First class, second class, worldwide. How a Broadway show makes money on the road
Investing Unpacked · No. 02 · Touring and global
In 2018–19, the last season in the Broadway League's published touring statistics, Broadway's touring productions sold 18.5 million tickets in North America, 3.7 million more than Broadway itself, for $1.63 billion. That count left out every non-Equity tour. The League's latest study puts the road's economic impact at more than $5 billion across 145 cities in 2023–24, and it too counts only the 38 tours on Equity contracts. The biggest title in the business, The Lion King, has grossed $11.5 billion worldwide; its Broadway production accounts for $2.15 billion of it. For most of what a hit earns, the 41 houses in this week's Pulse are the showroom.
The latest Pulse found Broadway holding seats by giving up yield: the average paid ticket fell 13% on the year, to $115.17. On the road the guarantee is fixed, so a price cut comes out of the overage first and, below the guarantee, out of the presenter's week rather than the producer's.
Three classes of tour
18.5M
Road tickets, 2018–19 · Broadway sold 14.8M
145
Cities with an Equity tour, 2023–24 · 38 tours
81%
Of The Lion King's $11.5B grossed away from Broadway
First class is a term from the authors' contracts. A first-class production is the top of the ladder: full scale, in a first-class theater, with a first-class director and cast, which in practice means Broadway and the tours built to match it. On the road these are the tours that sit down for several weeks at a time in the largest markets, usually with the Broadway producers behind them, each one a separate company with its own capitalization and its own investors. Under the actors' Touring Agreement they are the Levels 1 and 2 tours; by one count about one show a year launches at Level 1.
Second class is everything below that, and the contracts treat it differently. The rights agreement for one new musical, filed with the SEC, pays the authors 4.5% of the gross for first-class productions, rising to 6% once the show has recouped 110% of its capitalization, and then says only that for a second-class production "minimum weekly guarantees and other royalties will be subject to good faith negotiation." The category covers two very different animals. The Equity tours at Levels 3 to 7 play mostly single weeks in subscription markets at lower minimums (Level 5 paid $1,077 a week in 2025 against $2,599 at Level 1), with the cast sharing a small slice of the overage. The non-Equity tours, which the trade also calls non-union or second-class tours, play shorter engagements, from a week down to a single night, in smaller houses, and are usually produced by specialist touring companies rather than the original Broadway producers.
Worldwide is three businesses, not one. A Broadway producer usually negotiates options to present the show in Britain and Australia, and can pay for options on other territories (the agreement filed with the SEC prices Japan's at a $75,000 advance). Beyond those, the show is licensed to local producers for a fee and a royalty, often in the local language. The third route is the English-language international tour: one company that moves between countries. The Lion King's first international tour opened in Manila in March 2018 and closed in Abu Dhabi in December 2022, having played eleven cities from Seoul to Auckland.
How a touring week is paid
The standard road deal is a guarantee. The presenter, the performing arts center or the local Broadway series, pays the producer a fixed sum for the week, "typically in the neighborhood of $300k" for most tours, plus a royalty of around 10% of the gross above a breakpoint. The presenter pays the local costs that a Broadway producer would carry: the house, the local stagehands and musicians, the advertising, the ticketing fees. If the week's gross covers all of that, the surplus is split, usually 60/40 in the producer's favor. In big markets the presenter's commitments run to $600,000–$800,000 a week, "some markets are close to $1 million." The alternatives are a terms deal, in which the two sides split the gross after agreed deductions, 75/25 or 80/20, and share the risk, and a four-wall, in which the producer rents the building and keeps everything.
Take an illustrative first-class tour of a typical Broadway musical, in a 2,500-seat house at a $100 average ticket, on a $500,000 guarantee with a 10% royalty above $800,000 and a 60/40 split after the presenter's $400,000 of local costs and 6% in fees.
| Capacity | Gross | Presenter pays out | Presenter's week | Producer receives | Producer's week |
|---|---|---|---|---|---|
| 95% | $1.90M | $1.12M | $310K | $1.08M | $333K |
| 80% | $1.60M | $1.08M | $210K | $894K | $225K |
| 65% | $1.30M | $1.03M | $109K | $713K | $116K |
| 50% | $1.00M | $980K | $8K | $532K | −$18K |
| 40% | $800K | $948K | −$148K | $500K | −$50K |
| Empty | $0 | $900K | −$900K | $500K | −$50K |
Producer's week after fixed running costs of $520,000 and a royalty pool of 40% of the operating profit (with a $30,000 weekly minimum) covering the authors, the creative team and the Broadway company's share. Weeks to recoup a $7 million tour: 31 at 80% full, 60 at 65%.
