"Producer's Corner"
by Bruce Lazarus

The Role of the General Manager - Part I

A Tale of Two Budgets

Recently our guest was Roger Gindi, who is my partner producer and general manager on the current off-Broadway play Shakespeare’s R&J.  Roger was also general manager of Our Country’s Good and A Small Family Business on Broadway, and Nunsense, Nunsense Jamboree and David Mamet’s Oleanna off-Broadway, among many other shows.  Roger spoke to the TeleCourse about production budgets, and the role the general manager plays in developing and implementing those budgets.  A subsequent article will discuss the difference between budgets for Broadway, off-Broadway, and Broadway Alliance productions.

Roger’s first piece of advice to producers is to find a general manager for your production before you do anything else.  This is vital to setting up your production for success, for reasons that will become apparent later on in this discussion.  As a general manager (commonly referred to as a “GM”), the first thing Roger does is develop budgets for the production.  He has had many producers come to him requesting that he devise budgets for their productions after they have already obtained the rights to the play they want to produce.  This may be a big mistake, he warned.  You cannot know what royalty arrangement to offer authors until after you have worked out your budget and “run the numbers,” before you know what royalty arrangements will be realistic.

It is a good idea to meet with your general manager early on.  He or she will request a production fee for work from that first meeting through rehearsal and up to your first performance.  Once performances get underway, your general manager will be paid a weekly salary.  The general manager will probably also request that you commit to using him or her as the general manager of all companies of your show that you produce.

Roger noted that the first thing he does is find out how much money the producer has a realistic expectation of raising.  Then, he looks at the play’s requirements for sets, costumes, cast and crew; what size theater would be best suited for the production; what the advertising and marketing campaign might cost; and what union contracts or royalty agreements need to be taken into consideration.

Next, your general manager will draw up your budgets, always looking to maximize profits by minimizing the expense of the production.

The general manager will draw up two budgets.  One, the Production Budget, will cover everything that a production will need to get it to a half an hour before the first performance.  This will include rehearsal salaries, general manager and legal fees; royalty advances to authors; fees and advances to directors; rent for rehearsal space; deposits on the theatre; the cost of building sets and costumes; renting lighting and sound equipment; an operating reserve fund for those first, often slow weeks (usually 4 weeks for an off-Broadway show);  and advance advertising and marketing costs.  The Production Budget will also have some money earmarked to offset advertising costs for the first weeks that the show is actually running.  Under Association of Theatrical Press Agents and Mangers (“ATPAM”) requirements, the press agent begins to collect his or her salary 4 weeks before rehearsals begin, but especially in the case of a highly anticipated production, and with magazines running on a 3 month “lead time,” it is often critical that a press agent begin disseminating press releases, photos and story ideas months ahead of time.  Therefore, some money may be put into the Production Budget for advance payments to the press agent.

The second budget the GM will draw up is known as the Weekly Operating Budget.  This budget breaks down what it will cost the show to run on a weekly basis once performances begin, thus setting the “break even” point that producers look to when they analyze the Gross Weekly Box Office Receipts (referred to as the “GWBOR”).  It includes weekly salaries; theatre rent; royalties; fees to the general manager, company manager, press agent and lawyer; weekly advertising and  marketing; and anything else that needs to be paid every performance week.  As a general rule, Roger told us, your operating budget off-Broadway should be no more than the amount of money the box office would take in if it sold 50% of the house every night that week at full price.  On Broadway, the aim is a little lower, perhaps 40%, primarily because the theater capacity is larger.

In addition to doing the initial budgets, the general manager is the producer’s financial advisor and consultant.  Some producers wish to involve themselves heavily in the every day business of their productions, some do not.  The general manager is sometimes the  producer by default, often taking on many diverse responsibilities as the production goes on.  He or she is a one-stop financial person as well, the person to check in with regularly to discuss the financial status and health of  your production.  Your general manager may tell you that you cannot afford the new advertising campaign you just thought of, the turntable you want on your set, or the star you want in the leading role, or when it’s time to close the show before you give back all the net profits you have just made.

Bruce Lazarus the former Director of Business and Legal Affairs for Walt Disney Theatrical Productions and producer of the current off-Broadway show Shakespeare's "R&J."

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