Inflation ruins Broadway’s romance with the ‘Phantom of the Opera’

The stage chandelier will fall for the final time when The Phantom of the Opera, the longest working musical on Broadway, shuts in February after 35 years. The curtain is descending on Andrew Lloyd Webber’s work, with its 130 solid members, crew and orchestra, 230 costumes and 6,000-bead replica of the Paris Opera Home mild.

The complete manufacturing defies gravity, actually. Musical theatre has been the mainstay of Broadway for the reason that 19th century, and London’s current revival of Cabaret reveals how necessary it’s to the West Finish. However the enterprise of working grand musicals that require large audiences to pay steep ticket costs is kind of a big gamble.

Cameron Waterproof coat, joint producer of Phantom with Lloyd Webber’s Actually Helpful Group, is keen on quoting Alan Jay Lerner, the American musical librettist. “You realize what a succès d’estime is, don’t you? Successful that runs out of steam.” Waterproof coat and Lloyd Webber’s monetary achievement with reveals equivalent to Cats and Phantom was to cease them from doing so.

Phantom had been seen by nearly 20mn folks on Broadway by earlier this month, grossing $1.3bn. It’s nonetheless working within the West Finish, after closing quickly through the pandemic, and has played to 145mn folks in 41 nations since opening in London in 1986. It won’t match classical operas as a murals, however you can’t argue with a money machine.

Nonetheless, the machine can abruptly break down, as Phantom has discovered on Broadway because it returned post-pandemic final yr, with a $10mn grant from a US authorities fund to revive theatres. “Phantom is a gigantic beast of a present, with lots of employees and performers, and costumes and wigs.” Waterproof coat advised me this week. “To begin it at the moment from scratch can be prohibitive.”

The largest issue just isn’t the preliminary funding in a brand new manufacturing, huge although this may be; it’s that musicals are very pricey to maintain going. Waterproof coat compares them with yachts. “It’s like proudly owning a ship: the happiest days are shopping for and promoting it. This can be very costly to run.”

Musicals are a primary instance of the “price illness” in performing arts identified by the economist William Baumol in 1966. Rising salaries and different prices can’t be offset by larger labour productiveness as a result of every efficiency requires the identical variety of folks for a similar output. Wanting shedding the chandelier, it’s a battle to make Phantom extra financially environment friendly.

The drag has turn out to be better with excessive inflation. Waterproof coat estimates that the weekly price of placing on Phantom on Broadway has risen from about $850,000 earlier than the pandemic to almost $950,000, with additional rises in power and different bills to return. Because it has been grossing solely an average of $850,000 weekly this yr, the sums not add up.

That is bolstered by the truth that long-running musicals in cities equivalent to London and New York are inclined to turn out to be more and more depending on vacationers. Locals will likely be interested in restricted runs of recent reveals, and revivals equivalent to The Music Man, however reveals equivalent to Phantom rely extra on guests. Fewer have been visiting New York than earlier than Covid hit, significantly from Asia.

As demand falls, tickets get discounted and the economics of the older musical sag. Phantom has performed to 71 per cent capability audiences on Broadway this yr, in contrast with Hamilton’s 96 per cent, at a median ticket worth of $93 in opposition to Hamilton’s $213. Saying that it’ll shut in February ought to make it a warmer ticket because the deadline approaches.

It will in all probability not be the final New York has seen of the lovestruck masked man; Phantom could also be revived sooner or later, maybe in a extra viable kind. It’ll keep it up touring the world for restricted runs in cities from Sydney to Vienna. If the vacationers won’t come to Phantom, it can come to them.

“The Broadway musical just isn’t lifeless however issues will likely be more durable. There will likely be extra stress to have smaller casts and orchestras,” says Matthew Rousu, a fan of musicals and professor of economics at Susquehanna College. The band will play on, however with fewer gamers.

That raises an existential query about the way forward for spectacular musicals on the dimensions of Phantom or Les Misérables. Musicals are usually enterprise financed, with a syndicate of buyers bearing the excessive threat of closure earlier than a brand new manufacturing earns again its preliminary outlay, for a small likelihood of getting very wealthy (Cats’ unique London buyers received a 60-fold return).

The halo impact of an enormous hit on Broadway has traditionally been huge: it’s the cause why there are such a lot of productions of Phantom. Making musicals smaller will restrict the dangers, however it can additionally scale back the prospect of a brand new one turning into a worldwide phenomenon and producing money for many years.

Waterproof coat did very effectively on the peak of the grand musicals enterprise: his manufacturing firm paid him a £35mn dividend on the finish of 2019, earlier than the pandemic and at the moment’s inflation surge, then none because the disaster struck. When the curtain lastly falls on Phantom, he could shed a tear.

john.gapper@ft.com

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