Hollywood & Broadway: Studios Rush to the Stage Despite Clashing Business Models

When Hollywood merges with Broadway, there are always fender-benders.

Just ask Harvey Weinstein.

As the movie aficionado and awards maven steered “Finding Neverland,” his first venture as a lead theater producer, toward the Great White Way, eyebrows raised in his wake.

He switched press agents. He swapped out the lead actors. He entirely scrapped an earlier version of the musical with a different creative team. When in spring 2014, he landed a much-coveted spot for the show on the Tony Awards telecast, naysayers tut-tutted that the play hadn’t even begun performances out of town, much less confirmed its Broadway run. Besides, Jennifer Hudson, the star of the Tonys segment, wouldn’t even be appearing in the actual stage production.

“I was criticized for Jennifer,” Weinstein recalls. “But this song (‘Neverland’) has been downloaded a million times, and all over the world people now know ‘Finding Neverland.’ In the movie business, I would be getting congratulatory letters.”

Emiliano Ponzi for Variety

The producer’s experience with the $11 million musical, which is in previews ahead of an April 15 debut, underscores the fact that Hollywood and Broadway just do things differently. That divide has always caused friction, and you can bet that such clashes will continue — because the two sectors are more entwined than ever.

There are 6.2 billion reasons for that — specifically, the $6.2 billion grossed worldwide by the stage musical megahit “The Lion King.” That haul makes the Disney-produced show the top box office title in any medium, ever.

For the myriad studios and producers looking to replicate that success, there’s good news and bad news.

First, the bad news: There’ll likely never be another “Lion King,” in which a powerhouse property met creative risk and crowd-pleasing execution to forge a unique landmark that at once wowed audiences, commanded artistic respect and cemented Disney’s Broadway credibility.

The upside? Each of the Street’s three most consistent top earners — “Lion King,” “Wicked” and “The Book of Mormon” — have deep ties to media conglomerates, producers and creatives. Factor in the latest limited-run plays with stellar sales driven by Tinseltown A-listers like Helen Mirren and Larry David, and it’s clear there’s plenty of room for Hollywood on Broadway.

But there are challenges. Broadway is an insular cottage industry of 10 city blocks, populated by independent-minded producers whose love for the tradition-bound business can make them slow to change and wary of newcomers.

“Studio executives usually think more like executives than entrepreneurs,” sniffs one veteran stage producer.

Adding to the discord — and putting pressure on the longstanding Broadway business model — is the fact that Hollywood comes to the table with an entirely different concept of funding and ownership.

Despite all that, a wide contingent of Tinseltown types harbors an abiding love for the industry in which so many of its players — from Craig Zadan and Neil Meron to Paula Wagner and Sony’s Lia Vollack — got their start. With the success of “Lion King” and “Wicked” adding financial imperative to personal affection, the newest Hollywood wave carries to the Rialto a respect it hasn’t been afforded in prior decades.

But it’s a tough business to crack. Just ask NBC Entertainment chairman Robert Greenblatt, whose Tony win last year for “A Gentleman’s Guide to Love and Murder” came after his 2009 musical “9 to 5” shuttered in the red.

“When friends tell me they want to get into Broadway, I tell them you have to have the patience for it, and you have to be prepared to go to the depths of despair,” Greenblatt says. “Otherwise, run for the hills!”

The expansion last year of Greenblatt’s duties at Universal to include oversight of the conglom’s stage activities (alongside Universal Pictures president Jimmy Horowitz) marks just one example of the ways in which studios have upped their Broadway presence in recent months. Warner Bros. Theatre Ventures has grown its activities to a full slate that includes current Broadway success “The Curious Incident of the Dog in the Night-Time,” West End entry “Charlie and the Chocolate Factory” and a developing musical adaptation of “Beetlejuice.” Meanwhile, Fox and Sony have each separately pacted with Broadway veterans to develop catalog titles for the stage.

Disney is the studio most heavily invested in Broadway, both in terms of time (20 years and counting) and capital (many millions of dollars). The commitment makes sense. With an enduring catalog of well-known, family-friendly titles that in many cases are already musicals, the Mouse has the raw material for stage hits that no other Tinseltown pedigree can match.

Others in Hollywood are more circumspect about sinking money into live shows. Universal, as the major investor in “Wicked” (produced with Hollywood veteran Marc Platt and Broadway’s David Stone), conjured up $10 million of the musical’s $14 million capitalization, and as of winter 2015, the show has rung up enough coin (some $3.75 billion worldwide) to make it one of the most profitable enterprises in Universal history. The studio’s 2009 Tony champ “Billy Elliot” (produced with U.K. film production company Working Title) brought in less revenue on Broadway, but earned a wealth of critical praise, and has been running on the West End for a decade. But Universal still treads the boards with caution.

