There's No Business Like Show Business: Analyzing the Factors of Broadway Shows That Have the Most Influence Over the Theatre Industry's Recovery From the COVID-19 Shutdown

There’s No Business Like Show

Business: Analyzing the Factors of

Broadway Shows That Have the Most

Influence Over the Theatre Industry’s

Recovery From the COVID-19 Shutdown

BY Megan Swenson

ADVISOR • Charles Cullinan

EDITORIAL REVIEWER • Amber Day

_______________________________________________________________________________________

_ Submitted in partial fulfillment of the requirements for graduation

with honors in the Bryant University Honors Program

December 2022

Table of Contents

Abstract ..................................................................................................................................... 1

Introduction ............................................................................................................................... 2

Literature Review ...................................................................................................................... 3

COVID-19 and the American Economy ............................................................................... 3

Tourism in the COVID-19 Era .............................................................................................. 4

Performing Arts Industry ...................................................................................................... 6

Broadway Musicals ............................................................................................................... 8

Success Factors for Broadway Musicals ............................................................................. 10

Research Questions ................................................................................................................. 12

Methodology ........................................................................................................................... 13

Regression Analysis ............................................................................................................ 13

Sample ................................................................................................................................. 14

Measures ............................................................................................................................. 15

Results ..................................................................................................................................... 18

Source Material Variable .................................................................................................... 20

Pre-COVID-19 Run Duration Variable .............................................................................. 22

Show Type Variable ............................................................................................................ 24

Tony Award Nominations and Wins Variable .................................................................... 25

Conclusions ............................................................................................................................. 28

Limitations .......................................................................................................................... 28

Future Research ................................................................................................................... 28

Appendices .............................................................................................................................. 30

Appendix A – All Reopened Broadway Shows by Source Material and Show Type ........ 30

Appendix B – All Reopened Broadway Shows and Tony Award Nominations/Wins ....... 31

Appendix C – All Reopened Broadway Shows and Relevant Opening Dates ................... 32

Appendix D – Research and Data Usage Approval from the Broadway League ............... 33

References ............................................................................................................................... 35

There’s No Business Like Show Business: Analyzing the Factors of Broadway Shows

That Have the Most Influence Over the Theatre Industry’s Recovery From the COVID-

19 Shutdown

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ABSTRACT

The COVID-19 pandemic had a significant impact on the Broadway theatre industry, with all

performing arts venues suspending performances for at least 18 months. The economic

recession associated with the COVID-19 pandemic left actors, directors, and theater workers

unemployed for months on end, causing undue economic harm to individual finances and the

industry. Since the reopening of Broadway plays and musicals in the fall of 2021, very few

shows have been able to reach pre-pandemic levels of income and attendance. This project

aims to use a regression analysis of weekly gross income for Broadway shows to predict what

factors will have the greatest influence on the amount of time it will take Broadway shows to

return to pre-pandemic earnings levels. This paper will examine multiple factors and facets of

a Broadway production, including each show’s source material, pre-pandemic run, and Tony

Award nominations and wins.

There’s No Business Like Show Business: Analyzing the Factors of Broadway Shows

That Have the Most Influence Over the Theatre Industry’s Recovery From the COVID-

19 Shutdown

Honors Thesis for Megan Swenson

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INTRODUCTION

The COVID-19 pandemic, which hit the United States with full force by March of 2020, has

fundamentally changed how American businesses operate. As examined in a 2021 report by

Thomas DiNapoli, the New York State Comptroller, closing borders to the rest of the world

and travel restrictions at extremely high levels led to drastic changes in one of the most

profitable industries for the American economy: tourism (DiNapoli, 2021). In New York City

in 2020, the number of tourists visiting the city dropped by 67 percent. Domestic and

international tourists that had previously driven over $80 billion in revenue for New York

City could no longer contribute to American economic growth, causing the tourism industry’s

economic impact to drop by 75 percent in 2020 (DiNapoli, 2021). Particularly in New York

City, public attractions, entertainment venues, and other businesses were forced to close their

doors for business indefinitely.

Broadway theatrical productions had some of the longest perpetual shutdowns of the COVID-

19 pandemic, during which more than 1,000 theater actors lost their jobs with little to no job

prospects in the performing arts for months on end (Whitten, 2020). Though certain shows

could reopen in September of 2021 due to widespread access to vaccines and lower COVID-

19 transmission rates, many musicals continue to face economic setbacks (Paulson, 2021).

Since the reopening of Broadway theaters in September 2021, the decline in tourism levels

within New York City has caused attendance at Broadway performances to remain lower than

pre-pandemic levels (Paulson, 2021). This paper seeks to examine how long it will take

Broadway musicals to recover financially from the COVID-19 pandemic now that theaters are

reopening for business and the United States is reopening its borders to travelers.

There’s No Business Like Show Business: Analyzing the Factors of Broadway Shows

That Have the Most Influence Over the Theatre Industry’s Recovery From the COVID-

19 Shutdown

Honors Thesis for Megan Swenson

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LITERATURE REVIEW

COVID-19 and the American Economy

Existing literature from the beginning of the COVID-19 pandemic demonstrates scientists’

uncertainty about the duration of the pandemic and its overall impact on the American people

(National Institutes of Health, 2020). Whereas public health officials’ initial predictions of the

end of the pandemic changed due to the development of different COVID-19 variants, a

mathematical model of the pandemic at the time of the study revealed that the Coronavirus

pandemic could potentially end sometime between October of 2021 and November of 2024

(Garcia de Alcañiz et al., 2020). However, throughout many points during the pandemic,

public health officials agreed that the overall duration of the pandemic would be dependent on

multiple factors. For example, one study examined COVID-19 transmission and infection

statistics in Wuhan, Hubei Province in China, where the virus originated and found that

stricter quarantine measures could cause a significant decrease in the transmission rate of the

coronavirus (Roda et al., 2020). Transmission rates, hospitalization rates, and instances of

outlawed large gatherings all contributed to extended lockdowns during the original months

of the COVID-19 pandemic (Roda et al., 2020).

