Broadway’s Financial Crisis Needs Structural Fixes, Not Hand-Wringing

Jasmine Amy Rogers and company of Boop! The Musical (Photo: Matthew Murphy and Evan Zimmerman)

by Chris Peterson

The New York Times recently published an article outlining the grim financial state of Broadway, noting that even big-budget musicals with strong reviews are struggling to recoup their investments. Rising production costs, stagnant ticket sales, and a post-pandemic audience that hasn’t fully returned have created what feels like a breaking point for the industry.

But the truth is, Broadway’s financial model has been unsustainable for years. Unless producers, theatre owners, investors, and unions make structural changes, the situation will only worsen.

Here are three reforms that I have been screaming about for years, that could help Broadway survive, and even thrive, over the next decades.

1. Let’s Talk About Theatre Owner Deals

Right now, the financial arrangement between producers and theatre owners is lopsided. Owners either charge rent that is sky high, or they take a cut of the weekly gross, sometimes both. For a show that is already spending millions just to keep the lights on, that extra bite makes survival nearly impossible once the early buzz wears off.

Owners often argue that their own expenses are too heavy to reduce costs. They point to taxes, staff, utilities, and upkeep on century old theatres. That is fair, but here is the thing: empty theatres make nothing. A theatre that sits dark after a show closes early generates zero income.

Would it not be smarter to have more shows able to survive and run at least their planned length? A healthier pipeline of productions means steadier occupancy and steadier income. Protecting short term profit margins by bleeding productions dry is a losing strategy.

2. End the Myth of the “Open Run”

Here is another sacred cow Broadway should retire: the idea that every new musical is supposed to run forever. That era is over. Limited runs are the smarter play. Twelve or sixteen weeks feels doable for big name talent, it creates urgency for audiences, and it keeps budgets realistic.

Skeptics push back and say limited runs discourage tourists, who want to know a show will still be there when they book their trip six months out. But in reality, the opposite happens. A limited run creates must-see buzz.

Those shows became the hottest tickets in town. And with theatres able to rotate new titles in more often, there would always be something fresh to see, whether you came in January or July. The real tourist deterrent is a half-empty house with a tired production.

3. Streaming Is Not the Enemy

This is the big one nobody wants to touch: streaming. The numbers simply do not work anymore if Broadway is relying only on a thousand seats a night. Ticket prices are already creeping toward the absurd. Investors get nervous about $20 million dollar capitalization costs unless they see a backup plan.

The most common objection is that a streaming release will cannibalize ticket sales. People will watch from their couches instead of buying seats. But that has been disproven time and again. Hamilton is the obvious example, but there are others. The filmed version of Newsies did not stop fans from flocking to see it live. The National Theatre Live series in London has built a loyal audience without emptying houses.

The truth is, streaming broadens the base. It turns casual fans into committed ones. Someone in Ohio might watch the stream and then decide they need the live experience next time they visit New York. If Broadway wants global reach, streaming is the path.

The Real Problem: Nobody Wants to Blink

So why are these things not happening? Because every group involved, producers, investors, owners, unions, wants to protect their own piece of the pie. No one wants to take the hit, even if the system as a whole is collapsing. It is Washington gridlock with better costumes.

Until those groups sit down and decide what is best for Broadway as a whole, not just their corner, we are going to keep having the same conversation every season. Yes, it is uncomfortable. Yes, everyone has to give something up. But the alternative is watching the Broadway we love shrink until only a handful of mega hits and revivals are left standing.

Broadway has always found ways to reinvent itself. This is the moment to do it again. The question is whether the people in charge are willing to stop protecting the present long enough to start planning for the future.