Do actors from ‘Hamilton’ deserve to be paid royalties?
NEW YORK — Alexander Hamilton might have survived on the $10 bill, but the news here that the original “Hamilton” cast is to get a piece of the currency generated by the hit Broadway show sent some shock waves through the commercial theater industry.
Among the more salient questions: Is “Hamilton” a bizarre exception, or is every original cast of a new musical now going to bargain for profit-sharing should the show become a megahit?
Actors, like dancers, traditionally have been salaried employees operating, in the case of Broadway, under a negotiated collective bargaining agreement between the Actors’ Equity Association, a trade union, and the Broadway League, an organization of employing producers. That so-called production contract specifies minimum salaries (and other working conditions) for ensemble members and principals; compensation that does not vary according to the financial success or failure of any given show.
The contract applied to the “Hamilton” actors, which explains why the union of actors and stage managers was not publicly at the side of the “Hamilton” actors when they pressed for a cut of a brand that could well take in more than $1 billion at the box office before it is done, worldwide. (The show opens in Chicago in September.) Actually, that’s a conservative estimate of the potential global gross. “Wicked” already hit that milestone. For “Hamilton” I’d say $2 billion is a distinct possibility. On Broadway alone the show now is clearing $1 million per week.
The union, though, did cheer the deal, after it was done. How could it not?
For the actors won. Or, more accurately, some of the actors won: those who were involved in the original workshop and first full production at the New York Public Theatre not the replacement cast members nor, presumably, those who join the show for its Chicago production. The New York Times first reported the existence of a peacemaking, preTony Awards deal, but not much of the details — and for good reason, given the agendas on both sides of the table.
But insiders say that the profitsharing deal is modest and coming out of the producers’ slice of the “Hamilton” pie — as distinct from, say, the author-composerstar Lin-Manuel Miranda’s share of the profits, which The Hollywood Reporter has reported runs to at least 7 percent of the box office take and is probably now at least 10 percent, as the show likely has recouped its initial $12.5 million cost. Miranda, clearly, has become a very rich man. And, given that he wrote, composed, promoted and stars in what surely is one of the most successful shows of the last century, fair enough. Who could possibly argue otherwise?
The issues here are complicated and in some ways pit the various categories of theatrical artist against one another.
The argument against the actors getting a share of the profits generally is expressed as some version of the theory that returns on investments should go to those who risk their capital.
In the case of Broadway, that risk is very high. Most shows do not return any of their original investment, and only a very select club has actually generated massive profits. What has changed is that the members of that club, thanks to the benefits of sophisticated yield management tools and global branding advancements, now generate more money than ever. And the biggest hits can now play for decades, as with “Wicked” and “The Lion King.”
Of course, as in Hollywood, predicting which shows will become the next hit is about as easy as, in my business, predicting which stories will get the most clicks. You can follow some guidelines — celebrities help, pre-awareness helps, controversy helps — but if a formula existed, everyone would copy it. Hits are usually a surprise. Sure things often miss. Experience generally