"In another lifetime, I worked for a large institutional theatre here in New York, and there was definitely a policy with certain writers (that the company had a long history with) that the company would produce any play brought to them by those writers. This was, firstly, to preserve the company's relationships with those writers, and, secondly, it was thought that, even if this particular play isn't as good, that it was worth producing in order to get the inside track on the next one, which might be a masterpiece. That tends to mean that the audiences are getting subpar plays now and then, but also means that, if one of the plays is a huge hit, the company will be earning income from it for years to come, perhaps even enough to cover the costs of less successful endeavors from those writers."
I understand all of that on one level -- but on another level, when plays are as shockingly bad as the ones I'm referring to, I think that completely negates any arguments regarding the upside of producing them. P.S. There is no way in any universe that any of the plays I'm referring to could ever have become huge hits. They weren't just "subpar," they were so awful that they should never have been produced, and would not have been if those writers' names hadn't been attached to them.