The United States economy has been drastically changed since the onslaught of the

Coronavirus pandemic (DiNapoli, 2021). Since the first official shutdowns within the United

States starting in March 2020, every aspect of life in the United States has been affected by

the COVID-19 pandemic. In its Current Population Survey starting in May 2020, the U.S.

Bureau of Labor Statistics added questions to identify how the pandemic influenced the labor

market. In its July 2020 survey, the Bureau of Labor Statistics revealed that 16.9 million

Americans were unemployed, and 57 percent of those Americans lost their jobs because their

employer closed due to the pandemic (U.S. Bureau of Labor Statistics, 2022). Like other

periods of economic recession, the COVID-19 pandemic has caused significant levels of

unemployment, and many businesses are still struggling to recover from the immediate

shutdowns at the onset of the pandemic (U.S. Bureau of Labor Statistics, 2022).

There’s No Business Like Show Business: Analyzing the Factors of Broadway Shows

That Have the Most Influence Over the Theatre Industry’s Recovery From the COVID-

19 Shutdown

Honors Thesis for Megan Swenson

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However, what sets the COVID-19 recession apart from other economic recessions is how the

high unemployment rate and low job prospects impacted the mental and physical well-being

of many Americans, especially performing artists. According to a study conducted by Brenner

(2021), the COVID-19 pandemic has caused the mental well-being of many Americans to

change for the worse, and changes in employment opportunities may be part of the

explanation (Brenner, 2021). The increasing levels of unemployment associated with the

COVID-19 pandemic contributed to more people suffering from stress and anxiety associated

with economic and social impacts of the virus (Brenner, 2021). This phenomenon was also

reviewed in a study from the United Kingdom about artists and work habits because of

COVID-19 (Spiro, et al., 2021). In this study, researchers concluded that 96 percent of

surveyed artists and performing arts employees spent less time performing because of the

COVID-19 shutdown (Spiro, et al., 2021). This study also revealed that during the COVID-19

lockdowns prior to June 2020, 76 percent of respondents reported a decrease in income, and

85 percent of respondents reported increased levels of anxiety (Spiro, et al., 2021). The

COVID-19 pandemic has caused significant economic turmoil for the United States and other

countries worldwide, yet it has also caused much deeper effects on the physical, mental, and

financial well-being of individuals.

Tourism in the COVID-19 Era

Tourism was one of many industries that was drastically affected by the COVID-19 pandemic

within the United States (DiNapoli, 2021). As major cities had to shut down for extended

periods of time, urban centers suffered tremendous losses. According to a report from the

Office of the New York State Comptroller (2021), the annual income driven by domestic and

international tourists in major cities decreased significantly, and as a result, the economic

recession associated with the COVID-19 pandemic was significantly worsened (DiNapoli,

2021). In New York City alone, the absence of tourists during most of 2020 cost the city an

estimated $1.2 million in tax revenue. In 2019, tourists spent $5.6 million in New York City

on Arts, Culture, and Entertainment venues, which could not be earned fully in 2020

(DiNapoli, 2021). Furthermore, because of travel restrictions set by local and federal

governments, thousands of employees in tourism and hospitality businesses lost their jobs. In

There’s No Business Like Show Business: Analyzing the Factors of Broadway Shows

That Have the Most Influence Over the Theatre Industry’s Recovery From the COVID-

19 Shutdown

Honors Thesis for Megan Swenson

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2019, New York City’s tourism industry accounted for 53.5 percent of the entire state’s

tourism employment, and due to the COVID-19 pandemic, a significant number of these

workers lost their employment (DiNapoli, 2021). Because the tourism industry plays a

significant role in generating wealth for the United States, it is important to examine how

successful tourism recovery plans were at the beginning of the pandemic. Existing literature

and studies of the economic changes associated with the coronavirus pandemic demonstrates

that even though countries developed tourism recovery plans during the first few months of

the pandemic, those plans were either not effective in the first place or had to be changed to

be successful as the pandemic evolved (Collins-Kreiner & Ram, 2020).

One study conducted by Collins-Kreiner and Ram (2020) analyzed tourism recovery

strategies and plans structured by the United Nations World Tourism Organization that were

applied in seven different countries. Through the analysis of these multiple plans in different

countries, researchers discovered that most countries’ tourism recovery plans handled

changing travel restrictions and regulations as needed (Collins-Kreiner & Ram, 2020). Out of

161 possible recommendations for tourism recovery under three strategies for those seven

countries, only 8 percent were fully implemented in the early parts of the pandemic (Collins-

Kreiner & Ram, 2020). During the COVID-19 pandemic, many countries had to routinely

change travel restrictions and limitations based on the transmission rates and case counts of

other countries.

Within the United States, many states set up travel restrictions to close their borders to

individuals coming from other states with high transmission levels. One study from Gössling

et al. (2020) revealed that by March 26, 2020, international travel was down by 30 percent

(Gössling et al., 2020). As airlines stopped flying people around the world, tourism

subsectors, including hospitality, restaurants, sporting events, and performing arts all suffered

significant financial losses. However, the study also predicted that for the tourism industry to

begin recovering, it would be necessary for cases to remain in decline for weeks at a time and

for COVID-19 tests to be widely available for the public (Gössling et al., 2020). A similar

study demonstrated that following public health guidelines, such as maintaining social

There’s No Business Like Show Business: Analyzing the Factors of Broadway Shows

That Have the Most Influence Over the Theatre Industry’s Recovery From the COVID-

19 Shutdown

Honors Thesis for Megan Swenson

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distancing and wearing face masks when in public, would lower the risk of infection (Zu et

al., 2021). When people follow public health guidelines and take restrictions seriously, the

chance of reopening increases, which poses a greater possibility to get the tourism industry

back on track (Zu et al., 2021).