“Ten years into ‘Wicked,’ the question is: What do you do now?” says U’s Horowitz. “You see the opportunity, but most shows don’t recoup. It’s a high-risk, high-reward market. We’re always going to try to find the balance between how much you spend and the point when it gets into diminishing returns,” he notes. “Rather than sink a bunch of money in it, we’ve partnered with people we think are the best at what they do, and invested in the properties rather than the overhead.”

Broadway today is a changed landscape compared with what it was 20 years ago when Disney Theatrical first set up shop — and Hollywood itself was one of the drivers of that transformation. When it signed a 99-year lease on the crumbling New Amsterdam Theater on 42nd Street, and gave it a sparkling renovation, Disney cast itself as a major player in the movement that turned Times Square from a red-light district to a family-fun zone. Concurrently, producer Cameron Mackintosh minted a touring and distribution model for worldwide smashes with “Cats,” “The Phantom of the Opera” and “Les Miserables,” providing a roadmap for Disney’s subsequent domination of international stages with “Lion King” and other titles.

Broadway’s increasing use of dynamic pricing — wherein the tariff shifts according to demand — helps extend a show’s life­span, allowing producers to take advantage of boom times in order to offset fallow periods, during which lower prices are offered to attract new crowds. And a heightened global profile plus added longevity (“Phantom” is 26 years old) has equaled landmark status for a handful of lucky shows, two of which, Disney’s “Lion King” and Universal’s “Wicked”, have lined studios’ pockets for years.

Meanwhile, the rise of premium pricing — instituted in 2001 as an end run around scalpers, and these days driving tickets to hot shows up to $497 a pop — has helped make limited-run star vehicles profitable for producers and Hollywood actors, bringing a flood of movie and TV talent to the boards. At the same time, big-name thesps have become more open to stage engagements as the studios’ blockbuster movie mentality has left them desperate for serious, actor-driven fare.

But Broadway is hard to impress. For every Hollywood name anointed with a Tony (Hugh Jackman, Scarlett Johansson, Neil Patrick Harris) there are many more who don’t even score a nomination (Daniel Radcliffe, Michelle Williams, James Franco). Among Broadway producers, you won’t win much respect until you prove you can launch a hit — and, perhaps more importantly, manage it long term. Just throwing in some cash and reaping the fiscal rewards doesn’t count.

“They call you a producer, but that’s not producing,” admits Weinstein, a longtime Broadway backer (“The Producers,” “August: Osage County”). “That’s putting some money in and giving a few suggestions.”

Hollywood veterans sometimes come in wielding West Coast tactics that can surprise theater veterans. Movie producer Scott Rudin, whose prolific Broadway credits include “The Book of Mormon” and a string of star-driven plays such as “A Delicate Balance” (with Glenn Close) and “Fish in the Dark” (Larry David), often takes a flood-the-zone approach to advertising that’s more common for a studio promoting a cinematic tentpole.

And Weinstein, it can be argued, has developed “Neverland” more like a film than a stage show. When an earlier incarnation of the musical, with a different composer, writer and director, bowed to less than positive reviews in Leicester, England, in 2012, Weinstein jettisoned the team and hired a new one.

That practice is common in Hollywood, where studios routinely hire one screenwriter to take a pass at a script, and then tap someone else when they decide that they want to go in a different direction. But on Broadway, such things are just not done.

That’s because Hollywood and Broadway are founded on opposing models of IP ownership — which, according to execs on both coasts, forms the crux of the conflict between film and stage producers. Whereas Hollywood operates on a work-for-hire basis in which studios retain ownership and control of their developing properties, Broadway creatives own their work under the tenets of the Dramatists Guild.

“On Broadway, writers are king. In Hollywood, they’re Kleenex,” says Peter Schneider, the former Disney exec who launched Disney Theatrical Prods. with Thomas Schumacher, his fellow co-head of Disney Animation at the time.

The Broadway system is rooted in the tradition of writers hatching an idea for a musical, and then getting an independent producer onboard who goes out to raise money from investors to bankroll the show. In Hollywood, the studio is the bank.

In the case of Disney Theatrical, the studio is also the lone producer and investor in its stage output. But as more and more musicals are developed from movies, studios often are enmeshed in a complicated tangle of rights among screenwriters, stage producers and the creators of a theatrical adaptation.

