The Business of Broadway

How fresh ideas from finance, film, and TV are creating new opportunities for the theater

The Business of Broadway
Pun Bandu and Marc Falato | photograph by Brian Finke Pun Bandu and Marc Falato | photograph by Brian Finke

The Cool Cat

Stephen Byrd
Front Row Productions
New York, New York


Stephen Byrd, 55, a former investment banker at Goldman Sachs and currently a partner in the private-equity firm Stonehedge Partners, spent 13 years trying to bring an all-black production of Cat on a Hot Tin Roof to Broadway. It debuted this spring.

“On Broadway, everyone wants to know what you’ve done before. But there’s no producer school. You need dollars. I know dollars. African- American films never lose money. I didn’t see why you couldn’t repeat that success in the theater. I started with Cat on a Hot Tin Roof because I grew up loving that movie. The show had to be an event — with big names like James Earl Jones and Terrence Howard — because my goal is to get fannies in the seats. I did not want to be August Wilson, who got great reviews but made no money. Even after we had a great cast, though, we couldn’t get a theater. A serious drama with a black cast? No one takes you seriously.

I don’t want to say, ‘I told you so,’ but the show came in under budget at $2.1 million, and tickets are selling out. Our audiences are 60% black and 40% white. Seeing all these people in the audience who are new to Broadway makes all those years I’ve been working on this worth it.”

The Drama Queen

Joan Stein
Producer and Managing Partner
Center Stage Fund
Los Angeles, California

Joan Stein, 54, a 28-year veteran producer for TV and Broadway, recently launched Center Stage Fund, a sort-of hedge fund for live stage productions.

“Most theater productions are still financed by individual investors. I am bringing the hedge-fund mentality to Broadway, letting people invest in units of $100,000 — or even less — in several shows to minimize risk and maximize profits. So far, the portfolio includes the new 9 to 5 musical, based on the movie, which will open in Los Angeles this fall and be on Broadway by spring. We are also invested in the national tour of Dirty Dancing. The fund will not reinvest its money. As revenue comes in, it will flow back to investors. Of course, profits in theater, even with a fund, aren’t guaranteed. But investors get access to all the fun perks of the theater world, which you won’t get investing in an oil company.”


The Prodigy

Amanda Lipitz
Amanda Lipitz Productions
New York, New York

Amanda Lipitz, 28, became the youngest producer on Broadway in 2005 when she raised $1.3 million to help open the musical Dirty Rotten Scoundrels. She followed up by coproducing Legally Blonde: The Musical, securing sponsorship from Apple, Pottery Barn Teen, and Tiffany & Co.

“No one invests in Broadway thinking they are going to get rich. But if you hit with the right show, it’s an unending well of money that never stops. Many people don’t know Phantom of the Opera is the highest-grossing entertainment venture of all time, surpassing Star Wars.

I recently executive-produced a Legally Blonde reality series for MTV. I thought it was important to venture into TV because of the potential it has to get more young people excited about Broadway and ultimately going to our show. I used to find it difficult to always be the youngest producer in the room, but then I realized that Broadway needs my perspective. There has to be someone who doesn’t turn up her nose if Clay Aiken does Spamalot.”

The Guerrillas

Pun Bandhu and Marc Falato
Zen Dog Productions
New York, New York

Pun Bandhu, 33, is a Yale Drama alum who teamed up with former investment banker Marc Falato (right) to try his hand as a Broadway producer. Their artistic and financial pairing has produced two Tony award-winning shows — Spring Awakening and Glengarry Glen Ross — in four years.


“We’re pursuing the independent-film model on Broadway. We’re interested in high-concept projects with universal reach that can have low weekly operating costs and capitalizations that can recoup their budgets reasonably quickly.

Our shows typically don’t have A-list actors and built-in name recognition. So we have to be more creative in developing a groundswell of support for a show. With Spring Awakening, we created an Internet campaign that let fans create music videos online and share them virally via MySpace. We had cast members live-blogging via text message during the Tonys. We recouped our costs in less than a year. Our investors on Spring Awakening will continue to make money for as long as it remains on the boards and also participate in subsidiary profits.”