Investing Unpacked · No. 06 · New models
The Pulse for the week ending November 1 found Halloween took $17 off every seat on Broadway: the street grossed $29.6 million, 13% below the week before, and revenue per available seat fell to $103.10 from $120.23. The bottom of the table emptied first, and the table got steeper: the top ten of the week's 33 shows took 53% of the gross, up from half the week before; the bottom sixteen, nearly half the table, took 27%. Grosses concentrate in a few rows, and profit, which sits above a show's running costs, concentrates further still. A portfolio is the usual answer to that. In our model it answers half the question.
The odds for one show
The best public count of how Broadway musicals turn out is a 2025 study in the statistics magazine Significance of the 133 commercial musicals that opened on Broadway from 2008 to 2017. Between 21% and 26% of them, about one in four, recouped. At most eight, about 6%, gave their investors a realistic chance of doubling their money on ticket sales alone. Half, 67 of the 133, closed within 26 weeks of their first preview. The shows that recouped ran a median 140 weeks; the shows that failed, 18. The Broadway League's president has put the share of musicals now turning a profit lower still, at about one in ten.
We turned those counts into four outcomes for the musical this series runs its numbers on, the same show as Nos. 03 to 05: a 1,200-seat house playing eight performances a week, $1.25 million a week when full at budgeted prices, $625,000 of weekly running costs, $15 million to recoup. The odds are the study's, rounded and split into four. The payoffs are the model's: what each kind of run pays its investors for every dollar they put in, before any tax credit.
| How the run turns out | Odds | In the model | Pays, per $1 |
|---|---|---|---|
| The long run: doubles or better | 6% | 8.8 years at 90% full | $3.00 |
| Recoups, then closes | 17% | 140 weeks at 90% full: 76 to recoup, 64 more at $78,222 a week | $1.33 |
| Runs past 26 weeks, never recoups | 27% | A year at 75% full, then closes | $0.35 |
| Closes within 26 weeks | 50% | The reserve and the closing costs absorb what is left | $0 |
| Average, one show | 18¢ from the long run, 23¢ from the recoupers that close, 9¢ from the rest | $0.50 |
At those payoffs a dollar in one show comes back as 50 cents on average, and 18 of the cents come from the one-in-sixteen long run. Change nothing but that payoff and the average moves with it: pay the long run $2 and the average is 44 cents; $5, 62 cents; $10, 92 cents. For the average to reach a dollar, the long run has to pay about $11.30, and the study's own estimates for its largest hit run into the teens. The average is a statement about the size of the hits. It says nothing about how many shows you hold.
What a slate changes
Now hold equal stakes in several copies of that show, each turning out on its own. The odds of each outcome don't change. What changes is how they add up.
Equal stakes in N shows · the model, base payoffs
| Shows held | Nothing recoups | At least your money back | Less than half back | Middle 80% of outcomes, per $1 |
|---|---|---|---|---|
| 1 | 77% | 23% | 77% | $0 to $1.33 |
| 3 | 46% | 20% | 58% | $0 to $1.12 |
| 5 | 27% | 10% | 56% | $0.07 to $0.94 |
| 10 | 7% | 4% | 52% | $0.20 to $0.84 |
| 20 | <1% | <1% | 52% | $0.29 to $0.74 |
The average is $0.50 per dollar in every row. Each show is assumed independent of the others; shows sharing a producer, a season or a theatre district are not, which makes a real slate less diversified than this one.
Read the first column and a slate looks like insurance: the chance that nothing recoups falls from 77% with one show to 7% with ten, and the chance of losing every dollar from one in two to one in a thousand. Read the second column and it looks like the opposite: the chance of getting all your money back falls from 23% to 4%, because a slate's result crowds toward its average, and at these payoffs the average is below a dollar. Both columns are the same fact. Spreading money across shows narrows what can happen to you. It cannot lift what happens on average. With enough shows, a good bet becomes dependable and a bad one nearly certain; ten is not enough to settle either, since even when the shows repay their capital on average, ten of them give the dollar back only 46% of the time. At the League's one-in-ten, ten shows still leave a 35% chance that nothing recoups.
