Play Money

Broadway has definitely been on a roll. The Great White Way had a record year in its 2007-2008 season, which ended on May 25, grossing $937.5 million.

One of last season’s biggest success stories was the all-black cast of Cat On A Hot Tin Roof starring James Earl Jones, Phylicia Rashad, Terrence Howard, and Anika Noni Rose, and directed by Debbie Allen. The revival of the Tennessee Williams classic grossed $12.6 million on a final budget of $2.1 million before it closed last month after a limited run. It generated a spectacular return for its investors, led by the African American producing team of Stephen C. Byrd and Alia M. Jones, both of Front Row Productions. A made-for-television film is now in the works, as well as a production in London’s West End.

While theater-like movies and art are undeniably risky investments–;reportedly 80% to 90% of Broadway productions lose money–;the success of Cat on A Hot Tin Roof proves that an investment in a theatrical production can generate high returns when the elements and the stars align properly, making theater a hot property for people with the appetite to see their investment live or die on the whims of the public and theater critics.

Cat’s stellar ride is a great case study of what an investor needs to contemplate when considering an investment in a play or musical. “Ultimately the investors are investing in a producer,” says Jones, the co-producer on Cat. Jones underlines the fact that a producer’s job is to not only raise the financing, but to be a sound money manager while selling ticket inventory. “The investors must have confidence in the producer’s ability to bring the production in on budget or under budget and to get audiences to the theater,” she says.

In evaluating Jones’s advice, it should help to know that Byrd and Jones are not your typical Broadway producers; both have backgrounds in the corporate sector. Before venturing to Broadway, Byrd, who worked 13 years to bring Cat to the stage, was an investment banker at Goldman Sachs, specializing in mergers and acquisitions. He’s currently a principal and co-founder of StoneHedge Capital Inc., a private equity firm. Jones, like Byrd, has an MBA, and serves as a vice president at Front Row. She is also a principal in AMU Services, a business development consulting firm, and she worked in interactive marketing at Proctor & Gamble.

With demonstrated business acumen, Byrd and Jones are the types of producers in whom investors, particularly those new to the theater world, might find some level of comfort in spite of the inherent risks such investments present.

In raising the initial estimated budget of $2.8 million, the producers targeted high net worth individuals who had an appetite for risk, each making a minimum investment of $280,000. The producers and the play’s general manager found ways to cut costs, bringing the budget down to its final number of $2.1 million, a 25% savings.

The savings