Why Invest in Broadway?
There are several compelling reasons to invest in theatre. Some people invest in a show because they love it and want to share it with the world. Some will join the industry for the connections or access to events. (There is nothing like Opening Night on Broadway!)
Some investors seek to round out their portfolio with alternative-class investments, which might include theatre. Here at In Fine Company, we are committed to helping you find the project best suited to your interests. Contact us below for a complimentary consultation.
Is There Risk Involved?
Investing in Broadway shows is similar to investing in start-ups. There is a risk involved, because there is no guarantee how audiences will respond. Click here for an article detailing ROI statistics on Broadway shows.
While Broadway is a high-risk environment, there is also a chance for equal if not greater reward. You should only invest if losing that investment will not impact your lifestyle. The best way to prevent financial loss is to heavily research a show and the team behind it before getting involved. It is worth noting that investors can never lose more money than they have invested.
What Are the Requirements?
Units vary on Broadway. Generally a single unit begins at $50,000. Sometimes a show may offer ½ units (i.e. $25,000). One factor to consider is whether the show is a play or a musical. (Musicals are generally more expensive.) Off-Broadway you will find units at a fraction of Broadway.
Who Can Invest and When?
In order to invest in a Broadway show, you must be accredited as an investor by the IRS, which essentially confirms that you meet the necessary financial requirements. For more information on what an accredited investor is and how to become one, check out this article.
Are There Any Perks?
While there is no guarantee for financial success, there are some exclusive benefits for Broadway investors. These perks may include invitations to opening nights, cast events, award telecasts, and industry workshops, as well as access to purchasing house seats. Additionally, investors are notified about other opportunities in the industry. We like keeping our investors in the loop with exclusive and frequent (optional) press clips, tune-in alerts, and industry news updates.
Are There Financial Benefits?
As a show turns a profit, capital is returned to the investors until the original investment is completely recouped. After that, the net profits are frequently split 50/50 between producers and investors. Investors may receive a portion of a show’s ancillary income (merchandise, licensing, national and international productions).
How Is Money Doled Out?
It is not standard practice for return checks to be cut weekly, monthly, or quarterly. The General Management team keeps a healthy reserve to protect the immediate needs of the show.
Investors receive K1s at the end of each fiscal year. The expectation should be to pay taxes if a show is making a profit, and write off investments as losses if the show is not. When in doubt, ask your accountant.
How Do Taxes Work?
How Do You Choose a Show to Produce?
How Do You Become a Producer?
We have a webinar, called Producing 101, on this topic as well. There are a few different positions in terms of producing: Co-Producer, Associate-Producer, Executive-Producer and Lead-Producer. Each tier requires a different financial commitment. Benefits of co-producing may include Playbill credit above or below the title, and eligibility for Tony Awards. Additional perks could include potential financial rewards, invitations to meetings, involvement in decision-making, and exposure to the inner workings of a production.