Chance nothing recoups = (1 − recoupment rate) ^ shows held
Average per $1 = Σ (odds of each outcome × what it pays per $1)
77% → 7%
Chance nothing recoups · one show, then ten
$0.50
Average per $1 at the model's payoffs · any number of shows
$11.30
What the long run must pay per $1 for the average to reach a dollar
And the hits pay slowly. In the model at 90% full, recoupment takes 76 weeks; the second dollar arrives in week 268, five years in; the third in week 460. The Outsiders, which announced recoupment in January 2026, took about 89 weeks from its opening in April 2024 to the week ending December 28, 2025, on a reported $22 million. A slate's average is earned over a decade, by the one or two shows still running.
What a fund adds, and what it takes
Two structures spread a Broadway investment, in opposite directions. The crowd model spreads one show across many investors. The 2011 revival of Godspell sold $100 units, ten of them to get in, against the $10,000 to $100,000 units of a conventional offering, and ended with more than 730 named investors; its producer, Ken Davenport, said in 2021 that he knew of no Broadway or Off-Broadway show that had used the crowdfunding rules written since. The fund model spreads one investor across many shows. A filed example is a Delaware limited partnership, Broadway Strategic Return Fund, whose amended Form D of October 23, 2026 reports $123.3 million taken in from 135 investors since its first sale in January 2016, filed as a pooled investment fund of the hedge-fund type, with the note that its manager receives management fees in line with industry standards.
Industry standards are public enough to model. The SEC's investor education site puts a typical hedge fund's charges at 1% to 2% of assets a year and 15% to 20% of profits, with lock-ups of a year or more, and funds of this kind are open only to investors who pass the SEC's income and net-worth tests. Take the top of each range as an illustrative convention: 2% a year on committed capital for five years, so 90 cents of each dollar reaches the shows, and 20% of profits as carry. Then the question that decides more than the rate is how the carry is computed. Whole-fund, the fund's investors (its limited partners) get every dollar of their contributions back before the manager takes a share of profit, the structure the Institutional Limited Partners Association's principles prefer. Deal-by-deal, the manager takes 20% of each winning show's profit as it comes, and the losers are not netted against it.
Ten shows · average per $1 committed · the model
| The long run pays | Self-built slate | Fund, whole-fund carry | Fund, deal-by-deal carry |
|---|---|---|---|
| $3.00 per $1 (the base case) | $0.50 | $0.45 | $0.42 |
| $10.00 | $0.92 | $0.79 | $0.72 |
| $11.30 (the shows repay exactly their capital on average) | $1.00 | $0.84 | $0.78 |
In a business where three shows in four don't recoup, the carry's design is not a detail. When the slate's shows repay exactly their capital on average, the fund's investors keep 84 cents of each dollar with whole-fund carry and 78 with deal-by-deal. Ten of the missing cents are the fee; the rest is carry, paid in the outcomes where the fund made money, and under deal-by-deal paid on each winner even when the slate as a whole did not. Deal-by-deal costs about 7 cents more. What the fee buys is what the arithmetic cannot: access to the shows, the picking of them, and a seat at the producers' table, which carries economics of its own, the co-producer's share of the producers' half of adjusted net profits. Whether that share flows to the fund's investors or stays with its principals is the first thing to read.
What to ask before you spread the money
01
The base rate behind the slate.
How many of the shows this manager or producer has backed recouped, over what period, and how were they chosen? The study's 21% to 26% is the yardstick; a slate built on worse odds needs bigger hits to break even.
02
Whole-fund or deal-by-deal.
Is carry taken only after every dollar of contributions is back, or on each winner as it pays? With three shows in four not recouping, the second can pay the manager on a fund that lost money. Ask what the clawback says (when the manager must hand carry back), and when it is tested.
03
The fee's base and its clock.
Two percent of committed capital for five years is 10 cents of every dollar that never reaches a show. Ask whether the fee is charged on committed or invested capital, when it steps down, and whether it keeps running on capital already written off.
04
Who owns the producers' seat.
