|Traditionally, that was certainly the case for many, perhaps for most shows, but there were exceptions now and then. Back in the 50's and 60's cast album LPs actually made money. Labels competed for the right to record shows like My Fair Lady, Hello, Dolly!, Follies, and countless others. Gradually that started to change -- I'm not sure exactly when. I would assume that a recording can not be made until the costs have been covered. For example, the OBC album of Jason Robert Brown's Parade was recorded on Mar. 1, 1999, even though the show opened on Dec. 17, 1998 and closed on Feb. 28, 1999.
Today it's pretty rare for a cast recording physical CD to actually be profitable. I assume that is why many scores in recent years have been getting a digital release only.