Broadway Investing Glossary
Your guide to understanding the language of theatrical investing
Essential Terms
Broadway investing has its own vocabulary. Here's what you need to know to understand how theatrical financing works.
1-for-X System
A bonus structure where fundraisers earn additional ownership based on capital raised. '1-for-1' means you earn $1 of bonus ownership for every $1 raised (100% bonus). '1-for-2' means $1 bonus for every $2 raised (50% bonus). '1-for-3' means $1 bonus for every $3 raised (33% bonus). The better your deal, the lower the number after 'for.'
Associate Producer
A credit tier typically earned by investors who contribute significant capital but less than what's required for co-producer" class="text-blue-600 hover:text-blue-800 underline font-semibold">Co-Producer status. Often tied to specific investment thresholds (e.g., $50K-$74K).
Average Ticket Price (APT)
The mean price paid per ticket across all performances and seating categories. This metric directly impacts gross potential and overall revenue - higher average ticket prices mean higher revenue at the same capacity levels, leading to better ROI for investors.
Bonus Entitlement
Additional ownership percentage earned beyond your direct investment, typically by raising money from other investors. This gives you a share of profits even if you don't invest your own money.
Breakeven
The minimum weekly capacity or revenue needed for a show to cover its running costs without losing money. Expressed as a percentage of total seating capacity or gross potential.
Breakeven Capacity
The percentage of seats that must be filled each week for the show to cover its weekly running costs. Most Broadway shows need 65-75% capacity to break even; shows with lower breakeven capacity are considered less risky.
Broadway Transfer
When a show that premiered in a smaller venue (regional theatre, Off-Broadway, or out-of-town tryout) moves to a Broadway theatre. Early investors may get preferential terms for reinvesting in the Broadway production.
Capitalization (Cap)
The total amount of money needed to mount a production, covering everything from sets and costumes to rehearsals and marketing before opening night. Once the show recoups this amount, investors begin sharing profits.
Co-Producer
A premium credit tier earned by investors who contribute substantial capital or raise significant funds (often $75K+). co-producer" class="text-blue-600 hover:text-blue-800 underline font-semibold">Co-Producers typically receive bonus entitlements and preferential treatment for future opportunities.
Executive Producer
The highest investor credit tier, typically requiring very large contributions (often $250K+). Executive Producers may receive the best bonus rates, prominent billing, and first access to future investment opportunities.
Gross Potential
The maximum amount of money a show can earn in one week if every seat is sold at full price. This represents 100% capacity revenue.
Investment Unit
The minimum amount required to invest in a production, similar to buying shares in increments. For example, if the investment unit is $25,000, you can invest in multiples of $25K.
Lead Producer
The primary producer(s) who initiate the project, secure rights, assemble the creative team, and oversee all aspects of the production. They typically invest significant capital and earn producer fees in addition to profit participation.
Limited Partnership (LP)
The traditional legal structure for Broadway shows, where the Lead Producer is the General Partner and investors are Limited Partners. Limited Partners have limited liability (can only lose their investment) and share in profits after recoupment.
Net Profit
The amount remaining after the show has recouped its capitalization and paid all ongoing expenses. Net profits are typically split 50/50 between investors (Limited Partners) and the producers (General Partners).
Out-of-Town Tryout
When a show runs in another city before opening on Broadway, allowing the creative team to refine the production based on audience feedback. These runs often offer early investors advantageous reinvestment terms for the Broadway transfer.
Producer Credit
Recognition as a producer on a show, appearing in programs, advertising, and award submissions. Different credit tiers (Associate, Co-Producer, Executive) reflect varying levels of investment or fundraising.
Profit Participation
Your ownership percentage that determines your share of net profits after recoupment. This is based on your direct investment plus any bonus entitlements earned through fundraising.
Recoupment
The point at which a show has earned back its full capitalization from net profits. Once recouped, investors begin receiving profit distributions. Investors get their initial investment back before producers take their share of profits.
ROI (Return on Investment)
The percentage return you earn on your investment, calculated as (Profit ÷ Initial Investment) × 100. A 50% ROI means you earned half your investment back in profit. A 100% ROI means you doubled your money.
Seating Capacity
The percentage of available seats sold for performances, usually measured weekly. If a theatre has 1,000 seats and sells 600 tickets per show, that's 60% capacity. Higher capacity means more revenue.
Weekly Running Cost (Weekly Nut)
The amount it costs to run the show for one week, including salaries, theatre rent, marketing, and operational expenses. This must be paid regardless of ticket sales, which is why breakeven capacity matters.
Why This Matters
Understanding these terms helps you make informed decisions about Broadway investments. Every show is different, but these concepts apply across theatrical productions.
The language of Broadway investing can seem complex at first, but it's really about understanding risk, reward, and how money flows through a production. When you see terms like "19% breakeven" or "1-for-2 bonus," you now know exactly what that means for your potential return.