What Is a Broadway Theater Worth?

That is, what is a Broadway theater building worth?

In Stage Money, we use some public figures to estimate the value of a Broadway theatre--read the book to find out what sources--and estimate the value of a Broadway house as being between $6 million and $20 million.  A recent article by Michael Riedel in the New York Post, "The Broadway Gem You Will Never See - Unless You Pray," suggests our estimate may be low.

The reasons the value of a Broadway house is important is detailed in a section of Stage Money titled "Broadway and the Shubert Interests." We report there that the NFP Shubert Foundation in its IRS filing in 2005 puts the fair market value of its wholly-owned for-profit business, the Shubert Organization, at a little over $49 million.  The Shubert Organization owns 17 Broadway theaters, plus the Telecharge ticketing service and interests in varied proportions in three theaters elsewhere in the US. The Broadway theaters that the Shubert Organization owns are worth then on average less than $2.9 million each ($49 million divided by 17 theaters). There are many co-op apartments in NYC that are priced higher than that!  Because the unusual relationship between the NFP Shubert Foundation and the commercial Shubert Organization may be an example of what economists call a "moral hazard," the issues of values and profits and their distribution is a matter of concern. The discussion is too long to repeat here; read the book.


Riedel writes in the Post about the former Mark Hellinger Theatre which since 1989 has been the interdenominational Times Square Church.  First leasing the theatre, the church bought it in 1991 for $17 million.  Using the CPI as a measure of inflation, that purchase price is about $27.5 million in 2010 money.  The church has refused offers to buy the building.  Producers estimate its value as about $40 million today.  Broadway theaters are worth more in today's cleaned-up theater district than they were in the dismal 1980s-1990s.

Of course, the only true way to know the value of real estate is to witness an arm's length sale.  Every piece of real estate has a unique value and since the sale of the Hellinger, almost no Broadway theaters have sold individually.  Moreover, the Hellinger is considered a gem of a theater.  This is the theater that hosted the original production of My Fair Lady. Philip J. Smith, chairman of the Shubert Organization, told Riedel, "It [the Mark Hellinger] is the theater to have.  We chased it twice, but the church wouldn't sell.  If they ever do, you can put us at the head of the list." It seats 1,600 and has a 45-foot deep stage.  Today, the largest capacity Broadway theater is the Gershwin, owned by the Nederlander Organization, which seats 1,933.  Only nine of the 40 Broadway houses seat more than 1,600.  Three of those are owned by the Shubert Organization.

As we've noted before, Michael Riedel's column is a great place to find information about the business of the New York theater.  We recommend it.

Defining Professional NFP Theatre

In Chapter 6 of Stage Money, we layout the problem of defining professional not-for-profit theater.  The NFP part is easy, since NFPs must have a 501(c)3 certification from the IRS.  The word "professional" is trouble.  In the NFP theater world, there are troupes that are clearly amateur, where no one--or almost no one--is paid.  Then there are theatres, such as the members of the League of Resident Theatres or LORT, where at its highest standing, LORT-A, everyone is a member of a professional union. Such LORT theatres are clearly professional.  Between these extremes is a continuum of different mixes of volunteer and professional.

We've just read a 1995 article by Joan Jeffri, "Nature's Journeymen: The Education and Training of the American Artist," available at Columbia University's Research Center for Arts and Culture site, that offers a structure for considering the definition of professional. Jeffri identifies three different definitions of professional which she says are "constantly being meshed, confused, or used interchangeably."  They are

• Occupational measures, such as, hours worked and money earned,
• Credentialing, holding a license to practice a profession, such as, a lawyer passing a state bar exam, and/or
• Quality of work performed.

In Stage Money, we identified membership in the Theatre Communications Group or TCG as the closest clear and distinct identifier of professional NFP theater status.  This mark of professionalism is not the same as credentialing but resembles it in some ways.  Using TCG as a proxy for professional NFP theater is far from perfect, as the book discusses.  For just one example, 18 of the 77 LORT theaters have not chosen to be members of TCG.

When friends reviewed early drafts of Stage Money, the use of this proxy was controversial for some.  We now realize the problem was that our friends had an unspoken definition of professional as reflecting the "quality of work performed."  One actually said, "I've seen the work of --------- theatre.  It may belong to TCG, but it's not professional."  If we had Jeffri's parsing of the definition of professional, we might have engaged our friends in a more meaningful discussion of professionalism in the NFP theater.

As to the quality of the art created by America's NFP theaters, we are not qualified to judge.  What night was the company unprofessional in quality?  What production?  What play?  All the time?  Never?   We don't think anyone is qualified to attest to the quality or lack of quality of even a few NFP theaters let alone all.  And if anyone did, he or she would surely get a battle from others who had the opposite opinion.

Who Works Off-Off-Broadway?

The Innovative Theatre Foundation has conducted a number of interesting and important surveys about off-off-Broadway.  The most recent survey, "Demographic Study of Off-Off-Broadway Practitioners," dated January 2010, looked at the artists and staff who work off-off-Broadway.  They collected over 4,000 completed surveys.  That's an impressive number but the survey cannot be considered representative of the universe of off-off-Broadway workers because the survey distribution wasn't random.  Be that as it may, the Innovative Theatre Foundation's data are the best available.

The survey found that off-off-Broadway workers resemble the averageUS resident a great deal, in terms of average age, breakdown of percentage by gender, and yearly income.   The income finding is a conundrum, as only ten percent reported work in theatre as their sole source of income.  Also, just over 50 percent of respondents live in Manhattan, where a US average income is not enough to live an average lifestyle.

The off-off-Broadway community has fewer African-Americans than the US population: five percent vs. twelve percent. The OOB folks are less than half as likely as the national population to be married and much less likely to have children living in their households.  OOBers are much better educated than the US population, with 85 percent holding a college degree.  The US percentage of college educated adults is 27.  Nearly one-third of respondents belong to Actors Equity, with another 16 percent belonging to other theatrical unions, such as American Federation of Musicians, Dramatists Guild, IATSE, Society of American Fight Directors, Stage Directors and Choreographers Society, United Scenic Artists, and others.

We wrote about an earlier survey by the Innovative Theatre Foundation here.