‘Matilda’s’ Payday Prospects Made Angels Give Up BillingPhilip Boroff
As the title character of Broadway’s “Matilda” prepares hair dye to exact revenge on her nasty dad and his pompadour, she sings in a tribute to naughtiness: “Just because you find that life’s not fair it/ Doesn’t mean you just have to grin and bear it.”
The precocious schoolgirl has the telekinetic ability to manipulate chalk on a distant blackboard. Perhaps more important, she sold more than $12 million worth of tickets ahead of her show’s April 11 opening night.
A horde of investors grinned through unusually tough terms dictated by the lead producer, the Royal Shakespeare Co., for a stake in the musical, which is in previews at the Shubert Theatre. It’s based on the popular Roald Dahl story of the same name.
“There were people hanging from tree limbs trying to get into it,” said Jerry Frankel, who invested after being wowed by “Matilda” in London, where it’s been playing to full houses since November 2011. “We’re all grown-ups. If you don’t want to get in you don’t have to get in.”
Backers are forgoing customary perks and profit-sharing terms for a piece of what resembles as close to a sure thing as Broadway offers.
The RSC and its American co-producer, Dodger Theatricals, raised $16 million without dispensing producer credits to its top investors. So instead of trading above-the-title credit for cash -- standard practice these days, making dozens of people eligible for a Tony Award if the show wins for best musical -- “Matilda” lists only two producers. The key investors are cited in the playbill in small print below the cast and production team.
The investors stand to earn just 34 percent of the show’s profits after getting their money-back-plus-50-percent, according to a partnership agreement. The papers were obtained from the office of New York Attorney General Eric Schneiderman through the state’s Freedom of Information Law.
Backers of less-heralded productions usually share profits of 45 percent or more.
“If you have a hot show, you have a lot more freedom to structure it in a way that will benefit the producing team,” said Jason Baruch, a partner with the entertainment law firm Sendroff & Baruch.
RSC Executive Director Catherine Mallyon said in an e-mail that “profits generated by our activities are returned to support our charitable purposes to connect people with Shakespeare and live theatre.”
Mallyon declined to comment further. A spokesman for the show said the production team had no comment.
The show has been in the works since December 2008, when director Matthew Warchus (“God of Carnage”) approached Tim Minchin, an Australian performer and composer, about writing music and lyrics for an adaptation of the 1988 bestseller, according to Minchin’s website. Minchin finished a draft in mid-2009 and it had its premiere at Stratford-upon-Avon in 2010 with Dennis Kelly’s libretto.
The RSC self-produced it on the West End, where it won a record seven Olivier Awards and recouped its roughly $4 million production costs in six months.
For the inevitable New York transfer, the RSC chose to partner with the the Dodgers, the partnership behind the global blockbuster “Jersey Boys.”
The Broadway-bound production accepted minimum stakes of $25,000, according to an October filing with the U.S. Securities and Exchange Commission. Its fixed weekly expenses are relatively low at $584,452 plus 7 percent of grosses payable to the landlord, the Shubert Organization, exclusive of other theater expenses.
Weekly ticket sales potential at the 1,427-seat Shubert is about $1.1 million, although sales of “premium” seats starting at $194 may boost that figure considerably.
If the show plays to almost full houses, it can recoup $14.4 million of projected production costs in a little more than a year.
The RSC gets a share of box office or weekly operating profits, and after investors recoup production expenses it will earn 15 percent of net profits “off the top.” The going rate for large nonprofits that develop work for Broadway is about 10 percent. The RSC also shares with the Dodgers and investors the final pool of profits -- net adjusted profits -- once authors and the director receive their cut.
Baruch, the lawyer, reviewed the Broadway papers for clients who were considering investing.
“I told them the fees were high and this is the most highly anticipated musical of the season and I thought it would do well,” he said.
Participants in the investing pools that “Matilda” spawned will take a further hit on returns. Gail Bryan, a West Coast theater patron, formed a partnership of investors to raise as much as $900,000 for the show. She’s eventually entitled to 10 percent of her partnership’s profits plus a $9,000-a-year management fee, according to a copy of the agreement.
“People who invested through us wouldn’t have been able to get into the show otherwise,” Bryan said, adding that she doesn’t plan to take any fees until the paperwork becomes burdensome. “If you look at a venture-capital deal, the management fees are much higher than what we’ve allowed for.”
Competition for opening-night seats is as heated as the battle for stakes. To make room for more than 100 RSC board members, supporters, U.K. attaches “and the like,” plus investors and press, talent agents aren’t invited, according to an e-mail from the Dodgers and RSC obtained by Bloomberg. The same goes for managers and lawyers.
Agents endured a six-month-plus audition process with their clients and see it as a snub, according to one who spoke on condition of anonymity.
The RSC and Dodgers wrote: “Unfortunately, the rare and blessed interest and expectation our little show has generated, has created collateral damage at a moment like this for everyone.”
Confident that the moment will pass, producers are already auditioning potential replacements for the four girls in the title role.
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