That’s a hard pill to swallow for studios, accustomed to doing what they want with the intellectual property they own — and, in success, reaping all the rewards.

There is, however, a silver lining here for studios. The pay scale for theater writers is downright miniscule. Whereas Hollywood can dole out hundreds of thousands of dollars or more to a screenwriter, dramatists work for a pittance: as little as $5,000 for an initial option payment, plus $35,000 as an advance when the show goes into rehearsal, according to the Dramatists Guild’s boilerplate contract. If the production hits big, the authors share in the financial success.

Over the years a truce has been struck over the warring ownership models, but studios can always put pressure on the Broadway construct by offering a greater initial payout in exchange for more control.

Kevin McCollum, the Broadway veteran (“Rent,” “Avenue Q,” “In the Heights,” “Motown”) Fox has tapped to partner on its expanding stage activities, sees a potential meeting of the minds in the future. “I think the two ownership models might merge eventually,” he says.

At the moment, though, development costs for a Broadway show tend to ring in at $500,000 or less. From a studio perspective, those are extraordinarily low stakes to gamble for a shot at that rare prize — the long-running cash cow. But along with the challenge of crafting a hit, Broadway success comes with the additional responsibility of maintaining the achievement, both onstage and at the box office, for years to come. With Hollywood focusing primarily on the sprint to a movie’s opening weekend, the ongoing work of an onstage smash can make Broadway seem a marathon.

To top it all off, there’s the idiosyncratic politics of securing one of the 40 Broadway theaters for your show. Take all that into consideration, and Broadway can feel like a foreign country, notes Kevin McCormick, a former WB exec who’s attached as an independent producer to stage projects “Charlie and the Chocolate Factory” and “Beetlejuice.” “It’s a very different language than any other business,” he says.

Of all the studios, Warner Bros. comes closest to following the Disney model. Although it has a much smaller staff — six in its dedicated theatrical division — Warners has, since its 2011 reboot following the flop of “Lestat,” laid the groundwork for a busy slate that ranges from brewing Broadway shows (“Dave,” “Misery”) to having a hand in the productions it licenses to other producers (“Diner,” “Honeymoon in Vegas,” “Gigi,” “Doctor Zhivago”).

“We’d like to create a presence here on Broadway,” says Mark Kaufman, New York-based exec vice president of Warner Bros. Theatre Ventures. “We’ve got a great catalog and amazing talent relations.”

WB still has a ways to go before it earns the kind of respect that didn’t come to Disney until well into its 20-year stint on the Main Stem. But at the very least, Broadway has taken note of Hollywood’s new attitude. “They’re approaching with a new respect,” says Philip J. Smith, a 60-year-plus veteran of the theater industry and president of the Shubert Organization, which owns 17 Broadway houses. “Now they’ve seen all the money that can be made.”

For what seems the vast majority of movie types wading deeper into Broadway, the move marks a return to their roots. Zadan and Meron, for instance, started out working with Joseph Papp at the Public Theater before heading West; a slew of studio execs — from Michael Eisner to Horowitz — grew up in the New York area, and going to Broadway.

“My kid dream, when I was 13 in Ohio, was to be onstage,” says producer and former studio exec Wagner, who started out as an actor on the boards, and whose resume as a stage producer now includes Jessica Chastain starrer “The Heiress. “Coming back was unfinished business for me.”

And as different as the worlds of Hollywood and Broadway may be, producers who give theater a try can still gain know-how that helps them in their screen endeavors.

Zadan, Meron and Greenblatt all had stage experience that came in handy for their live telecasts of “The Sound of Music” and “Peter Pan” — and will again for their upcoming TV broadcast of “The Wiz,” co-produced by Cirque du Soleil and intended to move to Broadway in 2016-17. Besides that, Zadan and Meron, who have produced two musical revivals (“Promises, Promises,” “How to Succeed in Business Without Really Trying”), used their Broadway chops when they produced Hollywood’s most definitive night of the year, the Academy Awards.

“Of all the things we’d done before, the thing that was most useful to us at the Oscars was the experience of doing theater,” Zadan says. “You’re putting on a live show. Once the curtain goes up, there’s no stopping.” He and Meron have recently begun developing new musical titles; the real money is in first productions of original tuners, in which producers can have the highest stakes, and ring in the biggest rewards.

That’s another reason for Weinstein to revisit “Neverland,” even when he knows he’s still got a lot to learn to earn a seat at Bar Centrale.

“Now I’m reading every book about Broadway,” he says. “Arthur Laurents? Jerome Robbins? I used to think those guys played for the Yankees.”

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