A fund large enough to be a co-producer earns a share of the producers' half of adjusted net profits, and sometimes billing and fees besides. Ask whether those flow to the fund or to its principals, and whether the fund's shows are picked by the same people who are paid to produce them.
05
How long the money is locked.
One show holds your money until its company winds up; a fund adds its own term and extensions, and lock-ups of a year or more are the norm in private funds. Match the lock to the hits' timeline: in our model the second dollar arrives five years in.
Watch for it
01
Half the street in ten rows, at Thanksgiving.
Concentration is why a slate's average depends on one or two of its rows. In the week ending October 25 the top ten of 32 shows took 50.2% of the street's gross. The Thanksgiving table, the week ending November 29, is usually the fullest week of the fall, and full houses lift the whole table; we expect the top ten to hold at least half of it even so. Wrong if their share falls under 50%. Settles on that table.
02
The next recoupment from the 2025–26 class.
At least four shows that opened in the 2025–26 season had announced recoupment by May 19, 2026: Waiting for Godot, Art, Every Brilliant Thing and Giant. We expect at least one more announcement from that class between the day this publishes and the table for the week ending November 29. Wrong if none comes in that window. Settles on the trade press, scored by count.
Notes
Illustrative figures for a hypothetical show, not any specific production: the musical this series runs its numbers on (Nos. 03 to 05 use it too), in a 1,200-seat house playing eight performances a week, grossing $1.25 million a week when full at budgeted prices (a $130 average); 9.5% of gross deducted to reach net receipts; the theatre paid 6.5% of net receipts plus a $15,000 flat rent; $625,000 of weekly running costs, the rent and house charges included; a royalty pool of 40% of weekly operating profit before recoupment and 45% after, with $22,500 of weekly minimums; $15 million to recoup, and no tax credit counted; after recoupment, participations of 13% of the company's profit after the pool, then a 50/50 split, so the investors receive $196,168 a week at 90% full before recoupment and $78,222 after. The slate is made of independent copies of that show. Its four outcomes take their odds from the Significance study, rounded (23% recoup, of which 6% double or better; 50% close within 26 weeks; the remaining 27% run longer and never recoup), and their payoffs from the model as the table states them; a show that closes within 26 weeks is assumed to repay nothing. The fund layer is an illustrative convention, not any fund's terms: a 2% fee a year on committed capital for five years and 20% carry, computed whole-fund or deal-by-deal without a clawback. Every slate figure is an average or a probability over those outcomes, not a forecast for any show or fund. Educational only; not an offer to sell, or a solicitation of an offer to buy, any security.
Sources: recoupment, doubling, closing and run-length counts for the 133 musicals that opened 2008–2017, Sam Gutekunst, Christopher Kopac and Allan S. Detsky, "Defying Gravity or Failing to Launch?", Significance (July 2025), and Bucknell University (May 30, 2025); the League president's one-in-ten, The New York Times (September 22, 2025); The Outsiders' recoupment and capitalization, BroadwayWorld and Deadline (January 2026); the 2025–26 recoupments, Broadway Journal (May 6, 2026) and Broadway News (May 19, 2026); Broadway Strategic Return Fund, its Form D/A filed with the SEC on October 23, 2026, and its earlier amendments; fee, carry and lock-up conventions, the SEC's Investor.gov page on hedge funds; the whole-of-fund waterfall, ILPA Principles 3.0 (June 2019); Godspell's offering, Playbill (September 15, 2010) and Ken Davenport (May 31, 2021); funds on Broadway, Ken Davenport (February 27, 2020). The concentration figures trace to the Broadway League's grosses for the weeks ending October 25 and November 1, 2026, as read in Pulse Nos. 05 and 06.
OFFSCRIPT invests in and co-produces shows under agreements like the ones described here.
Next week in Unpacked: recoupment math. The papering tell: what it means for a show's weeks to recoup when its attendance holds and its gross doesn't.
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.
This issue on Instagram: the narrated reel. Every issue: @offscript.theatricals.
Revised November 6, 2026: the opening brought to Pulse No. 06 (week ending November 1), with the Watch for it baseline and the Notes' table line dated to their weeks; no other figure changed.