To fully recover from the COVID-19 pandemic and its associated economic recession, many

researchers wondered what policies or plans that would have the greatest chance of recovery

and long-term success even during the pandemic. One of the most important factors as

determined by many researchers is that of public demand for tourist opportunities (Zhang et

al., 2021). Without rebuilding demand for international or domestic travel, businesses in

major metropolitan areas were at a much greater risk of going out of business. These plans for

the tourism industry had to depend significantly on public health performance (Zhang et al.,

2021). The relationship between the public’s willingness to follow COVID-19 restrictions and

their reopening plans allows for future research opportunities. Public perception of their

governments’ response to public health crises may influence their personal actions, and it

would be interesting to study if there is any association between these factors.

Performing Arts Industry

Along with small businesses and restaurants, the performing arts industry changed drastically

due to the COVID-19 pandemic (Whitten, 2020). With movie studios and theaters suspending

production indefinitely starting at the beginning of the pandemic, professionals in the

performing arts industry struggled with staggering unemployment and limited job

opportunities (Whitten, 2020). Tourists, both domestic and international, have routinely

comprised a significant portion of the audience members at public theatrical performances.

Without the steady flow of individuals and revenues into the performing arts from tourists to

major cities, the entire performing arts industry drastically suffered because of the COVID-19

pandemic.

Many studies have been conducted to reveal what makes the performing arts industry so

valuable, not only in terms of the impact it has on individuals, but the economic impact it has

on cities across the country. Data from The Broadway League, an organization that

There’s No Business Like Show Business: Analyzing the Factors of Broadway Shows

That Have the Most Influence Over the Theatre Industry’s Recovery From the COVID-

19 Shutdown

Honors Thesis for Megan Swenson

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communicates data about Broadway shows’ financial reports, revealed that in the 2018-2019

season, touring productions of Broadway shows grossed a total of $1.6 million in around 200

cities across the United States (“Statistics- Touring Broadway”, n.d.). Furthermore, a case

study about the performing arts demonstrates how internal costs of producing shows can

indirectly influence the operations and economic trends of the city (Lin et al., 2018). The cost

disease theory, as applied by Lin et al. (2018), demonstrates how theater cannot be considered

an economic good that can be used numerous times, as it is subject to much less rapid growth.

Whereas tangible economic goods can be used multiple times and purchased by a wide

variety of consumers, tickets for a Broadway theatrical production must be purchased for each

customer each time they see a show. Even though consumers cannot access theatrical

productions outside the single performance they purchased tickets for, professional theater

still is able to drive a significant earning for major metropolitan areas (Lin et al., 2018).

Baumol’s Cost-Disease, as explained by Last and Wetzel (2010), is the phenomenon in which

wage increases in one industry leads to greater labor costs in other industries, especially those

without significant technological advancement. This greater labor cost is commonly

associated with a decrease in productivity as well (Last and Wetzel, 2010). In other words,

many industries face rising labor costs in line with economic growth. However, industries

with little capacity for technological advancement face challenges in increasing labor

productivity and justifying the increased labor cost. This trend is evident in the performing

arts industry. Live artistic productions depend on every single action being consistent from

performance to performances, so there are limited opportunities for technological

advancement in this industry. Therefore, there is no way to make a theatrical performance

more productive, and as wage rates increase for performers and theatre personnel, producers

have very few ways to recoup those additional costs (Last and Wetzel, 2010). Through their

analysis of performing arts venues in Germany, researchers discovered that theatrical

performances are subject to this cost-disease theory (Last and Wetzel, 2010). As Lin et al.

(2018) explains, one of the ways the live theatre industry tries to circumvent the effects of

Baumol’s cost-disease theory is through workshops of new productions. Instead of spending

There’s No Business Like Show Business: Analyzing the Factors of Broadway Shows

That Have the Most Influence Over the Theatre Industry’s Recovery From the COVID-

19 Shutdown

Honors Thesis for Megan Swenson

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exorbitant amounts of money on preparing a new show directly on Broadway, most shows are

workshopped and produced first in regional theaters before having the chance of transferring

to Broadway (Lin et al., 2018). Theatrical workshops may help mitigate the impacts of cost-

disease theory because once a show transfers to Broadway, they can utilize previously

established technologies or creative designs and build upon them instead of developing brand

new designs (Lin et al., 2018).

The performing arts industry has grown significantly due to its relationship and respect for its

audiences. While audiences of films, television shows, and theatrical shows help determine

the success of a production, the producers can implement specific attributes into their shows

with the intent of drawing in audiences. If producers can identify what makes a show popular,

it can carry those attributes and financial success over to other projects as well. When the

performing arts industry in major cities is crossed with already popular franchises in other

media forms, even greater levels of financial and critical success are possible. In a study

conducted about the impact of Disney musicals on Broadway, the researchers identified that

for years in which greater percentages of shows were based on other movies or franchises, the

overall success of those shows would increase (Thomas, 2019). Thomas (2019) asserts that

for shows that already have a popular following, they may pose less of a risk when reopening

after the pandemic. These types of shows can generate significant more value for cities and

may be less subject to the cost disease theory explained by Lin et al (2018).