Read the bottom two rows together. The presenter's worst week costs the guarantee plus everything it spent on the house; the producer's costs about $50,000, because the guarantee covers most of the tour's running costs. Producers have a stricter test, which one calls the golden rule of touring: the weekly running costs, plus the production cost spread over the weeks the tour plays, should fit inside the guarantee. Our first-class tour doesn't pass it. Its guarantee covers 96% of its running costs and none of its $7 million production cost, so it pays back out of the overage, and that is why it needs markets that can deliver a million-dollar week. A Broadway show has no floor at all: in our Broadway model the same musical at 40% full loses more than $200,000 for the week, and pays the landlord first. On the road the presenter is the landlord and the risk-taker at once, which is why presenters sell subscriptions: in the League's last survey of the touring audience (2017–18), 39% subscribed to a local Broadway series, sold months ahead, and that pre-sold money is what lets a presenter sign a guarantee at all. When Hamilton went out, Baltimore's Hippodrome went from 10,500 subscribers to a sold-out 14,250.
The same show at three sizes
Now run the same deal for the three classes, scaled to the markets they play: the first-class tour above; a mid-level Equity tour on a $300,000 guarantee in the same 2,500-seat house at an $80 average; and a non-Equity tour on a $150,000 guarantee in an 1,800-seat house at $60. Fixed weekly costs of $520,000, $300,000 and $165,000. The non-Equity tour runs at about 55% of the mid-level Equity tour's cost, inside the range reported in 2003, when non-union tours were said to cost "half to two-thirds" as much as Equity tours.
| Tour | Guarantee | Fixed cost | Smallest week that pays both sides | Weeks to recoup, 80% full | At 65% full |
|---|---|---|---|---|---|
| First class · $7M | $500K | $520K | $1.03M | 31 | 60 |
| Mid-level Equity · $4.5M | $300K | $300K | $670K | 19 | 30 |
| Non-Equity · $2.5M | $150K | $165K | $370K | 20 | 32 |
The point of the table is the fourth column. A first-class week needs a market that can produce about a million dollars at the box office before anyone makes money; the non-Equity week works from $370,000. An 1,800-seat house selling $60 tickets grosses $864,000 even when it sells out, so the first-class tour cannot play it at any capacity. Nor can the mid-level one, comfortably.
Checked against real tours. The US tour budgets OFFSCRIPT has invested in or reviewed as an investor were capitalized at roughly $3 million to $8 million, the range our first-class and mid-level tours sit in; our non-Equity tour, at $2.5 million, sits below it. Their royalty pools run up to about half of profit, more after recoupment, against 40% in our model, and their licensors are paid weekly fees plus a share of net profits. A budget is the producers' estimate before opening, not a result.
The road also pays the people who aren't on it. Each tour pays royalties to the authors and the creative team, and, by one producer's account, about 1% of its gross every week plus 5% of its profits after recoupment to the Broadway company, and through it to the Broadway investors. At 80% full, our first-class tour sends the Broadway company about $16,000 a week, $640,000 over a 40-week season, more than three weeks of the same musical's Broadway profit at 90% full in our model, from a company it didn't have to capitalize. The non-Equity tour sends about $7,000 a week, $276,000 a season, and keeps sending it for as many seasons as it runs.
Why the long non-Equity tours matter
The argument against them is a fair one and it comes with numbers. In the early 1990s about 90% of touring Broadway productions were union; by 2003 about 60% were, and union work weeks on tour had fallen from 44,000 to 21,000 in five years. Non-union actors earned "a third to half less." Equity's answer, over years of campaigns, was to bring the lower market inside the contract: low-guarantee touring contracts in 2001, the short-engagement agreement of 2008, with minimums that could be as low as $550 a week, and the single Touring Agreement of 2023 that replaced them, which still pays its lower levels less than half of Level 1. That is the trade the union made, and it is the honest frame for everything that follows.
The case for the tours is about what the rest of the business gets from them.
