Brits on Broadway: What makes British theater work in the U.S.?

FT
Stories from the Financial Times. 
June 12 2011 8:15 AM

Brits on Broadway

What makes British theater work in the U.S.?

(Continued from Page 1)

Many of Broadway's recent British hits came from four London theatres, none of them in the commercial West End: the National (War Horse), the Royal Court (Jerusalem); the Donmar Warehouse (Hamlet, Red and Frost/Nixon) and Southwark's 180-seat Menier Chocolate Factory (La Cage aux Folles, A Little Night Music and Sunday in the Park with George). The bonds between these institutions and New York's theatre elite are getting tighter. The Donmar has a "first look" deal with Arielle Tepper Madover, a US producer who says she pays something "in the low six figures" for privileged access to productions such as Jude Law's Hamlet. Madover opted to transfer the play even after it earned so-so reviews in London. "I connected to Jude's performance and I felt strongly about it," she says.

But a more profound change has been the decision of a generation of entrepreneurial managers in the subsidised sector to act more like their commercial peers and to take a leading role in bringing their shows to Broadway. Traditionally, subsidised theatres with a hit would hand it to a commercial producer for a royalty and a share of any profits when the play transferred to the West End or on to Broadway. Now, many are deciding to take the risk themselves, to stay involved both creatively and financially.

War Horse, which opened in London in 2007, has been the most successful production in the National's history, making more than £2.5m a year, a significant level of profit for a subsidised theatre to earn from a show, according to Harbottle & Lewis, the entertainment law firm which advised on its New York transfer. When the Lincoln Center looked to bring the play to New York, the National decided for the first time to stay in as co-producer. Similarly, the Royal Court had never co-produced a Broadway transfer before Jerusalem, and in London is acting as lead producer for the first time on a transfer of Clybourne Park, Bruce Norris's Pulitzer Prize-winning satire on race and class, from its Sloane Square theatre to the West End, raising 60 per cent of the budget from investors.

"Places like the National, the Royal Court and the Young Vic are thinking more and more like commercial producers, because we want to be in charge of our own destiny," says Patrick McKenna, chairman of the Young Vic. Financial pressures are a spur, he says: "We also have to start thinking about how we're going to create new funding sources as government grants start to slow down. We have to be less dependent on the state."

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Horton puts it another way, describing the Royal Court's new business model as a way of figuratively repaying the state's investment, keeping a share of the commercial profits of its hits to reinvest in future risky scripts. "The idea you have a non-profit mission doesn't mean making money is a bad thing," she says.

Though attitudes are changing, the chances of making money in theatre, a notoriously high-risk investment, are still slim. "They say only one in every 10 [plays] makes a proper recoupment. I think it's probably one in every seven or eight these days," says Friedman, who adds that she has made money on two-thirds of her plays. "The odds are stacked against you," says Neil Adleman, head of theatre practice at Harbottle & Lewis, who reckons that less than half of all West End shows turn a profit. But when they do, they can provide significant, and rapid returns. "If you have a hit play, you can probably have your capital returned in 12 weeks, and, in the case of a smash hit, in another 12 weeks you could make a 50 per cent return," he says.

London's subsidised theatres display the same mix of greed and fear as any investor. The Royal Court limited its risk when it sent Jerusalem to Broadway. While it raised $500,000 towards the $3.1m production, the money is backstopped by other investors, giving it "no downside", Horton says. The National similarly took up its rights to provide 30 per cent of War Horse's New York budget but laid off most of it to investors who will hand half of any profits back to the theatre. Starr says it will take up its full rights to 37.5 per cent of a US tour due to start next year, and is thinking ahead to tours in Canada to Australia and to foreign language productions in Europe and Japan.

Friedman concedes that as subsidised theatres step up there will be less room for commercial producers but she claims this has an upside. "Either commercial producers will be frozen out or we have to up our game. I like the idea of upping our game."

The biggest threat to this transatlantic production pipeline could come from Britain's sluggish economy. West End attendances fell by 10 per cent and box-office revenues dropped by 6 per cent in the first quarter. "That's a very dangerous set of numbers," Niemtzow says. New York, by contrast, is booming, with box office grosses up 5.9 per cent in 2010 to a record $1.08bn.

With a 15 per cent cut to arts funding expected over the next three years, Friedman predicts that London's subsidised stages, and the commercial theatres which increasingly depend on them, could start to see the impact. Kate Horton agrees. "Our ability to programme work on the scale of Jerusalem, Clybourne Park and Enron is called into question," she says.

. . .

Nick Starr, for one, is wary of claiming that British theatre has hit upon a lasting new formula. "There is not a business model that says, 'Have War Horse, exploit War Horse, repeat,' " he says: "War Horse might be one of those once in a generation things."

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