| re: Why are there not laws about profit sharing for this very reason? | |
| Posted by: NewtonUK 08:02 am EST 01/06/18 | |
| In reply to: re: Why are there not laws about profit sharing for this very reason? - Chazwaza 01:13 am EST 01/06/18 | |
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| Let me try to put it all into perspective this way - first off, with the extortionate prices being charge for HAMILTON, and their grosses in the $2.5-3 million range, could they afford to add $500-$1000 to every actor (and stage manager) salary? I imagine they could. But on the other hand, profits are shared by producers and investors. If your show is a hit, and you suddenly decide to share profits with the cast - well - your investors would have to agree to that, as that is not what they signed up for. So you could raise salaries a bit. Lets look at the example of Corporate America. After the multi zillion $ tax break that corporations just got, Mr Trump has proudly reported that a number of companies are giving their employees $1000 bonuses because of the bonanza that they are reaping. That amounts to $19.23 a week over a year. After taxes, state fed local fica medicare - that leaves about $12.50. As was hinted above, writers may have been working on a show 5-7 years with no compensation other than an option agreement - which is an advance against future royalties. The Producer, and his office, may have been working 7 years or longer - and they receive zero compensation. And the investors are in perilous straits as well. Now, the Hamilton investors are going to make out very well indeed. But I look at one - and let us say this investor has $1 million in each of 4 shows. This investor's last three shows - $3 million in - maybe $1.5 million returned. So a $1.5 million loss. So first HAMILTON has to recoup the investors $1 million in HAmilton. That's 100% return on capital is required. To get the $1.5 million lost on the previous three shows back, now HAMILTON has to return 300% on capital, as the investors are only getting 50% of Hamilton profits after recoupment. HAMILTON recouped in 8 months. At the same rate of return, it would take two more years for the investor to get back the money lost on the previous three shows. So - only after 32 months of HAMILTON would the Producer see a penny of profit from shows they had invested in/produced over a period of 6 years (2012-2018). Keep in mind that while London and tours bring $ back to the Broadway producers - all of these other productions are separately produced, with additional capital raised. Now these are all great investments - but this investor would have to pony up new investment for each new production. And start the whole rat race again. |
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