Reach. The League counts 145 cities with an Equity tour. The non-Equity tours play the next ring of markets, the cities "30 miles away or 60 miles away or 200 miles away" with a smaller performing arts center, as one producer describes them. One non-Equity revival, first out in 2019, was booked into more than 60 cities in its 2023–24 season alone; a first-class tour, sitting down for weeks at a time, plays a fraction of that. A season of our illustrative non-Equity tour sells about 430,000 tickets at 75% full, every one of them in a house a first-class tour cannot afford to play.
The audience. About 42% of Broadway's own audience last season were domestic visitors from outside the New York area, and the average theatergoer saw 5.4 shows in a year. The habit is formed at home, on a subscription, and the subscription is sold on the strength of the season: a first-class title or two, filled out with tours that can play a week in that market at a price that market will pay. Take the non-Equity tours out of a 2,000-seat house's season and the season gets shorter and dearer. After Hamilton, road audiences aged 18 to 44 grew 130%, and presenters reported the subscribers mostly stayed.
The title's life. A Broadway run is measured in months; a licensed title is measured in decades. Each non-Equity season pays the authors their royalties and the Broadway company its royalty, and under the authors' contracts the Broadway company also keeps a share, 10% to 40% in the agreement filed with the SEC, of the authors' income from other productions of the show (stock, amateur and, depending on the contract, second-class tours) for a term of years, provided the show ran 21 performances. The producer in that same agreement holds a right of first negotiation on the non-union touring rights for a year after the last commercial production closes. That clause is worth money precisely because the long non-Equity tour exists.
The pipeline. The companies that run these tours are also the booking machinery of the road. They keep the trucks, the routing relationships and the one-nighter markets warm, so that when a presenter wants to add a week in a city a first-class tour has never seen, there is somebody to call. And they are a training ground: a non-union tour is where many performers who can't yet get union work learn to do eight shows a week.
None of this means every tour should be non-union, or that the pay is adequate. It means that a touring economy with only first-class tours would be a smaller one, in fewer cities, with shorter seasons and less money flowing back to the titles and the people who wrote them.
The road runs on what Broadway and the West End make
Everything above assumes there is a show to tour, and that is the part of the ecosystem a touring investor can take for granted until it isn’t there. A tour is a downstream product of a first-class production. The contracts say so: in the agreement filed with the SEC, the Broadway company’s share of the road’s income vests only after the first-class production has played 21 performances, and its first negotiation on a non-union tour is counted from the day the last first-class company closes. The presenters say so: Broadway Across America, which calls itself the market leader in touring theatre, sells subscriptions in 48 markets to more than 400,000 subscribers under the word “Broadway,” and what the word carries is the New York run, its reviews and its awards. A presenter cannot sell a season of shows that never opened anywhere.
The money says so too. The expensive, uncertain part of the business is the first production. Our illustrative tours are capitalized at $2.5 million to $7 million; the Broadway musical that creates the title usually costs more than the tour that follows it, often several times more, and it carries the development, the New York running costs and the risk that the show never finds its audience. The tour borrows the result. That is why the royalty back to the Broadway company, about 1% of gross and 5% of profits after recoupment by the account above, matters: it is the road paying for the laboratory. The loop closes the other way as well. The subscriber who met Hamilton at the Hippodrome in Baltimore is the domestic visitor who makes up 42% of Broadway’s audience. Take the originating production away and the chain breaks at the top: no title, no series, no non-Equity tour five years on, nothing flowing back to the authors. Take the tours away and Broadway keeps its showroom and loses its distribution.
The West End is the other source, on different plumbing
Broadway is not the only first-class market. London is the other, and lately it has been the cheaper place to find out whether a show works, with Broadway as the transfer rather than the source. Three of OFFSCRIPT’s Broadway titles came that way: Operation Mincemeat went from a 2019 run at London’s small New Diorama to the Fortune Theatre in 2023 and the Golden Theatre in 2025; Two Strangers (Carry a Cake Across New York) from a sold-out run at the Kiln Theatre to the Criterion in 2024 and the Longacre in 2025; Paddington The Musical from the Savoy, where it opened in November 2025 and won seven Olivier Awards, to the Al Hirschfeld next spring. Mincemeat’s producers have said the London production cost about $3 million; the Broadway transfer was capitalized at $11.5 million to $14.5 million, by the filing Broadway Journal reported. The titles travel the other way too: The Addams Family, a Broadway musical of 2010, went out on a 2025 UK tour that OFFSCRIPT co-produced, from Birmingham Hippodrome to Blackpool Opera House.
