Investing Unpacked · No. 01 · Recoupment math, not gross
This week's Pulse found the average paid ticket on Broadway down 13% on last year. That reads like a pricing story. For the people who financed the shows it is a recoupment story: most of the costs between a show's gross and its investors don't move when the price does, so a small cut in price becomes a large cut in the profit that pays them back.
Where the money goes
The trades report what a show grossed. Investors are paid from what's left after fees and taxes, royalties, the theatre and the weekly running costs. The running costs, the biggest slice, barely change whether the house sells at full price or at a discount. That is operating leverage: a small move in gross becomes a large move in profit.
Where $1 of gross goes · illustrative mid-size musical at $1.0M a week
Fees, taxes, royalties and the theatre
Running costs: cast, crew, band, marketing, insurance
Weekly profit toward recoupment
Same seats, different price, different decade
| Average ticket | Weekly gross | Weekly profit | To recoup $20M |
|---|---|---|---|
| −13% (vs. last year) | $870K | $15K | 25+ years |
| Base case | $1.00M | $110K | ~3.5 years |
| +10% | $1.10M | $183K | ~2 years |
At $1.0M a week the show is 18% above its break-even and recoups in about three and a half years. Cut the average ticket 13% on the same attendance and it is 2% above break-even: weekly profit falls 86%, and recoupment moves out past 25 years. In practice, never.
Winning it back with attendance is harder than it looks. To make up a 13% price cut, a show needs 15% more people just to hold its gross. At this week's 87% average capacity, that is every empty seat in the house.
Checked against real budgets
Our model is simple on purpose. To see how it compares, we put the same test to the weekly operating budgets of six Broadway musicals OFFSCRIPT has invested in or reviewed as an investor: cut the average ticket 13%, keep the same crowd, and measure the fall in weekly profit at each level of capacity. A budget is the producers' estimate before opening, not a result.
A 13% price cut, same crowd · fall in weekly profit
| Capacity | Typical budget | Range across the six |
|---|---|---|
| 95% | 34% | 30–45% |
| 90% | 37% | 30–50% |
| Our model, at 90% | 86% | — |
| 87% (Broadway this week) | 40% | 35–55% |
| 80% | About half | 40–90% |
| 75% | 60% | 45% to a loss |
| 70% | Nearly all | 60% to a loss |
The budgets take the cut better than our model, for two reasons. All six pay most of their royalties as a share of weekly profit, not of gross, so when profit falls the royalty falls with it and takes part of the hit; our model takes royalties off the top of the gross. And their running costs come to about half of what a full house would gross, a little under our model's 56%. Together, those two things put their break-even at roughly 55% to 70% full. Our model breaks even at about 77%.
So our model is the thin-margin case. In the budgets, a 13% cut takes 86% of the profit when a show is running about 70% full; at Broadway's 87% this week, it takes about 40%. The direction holds in all of them. Even with every seat sold, profit falls by more than twice the price cut, and at 75% full the same cut turns some of them from a profit into a loss.
One number for price and capacity
Capacity counts every seat with a person in it, whatever they paid. The average paid ticket counts the money but ignores the empties. The running costs ignore both: they are charged by the week, on every seat in the house, sold or not. The number that matches the costs is revenue per available seat, the week's gross divided by every seat the show could have sold. It is also the average paid ticket times capacity, so it moves when either one does, and it can't be flattered by filling the house at the wrong price.
Revenue per available seat = weekly gross ÷ seats available
(= average paid ticket × % capacity)
Put the hypothetical show in a 1,100-seat house, eight shows a week: 8,800 seats to pay for. At $1.0M it earns $114 on every one of them, against a break-even of $97 a seat. Cut the price 13% and it earns $99. The house looks exactly as full as it did, and $17 of headroom on every seat has become $2.
$114
Per available seat · base case
$97
Break-even per seat
$17 → $2
Headroom per seat · before and after a 13% cut
Two scorecards · week ending September 27, 2026
This is the public table re-ranked by that number: gross on the left, revenue per available seat on the right, and the shift between the two columns is house size doing its work.
