Updated: May 2
In my family, talking about money was never a taboo subject as I came to discover is the norm in many other households.
The idea of complete transparency when it comes to the financials of a theatre company also feels like helpful information to know in order to better understand how much mounting a play or musical ultimately costs.
It ain't cheap, to say the least. That's why many theatre companies did not reopen their doors after the pandemic; the extended closure did not help their likely already cash-strapped businesses. While licensing companies -- who a theatre must pay for a published work -- have made some accommodations to help us struggling producers out, and some performing groups have gotten a little more creative with their seasons, but the clash exists when both sides still need to keep their profits up.
The leading distributor of musicals is Music Theatre International (MTI), and while there are some other companies that hold the rights to popular song-and-dance shows, all roads eventually lead back to that behemoth if musicals are a regular feature of a theatre's season. Regardless, MTI isn't a singularity; some licensers might be a little more cost-effective, but only by a few dollars in most cases.
Once you get past finding out if you even can get approved by the MTI overlords -- there was a time when, if a show was being performed near you, you could not get the rights for an indefinite amount of time -- licensing (that is, paying to get the permission to do a show) starts in the $300-$500 range. However, this price may go up (exponentially so) depending upon the following factors: number of performances, number of seats in your house, ticket prices, the length of your theatrical run and rehearsal process, and if you are paying your actors.
Some community theatres end up forking over $2,000+ for a musical with name recognition that may only play 5 performances over 2 weekends, in a house of 75 seats, where you charge $20 a ticket (which small theatres hate doing, as that can be an expensive night out for many patrons). Mathematically, if you sell out all your shows, sure, you might make a pretty profit. But that's often quite rare, especially now in the post-COVID era where people hesitate being in an enclosed space with others.
Add to that, paying musicians (if it's a musical) and the director and other stage crew. Throw in the overhead costs of marketing, heat/air conditioning, publicity, and random costs that can crop up, and you start to see that theatre is rarely a business that ends in the black in the ledgers. Sure, that's the cost of doing business, but only to an extent. I submit both sides -- the theatre and the licenser -- can succeed in business without really gouging one out.
What's the solution, then? Close theatres? Do only public-domain works where licensing is not required? Have talented artists volunteer to do the hard work of producing a show? Make it a survival of the fittest environment, where the deeper pocketed theatres kill off the smaller operations?
Obviously none of those are viable.
And, for the record, this is not my roundabout way of saying that only virtual theatre should remain; we, too, face the same fees with even more restrictions on what shows we can do due to many authors not granting streaming rights to their works. (We also have our own unique costs, like streaming software that can add on an additional $500 per production!)
I'm also not blaming that licensing houses, like MTI, are the ones responsible; as I said before, they need to keep their lights on, too. But they can make some strides in not clutching the purse strings so tightly, like eliminating licensing fees OR royalties (an additional sum paid to them based on the audience turnout). Both seem a tad greedy when licensing fees often considered the projected audience turnout.
They could go further with more affordable rates for smaller theatres versus larger ones, including adding incentives, such as access to some of their wonderful resources that are often "add-ons" to a license. Such assets include pre-recorded rehearsal and performance tracks, digital stage managing, and virtual backgrounds for us streamers.
Theatre companies, likewise, can be in better communication with each other too, because this will actually help their bottom line. How? I've ranted about it before, but when multiple groups in the same general geographical area do the same show in the same season (or even two seasons), you're hurting your audience numbers. In fact, I wish MTI would deny more licenses like they used to, because if you had to wait a couple of years to see a show in your area (like Matilda) then the ONE company that gets the license will reap the financial benefits. The exorbitant licensing costs will be far less of a concern as a result.
I'm sure people smarter than me can discovers ways that can be beneficial to theatre companies and licensing houses, without either having to lose much in the bargain.
Audiences, like you, are the way we theatre companies stay in business, and are able to provide the entertainment you crave. Thank you for your support of theatre, in any form!