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On Broadway, Investors With Shallow Pockets
Broadway musicals usually cost $5 million to $10 million to produce, and that money often comes in checks for $50,000 or more from experienced investors who wouldn’t mind the tax write-off if their show flops. But this season’s revival of “Godspell” has introduced a new breed: shareholders who have put as little as $1,000 each into the $5 million musical and in return have gotten a rare inside look at show business, including the ear of the lead producer.
Jane Strauss is one of these 700 People of Godspell, an investment group 15 to 20 times bigger than Broadway musicals usually have. Ms. Strauss, a theater actress who has never financed a show before, was vocal at a recent shareholder meeting about her concern that the production’s new poster (featuring the star Corbin Bleu) lacked the brand image that has sold “Godspell” since the 1970s: A serene-looking man with long wavy hair.
“Have you thought of keeping the iconic hair and putting Corbin’s face in there?” asked Ms. Strauss, one of 100 investors seated in the musical’s Circle in the Square Theater or watching online. The show’s advertising man, Sandy Block, said no, and Ms. Strauss shot back asking why. At which point the lead producer, Ken Davenport, proposed squeezing the old image into a corner of the poster. Ms. Strauss moved on, though she said afterward that she worried the poster would look “too typical.”
In adapting the crowd-funding model for commercial theater Mr. Davenport is going to an extreme never achieved recently on Broadway — and for good reason, say other producers, who shake their heads imagining the time and sanity that Mr. Davenport expends on his shareholder flock. “Godspell” is attempting to bring youthful energy and new investors to an old-guard industry that has always depended on the kindness of real-estate moguls and divorcees with shrewd lawyers.
No wonder Mr. Davenport will indulge any shareholder to keep his or her loyalty. Seventy-five percent of shows end up losing money, as theater investors well know, making largess a building block of Broadway.
“On big shows I often hear investors complain that they don’t have a chance to even meet the producer, or feel part of the process, and there’s no reason to think those people will keep investing if they feel unappreciated,” said Mr. Davenport, who has worked on New York shows for nearly 20 years but is now on his first outing as a Broadway lead producer, making him the point man for decisions as well as legal and financial liability.
The “Godspell” business model was somewhat common decades ago when producers would hold backers’ auditions in living rooms to attract average Joe investors, or even open the Manhattan phonebook and cold-call doctors and dentists. Tactics like those were famously satirized by Mel Brooks in his 1968 film “The Producers” (later itself a Broadway show), and federal and state regulators eventually cracked down. Now most Broadway producers solicit money from “accredited investors,” who meet wealth thresholds set by the United States Securities and Exchange Commission that, in essence, mean they can afford to lose money in shows.
“I have great difficulty with the idea of recruiting any non-high-net-worth people to invest in theater, because it’s such a gamble,” said John Breglio, a long-time theater lawyer who produced the 2006 Broadway revival of “A Chorus Line,” among other shows, and is not involved with “Godspell.” “But what Ken is doing is giving average people a chance to become part of the process.”
Mr. Davenport cited both the 2008 Obama campaign’s success with small donors and the fundraising Web site kickstarter.com as inspirations, and he also wanted “a community of investors since the musical is about a community of people.” He spent many months on S.E.C. paperwork (including taking an exam) in order to enlist nonaccredited investors, steps that traditional producers are spared.
The bureaucratic heavy lifting leaves many producers skeptical that Mr. Davenport’s model will take over Broadway, yet still they are watching closely.
“I’d love to see his people stick around and add some zeroes to their investment,” said Roger Berlind, a Tony-winning veteran producer who usually asks his investors for a minimum of $25,000.
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