The British road works on different plumbing. The standard deal between a touring producer and a receiving house is a split of the box office rather than a guarantee: SOLT and UK Theatre’s touring handbook gives 80/20 to the producer as its example, after the venue’s “contra,” its charges for crew, equipment, marketing and the building. Where a guarantee exists it is usually the venue that gives one, and a producer sometimes takes a “first call” on the first slice of receipts. Venues are graded by size rather than by union tier: large-scale is over 800 seats, mid-scale 400 to 800, small-scale under 200. And the state sits on both sides of the ledger. VAT at 20% comes off every ticket before the split (it was cut to 5% and then 12.5% in the pandemic and went back to 20% in April 2022), while Theatre Tax Relief, below, hands a touring production up to 36% of its core costs back. How the West End itself is financed, the theatres’ rents and contras and what a London run costs, is a piece of its own.
Worldwide: the same show, a different balance sheet
Abroad, the question an investor should ask is who is carrying the cost. In the producer's own foreign productions, the Broadway investors usually get the right, not the obligation, to invest again. In a licensed production, a local producer pays a fee and a royalty, carries the budget and the currency, and the Broadway company sees license income without risking capital. In an international tour, the producing partners carry a single company around the world and sell it city by city to local presenters, who sometimes include governments. Hamilton's 2024 run in Abu Dhabi was presented with the emirate's Department of Culture and Tourism and the operator of Yas Island.
Public money is part of the model in a way it is not in New York. Britain's Theatre Tax Relief pays a touring production a credit at 45%, 40% if it doesn't tour, on the 80% of core costs that qualify, which comes to up to 36% of a touring show's core production costs back from the Treasury; a production "tours" if it plays six venues, or two venues and fourteen performances. Victoria's Major Events Fund backed the Australian premiere of Beetlejuice in Melbourne in 2025. The same state backed Harry Potter and the Cursed Child, which did not tour at all: it sat down in Melbourne for four years, sold more than a million tickets, drew 42% of them from outside Victoria and was credited with more than A$250 million of economic impact in its first year. Its Australian producer's lesson was that a big enough title doesn't need to tour, because the audience travels to it. That is the opposite of the American model, and it is why governments will pay: tourists are what they are buying.
The risks are the ones a domestic tour doesn't have: sea freight and visas, a currency that moves between the deal and the settlement, few houses of the right size, and contracts in which the Broadway company is a licensor rather than an owner. The upside is the scale of it. Of The Lion King's $11.5 billion, four dollars in five were earned somewhere other than Broadway.
What to ask for when the show leaves town
01
Which companies you own a piece of.
The Broadway company, or the first-class tour, London and Australia as well? Often the answer is only the right to invest again. Know which before you count on the road.
02
The royalty from the road, in writing.
By one producer's account tours pay the Broadway company about 1% of gross and 5% of profits after recoupment. Ask what your operating agreement says, not what the custom is.
03
Subsidiary rights, and when they vest.
They vest after a minimum run (21 performances in the agreement filed with the SEC) at 10% to 40% of the authors' income from other productions of the show, for a term of years. It is the longest-lived money in the deal.
04
The golden rule, on the booking sheet.
Before the tour launches, set the average guarantee against the weekly running costs. Whatever the guarantees don't cover, the production cost included, is riding on the overage.
05
Who controls the second-class rights.
The right of first negotiation on a non-union tour is worth real money once the first-class tours end. Ask who holds it and what the Broadway company gets when it is exercised.
Watch for it
01
The touring contract.
The Equity–League Touring Agreement's term ran to September 7, 2026, and as far as we can find no successor has been announced. Its minimums set the floor under every Equity tour's costs; watch the levels and the per diem.
02
Tours that launch early.
Back to the Future toured about ten months after its Broadway opening, and its Broadway grosses then fell about $250,000 a week on average (a thin awards season didn't help). This season's launches are in the Pulse table every week; watch the New York gross of each title the week its tour opens.
03
The non-Equity count.
Playbill's March list of current and upcoming national tours labels seven of its 30-plus tours as non-Equity. Watch how many of this season's Broadway closings go out non-union within two years, and how many cities they play.