Broadway Musicals

Broadway musicals are one of the most niche forms of performing arts. Not only are they

much less accessible than movies or television shows because they require an in-person

attendance, but the high-priced tickets can also be seen as a barrier to entry for some

interested customers (Paulson, 2022). For example, in the 2018-2019 season, the average

admission price paid for Broadway musicals was $122.73 per ticket (“Broadway Season

Statistics At A Glance”, n.d.). For large families or tourist groups, the cost to see a Broadway

production can cost several hundred dollars when dining, lodging and transportation is

factored in as well. For out-of-state travelers who visit New York City to see Broadway

There’s No Business Like Show Business: Analyzing the Factors of Broadway Shows

That Have the Most Influence Over the Theatre Industry’s Recovery From the COVID-

19 Shutdown

Honors Thesis for Megan Swenson

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shows, $8 billion of their total $11.5 billion spending in 2019 was attributed to restaurants,

hotels, public transportation, and other stores near Broadway theaters (Whitten, 2020).

Previous studies have been conducted concerning the pricing of Broadway musicals and how

show ticket prices are determined (Jaworski et al., 2018). Multiple studies concur that the

overall production level and costs, venue location, and other factors can all influence how

much producers charge for Broadway tickets (Jaworski et al., 2018).

In a study analyzing the factors that affect Broadway ticket pricing, Jaworski et al. (2018)

asserted how in the weeks leading up to the premiere of a new Broadway musical, producers

will lower ticket prices to appeal to a wider audience of the general public. Furthermore, their

study revealed that for shows that have lasted for longer runs on Broadway, lower ticket

prices are more easily available because producers no longer need to recoup their investment

(Jaworski et al., 2018). The longer shows run, or contract performances for within a theater,

the more likely an average theatergoer will attend because the show has already proven itself

to be worth keeping in production (Jaworski et al., 2018). People who attend only one or two

Broadway shows each year tend to pick more established, highly reviewed shows than lesser

known shows because they do not want to spend money on a show they don’t think they will

enjoy (Jaworski et al., 2018).

These findings are supported by earlier studies, which examined the duration of different

Broadway musicals (Maddison, 2004). One study contended that as the length of a musical’s

run within a theater is extended, the show becomes less likely to close before exerting

significant economic influence on the investors and city (Maddison, 2004). Maddison (2004)

contends that for shows that have already proven themselves on Broadway to be successes,

they are at a substantially lower level of risk of closing in future economic crises. Further, a

study conducted by Reddy et al. (1998) demonstrated how hearing positive reviews of

different Broadway shows could influence an individual’s decision to see the show. Because

consumers’ opinions on purchasing experiences can be heavily influenced by the opinions and

reviews of other theatergoers and critics, shows that have favorable reviews from newspapers

There’s No Business Like Show Business: Analyzing the Factors of Broadway Shows

That Have the Most Influence Over the Theatre Industry’s Recovery From the COVID-

19 Shutdown

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or other media outlets could be more successful over time than Broadway shows without

favorable reviews (Reddy et al., 1998).

Success Factors for Broadway Musicals

In many cases, the number of weeks in a Broadway musical’s run greatly exceeds that of a

straight play. Several Broadway plays have had performances last for several months to

several years; however, most non-musical productions run for a shorter amount of time than

musical productions. There are a significant number of factors that influence how long the

musical will run for (Reddy et al., 1998). A theatrical run refers to the number of

performances that a Broadway production presents for the general public before the

production closes permanently. Multiple studies have been conducted to analyze how

different facets of a theatrical production influence its overall performance at the box office

and critical opinion. For example, a study conducted by Hodge (2020) contends that

Broadway productions with multiple Tony Award wins or nominations will have longer runs

than shows without nominations or runs. The results from the Hodge (2020) study are further

explained by a study conducted by Simonoff and Ma (2003). These researchers concluded

that for lost Tony Award nominations, or nominations that did not win the award, the risk of a

show closing increases by almost 30 percent (Simonoff & Ma, 2003). The Tony Award for

Best Musical is one of, if not the most significant and prestigious awards a Broadway musical

can win, and musicals that have won this award have run for multiple years longer than shows

that did not win the award (Hodge, 2020).

Hodge (2020) also contends that in conjunction with winning a Tony Award, shows that are

based on material that the public is already aware of, such as popular movies or franchises,

are more likely to have an extended run because the public is familiar with the content

(Hodge, 2020). Since Broadway consumers will likely choose familiar companies or

franchises to support, these types of shows may have a longer theatrical run. This assertion by

Hodge (2020) of patron familiarity with the show has been supported by the Broadway gross

information from the week of December 12, 2021, a few months after Broadway shows began

reopening (Paulson, 2022). Paulson (2022) explains how for the week of December 12

There’s No Business Like Show Business: Analyzing the Factors of Broadway Shows

That Have the Most Influence Over the Theatre Industry’s Recovery From the COVID-

19 Shutdown

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2021, musicals including Hamilton, Lion King, The Phantom of the Opera, The Book of

Mormon, and Hadestown each grossed over $1 million in ticket sales. These musicals each

won the Tony Award for Best Musical, in 2016, 1998, 1988, 2011 and 2019 respectively

(Tony Awards, n.d.). Many of these stories are based on existing materials the general public

may know about. For example, Lion King is a stage adaptation of Disney’s musical film, and

Hadestown is based on the Greek myth of Orpheus and Eurydice (Tony Awards, n.d.). The

results found by Hodge (2020) are supported by recent Broadway attendance and income

data.

Other studies have been conducted to determine other factors that influence the overall run of

a Broadway musical (Reddy et al., 1998). When shows premiere on Broadway, there are often

reviews written about the performance in major newspapers, either praising or expressing

distaste for a musical or play. Research has demonstrated that for shows with positive reviews

in city-wide newspapers, the general public reception to the show is greater and the theatrical

run may extend longer than for other shows (Reddy et al., 1998). When Broadway shows

receive award nominations and reviews, they are much more favorable in the public eye, and

may show greater chances of future continued success post-pandemic (Reddy et al., 1998).

