With the odds of backing a big winner on London's West End running at less than one in 10, only "angels" — those blessedly rich, private investors who finance commercial theater — rush in where fools alone should tread. But the hellish escalation in production fees, where a modest play can cost half a million dollars, is causing even the most star-smitten angels to pause.
Enter a new cast of financiers who believe they have found the formula for improving the odds. Adam Kenwright, 27, nephew of Bill Kenwright, one of Europe's biggest producers, typifies the new money men. Adam rose within his uncle's organization to become heir apparent. After an acrimonious split five years ago, he formed his own p.r. agency and joined forces with Andrew Lloyd Webber and then Cameron Mackintosh to mastermind the marketing of such shows as 'Jesus Christ Superstar' and 'Oklahoma'. In 1997 he moved into production in his own right, with London shows like the current hit 'Stones in His Pockets'. That two-person comedy will go to New York in March, where production costs will be $1 million, vs. the West End's $215,000.
In fact, Kenwright's inspiration comes from New York City — but not so much Broadway as Wall Street. "There are more millionaires than there have ever been," he says, clearly thinking about people who could sprout wings. "There are more new businesses being started, and more investors — and all of this applies twofold in North America."
While Kenwright feels older investors sometimes fail to take him seriously, their younger counterparts speak his language. "My generation has a way into the new money, because the Internet and Wall Street entrepreneurs are the same generation," he says. "We move in similar social worlds so we can talk to each other, and we listen."
What they talk about is money — and spreading risks. "If someone wants to invest £50,000 [$71,000] in 'Stones in his Pockets', I'll agree to put £10,000 [$14,000] in that show and £10,000 [$14,000] in four others," says Kenwright. "We can then afford one disaster, two or three that go okay and one big hit. And the investors still make money. One hit in five becomes a reasonable business record to aim for." Such diversification, a practice new to theater, would seem to make sense. Yet there are plenty of doubters. Says British producer Duncan Weldon: "Theater for time immemorial has never been a proper business. It cannot work like that." His American contemporary Rodger Hess (producer of the current revival of 'Annie') echoes the sentiment. "I've gone to investors for road shows, where the income was guaranteed by the presenters, and they haven't been interested. They only want the glamour of Broadway."
The younger bloods, however, disagree. Kenwright's management inspiration — and sometime producing partner — is 40-year-old New Yorker Dan Marklay. In 1997 he set up the Select Entertainment Fund, which has invested in such successful shows as 'Rent', 'Art' and 'Fame'. The fund has 40 investors, four of whom have a direct affiliation with Wall Street, and several others are dotcom millionaires. Marklay is cagey about figures, as is almost every producer in theater. But he reports that his fund's members are so far "surprised and delighted."
Marklay believes hedging is the beginning of a trend. "The old rifle-shot system of investment makes no financial sense," he says. "You get a very short ride on the roller coaster. This way you stay in the game for longer, your chances increase."
Kenwright is adamant that he can improve the one-in-10 success rate. "We've got to reinvent ourselves in the same way that art, the pop and fashion worlds do," he says. "Because at the moment theater is insular, it's expensive, it's uncomfortable — how much more difficult are we going to make it?" And Kenwright's rapidly expanding oeuvre bears this philosophy out, whether it's the bungee-swingers of 'De La Guarda' or the flamenco explosion promised by his big new project (with Marklay) 'Zorro — The Musical'.
Kenwright's biggest investor is Michael Fuchs, the man who pioneered HBO's rise to the highest-rated cable network in the U.S. "Adam is part of a new generation, that enjoys theater but sees it primarily as a business." says Fuchs, "I've known for a long time that there is money to be made by investing in it, and Adam has the right acumen. And he's the right age." Scene change.