Notes
Illustrative model, not any specific show: three tours of one typical musical, each paid by a weekly guarantee, a royalty of 10% of the gross above a breakpoint and a 60/40 split of the surplus after the presenter recovers its local costs and 6% of the gross in ticketing fees and commissions. First class: 2,500 seats, $100 average ticket, $500,000 guarantee, $800,000 breakpoint, $400,000 of local costs, $520,000 of fixed weekly running costs, $7 million capitalization. Mid-level Equity: 2,500 seats at $80, $300,000 guarantee, $500,000 breakpoint, $300,000 local, $300,000 fixed, $4.5 million. Non-Equity: 1,800 seats at $60, $150,000 guarantee, $300,000 breakpoint, $150,000 local, $165,000 fixed, $2.5 million. Royalties are a pool of 40% of the producer's weekly operating profit with weekly minimums of $30,000, $25,000 and $15,000; the Broadway company's 1% of gross is quoted from a producer's public description and is counted inside the pool, not on top of it. Eight performances a week, 40-week seasons. Guarantees, splits, breakpoints and cost levels are set from the public descriptions cited below; none is any production's figure. The Broadway comparisons use the same musical in a 1,200-seat Broadway house grossing $1.25 million a week when full, with running costs of about half that and a 40% royalty pool; at 90% full it makes about $196,000 a week. Educational only; not an offer to sell, or a solicitation of an offer to buy, any security.
The check against real tours uses the budgets of US tours OFFSCRIPT has invested in or reviewed as an investor, aggregated and rounded so that no single production's figures are shown or can be worked out; each range is rounded outward. Budgets are estimates made before opening, not results, and nothing here describes any production's actual performance or returns.
Sources: touring and Broadway season statistics and the touring audience study, the Broadway League (the touring series ends with 2018–19 and excludes non-Equity tours); the League's touring economic-impact study for 2023–24, as reported by Broadway News (March 2026); the Broadway audience for 2024–25, the League as reported by Broadway News (December 2025); deal structures, guarantees, presenters' outlays, the golden rule (paraphrased) and the royalty to the Broadway company, Ken Davenport (2010 and 2017); contract levels, the typical guarantee and the Back to the Future figures, BroadwayWorld (March 2026); 2025 minimums, BroadwayWorld (October 2025); the 2023 Touring Agreement and its term, Actors' Equity; earlier contract terms, Playbill (2001, 2023) and Backstage (2001, 2014); union share, work weeks and cost comparisons, Gotham Gazette (2003); SETA minimums, HowlRound (2014); first-class and second-class royalty terms, foreign-territory advances, subsidiary-rights vesting and the non-union touring clause, a rights agreement filed with the SEC (2020), with the Empire offering circular (2016), Loeb & Loeb (2023), the Commercial Theater Institute (2019) and Gordon Firemark (2011); the Jesus Christ Superstar tour, Playbill (2019, 2023); Hamilton's effect on subscriptions, the Washington Post (2019); The Lion King's grosses, Guinness World Records (November 2025); the Lion King international tour and Hamilton in Abu Dhabi, Michael Cassel Group; Harry Potter in Melbourne, Variety Australia (2023); Victoria's Major Events Fund, the Premier of Victoria (2025); Theatre Tax Relief, HMRC; Broadway Across America’s markets and subscribers, the John Gore Organization; the UK touring deal (splits, contras, guarantees and first call) and venue scales, SOLT and UK Theatre’s Producing, Presenting and Touring Handbook (2019); VAT on admissions, HMRC; Operation Mincemeat’s London cost and Broadway capitalization, Broadway Journal (2024); Two Strangers’ West End transfer, Musical Theatre Review (2024); Paddington The Musical’s London run and Olivier Awards, as stated on this site’s production pages; The Addams Family’s Broadway opening, IBDB.
OFFSCRIPT co-produces and invests in national tours, including three on the road this season, and nothing here describes any one of them. Nothing here describes any offering; investments are made only through a production's own offering documents.
Next week in Unpacked: pricing science. Premium seats, discounts and where a show's margin really comes from.
Investing Unpacked takes one mechanism of the Broadway business apart each week, alongside The Pulse, OFFSCRIPT's weekly read on the grosses. How we read them: our methodology.