These multiple factors present can influence the run length of a Broadway show. When these

shows inevitably come back to recover from the COVID-19 pandemic, they will have to adapt

to the health and safety guidelines set by governments; however, having additional accolades

may allow the Broadway musicals to have a greater chance of success.

There’s No Business Like Show Business: Analyzing the Factors of Broadway Shows

That Have the Most Influence Over the Theatre Industry’s Recovery From the COVID-

19 Shutdown

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RESEARCH QUESTIONS

Through completing the preliminary research of this project, several research questions and

opportunities arose. However, due to the scope of the project, there were four specific

questions that this study aims to answer.

1. Will productions based on already successful franchises or ideas be able to recover

faster than shows based on original material?

2. Does a Broadway show’s run duration prior to the COVID-19 shutdown indicate how

well the show will bounce back after reopening?

3. Does the type of show running on Broadway influence how it will perform after

reopening from COVID-19?

4. Will Broadway shows with previous Tony Award wins, especially for Best Musical,

show quicker recovery than shows without Tony Award wins or nominations?

There’s No Business Like Show Business: Analyzing the Factors of Broadway Shows

That Have the Most Influence Over the Theatre Industry’s Recovery From the COVID-

19 Shutdown

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METHODOLOGY

Regression Analysis

This quantitative study aims to explain the factors that influence the length of time it will take

theatrical performances on Broadway to recover financially from the COVID-19 pandemic

and reach pre-pandemic weekly revenue gross levels (grosses). There are multiple factors that

can influence the recovery of Broadway shows in a post-pandemic world, and this study will

examine which of these factors will have the greatest impact on the economic recovery of

Broadway productions. A regression analysis will be able to take historical financial data

about weekly grosses during Broadway seasons to predict which factors below will impact

future earnings the most. By putting data into a software such as SAS, the following

regression functions will be used:

Weekly Gross = f (franchise, show type, length of run, Tony Award Wins and

Nominations)

Percentage of Total Broadway Gross = f (franchise, show type, length of run, Tony

Award Wins and Nominations)

In doing a regression with these functions, this study aims to assess the impact of multiple

factors on two dependent variables. The first dependent variable will be the weekly gross of

individual Broadway shows. This will be examined through taking weekly gross information

for each individual show currently running on Broadway. By taking this step, the overall

recovery of individual shows can be assessed. The second dependent variable will be the

percentage of the total revenue of the industry is generated by individual shows. This will

allow researchers to assess the recovery of individual shows compared to the total of all

Broadway shows.

There’s No Business Like Show Business: Analyzing the Factors of Broadway Shows

That Have the Most Influence Over the Theatre Industry’s Recovery From the COVID-

19 Shutdown

Honors Thesis for Megan Swenson

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Sample

Weekly Grosses

The data for this research project will be a collection of aggregate data from The Broadway

League about weekly grosses of Broadway musicals. The Broadway League is an

organization comprised of producers, investors, and managers of Broadway shows. The

organization collects information regarding weekly income from each Broadway show. In

addition to composite data about each individual shows’ revenues, The Broadway League

compiles income data from all Broadway shows into total industry weekly grosses and makes

this information publicly available for interested parties to view.

This study will use weekly grosses from each of the past ten Broadway seasons to analyze

industry trends. The Broadway League’s assessment of each season lasts from the end of May

of one year to the end of May for the second year. For example, the Broadway League defines

the 2017-2018 season as ranging from the week ending May 28th, 2017, to the week ending

May 27th, 2018 (“Grosses- Broadway in NYC”, n.d.).

Weekly Grosses by Show

One subset of data collected for this project will be the weekly grosses for individual shows

over the past ten seasons. According to the collection of data from The Broadway League,

there are 31 shows running currently in Broadway theaters for the 2021-2022 season. Each of

these shows will be examined for their opening date to determine how many seasons’ worth

of data can be collected. For example, the revival of Chicago, which has been running since

the 1996-1997 season, will provide more data on weekly grosses than Hamilton, which

premiered in the 2015-2016 season (“Grosses- Broadway in NYC”, n.d.). The data on weekly

grosses for each individual Broadway show will be analyzed based on the factors below to

determine if certain genres or qualities about Broadway shows will influence its recovery in a

post COVID-19 economy.

There were several shows that had been running for numerous years on Broadway prior to

March 2020 that were performing well; however, due to the COVID-19 pandemic shutdown,

There’s No Business Like Show Business: Analyzing the Factors of Broadway Shows

That Have the Most Influence Over the Theatre Industry’s Recovery From the COVID-

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these shows have not reopened. For example, the musical Mean Girls, based off the hit 2004

film, opened on Broadway in 2018 but announced it would not reopen at the August Wilson

Theatre post-pandemic (Gans, 2021). Additionally, Frozen the musical, Disney’s most recent

new musical to premiere on Broadway, was the first Broadway show to announce its

permanent closing as a result of the COVID-19 pandemic back in May of 2020 (Paulson,

2020). Shows that permanently closed due to the pandemic will not be examined in this

analysis because they will not contribute to post-pandemic Broadway weekly earnings. Only

shows that have premiered or reopened after September 2021, when many shows reopened,

will be analyzed.

Measures

Source Material

One question the present study aims to answer is whether performances of shows based on

existing films or music will recover faster than original material. Many shows on Broadway,

whether a musical or play, draw inspiration from existing films or pieces of literature.

However, there are a few shows that have been developed from entirely original ideas. The

independent variable in question here is the type of media a Broadway show is based on.

According to Matthew Hodge of the Musical Theatre Department at William Peace

University, Broadway musicals in the 21st century that have been nominated for Tony

Awards have been based on any combination of works of literature, real people, films, or

music from existing musicians (Hodge, 2020).

To examine the impact of this independent variable on the dependent variable of weekly

grosses of Broadway shows, each show will be examined as to what the source material is.

