Theatre Design & Technology - Oct 1966 - 21

THEATRE ADMINISTRATION

(Moderator: James Nuckolls)

Money, Management and Make-Believe
T. Bruce Birkenhead
I.R. CODE: equipment
musical theatre

economics - summer theatre - tickets

What I wish to address myself to today are the operating
costs of regional theatre. The theatres I will use as samples are classified as summer theatres, being located in
the northeastern part of the United States. The sample
consists of three musical theatres and one dramatic
house. The non-musical house is a proscenium theatre,
while the three musical theatres are tent houses with
seating capaciti~s in excess of 1,600 persons. The
largest of the three has a capacity of 2,600. The nonmusical house is rather typical-seating 600.
One fact must be noted as we begin. The cost situation
is quite different in summer theatres as compared to
Broadway. There is no real equivalent of pre-production
costs. That is, once you decide to "go" for the season,
all costs are running costs. There are some pre-seasonal
costs, it is true; and there is a certain element of depreciation of capital where the equipment is owned by
the theatre. The major expenditures however, are variable
costs.
The difference is that a Broadway production may involve
an investment of $400,000 before the curtain ever goes
up; and the curtain may come down for good on opening
night. Normally, if a summer producer gets into the preseasonal work of hiring individuals for his theatre, he
will operate for the entire season even if the season turns
out to be a losing proposition.
The theatres I am referring to are profit-making. In fact,
this is their goal. All of them have made money at least
In the past and presumably will in the future. In particuJar, two of the musical houses have a very Strong following.
Not being able to break down expenditures convenielllly
into fixed and variable costs, we begin with the total
cost of mounting a production - and I expect they are
above what one would be inclined to estimate.
The lowest-cost musical tent we have in our sample consumed $156.600 during a nine week season. The next
mUSIcal tent, which also has a 1.600 seating capacity,
had an operating cost of $ 22 7 ,000. The largest house
spent $ 528,000 to mount a twelve week season.
Now, if that is not impressive as a figure (the average
cost of mounting a Broadway musical in 1960-61, and
this does not include running cost, was $ 389.7 thousand) we have here at least a summer theatre involved
in an expenditure that is in excess of the average expenditure on Broadway.

OCTOBER 1966

The total cost of the 600-seating-capacity theatre was
$104,000 for the season, which compares well to the
Broadway experience. That was for a ten week season,
and the average run for non-musicals on Broadway is
longer than that.
One may wish to include running costs of Broadway productions in order to make a more meaningful comparison. If this is done, the expenditure of the typical Broadway production is obviously far in excess of a summer
theatre, not only because the weekly costs are higher
than in a summer theatre, but because the run tends to
be much longer on Broadway.
A typical musical on Broadway spent $2.4 million in
1960-61 by the time it closed down completely. A nonmusical production spent about $ 560,000 before closing;
non-musicals have a shorter run on Broadway than musicals. A ty"pical musical production on Broadway will run
in excess of 40 weeks, while the average for nonmusicals is 15-17 weeks.

Most interesting, at least from my point of view, is the
breakdown of costs. Beginning with the dramatic house,
we find costs for the cast at the top of the list (and this
is true of both musical and non-musical productions).
In the case of the house that I am referring to, if one
includes both principal and non-principal players, the cost
for the cast was 43°·f, of all running costs each week.
The stars, however, accounted for 26.2% of running cost;
all the rest of the cast, 17.2 ~o.
The next most important costs are the so-called allocable
costs, which consist largely of insurance, travel pay, telephone, et cetera. This accounted for better than 13 °0
of costs for the dramatic house. Next in line is the staff;
after that, advertising.
The last item demonstrates a significant difference with
Broadway. Approximately 6°,<> of the seasonal cOSt - 6.7%
actually - went for advertising. In the case of Broadway,
21.2 0 0 of the operating costs of dramatic productions
consisted of advertising outlay - a phenomenal flguremuch higher than for musical productions.
Royalties were relatively significant, even for a summer
theatre: 5% of costs. This item is much more significant on Broadway, where better than 15% of weekly
costs accrued to the author in 1960-61.

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