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Business & House Management

Business & House Management. Day Five. Every show and every season must have a BUDGET. Some production expenses are pretty well fixed, like ROYALTIES and RENTALS . Royalties are money that is paid to the LICENSING COMPANY for the legal right to perform the show. Production Budgets.

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Business & House Management

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  1. Business & House Management Day Five

  2. Every show and every season must have a BUDGET. Some production expenses are pretty well fixed, like ROYALTIES and RENTALS. • Royalties are money that is paid to the LICENSING COMPANY for the legal right to perform the show. Production Budgets

  3. Rentals are also paid to the licensing company, but you are renting the scripts, musical scores and other materials that must be RETURNED to the company at the end of your performances. • Purchases are generally SCRIPTS for a non-musical production which your school then may KEEP.

  4. These companies represent the AUTHORS and COMPOSERS of plays and musicals. • They PRINT up scripts and musical scores which are rented or sold to schools, handle all the LEGAL ASPECTS of giving your school permission to produce a show, and then send ROYALTY PAYMENTS to the authors and composers who created the show.

  5. In order to produce one of their shows, you must sign a CONTRACT with them. Several factors enter into whether your school can get PERMISSION to do a particular show. • One factor is if the show has been released for AMATEUR production. • Another factor is if there is a PROFESSIONAL PRODUCTION of the show being done in your area. Professional companies will be given preference over amateur productions almost ALL THE TIME.

  6. The cost of royalties for some shows, usually musicals, is VARIABLE, depending on • how BIG your theater is, • the PRICE of your tickets, and OTHER FACTORS. • The cost of rentals and royalties can be as little as a few hundred dollars for certain plays, up to many thousands of dollars for the big name musicals. The thing to remember is that royalties go to the playwrights and composers of shows, as well as the licensing companies, and it is ILLEGAL to produce their shows without having a signed contract and paying royalties.

  7. The easiest way to make a budget is to look at your LAST YEAR’S SEASON, and see what your RECEIPTS were for each show, and how much money you spent on EACH OF THE AREAS we just mentioned. • Always figure your budget on the CONSERVATIVE side.

  8. Here is a typical budget for a large cast musical: • Royalties and rental of scripts and orchestrations (4 performances): $3,100.00 • Set construction and backdrop rentals: $2,700.00 • Costume construction and rentals: $2,100.00 • Props construction and rental: $750.00 • Make-up kits and supplies: $300.00 • Lighting supplies and rentals: $275.00 • Publicity: $175.00 • Programs and tickets: $350.00 • Audio rental and batteries for wireless mics: $300.00 • That makes for a total production budget of $10,050.00 for this musical.

  9. The total number of tickets that need to be sold or given away is t. • If 40 percent of the tickets will be discounted ticketsthatis 40 percent, or .40 TIMES t . • If we figure that 58 percent of the total number of tickets to be sold will be full price tickets. That number is .58 TIMES t.

  10. While they don’t generate any revenue, we still need to figure in the comp tickets, in order to keep from OVERSELLING THE HOUSE. • If we predict that 2 percent of the tickets will be comped, the total number of comp tickets is .02 TIMES t. • Since you already know the total revenue needed to break even is $10,050.00, the next step is to determine the revenue generated by the sale of the DISCOUNTED TICKETS and the FULL PRICED TICKETS. • Obviously, the comp tickets do not generate any revenue.

  11. To find the total revenue generated by discounted seats, multiply the price of a discounted seat by the number of DISCOUNTED SEATS. A discounted seat is $6.00… times .40t = 2.4 dollars times t. • We’ll apply the same formula to find the revenue generated by full price seats. Multiply the full price ticket of $8 by the number of FULL PRICED SEATS. That makes $8 times .58t which is 4.64 dollars times t.

  12. The comp seats are easy to figure. The revenue generated by comp seats, is the comp price per seat, which is zero, multiplied by the number of COMP SEATS or $0 times .02t = 0 dollars. We won’t have a dollar figure here, but we WILL discover how many tickets we can comp by using this formula and still make our budget.

  13. Next, we add all three of the revenue streams together and equate this to the total amount of revenue needed to BREAK EVEN • 2.4 dollars times t + 4.64 dollars times t + 0 dollars which we know has to equal 10,050 dollars, which is our break even number. We add the $2.40 and the $4.64 for a total of $7.04. When we multiply $7.04 by t we know that the total MUST be $10,050. So when we divide $10,050 by $7.04, we get 1427.56, or, rounded off, 1428 seats, which is the total number of seats to be sold and given away to break even.

  14. Forty percent of 1428 equals 571 seats sold at the discounted price • Fifty eight percent of 1428 equals 828 seats sold at the full price, • and two percent of 1428 equals 29 seats are given away as comps. Remember, that the numbers will vary from school to school or show to show, but the formula used to find the numbers won’t change.

  15. You can see that producing theater can be an expensive proposition. You would need to have nightly houses of 357 people to break even in a four night run. This is almost 90% capacity, using a medium sized theater program as this example.

  16. At the end of each performance, a BOX OFFICE STATEMENT needs to be filled out. This includes a STUB COUNT from the house manager that indicates how many FULL PRICED, DISCOUNTED, and COMPLIMENTARY tickets were used, and a statement of money to be DEPOSITED. It also includes how many tickets were sold PRE-SHOW, and how many were sold in the box office THAT NIGHT.

  17. The total sold should MATCH the stub count, with one exception. There will often be tickets that were sold that the patron DIDN’T USE, for one reason or another. If your stub count and your sales report from the box office don’t agree, this is usually the reason. These unused tickets are sometimes called DEADWOOD. The only problem is when there are MORE ticket stubs than there were tickets sold. That means there was money taken in that is UNACCOUNTED FOR.

  18. At the end of the run of each show, take all of the box office statements and do a BOX OFFICE SUMMARY to see if the show ran at or under budget. A Box Office Summary lists the performance date, the number of full priced tickets sold, the discounted tickets sold, the comps sold, deadwood, the TOTAL INCOME for the night, and room for NOTES.

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