| Show | Gross · rank | Per seat · rank | Shift |
|---|---|---|---|
| The street · 26 shows | $24.09M | $101 | |
| Hamilton | $2.61M · 1 | $246 · 1 | — |
| The Lion King | $1.70M · 2 | $125 · 4 | −2 |
| Harry Potter and the Cursed Child | $1.57M · 3 | $121 · 5 | −2 |
| MJ | $1.54M · 4 | $139 · 3 | +1 |
| Oh, Mary! | $1.46M · 5 | $204 · 2 | +3 |
| The Lost Boys † | $1.05M · 6 | $89 · 14 | −8 |
| Wicked | $1.01M · 7 | $70 · 22 | −15 |
| Aladdin | $983K · 8 | $71 · 20 | −12 |
| Chicago | $980K · 9 | $113 · 7 | +2 |
| Schmigadoon! | $872K · 10 | $94 · 12 | −2 |
| Paranormal Activity † | $871K · 11 | $92 · 13 | −2 |
| The Great Gatsby | $841K · 12 | $71 · 21 | −9 |
| Hadestown | $828K · 13 | $113 · 8 | +5 |
| The Book of Mormon | $811K · 14 | $95 · 11 | +3 |
| Buena Vista Social Club † | $804K · 15 | $96 · 10 | +5 |
| The Rocky Horror Show | $700K · 16 | $88 · 15 | +1 |
| The Outsiders | $697K · 17 | $85 · 17 | — |
| & Juliet | $691K · 18 | $84 · 18 | — |
| Maybe Happy Ending † | $682K · 19 | $88 · 16 | +3 |
| Operation Mincemeat † | $670K · 20 | $106 · 9 | +11 |
| Just in Time † | $668K · 21 | $121 · 6 | +15 |
| Stranger Things: The First Shadow | $573K · 22 | $45 · 26 | −4 |
| SIX | $491K · 23 | $60 · 24 | −1 |
| Two Strangers † | $477K · 24 | $57 · 25 | −1 |
| School Girls; Or the African Mean Girls Play | $322K · 25 | $63 · 23 | +2 |
| The Imaginary Invalid (3 perfs) | $183K · 26 | $83 · 19 | +7 |
† OFFSCRIPT is an investor or producer. Per seat: reported gross ÷ reported seats available for the week; ranks among the 26 shows on the table. The Imaginary Invalid played three performances in its first week.
Four of the ten biggest grosses earn less per available seat than the street. Every show that falls eight or more places plays more than 11,500 seats a week; every show that climbs five or more plays fewer than 8,500. Neither column is a P&L. But the right-hand one is the one the running costs are charged against, and a big house is a big weekly bill: what it asks is how much of the house a show is converting at price. The best week in the business is still a big house, full, at a high price. There is one show in the table doing all three, and it is $246 a seat.
The number to watch: recoupment velocity
Weeks to recoup = unrecouped capital ÷ weekly operating profit
It tells you whether a show is on track, and you can estimate it yourself. The offering documents usually give you the capitalization, the weekly running costs, the house and the royalty and theatre terms; the public grosses give you the gross, every Monday.
Track these, not gross
01
Revenue per available seat.
Gross ÷ seats available, against the street's figure and, if the offering documents give you the house and the weekly costs, against the show's own break-even per seat.
02
Margin over break-even.
Weekly gross ÷ break-even gross. The closer to 1.0, the more a small price move matters.
03
Average paid ticket.
Week over week and year over year. A price cut has to be won back with attendance, and a 13% cut takes 15% more people just to stand still.
04
Yield ratio.
Average paid ÷ top ticket: a rough public read on discounting. Premium top prices pull it down too, so watch one show's trend.
05
Recoupment velocity.
Weeks to recoup at the current run rate. Recompute it monthly from the Monday grosses; it can move a long way between investor statements.
Watch for it
01
The street at $101 a seat.
Next week's table says whether October lifts it, and whether the lift is price or people. On 87% capacity there is room for either.
02
Harry Potter's $607K week.
The gross rose $607K on a four-point gain in capacity: that is price, not people, and it took the show from $74 to $121 a seat. Whether it holds a second week is the first read on how much of it was a one-off.
03
From No. 02, The Pulse carries this column for every show.
Revenue per available seat, and each show's move against the street, every Tuesday.
Notes
Illustrative: round-number estimates for a hypothetical mid-size musical in a 1,100-seat house playing eight shows a week (8,800 seats available), at 90% capacity and a $126 average paid ticket for a $1.0M gross; $20M capitalization; $620K weekly running costs; 27% of gross to fees, taxes, royalties and the theatre, so $17 of gross over break-even is about $12.50 of profit on each seat. Not any specific show. Many shows pay royalties from a pool tied to profit, which softens the swing: see the comparison with real budgets above. Educational only; not an offer to sell, or a solicitation of an offer to buy, any security.
The comparison with real budgets uses the weekly operating budgets and royalty terms of six Broadway musicals 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. The typical figure is the median of the six, and each range is rounded outward to the nearest five points. Budgets are estimates made before opening, not results, and nothing here describes any production's actual performance or returns.
Every figure in the re-ranked table traces to the Broadway League's grosses for the week ending September 27, 2026. Revised October 1: added revenue per available seat, the re-ranked table and the comparison with real budgets.
Next week in Unpacked: touring and global. First class, second class and worldwide, and how a touring week gets paid.
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.