6 actors in standing in a group, leaning to the left, gazing into the distance in the broadway production of Moulin Rouge!

Investing in Theatre

OUR STRATEGY

As a multigenerational team, we have a unique lens into the creative and financial elements of a theatrical project. In addition to our personal taste as avid theatregoers, we apply our professional experience in investments and theatre marketing when considering potential projects. Using our own comprehensive research, we’ve developed an investing strategy that we balance with our artistic intuition and other factors to identify projects we’re enthusiastic about pursuing.

OUR COMMITMENT

While we occasionally invest in personal passion projects, we only invite investors to participate in projects that we feel have a strong potential for commercial success—meaning a full recoupment of the investment, and ideally a profit. We always invest in the shows we co-produce, so we have skin in the game alongside our investors.

OUR RECORD

While only around 20% of Broadway shows end up profitable, PickleStar Theatricals is proud to share that the majority of our projects have fully recouped or are on their way to recoupment, including Funny Girl, Hadestown, Moulin Rouge! The Musical, and others.

Any content on this website is provided for only informational purposes, and it is not intended, and should not be construed, as investment, tax, legal, financial, or any other kind of advice. Further, the content on this website is not an offer to sell, or a solicitation of an offer to buy, any security or units in an entity. Offers are only made through definitive offering documentation, and investments may only be made after investors meet applicable qualifications and review and return signed copies of the issued operating agreement and subscription documents. Past performance is not indicative of future results, and investing in theatre involves both a high level of risk and a significant possibility that investors will lose the full amount of their investments.

FAQs

Raising the curtain on the process of investing in Broadway
How much does it cost to invest in a Broadway show?
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Broadway shows typically offer the opportunity to buy a “unit” in a production, similar to buying a share of stock in a company. In our experience over the past few years, a single unit has typically been $25,000 or $50,000, depending on the show. It’s also sometimes possible to take a half unit in a show. Musicals are generally more expensive to invest in than plays, as they cost more to produce.

Can anyone invest in a Broadway show?
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If you meet the criteria for being an accredited investor as defined by the SEC, you’re eligible to invest. 

Currently, you are considered to be an accredited investor if you meet one of the following qualifications:

  • Your individual or joint net worth is over $1 million (excluding the value of your primary residence); or
  • Your individual earned income exceeded $200,000 (or $300,000 jointly) in each of the prior two years, with reasonable expectation for the same income level in the current year.

You may or may not be asked to provide personal financial information to verify your status, depending on the producer; however, you will need to sign a document confirming you qualify as an accredited investor.

What’s the process for investing in a Broadway show?
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While you’ve probably been talking about the project you’re thinking about investing in with a co-producer, all the investment documents will come from the lead producer or the general manager’s office. The lead producer will have created a limited partnership entity for the show, and when you invest, you become a member of that partnership. 

You’ll receive several documents to complete, along with instructions on exactly what you need to fill out, where to return, and how to send funds.

  • The Operating Agreement specifies the terms by which the partnership will operate. Also included is the production budget, weekly operating budget and recoupment schedule for the show.
  • The Subscription Agreement is where you’ll indicate the amount of your investment and officially subscribe to join the partnership. You’ll eventually receive a countersigned page for your records.
  • The Purchaser Questionnaire essentially establishes you as an accredited investor.
  • The Tax Supplement Package is a series of documents that needs to be completed for tax reporting purposes.

Once you get verification that the documents have been completed properly and that funding has been received, you’re officially part of the team!

Do investors get any cool perks?
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Yes, indeed! Depending on the show and your level of investment, you may get opening night tickets and party passes, a special opening night Playbill and other exclusive gifts and memorabilia, access to purchasing house seats and Tony Awards® tickets, cast event invitations, dress rehearsal tickets, the opportunity to invest in additional productions of the show, and more.

How risky is it to invest in a Broadway show?
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Think of investing in Broadway as investing in a start-up. Only about 20 percent of Broadway shows end up recouping their original investment. It’s a risky endeavor, and there are admittedly safer ways to invest your money. 

So why invest in Broadway? Because in some profound way, theatre captures your heart and soul. Maybe you have an ardent passion for the art of live theatre. Maybe you want to support the creation of innovative new works. Maybe you adore a particular writer or composer or performer and want to help bring their show to the stage. Maybe a show has a message you strongly believe in. Maybe you want to be part of the amazingly creative and talented theatre community. Maybe you fancy the thrill of being part of opening night festivities or attending the Tony Awards®. 

Whatever your personal reason, go in with the attitude that even if you don’t return your financial investment, you will live with the proud reward of knowing you helped to advance theatre culture. Also, it’s worth mentioning that you can never lose more money than you’ve invested. And ultimately, you should only invest if losing the entire investment won’t negatively affect your quality of life. 

How and when does money get returned to investors?
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Investors get 100% of the profits of a show as a return of capital until the original investment is recouped.  After recoupment, profits usually get split 50/50 between investors and producers. 

A successful show will send returns based on the cash flow situation and the discretion of the producers, so there’s really no regular schedule for receiving returns. Sometimes producers will hold on to profits for a while to ensure they can weather slow periods. In good times, you might get a sizable distribution all at once, or a series of smaller returns on a fairly regular basis. 

And it’s not a matter of all or nothing—it’s possible to wind up with a partial return of capital. Since productions don’t announce what percentage of capital they’ve returned if they don’t fully recoup, only investors and producers know the final return on investment.

There is also a possibility of receiving returns after an original production has closed on Broadway. In some cases, licensing the subsidiary rights for regional and amateur productions will bring revenue back to the Broadway production, which trickles down to original investors.

How are taxes handled?
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Investors receive a K1 at the end of every year (but keep in mind that they almost never show up before April 15th!). If the show is profitable, you should expect to pay taxes, and if not, you’ll be able to write off a loss. Always consult your accountant about how an investment will impact your tax situation. 

Let’s Make Theatre Magic

Any content on this website is provided for only informational purposes, and it is not intended, and should not be construed, as investment, tax, legal, financial, or any other kind of advice. Further, the content on this website is not an offer to sell, or a solicitation of an offer to buy, any security or units in an entity. Offers are only made through definitive offering documentation, and investments may only be made after investors meet applicable qualifications and review and return signed copies of the issued operating agreement and subscription documents. Past performance is not indicative of future results, and investing in theatre involves both a high level of risk and a significant possibility that investors will lose the full amount of their investments.

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