The closure of Broadway theatres amidst the Corona pandemic came as a gut punch. It was swift, sharp and immediately changed the fate of the forty-one theatres that make New York City the center of the global theatrical market. It is a devastating and crippling event for our industry and the world at large, but there are ways in which we can mobilize to address its impact on the theatrical market – and the answer lies, at least in part, in the power of a ticketing pre-sale.
A very quick summary on theatrical ticketing: when patrons purchase tickets to a show, the monies are held in an escrow account until the performance has actually occurred. On a weekly basis (one week in arrears), ticketing agencies remit gross receipts to the theatres and producers, which amounts are thereafter used to cover weekly operating expenses and (hopefully), recoupment/payment of profits. This accounting structure enables theatres and ticketing agencies the ability to issue refunds directly to consumers, should a performance be cancelled.
While producers do not have access to gross receipts until after each performance, the escrow balance (i.e. prospective gross receipts) is a powerful metric when it comes to Broadway budgeting. For instance, if the escrow balance looks low for November, a strong pre-sale for the period commencing on or about Thanksgiving and leading into the holidays will likely protect a show from early closure. Simple (and like any business), the metrics allow producers to amortize the losses of low-grossing periods against higher grossing weeks.
So what does this mean for us now? It means we need to prepare the public to come back to Broadway – and if we start on April 13, 2020 (the currently scheduled re-commencement date), it will likely be too late for shows with less than Hamiltonian numbers. Importantly, refunds for show cancellation will always protect ticket-buyers if further shows are cancelled, so there is little downside to committing to show dates even in light of uncertain times.
Call your parents, circulate emails to your co-workers and make group bookings with your friends. You should be seeing West Side and Company and Jagged Little Pill and How I learned to Drive and of course, the Lehman Trilogy. Six and Doubtfire and Whose Afraid of Virginia Wolf. And Plaza Suite because Bradshaw is back on Broadway and Sing Street because we love an OG musical.
A gut punch hurts, but it’s not a knock out. I won’t give up on this season, and neither should you.