Gov. Paterson Backs Off B'way Ticket Tax; Producers Reply with Lower Prices (Not)

As the Times reported yesterday, Gov. Paterson has withdrawn his idea of an "8 percent levy on theater tickets that Broadway industry leaders had fought fiercely." That is, of course, good for consumers. But as I wrote in this post last month, there has been a bit of disingenuousness in the commercial producing community regarding how much of a negative impact the levy would really have on Broadway. Ask a commercial producer and they'll likely tell you the sky would fall, a fiscal nuclear holocaust would ensue, and the only shows still to be open would be, well, theirs.

Here's a bit of Patrick Healy's piece:

Representatives for theater owners, producers, actors and union members testified against the tax proposal in Albany last month, arguing that the new levy would drive down ticket sales and ultimately lead producers to close some shows. They made the case that such a tax would have negative side effects on tourist business for restaurants and hotels and work for scenery carpenters, dry cleaners and others who contribute to theater productions.

Several theater organizations released statements of praise on Wednesday in reaction to the decision, and it was also a matter of chatter (the positive kind) at some of the theater district restaurants that producers and press agents frequent for lunch.

“Broadway is a business that creates jobs: When a Broadway show closes, 100 percent of the jobs are lost,” Charlotte St. Martin, executive director of the Broadway League, an industry association representing producers and theater owners, said in a statement. “Our industry can’t simply ‘cut back’ 10 percent or 20 percent of the work force when things get challenging. Unemployment in the Broadway industry causes a major ripple effect on the state’s economy.”

Given that St. Martin's job is to promote the idea that "everything's perfect on Broadway," she is supposed to make statements like the one above. But Broadway, as anyone who knows the business knows, is rather a closed shop -- if you're a stagehand and one show closes, more than likely you'll work again on the next show coming in or on a different show in a different house. So when St. Martin warns that "100 percent of the jobs are lost," what she really means is "100 percent of the jobs are lost at that production." Well, that's true, but that's different from her implication: that those people are out of jobs for weeks, months or years. At Back Stage, we used to observe how Broadway shows -- and I'm not talking about stars -- use the same people in the chorus, the pit and the wings over and over. It's a whole community of mainstays, of usual suspects, and it many ways it always has been. I'm not saying this is bad or good; I'm saying it's a fact. And anyway, if "unemployment in the Broadway industry causes a major ripple effect on the state’s economy," why isn't St. Martin concerned about Equity unemployment, which never seems to decline? Oh, right, they're commercial producers...

But back to the math. When you have Broadway shows with top ticket prices of $100, $110, $120, $130, $200, $300, $400 -- depending on the show, the seat and method of purchase/acquisition -- for St. Martin to warn that an 8 percent levy "would drive down ticket sales and ultimately lead producers to close some shows" is a little bit like a deaf mute ringing an alarm bell. If people are willing and able to pay $120 a ticket, would $9.60 more really force shows to close? Who honestly believes that?

I'm glad the consumer won't be hit with the extra fee, but I fear for Henny Penny's vocal cords, as they must be getting hoarse. I'd write more about this, actually, but I'm waiting for commercial producers to raise Broadway ticket prices again. I figure that'll take, er, five minutes. The clock is already ticking.

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On Ken Davenport and Comping

Interesting post from my colleague, producer Ken Davenport, on the subject of comping. Read it and definitely respond. My questions below are probably going to earn me his enmity, but I ask these questions in the spirit of professional discourse; I hope that's the spirit in which they'll be taken. OK, here's an interesting excerpt from Ken's post:

....It would not be unheard of for a Broadway show to have 10,000 comps during the first year of a run (think papering for previews, trade deals, etc.)

That's $5k - $10k. That's some expensive paper, isn't it?

So what if we took a lesson from mail order companies that offer FREE products as long as the customer pays for the "shipping/handling"?

Here's my proposal that I'm going to institute at my shows this week: Charge $1 processing fee for each comp to cover your costs. And, if you can get that fee up front, you'll also get a stronger commitment from the consumer to actually show up for the show, as comp ticket attrition is one of the biggest problems with papering....

My first question is: Would this include critics? I'd assume not, but believe me, people bitch about having to dole out a few hundred comps for critics, such as Tony and Drama Desk voters, too.

Frankly, though, it's hard for me to summon up the necessary boo-hoo at a show like Young Frankenstein, where you know the capitalization is larger than the gross domestic product of Vanuatu. Thus, my second question: Isn't this really about trying to preserve Off-Broadway as a viable playground for commercial production?

If it is -- and if we're talking about just $5-10K -- given the size of Off-Broadway budgets, my third question: Would a processing fee would really make a difference, and if so, a difference to whom? Would actors see that money? Would it enable commercial producer to take bigger risks on bigger casts? Isn't this really about commercial producers covering their asses? If the margins are that tight, isn't the Off-Broadway commercial producing model...fucked?

More generally, if it is not unheard of for a Broadway show "to have 10,000 comps during the first year of a run," my fourth question: Doesn't that suggest there's something even more dysfunctional about the marketing models for commercial theatre in New York than we even know? Will a processing fee really address them meaningfully? How?

My fifth question: If it is not unheard of for a Broadway show "to have 10,000 comps during the first year of a run" -- and the show is huge monster hit -- why should anyone feel sympathy for the commercial producer having to subsidize those tickets up front? True, that's always going to be a small minority of commercial producers, but couldn't one simply argue that that's simply the cost of doing business? And if one wants to drum up business by "papering for previews, trade deals, etc.," doesn't it suggest that commercial producers want to have things both ways -- to reap all the benefits and take fewer and fewer of the risks?

That's more questions than Passover. I know, I know. Discuss.

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