Rudin’s $9 Million ‘Mormon’ Bet Pays Cash, Artistic Dividends
With hopeful pilgrims camping out daily on West 49th Street for standing-room tickets to “The Book of Mormon,” Broadway’s biggest hit in years is poised to earn millions for its creators, producers and investors, according to financial statements obtained by Bloomberg News.
The documents were filed with the New York State Attorney General’s Office by Book of Mormon Broadway LLC between December 2010 and June 2011. Bloomberg News was given copies of the papers under a Freedom of Information Law request.
They underscore the complexity of producing a Broadway show in which multiple creative and financial talents need to align. And they highlight how much money stands to be made when those forces combine to create a runaway hit.
“The Book of Mormon” opened on March 24 and cost about $9.1 million, according to the papers. It has returned about 30 percent of their money to its 74 investors, according to one who spoke on condition of anonymity because investors are not authorized to speak to the press.
According to the “Operating Agreement of Book of Mormon Broadway LLC,” the musical is expected to pay off the remaining 70 percent by October. That would be very fast recoupment for an industry in which shows can run for years without making money.
‘Extremely Long’ Run
“This show is going to run an extremely long time,” said Emanuel Azenberg, a producer who isn’t affiliated with the show, about freshly minted Mormon elders on a thankless mission to convert impoverished villagers in remote Uganda. “While it’s irreverent, it’s not sacrilegious. By the end of the evening, all is forgiven.”
Written by Robert Lopez (co-composer of the music and lyrics for “Avenue Q”) and Matthew Stone and Trey Parker, the creators of the “South Park” television series, the show won nine Tony Awards, including best musical. The producers initially projected recoupment at 33 weeks, based on weekly sales of $949,000.
“Mormon,” however, has grossed at least $1.2 million a week since late June, according to the Broadway League, the industry trade organization that publishes box office figures every week.
The lead producers are Hollywood and Broadway veteran Scott Rudin and the three “South Park” principals: Anne Garefino -- who is executive producer of the “South Park” series -- and Stone and Parker, under the aegis of Important Musicals LLC.
Through a spokesman, Chris Boneau, the producers declined to comment for this story.
The operating agreement lists running expenses of $621,454 for the week ending April 17, the last week for which figures are available. That excludes royalties but includes wardrobe and dressers, union benefits and $193,642 in advertising and promotion, a sum that will fluctuate over the course of the run.
“Mormon” is playing in one of Broadway’s smaller houses. Tickets are scarce through January 2012. Its average ticket price last week, $145.59, was the highest on Broadway.
Stunt-heavy “Spider-Man Turn Off the Dark,” which cost $75 million, has weekly running expenses of about $1 million. “Mormon” lacks special effects, elaborate costumes and stars. Salaries for its five principal performers totaled $22,516 for the week ending April 17 -- a third of what a single celebrity can command.
According to the operating agreement, the producers share 7 percent of weekly operating profit -- which is box office revenue minus running expenses. Once investors are repaid, every dollar of profit is split 50-50 with the lead producers. (First the general manager, Stuart Thompson Productions, receives 2.5 percent of net profit after investors are repaid.)
Assume, conservatively, net weekly operating profit of $500,000. The lead producers would divvy up about $175,000 a week after the show is in the black.
The filings don’t disclose whether lead producers gave up any “adjusted net profit” to other producers, a common reward for raising money. Each of the 74 investors has a minimum stake of $5,000, according to a July filing with the U.S. Securities and Exchange Commission.
Equally complex are the sums paid to the creators of “Mormon,” several of whom are also producers.
The three authors jointly earn royalties of 15.56 percent of operating profit, increasing to 17.78 percent after recoupment-plus-10-percent. Based on $500,000 weekly operating profit, authors would share as much as $89,000 a week.
For his work as co-director, Parker received a one-time $55,000 fee. He is paid an additional 3 percent of the weekly operating profit, or about $15,000 a week. (The state filing said that lead producers were in the “process of finalizing the material terms of an agreement” with Parker and others.)
The choreographer and co-director, Casey Nicholaw, was paid $100,000 up front and will receive 9 percent of weekly operating profit once the show doubles investors’ money. That could come to as much as $45,000 a week. The creative team and producers earn additional fees from subsidiary rights.
Jujamcyn Theatres, which owns the 1,068-seat Eugene O’Neill Theatre where “Mormon” is running, takes $22,000 a week plus 6 percent of weekly gross, increasing to 7 percent once investors are repaid. That comes to as much as $106,000 a week. Utilities and insurance are extra.
The set, lighting, costume and sound designers each receive about 1 percent of weekly operating profit.
Two years ago, the Broadway League changed the way it reports weekly box office revenue publicly, excluding credit card and other fees. That “gross gross” typically inflates public sales by about 10 percent.
The “Mormon” gap has been wider: For the week ending April 10, for example, the League reported gross gross sales of $966,075, while the production internally said box office revenue was $780,740.
Weekly operating profit is calculated from the internal box office figure. Credit card fees on orders for future performances largely accounted for the difference, two people familiar with the production said. The production paid the fees as orders came in, subtracting from box office revenue.
The producers have sold “The Book of Mormon” as an edgy but cheerful musical with broad appeal. Recent advertising has emphasized the show, not the actors. That tack should help extend its life.
While “Book of Mormon” mocks the Church of Jesus Christ of Latter-day Saints, for producers and investors it’s looking like manna from heaven.
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