Cameron Mackintosh Might Be Bluffing About Leaving Broadway, But He Still Has a Point

Greg Ehrhardt, OnStage Blog Editorial Staff

Cameron Mackintosh is back in the news, and I hate to say it, but this time he has a valid point to make.

Mackintosh claims he’s done producing theatre on Broadway, stating the costs to put on a new show on Broadway are “ludicrous”, and he’s walking away for good.

This may just be empty rhetoric. I know how expensive Broadway is from the ticket prices; we’ve written about it extensively. I have to admit, I chuckled at his statement, considering how long The Broadway League has insisted ticket prices are affordable.

It’s hard not to notice the timing here. Broadway cost panic always seems to get loud right when unions are in the middle of negotiations, which makes this feel like more than just a neutral conversation about economics.

The costs are real, yes. But when the industry suddenly rediscovers how expensive Broadway is while labor is asking for fair terms, it’s worth looking at that timing with a little skepticism.

However, as expensive as Broadway is to produce, Broadway is also an extremely lucrative market if you successfully launch a hit musical, so, we’ll see if he backtracks on this down the road.

But he has a point regarding production expenses, and we should really understand why The West End is easier (and cheaper) to produce theatre so we can understand a way out of this for Broadway.

Broadway’s Labor Costs

Let’s start with the fairest and unfairest argument for the high production costs in NYC: labor costs.

Broadway runs on some of the most expensive union agreements in the world. This is not an editorial; it’s a fact. The union agreements for West End performers and workers are shorter, cheaper, and more flexible for negotiations than Broadway union agreements. This is the fair part of the argument.

Now, the unfair nature of this is everyone involved in Actors’ Equity, IATSE, etc. deserves fair pay, obviously. I’m happy they get every dollar they can through collective bargaining. It’s unfair that this is usually the first thing brought up when discussing high production costs and elevated ticket prices. If the financiers can make millions, then the workers should receive equitable pay.

But high minimums, staffing requirements, overtime rules all add up fast when tallying production costs—and none of it flexes easily for smaller or riskier productions the way it can for West End productions. We love that Broadway union members get fair pay, but it does partly result in higher production and ticket costs. I should add, ballooning material and marketing costs are also a significant factor for high production expensess.

The upfront costs are significant for Broadway, and (for the most part) it all lands on private investors. This leads me to the next reason in why Broadway is so expensive compared to London:

Public Funding (or lack thereof)

You can argue this is the biggest reason for Broadway’s expensive cost structure. Shows at the West End can benefit from Theatre Tax Relief, Arts Council England, the National Theatre, and other public sources more easily than Broadway shows. That means production can take shape without immediately needing to recoup millions.

Public money can be made available for shows in New York City IF it's performed at a non-profit theatre; unfortunately, many of the theatres on Broadway are for-profit, rendering them ineligible.

Now, some hit shows on Broadway have taken advantage of non-profit theatres to develop promising shows; Hamilton (The Public Theater) and Hadestown (New York Theatre Workshop) are two recent examples.

So why doesn’t every show do this? There simply aren't enough non-profit theatres to use for subsidized development, and the non-profits want to do more than just serve as testing grounds to make millionaires richer, understandably.

So, shows will instead develop in London and then move over to Broadway ready to roll.

This isn’t necessarily a problem, until you get to the 3rd biggest reason for the expensive Broadway structure:

The Rent Is Too D*mn High!

Yeah, we need to invoke Jimmy McMillan here.

Broadway theaters are controlled by a handful of powerful landlords, and they charge accordingly.

Because these theatres were built decades ago, there’s no room to add extra seats to take cost pressures off, and no TV/streaming revenue to take the load off. We typically think, and write, about this as strangling the customers’ finances when it comes to ticket prices, but it also strangles the theatres’ finances. Their costs go up every year, too, so the only way they can make more money is to charge more.

And here’s the sad part: Broadway rental deals can include a base charge plus a share of grosses, and that’s before royalties are paid to the playwright, composer, and other rights holders. It’s easy to see why rent would be one of Mackintosh’s biggest grievances, especially when compared to the West End, where producers seem to have more flexibility within a more publicly supported theatre ecosystem.

NYC Property taxes increase every year; theatre owners do have ways to reduce their exposure through abatements and credits, but it is likely their taxes go up uncomfortably every year.

In short, there are increasing costs all the way up the economic ladder in NYC, and there’s very little incentive or wiggle room to find ways to save.

Broadway Isn’t Broken—But It’s Heading That Way

Let’s be clear: Broadway is still the global capital of theatre. The prestige and visibility is unmatched.

But the economic model is starting to crack.

So here’s the reality:

We generally support Broadway union members getting paid fair wages. We can’t argue in favor of them taking the brunt of the affordability medicine unless the theatres and producers take the medicine too.

We don’t see the overall tax structure of Broadway changing much. As much as we want to see less of an oligopoly controlling Broadway, NYC costs keep going up, and that is simply going to flow downstream.

We would love more public subsidies of the arts; this feels like the most obtainable solution, outside of creating more non-profit theatres, which, even if adopted, would take years. But we know how John Q Taxpayer would react when their taxes go up a dollar.

It’s easy to be pessimistic on this issue; we all know something has to change, and yet there is very little incentive for the powers that be to change a thing.

Unless more producers like Mackintosh actually follow through and stop producing on Broadway.

Honestly, that’s probably the only way we see change.

We still think Mackintosh is more likely than not bluffing, but sometimes in poker, the only way to change your fortune is to bluff and not be called.

Maybe, just maybe, its time for audiences to start loudly bluffing like Mackintosh they are done with Broadway too.