These classifications may include, but are not limited to pieces of literature, biographies,

jukebox musicals, films, or theatrical revivals. Once each show has been classified, its weekly

grosses from previous seasons will be analyzed to determine which characteristic has the

greatest impact on financial earnings. In doing so, it may help predict what types of shows

may recover best from the COVID-19 pandemic.

There’s No Business Like Show Business: Analyzing the Factors of Broadway Shows

That Have the Most Influence Over the Theatre Industry’s Recovery From the COVID-

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Pre-Shutdown Run Duration

This study aims to answer the question of whether the number of months a current show ran

for prior to the pandemic will influence how it recovers. In other words, this seeks to analyze

whether long-running shows will have a higher chance of success than newer shows on

Broadway. In order to analyze this data, each show in the current Broadway season will be

examined as to whether it was running or in previews prior to March 2020, or if it had not yet

premiered. For those shows that were already in full runs prior to the COVID-19 shutdown,

the total number of months of the show’s run will be calculated. The independent variable in

question here is the number of months each show previously ran for prior to the pandemic.

After finding the number of months each show was running or in previews for prior to the

COVID-19 pandemic, the weekly grosses of those shows will be analyzed. For example,

shows with longer runs prior to March 2020 may demonstrate more consistent earnings trends

across years, and they may be less volatile than newer shows or shows in previews. Once the

total number of months each show has been running for, predictions can be made about future

weekly gross trends for those shows. In doing so, this study can help determine the level of

difficulty newer, less-established shows may reach in recovering from the COVID-19

pandemic.

Tony Award Wins and Nominations

One of the greatest indicators of success for a Broadway show is whether it was nominated

for, and won, a Tony Award. The Tony Awards are presented yearly by the American Theatre

Wing to recognize achievements in the theatre industry (“Our History,” n.d.). There are many

categories of Tony Awards that are awarded each season, but the most well-known is the

Tony Award for Best Musical and the Tony Award for Best Play. Shows that have previously

won the Tony Award for Best Musical or Best Play have demonstrated steep increases in

ticket sales after winning the awards. For example, In the 2017-2018 Broadway season, the

weekly gross for Dear Evan Hansen in the end of May 2017 was at $1.25 million; however,

after winning the Tony Award for Best Musical at the 2017 Tony Awards on June 11th, its

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week-end gross increased to $1.75 million (“Grosses- Broadway in NYC: Dear Evan

Hansen”, n.d.). In this post-pandemic world, it is interesting to see how projected future

earnings for shows with Tony Award wins compare to earnings of shows without Tony

Award wins.

The independent variable in question here is whether a Broadway show has received how

many Tony Award wins or nominations. To examine this variable, each Broadway show in

the current season will be examined for its Tony Award wins and nominations. Each show

will be quantified on the number of nominations and number of wins for Tony Awards. After

each show is assigned a number based on its number of wins and nominations, this variable

will be manipulated in the regression analysis. The goal with this procedure is to determine

whether Tony Award wins and nominations will impact the weekly gross potential for shows.

If the presence of a Tony Award win or nomination predicts greater future earnings, in a post-

COVID-19 economy, shows that have previously won these awards may show a greater

chance of recovery.

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RESULTS

The regression output from SAS gave two primary results groups: (1) all Broadway shows

that were open prior to the COVID-19 pandemic, and (2) Broadway shows that were open

prior to and reopened after the COVID-19 pandemic. For the “All Shows Pre-COVID” data

group, there were 3,103 total observations, and there were 593 observations for the

“Reopening Shows” data group. The observations represent count of the gross revenue per

week per show on Broadway. Since the “Reopening Shows” data group only analyzed shows

from September 2021 to September 2022, there were fewer shows running in a shorter time

period. Therefore, the number of observations is much lower than the “All Shows Pre-

COVID” data group. Table 1 shows the full SAS output table for both groups based on the

regression analysis performed.

Table 1

Complete SAS Regression Results Output

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All Broadway Shows Running Prior to COVID-19 (“All Shows Pre-COVID” Data Group)

This data group encompasses all Broadway shows examined from the entire data sample. This

includes any Broadway show that had been running between September 2012 and March

2020. Each of the shows encompassed within this data set fall into three categories:

1. Shows that were already running or opened during the week ending September 2nd,

2012 and closed permanently prior to March 12th, 2020.

2. Shows that were already running or opened during the week ending September 2nd,

2012, and announced a permanent closure around March 12th, 2020, because of the

COVID-19 pandemic.

3. Shows that were already running or opened during the week ending September 2nd,

2012, closed temporarily due to the COVID-19 shutdown, and resumed performances

in the Fall of 2021 upon Broadway’s reopening.

Out of this data group, the dependent variable examined was the Weekly Gross revenue

generated. This data group had an adjusted R-squared of 0.64 based on 3,103 observations,

which demonstrates a high correlation between the variables presented. Each observation is

the total Weekly Gross revenue generated for all shows on Broadway running during that

specific week.

Broadway Shows That Reopened After the COVID-19 Shutdowns (“Reopening Shows” Data

Group)

This data group encompasses a smaller subgroup of data from the sample. This section

specifically focuses on the Broadway shows that were running prior to the COVID-19

shutdowns and reopened to the public during or after the week ending September 4th, 2021.

The dependent variable examined in this group was the Weekly Gross revenue generated, like

the first group of data. This data group had an adjusted R-squared value of 0.66 based on 593

observations. This, like the previous group, represents a high correlation between the

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variables as well. Each observation is the total Weekly Gross revenue generated for all shows

on Broadway running during that specific week.

