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Hey, Mr Producer! Where Does All the Money Go?

Date: 21 July 2010

Have you ever wondered where all the money you pay out for your theatre ticket actually goes? Well, we asked James Seabright, theatre producer and author of the new book So You Want to Be a Theatre Producer to tell us what your ticket price gets spent on.

Coming up with a typical production is pretty impossible so we have based this example on a moderately budgeted West End musical that breaks even over a year’s run – but do bear in mind that most shows in the West End lose money! Big-budget hits and smaller plays will have quite different breakdowns but, nonetheless, it makes for interesting reading.

Based on a top ticket price of £50 for the exercise below, which takes into account all of the costs of making and running the show over a year:

The biggest cost in putting on a show is the marketing and publicity budget which can be 20% of the total spend. Theatre rental and staffing is not far behind at 19%. The last really big chunk of cash chopped from your ticket goes to the government in the form of 17.5% VAT, which increases to 20% next year.

Box office commissions and commissions to agents then account for another 9% of the ticket price, without even considering any booking fee you may pay on top of the ticket price. The restoration levy (levied by some theatre owners) can be as much as another 4%.

So, before an actor has read a line or the orchestra has struck a single note, 60% of your ticket price has already been spent. As regards the production itself:

The cast's wages represent about 8% of the total budget, and this is based on a show which doesn’t feature stars being paid high salaries. The crew and orchestra between them represent another 8%.

Depending on the show, technical equipment such as lighting and sound can cost as much as 4% of the production budget and the set another 1%. Wages and office costs for the show's producers and management team take up about 3% of the total and the creative team (director, designer etc) another 1%.

A show cannot go on, of course, if it is not rehearsed and paying for the rehearsal time, both before a performance is even given, and rehearsing new cast members and understudies during the run, costs about 2% of the ticket price.

That leaves just 2% of the ticket which, in this example, is split equally between the royalties and rights to perform the piece in the first place and the contingency fund, which is drawn on when something goes wrong or costs more than planned.

Where a show ‘recoups’ and makes back its initial investment, some of your ticket price will contribute to profit. This is typically divided between a show’s investors and producers in a 60/40 ratio, although costs including rights and theatre rental also increase once a show achieves a profit.

Officially launched with an event at the New Diorama Theatre today (21 July 2010), James Seabright's book So You Want to Be a Theatre Producer is available now and can be ordered for £12.99 from Nick Hern Books.

- by James Seabright & David Dobson

Related Content

External Links
	Nick Hern Books
	Arts Cuts page on Whatsonstage.com

Reader Comments

Comment	Date
As far as I'm aware the producer doesn't see the VAT on ticket sales. It's taken off by the venue before the producer gets any share of the Box Office. I admit that the percentage spent on marketing does seem excessive but i imagine that advertising is incredibly expensive and I'm sure if producers could fine a cheaper way of reaching an audience they would. But Facebook and Twitter only reaches a limited number of people. Nothing like a big old ad on the tube to reach a mass market. - Tim	28 Jul 10

An interesting breakdown. Renting a theatre costs,sure, but what if the producer OWNS the theatre.Staff costs will remain the same but I doubt the owner will 'pay' the same rate if he/she owns the theatre. - WillyJozie	21 Jul 10

I think what's really salutary is the derisory amount given to the poor sucker who actually wrote the show in the first place in Rights and Royalties! Shouldn't things be weighted somewhat differently? - Richard Voyce	21 Jul 10

@ Kevin Darnell - No, the producer CAN'T claim back the VAT on ticket sales. That's not how VAT works - if only it were! Yes, the producer can put the VAT paid on publicity costs against the VAT collected, but that's already accounted for in the budget. Otherwise Publicity would be 20% plus VAT = 23.5% I'm sure every producer would be delighted to find a way of reducing publicity costs, and I'm also sure the person who could find a way of doing it could command a handsome consultancy fee! Might be a job opportunity for the right person who really believes it can be done for less.... - Christine	21 Jul 10

Thank you very much for the breakdown. But the message is clear: reduce the marketing budget! To spend 20% of the budget on this is outrageous, bearing in mind the effectiveness of digital marketing and the duplication of mailshots. And the producer claims back the VAT, so that is misleading. A cut in the prices by 25% is quite realistic in my view. - Kevin Darnell	21 Jul 10

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