Dollar-by-Dollar: "Godspell" Opens Up Broadway Investments

The old theater cliché of “Hey, everyone, let’s put on a show” is getting a modern financial makeover. A coming revival of the musical Godspell is taking a crowd-sourcing approach to theater finance by offering the chance to invest in a Broadway production for as little as $1,000.

Considering that Broadway productions normally require a minimum entry fee of $25,000 to invest, the far lower entry fee should be quite a lure to someone whose always dreamed of adding “producer” to their résumé. Of course, with a $5 million production price tag, that investor might have to share billing with 4,999 other people.

Getting as many people as possible to join in was exactly the strategy of Ken Davenport, a veteran producer who has mounted several Broadway and off-Broadway productions. Davenport said that in the past when people asked how much it would cost to invest in his shows, they would often shudder because of the high cost and the high risk.

“So I said to myself, what if we can turn that model upside down? What if I went out to thousands of people and said, ‘Hey, you can get involved, you can support a show that you love, you potentially could raise some money and risk a lot less,’” Davenport told Portfolio.com. For Godspell, Davenport is selling $100 investment units with a minimum investment of 10 units.

His plan for Godspell—a musical about the Book of Matthew that began in 1970 and ran on Broadway in 1976—is a far cry from the financial strategy for another big Broadway production. That show, Spider-Man: Turn off the Dark is counting on producers with deep pockets to handle its rumored $55 million to $60 million production costs, the highest in Broadway history.

Davenport noted that Godspell is a simple show, with 10 actors and a band of five or six musicians. “I’m a big believer in you have to do what’s appropriate for your show. Godspell could never be a $55 million show. It couldn’t be a $15 million show. It’s a $5 million show,” he said.

Asked about the risks associated with putting your money in a Broadway show, Davenport said he was actually trying to “demystify the myth” of such risks as he said that one out of five shows that comes to Broadway makes back its investment. Compare that with success in startups, which by one figure he cited is a 1 in 11 chance, and the risks don’t seem as large.

“It’s actually easier to raise money right now,” he said. “Five years ago whenever I used to ask someone, ‘Would you like to invest $25,000 in this show?’ they said, ‘Why would I do that? If I want to make money, I’ll just put the 25 grand in the stock market, and in five or six years, I’m guaranteed to get a return or I’ll buy a mutual fund and I’ll be fine.’ You can’t say that anymore. All of a sudden, Broadway looks better.’”