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Howard Sherman: Lessons from history show Broadway can shrug off turbulence in the economy

In 2018, Hamilton became the first show to gross over $4 million in a single week. Photo: Joan Marcus
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To give credit where it’s due, the growth in Broadway audiences over the past four calendar years is impressive, rising from 12.9 million admissions in 2015 to 14.3 million last year. It shows that producers are doing something right in choosing the right shows and managing them well.

After all, it’s not as if theatres are expanding their capacity or new theatres are regularly opened. Beyond the odd theatre being under renovation – and the rare addition of the Hudson to the Broadway roster by Ambassador Theatre Group – the number of seats is relatively constant.

The more than 10% increase in audience, however, is dwarfed by the rise in revenues. Leaping from $1.3 billion in 2015 to $1.8 billion in 2018, box office grosses are up, staggeringly, by more than a third.

There have been huge jumps from 2016 to 2017 and again from 2017 to 2018 and with minimal inflation in the four-year period, this means it’s an apples-to-apples comparison.

Normally, this is the point when I would inveigh against price escalation and the ever-more luxury status of Broadway seats, as I do regularly. After all, with last week’s summary of the year, it was noted that Hamilton was the first show to gross over $4 million in a single week, while Harry Potter and the Cursed Child set a new record for a play of $2.5 million followed by $1.7 million for To Kill a Mockingbird.

There are discounts to be found – though not during the holidays – through promotions such as the periodic two-for-one Broadway Weeks or the stalwart TKTS booths, now with variable same-day pricing offering up to 50% off per seat. But even with those factored in, and the unsuccessful shows, the returns are stunning.

Can this trend keep going? With a fixed supply of seats, if the demand remains thanks to widely popular shows, then it would seem so, based on the standard economic rules of supply and demand. But with recent wild fluctuations in the stock market – and presumably those who can afford premium seating are most affected by investment variations – as well as rumblings of a potential recession after unprecedented economic growth, could Broadway be at risk?

Well, 33 seasons of data suggest that the answer is “probably not”. Note the shift from calendar years to seasons here. That’s because the trade association for Broadway, the Broadway League, tracks figures according to the standard calendar as well as the theatrical season, which is roughly tied to the annual deadline for Tony Award eligibility – typically in late April. Seasonal figures date back to the 1984-85 season, while the calendar year figures only go back to 2015. This is why headlines about Broadway breaking records appear twice annually.

In 33 years of Broadway seasonal returns, there are fluctuations from year to year. Plot the returns on a chart and there is a jagged climb in audience numbers, but a climb nonetheless from the mid-1980s when some wondered about the future viability of Broadway.

But if the attendance ebbs and flows, there’s no evidence of any significant revenue resistance, with overall grosses only dipping noticeably in three years out of three decades. Considering that includes the 1987 market crash, the bursting of the tech bubble in 2000, the effect of the 9/11 attacks on tourism, and the financial crash that began in 2008, it’s a simply astonishing record.

There’s no question that success in New York also drives success of Broadway tours, but the industry in Manhattan is constrained within finite real estate. Yet, with the right projects – from relative newcomers such as Hamilton, Harry Potter and Mockingbird to the continued vitality of long-runners including Wicked and The Lion King – it seems there’s still more money to be made every single year, understanding that the net effect is to play to an ever more exclusive market. That’s so long as producers, writers, directors, actors and others give the people what they want. And, as always, that’s not necessarily easy to know.

Read the Broadway League’s season statistics

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