Source Material Variable

The first research question posed in this study was whether performances of productions

based on already successful franchises or ideas would be able to recover faster than shows

based on original ideas. To examine this factor and answer this research question, each show

running on Broadway was categorized into one of six source material categories: Original,

Historical, Film, Biography, Book, and Jukebox. However, after completing the analysis, the

Jukebox source material category was not determined to be the primary source material for a

significant number of shows within the Reopening Shows data group. Therefore, this was

excluded from the results. Table 2 demonstrates the SAS Regression output for the Source

Material Category variable.

Table 2

SAS Regression Output for Source Material Variable

For the “All Shows Pre-COVID” data group, each source material category had a p-value less

than 0.0001 except for the Book source material. This suggests that for any show based on a

biography, film, or history, the source material was statistically significant in generating

revenue. A similar trend can be found in the “Reopening Shows” data group. Each of the

source material categories in this data group, except for Historical source material, were

statistically significant.

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When comparing the most influential source material categories within both data groups, a

difference in the trends is noted. For the “All Shows Pre-COVID” data group, Broadway

shows with the Biography source material collectively earned an additional $877,386 of Gross

Revenue per week than shows based on an original source material. For the “Reopening

Shows” data group, this category generated even more revenue per week, at $1.2 million

additional revenue per week than shows based on original source material. The Film source

material category’s influence over weekly gross revenue remained relatively consistent

between the two data groups. Finally, the Book source material became more influential in the

“Reopening Shows” data group, earning an additional $500,461 in weekly gross revenue over

original shows.

In conclusion, across the two data groups, the most influential source material category

compared to Original shows was Biography, followed by Film, Book, and Historical. This

may be attributed to the show Hamilton, which is based on the life of Alexander Hamilton,

one of the United States’ Founding Fathers. Upon its opening in 2015 and through to present

day, Hamilton has performed extremely well at the box office due to high ticket sales and

high ticket prices. Figure 1 shows the percent capacity of three of the most popular shows on

Broadway upon reopening from COVID-19 in the Fall of 2021. When compared with the

attendance of Wicked and The Phantom of the Opera, Hamilton had a consistently higher

percent capacity of tickets sold in its theater since the week ending 9/19/2021. Because it sold

a greater percentage of its tickets at a higher average price, Hamilton was able to influence the

biography source material’s influence over total weekly gross revenue for all Broadway

shows that reopened after COVID-19.

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Figure 1

Percent Capacity (Attendance) in Hamilton, The Phantom of the Opera, and Wicked After

Reopening from COVID-19 Shutdowns

Pre-COVID-19 Run Duration Variable

The second research question posed in this study was whether the length of a show’s run on

Broadway prior to COVID-19 indicate whether it would return more quickly. This was

examined by isolating the shows on Broadway that had been running prior to March 2020 and

reopened at some point in Fall of 2021. Table 3 gives a list of each Broadway show fitting

that category and each show’s Opening Date, Closing Date, Post-Covid Reopening Date,

Announced Post-COVID Closing Date, and Total Number of Performances as of the week

ending September 4th, 2022. Table 4 provides the same information as Table 3, with the Total

Number of Performances sorted from greatest to least.

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Table 3

List of Reopening Broadway Shows and Relevant Dates

Table 4

List of Reopening Broadway Shows and Relevant Dates, Sorted by Number of Performances

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As evidenced through Tables 3 and 4, there were 18 shows that closed in March of 2020 due

to the COVID-19 pandemic that reopened at different points during Fall of 2021. Table 3 is

sorted by Opening Date from earliest to latest. The Phantom of the Opera, the longest-running

show on Broadway is listed first, and Girl From the North Country, which opened a week

prior to the COVID-19 shutdown, is listed last. Table 4 sorts the Total Number of

Performances for each of these shows from greatest to least. The Phantom of the Opera has

the greatest number of performances at 13,765.

Through sorting the total number of performances from greatest to least, there is a pattern

represented by the shows in the latter portion of Table 4. The Broadway shows with the

fewest total performances tended to have a later original opening date. These shows had a

greater chance of announcing a permanent closure even after reopening from the COVID-19

shutdowns. For example, Jagged Little Pill originally premiered on Broadway in December of

2019 and reopened in October 2021. Shortly after reopening, it permanently closed on

December 17th, 2021, with a total of 171 performances. This differs from shows that ran for

an extended period prior to the COVID-19 shutdown. For example, The Book of Mormon

originally opened on March 24th, 2011, and reopened after COVID-19 on November 5th,

2021. Even though it reopened much later in 2021 than other shows, because it had run for so

long prior, it was able to remain open.

One notable exception to this trend is The Phantom of the Opera. This musical is the longest-

running show on Broadway in history, running since January of 1988. Though it has been

running for almost 35 years, the show has announced its permanent closure for April 16th,

2023. Though other shows in this table demonstrate how the pre-shutdown run duration may

influence a show’s reopening, there can be clear exceptions.

Show Type Variable

The third research question posed by this study was whether the type of Broadway show

would influence a show’s financial success after reopening from COVID-19. To assess this

variable, each show on Broadway was categorized as one of three types: Musical, Play, or

Special. However, in both the “All Shows Pre-COVID” data group and the “Reopening

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Shows” data group, there were not enough shows to be significant. Therefore, it was excluded

from the final analysis. Table 5 demonstrates the SAS Regression output for this variable.

Table 5

SAS Regression Output for Show Type Variable

For both data groups, the show type “Play” was used as the base category for comparison. A

straight play is a piece of theatre performed strictly with spoken dialogue and limited musical

performance. A musical is a piece of theatre performed with spoken dialogue, song, dance,

and rhythmic movement. For the “All Shows Pre-COVID” data group, the p-value for the

Musical show type was 0.63, which is not statistically significant.

