Why the“Cabaret” Lawsuit Should Worry Every Broadway Investor

by Chris Peterson

Broadway is always a gamble. Everyone knows that. You put in money, you cross your fingers, and you hope the mix of stars, critics, and Tony buzz turns into a return. Most of the time it doesn’t—but usually, people walk away quietly. What’s happening with Cabaret right now is different. The revival that was supposed to be a crown jewel is closing early, and one of its investors has decided he’s not going quietly. He’s suing.

James Lorenzo Walker Jr. put $50,000 into Cabaret just before it opened last year. Fast forward 17 months: the show has grossed almost $90 million, and he hasn’t seen a single dollar back. Not one. In his lawsuit, he says producers built a maze of financial structures to hide money and bleed investors dry. His line to Broadway Journal is devastatingly simple: “At a certain point, it’s a hustle.” Tell me that doesn’t land like a gut punch to anyone thinking about investing in a show.

Here’s the thing: Cabaret looked like a safe bet. The title is iconic. Eddie Redmayne was headlining. The August Wilson Theatre was transformed into the Kit Kat Club with all the bells and whistles. On the surface, it was Broadway prestige at its flashiest. But the math never worked. The capitalization was $24 million—eye-watering by Broadway standards. Weekly costs were supposed to be $1.1 million, but they shot up to $1.5 million almost immediately. For a hot moment, grosses spiked at $2 million a week thanks to Redmayne. But after seven weeks of previews and performances, the show’s entire profit was $700,000. That’s a rounding error compared to what they needed. And once Redmayne left? The box office has fallen off a cliff.

The lawsuit digs into what really irks people about Broadway these days: the sense that investors are on the hook for everything while producers keep the books closed. Walker says he couldn’t get detailed records. All he saw were box office reports—no breakdowns, no transparency. Meanwhile, $7.5 million of investor money went into renovating the theater. In the past, landlords paid for that. The Shuberts redid the Majestic for Phantom. This time, the investors got stuck with the bill. It’s no wonder people are asking: where exactly is all this money going?

Now, will Walker’s lawsuit succeed? Maybe, maybe not. Some lawyers are already calling it weak, pointing out that Broadway contracts are airtight and heavily favor producers. Investors basically sign away most of their rights before the first preview even starts. But the fact that the lawsuit exists at all is the story. Because it shines a spotlight on something everyone whispers about but rarely says out loud: Broadway’s money game feels rigged.

And let’s not ignore the broader picture. None of last season’s 17 Broadway musicals has paid back investors. Not even the ones with stars, not even the prestige revivals. If Cabaret can’t recoup, with all its name recognition and hype, what does that mean for an original musical trying to break through? The economy is broken.

What happens next? One possibility is that investors just accept they’re buying cultural cachet, not profit. You put money in for the glamour of opening night, not for any realistic chance of getting it back. Another is that more people do what Walker did—stand up, say “enough,” and take it to court. Either way, it chips away at Broadway’s already shaky reputation with backers.

And the irony of it all? Cabaret invited audiences into the Kit Kat Club with the promise that “life is beautiful.” For investors, life has been anything but.

At the end of the day, this isn’t just about one revival. It’s about whether Broadway can keep asking for tens of millions of dollars while sending investors home empty-handed. It’s about whether people will keep buying into the illusion that grosses equal profit, when clearly they don’t. Walker might win or he might lose, but he’s pulled the curtain back. And once you’ve seen what’s behind it, it’s hard to pretend the show goes on the same way.