Risks and Rewards
Investing in a Broadway show is not for everyone. To be sure, it is a high-risk investment which is why producers only seek investors who are accredited. Usually, the minimum amount per show is between $12,500 and $25,000. The amount you invest can go as high as you wish, reflecting how confident you might be in the critical and commercial success of the show. You should feel comfortable with the dollar amount you commit and understand the risks involved. Many shows do not recoup their initial capitalization and in those cases you would not receive your full investment back. Occasionally, a show loses everything.
That said, investors in hit shows such as Wicked or Book of Mormon have seen tremendous returns on their investment. Wicked has been selling out through its entire Broadway run, distributing checks all along the way. When you invest in a new musical or play on Broadway, you also have subsidiary rights in national tours, overseas productions and licensed amateur productions, with a revenue flow going on for many years. Hamilton is primed to be the next mega hit.
Investing in several shows can create a more diversified portfolio, almost like a mutual fund of stocks, where losses on some are offset by gains on others. As of 2016, Carl has produced or invested in 70 shows; 46 of them or 66% have returned a profit. (Documentation can be provided.)
Broadway Investing will provide you with the basic tools helpful in understanding the risks and benefits of investing in general in Broadway shows. You will need to consult your own financial advisor for advice on specific shows.