The “Reopening Shows” data group results tell a different story. The p-value of the Musical

show type variable was less than 0.0001, which is statistically significant. The estimate

returned from SAS based on this category was -726,183. The negative coefficient before the

estimate suggests that the Musical show type variable was not influential over revenue

generation. Therefore, the type of Broadway show, whether a straight play or musical, does

not have an impact over the generation of weekly gross revenue.

Tony Award Nominations and Wins Variable

The fourth and final research question posed by this study was whether the presence of Tony

Award nominations and/or wins would influence the weekly gross revenue generated by

shows after reopening from COVID-19. To determine this variable, each individual Broadway

show within the data sample was examined on the total number of Tony Award nominations

and total number of Tony Award Wins. Further, each show was further examined as to

whether it won one of the major Tony Awards. The major Tony Awards, for the purposes of

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this analysis, include the Tony Award for Best Play, Tony Award for Best Musical, Tony

Award for Best Revival of a Play, and Tony Award for the Best Revival of a Musical. Table 6

shows the SAS Regression output for this variable.

Table 6

SAS Regression Output for Tony Award Variable

For the “All Shows Pre-COVID” data group, each of the parameters except for “Not Winning

a Major Tony Award” had a p-value less than 0.0001, which is statistically significant. For the

“Reopening Shows” data group, every parameter had a p-value less than 0.0001, which is

statistically significant. However, for these shows, winning the Tony Award for the Best

Revival of a Musical did not have enough data points to analyze, so that section is blank in the

“Reopening Shows” regression output.

When comparing the most influential award type between both data groups, there is a very

different trend. For the “All Shows Pre-COVID” data group, the only category that had a

positive correlation to generating revenue was Receiving Tony Award Nomination(s).

Broadway shows that received Tony Award nominations, no matter the award, earned an

additional $130,740 per week compared to shows that have won the Tony Award for Best

Play. The negative coefficient prior to the estimates of all other categories suggests that those

variables did not make a difference in generating additional revenue.

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The “Reopening Shows” data group shows a more interesting story. None of the estimates had

a negative coefficient, suggesting that the presence of Tony Award nominations and wins was

relevant at helping a show generate more gross revenue per week. The shows within this data

group that did win the Tony Award for Best Musical earned an additional $465,601 per week

compared to Broadway shows that won the Tony Award for Best Play. While this is a great

additional amount generated per week, the variable of “Not Winning a Major Tony Award”

had even more influence. Shows that fall under this category within the “Reopening Shows”

data group earned an additional $703,127 per week compared to shows that won any of the

major Tony Awards. This can be attributed to the quantity of shows that may be nominated

versus the quantity that may win major Tony Awards. In any Tony Award category, there can

be several shows nominated each year; however, only one show may win each award.

Therefore, because of the number of shows that do not win is much greater than the number

of shows that do win, there is more gross revenue generated because of these shows.

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CONCLUSIONS

Limitations

There are several areas of this study where the results or analysis could be limited. First, there

is a significant amount of subjectivity associated with categorizing shows according to source

material. There is no definite breakdown of each Broadway show’s source material, so I had

to categorize each show myself after researching the plot of each show. Therefore, there may

be some shows that could not be categorized into the most appropriate category, thus

influencing the regression analysis results.

Second, the types of audience members allowed to attend shows after COVID-19 was

changed, which could have influenced the ticket prices. In September of 2021, many shows

reopened for audiences at full capacity; however, they required audience members to wear a

mask and be fully vaccinated against COVID-19 (McPhee, 2021). This greatly limited the

number of individuals who were eligible to attend Broadway shows and decreased the total

number of potential customers for Broadway shows. If the demand had been filled up to pre-

COVID levels, Broadway shows could have charged higher ticket prices, allowing gross

revenue to increase on a weekly basis. Several Broadway producers explained how a major

challenge of coming back to Broadway was managing customers’ health comfort levels and

social distancing requirements with a need to fill seats to generate revenue (“Broadway is

Reopening. But Not Until September,” 2021). However, the smaller pool of customers led to

lower ticket prices, resulting in a lower weekly gross.

Future Research

The entertainment industry contributes a great deal to the American economy, and when the

COVID-19 pandemic shut down the performing arts industry, there was a drastic effect on

revenues throughout the country. For example, the $1.6 million generated by touring

Broadway productions in 2018-2019 could not be generated during 2020 and 2021,

contributing to the economic recession (“Statistics- Touring Broadway”, n.d.). As more

Broadway shows are reopening to the public, it may be interesting to see which shows are at

risk of closing permanently for not recouping investments. If producers of a particular

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Broadway show believe their show is at risk of lower attendance, they may create a different

advertising or promotional campaign to drum up interest in their show.

The present study may also be useful in determining how Broadway as an industry can

recover from future economic recessions. Though Broadway has not had a shutdown as

extensive as the most recent one, the industry is greatly affected by recessions. When

potential theatergoers do not have as much disposable income, they are much less likely to

attend live theater performances. This model could be used in periods of future economic

recession to predict the recovery of live theater.

Future research can also be conducted on the trends in ticket sales after Broadway shows

announce a permanent closing date. In September of 2022, The Phantom of the Opera

announced that it would officially close its doors on February 18

, 2023, after 35 years of

running on Broadway (“‘Phantom of the Opera’ to Delay Broadway Closing After Sales

Spike”, 2022). However, after experiencing a surge in ticket sales and public support in recent

months, the show announced in November of 2022 that it would extend its closing date to

April 16

, 2023, with an additional eight weeks of performances offered at the Majestic

Theatre (“‘Phantom of the Opera’ to Delay Broadway Closing After Sales Spike”, 2022). A

further research opportunity could be to examine the impact that these run closure extensions

have on both average ticket price and weekly revenue generated.

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APPENDICES

Appendix A – All Reopened Broadway Shows by Source Material and Show Type

Show Name

Broadway Theatre

Show Type

Source Material