Toronto: Great White North Way

When Show Boat opened on Broadway in 1927, it heralded the birth of the modern musical. It was a story with a message, not merely a variety show. So it's only fitting that a revival of Show Boat, acclaimed as the most ambitious production since the original, might make history again. This time, the $6 million show, which opened in Toronto in October, could proclaim Live Entertainment of Canada Inc.'s arrival as a major player on the world stage. Then, as Show Boat goes to Broadway next fall and across the U.S., Europe, and Australia, it could gross $1 billion, boasts LivEnt Chief Executive Garth Drabinsky.

Across town, David Mirvish--Drabinsky's archrival--is not about to be upstaged. His Toronto production of Crazy for You opened on Jan. 5 "to bigger advances than the show earned in London or New York," he gloats. Mirvish predicts Crazy will break even after just 30 weeks, vs. 91 on Broadway.

A decade ago, Toronto was just another stop for the weary stars of Broadway road shows, which might gross $50 million a year in ticket sales. Now, thanks largely to Drabinsky and Mirvish, it's the world's No.3 theater center, after New York and London. Especially for musicals. In the season ending in May, musicals are expected to gross about $150 million in Toronto, far outshining Los Angeles and Chicago, its nearest North American rivals after Broadway. "No other city has seen this kind of growth," marvels Cameron Mackintosh, who staged Cats and The Phantom of the Opera and is considered the world's top theatrical producer.

In 1993, both Mirvish and Drabinsky inaugurated huge theaters that surpass any house on the Great White Way. And Toronto now has four open-ended musicals: Mirvish's Miss Saigon and Crazy and Drabinsky's Show Boat and Phantom. Last year, these shows drew some 1 million Americans to Toronto, and theater now pumps about $1 billion a year into the economy.

There is one rub: Toronto's growth has been fueled by productions of the most successful musicals ever--including Phantom and Les Mis rables. Cautions Mackintosh: "There aren't that many of these shows, and people shouldn't assume that the assembly line will keep churning them out."

True, but Drabinsky and Mirvish have created a few hits, too--and there are more to come. In 1992, LivEnt originated Kiss of the Spider Woman in Toronto and later moved it to London and Broadway, where it won seven Tonys in 1993. On Jan. 27, Drabinsky announced he would produce a musical based on E.L. Doctorow's Ragtime, probably in 1996. Mirvish won raves in Toronto for his production of Dry Lips Oughta Move to Kapuskasing, a drama about life on a Canadian Indian reserve. Mirvish says he's also planning to develop musicals.

GOING UP. And they aren't the only acts in town. Toronto boasts 140 theater and dance companies, vs. two in 1962. Most are nonprofit, but not all. Marlene Smith, for example, who set off the boom with her 1985 production of Cats, will raise the curtain on a $3.4 million staging of Napoleon, Canada's first original megamusical, on Mar. 23.

Still, Drabinsky, 44, and Mirvish, 49, are the key players. Mirvish, who first made his mark as an art dealer, formed Mirvish Productions in 1986. He then began staging big musicals at the Royal Alexandra, which his father had bought in 1963. By 1989, he was co-producing Les Mis rables with Mackintosh in Toronto. The show, seen by more than 4 million people in Canada, grossed more than $150 million. Encouraged, Mirvish built a theater for his production of Miss Saigon--the $17 million, 2,000-seat Princess of Wales, which opened last May. It was the first privately financed, freestanding theater built in North America since 1972, according to the League of American Theatres & Producers.

If anything, Drabinsky is more ambitious. While in his 30s, Drabinsky vaulted to prominence as CEO of Cineplex Odeon Corp., which he built into North America's No.2 chain of movie houses. When his bid to take the company private was rebuffed in 1989, he and his veteran partner, Myron Gottlieb, bought Cineplex' live-entertainment unit for $77 million. LivEnt had just opened Phantom at the 2,200-seat Pantages Theater, which Cineplex had spent $17 million to restore. The show has now grossed more than $250 million, making it the most successful production in Canadian history--and fueling Drabinsky's plan to turn LivEnt into a global theatrical juggernaut.

LivEnt's strategy starts with controlling theaters. In addition to the Pantages, LivEnt has a 40-year contract to manage the new $38 million North York Performing Arts Center, which includes the 1,800-seat theater that's home to Show Boat. In November, it announced plans to erect an 1,800-seat theater in Vancouver. LivEnt further boosts revenues with road shows. In 1992, its production of Joseph and the Amazing Technicolor Dreamcoat grossed $7.2 million in Minneapolis, four times the previous box-office record there.

Although Mackintosh doubts Show Boat will gross $1 billion--only Cats, Phantom, and Les Mis rables have done that--LivEnt is making a profit. The results allowed Drabinsky last May to raise $22.5 million in an initial public offering. With LivEnt predicting profits of $6 million, on sales of $90 million in 1993, the shares have soared to 11--67% above the offering price--on the Toronto Stock Exchange. Mirvish won't disclose his financial results but insists he is making money despite some losses.

If those results look good compared with Broadway, where two shows out of three fail to recoup their costs, the Canadians do have some big advantages. Top seats in Toronto cost nearly as much as Broadway's--about $65--but production costs are much lower. Mirvish spent just $5.3 million on his lavish production of Crazy, vs. an $8.3 million cost on Broadway. Toronto benefits from lower labor costs and from less rigid work rules.

Mirvish and Drabinsky still face the theater's eternal challenge: How do you keep them coming back for more? Once their hits close, if the replacement shows "are not that potent, there is no reason to believe that the experience in Toronto will be that much different from any other city," warns Gerald Schoenfeld, chairman of the Shubert Organization, Broadway's largest theater owner. Then, audiences may dwindle, shows may lose money, and Toronto could face a theater glut. Mirvish and Drabinsky insist they can avoid this plight. But it will be their biggest challenge yet.

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