out the Cort, in “Fences” in 2010. Producers shopping around a play these days say the first thing a theater owner asks is “Who’s in it?”

No name, no theater.

Broadway has become a lucrative place for movie stars, who, unless they’re in a comic book franchise, aren’t getting the salaries from Hollywood they once did. When Kidman opened in “The Blue Room,” she reportedly took a low weekly salary (around $2,000) in exchange for more than 15% of the profits. And her commitment was for just a three-month run. That formula — low weekly salary, nice chunk of profits, limited run — fattened the bank accounts of Kevin Spacey (“The Iceman Cometh”), Judi Dench (“Amy’s View”) and Liam Neeson (“The Vertical Hour”). But as premium prices came into play, name actors demanded higher weekly salaries and a share of the box office gross. Today a star in a play is guaranteed around $40,000 plus at least 5% of the weekly gross. That can add up to a paycheck of $100,000 or more a week — not bad when you multiply that by a 12- to 16-week run.

For those who think Broadway has gotten too greedy for its own good, veterans are quick to point out it wasn’t always this great. In the late ’60s and early ’70s Broadway almost collapsed. Nearly 10 million people took in a Broadway show in 1968. By 1972, that number had fallen to 5 million, the lowest in theater history. The financial collapse of New York City hit Broadway hard, as did the slide into sleaze of its neighborhood, Times Square. The popularity of rock music also took a toll. Louis Armstrong topped the charts with the title song to “Hello, Dolly!” in 1964, but with the occasional exception — “Aquarius” (“Hair”), “Send In the Clowns” (“A Little Night Music”) and “Memory” (“Cats”) — show tunes rarely made Billboard’s list after that.

Credit the Shuberts, led by Bernard B. Jacobs and Gerald Schoenfeld, and James M. Nederlander, who built a rival theater chain, for holding Broadway together during the ’70s by presenting hits such as “A Chorus Line” (Shubert) and “Annie” (Nederlander). The Shuberts also did something that eventually would lead to the kind of grosses Broadway posts today: They raised ticket prices, which had been artificially low for years. The top ticket to “My Fair Lady” in 1956, for instance, was $8, but brokers were selling them for $50.

“I remember sitting with Bernie Jacobs once, and he said, ‘I’m going to raise ticket prices, and then I’m going to raise the rent,’” veteran producer Elizabeth I. McCann once told me. “And I thought he was crazy. I always believed the more you raised ticket prices, the more you turned off the audience, but that did not turn out to be true.”

The top ticket to “A Chorus Line” in 1975 was a then eye-popping but today laughable $15 — and yet the show ran 15 years.

“A Chorus Line” was the start of Broadway’s turnaround, but the seeds of its financial boom were planted by a pair of Englishmen — composer Andrew Lloyd Webber, with “Cats” and “Phantom,” and producer Cameron Mackintosh, with “Les Misérables” and “Miss Saigon.” Those four shows dominated Broadway in the 1980s.

Albert Poland, a general manager, recalls meeting with Jacobs one morning in 1982 to discuss raising ticket prices for “Little Shop of Horrors,” which the Shuberts were producing Off Broadway. Poland feared the increase would alienate theatergoers. And why be greedy? The show was a little gold mine, earning a profit of $6,000 a week. Jacobs pulled out the books for the first week of previews for “Cats.” The operating profit was $186,000. “I almost fainted,” Poland recalled in my book “Razzle Dazzle: The Battle for Broadway.” 

Today, adjusted for inflation, that profit would be about $500,000. No show in Broadway history had made that much money in one week.

“Cats” and the three other big British shows made hundreds of millions of dollars in New York. Produced around the world, they piled up grosses in the billions of dollars. By the end of the 1980s, Broadway was a global business. But it was still dominated by a handful of people — the Shuberts, the Nederlanders, Lloyd Webber, Mackintosh.

And then Michael Eisner, chairman of Walt Disney, ran into Lloyd Webber at an event in North Carolina. Eisner began “probing,” Lloyd Webber recalled, about the theater business. He was amazed to learn how much money could be made from a hit show. A few years later Disney opened “Beauty and the Beast” at the Palace Theater. Broadway insiders were aghast — their beloved street looked like it was going to be turned into a theme park — but the show was a success, and Disney decided to create a new Magic Kingdom in New York. The company refurbished the crumbling New Amsterdam Theater on West 42nd Street, kicking off the cleanup of Times Square. By the end of the 1990s, a neighborhood that was once one of the most dangerous in the world had become a major tourist attraction. Broadway’s attendance — and grosses — began to climb.

“Moulin Rouge! The Musical,” starring Danny Burstein, is expected to be among Broadway’s next big hits. The musical adaptation of the Baz Luhrmann movie will open at the Al Herschfeld Theatre in the summer after finishing a successful run in Boston.
Courtesy of Matthew Murphy

Future historians may disagree, but I’d say that Broadway’s current golden age, artistically, began in 1996 when “Rent” opened at the Nederlander Theater. Here was a contemporary show, with a rock and pop score, about young people grappling with AIDS, drugs, gentrification, love and death. It became a cultural sensation, attracting hordes of kids who probably never would have bothered with Broadway but for this show, which touched them deeply. Jonathan Larson, who wrote it and died on the eve of its first preview, brought Robert Lopez (“Avenue Q,” “The Book of Mormon”), Tom Kitt and Brian Yorkey (“Next to Normal”) and Pasek and Paul into the theater. Lin-Manuel Miranda has said he saw “Rent” more than 30 times.

After “Rent” came a slew of productions that have become household titles — “Chicago,” “The Lion King,” “The Producers,” “Mamma Mia!” “Hairspray,” “Wicked,” “Jersey Boys.”

“The Producers” played a key role in the financial boom. Rocco Landesman, its lead producer, was annoyed that scalpers were making huge profits from his show. His top ticket was $100, but resellers were getting $1,000 on the street. So he created premium pricing, putting his best seats at $480 a pop. The press screamed price gouging. Rival producers couldn’t believe the arrogance. But as long as Matthew Broderick and Nathan Lane were in the show, people paid the $480. Soon premium pricing became standard.

“We let Rocco take the hit, and then we all quietly followed suit,” one producer says.

So how long will the new golden age last? Well, the first such period ran from “Oklahoma!” in 1943 to (arguably) “Mame” in 1966.

If “Rent” is the kickoff, this one is in its 23rd year. But there’s no sense it’s petering out. It has, in fact, survived two catastrophes — the 9/11 attack on the World Trade Center and the 2008 economic collapse.

As long as tourism is robust, New York is safe and the hits and the stars keep coming — “Moulin Rouge! The Musical” arrives next month, and Hugh Jackman will lead the band in “The Music Man” — Broadway will survive. And be a good place to make a bet. 

Michael Riedel is co-host of “Len Berman and Michael Riedel in the Morning” on 710 WOR and the longtime theater columnist for the New York Post. His book “Razzle Dazzle: The Battle for Broadway” won the Marfield Prize for arts writing in 2015.

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