Businessweek Extra- Charlotte St. Martin

maybe later this year Broadway would get back. People would be back on stage, people would be back in the audiences.

It's not gonna happen. We're not going to see Broadway until at the earliest, and we don't even know what it's going to look like that We've been watching everything from a medical and scientific way, and our the people we're working with and that we've hired have said we're cautiously optimistic about after the first of the year, but for now, there's just no way we can accomplish your goal, which is to make sure that the cast, the crew

and the audience are all safe. So we won't be back until they can be and so talk to us about the the economics of this, Charlotte, because I mean, obviously there are economic considerations, and you talked with us about this the last time you're with us. Their economic considerations on a socially distanced performance that makes it virtually impossible,

and you did a nice job of explaining that. But the economic implications of no Broadway are are massive, they really are, and not just for Broadway, but for all of the businesses that depend on Broadway. We either hire or are responsible for nine thousand jobs. That's the local restaurants, that's the retail stores in the area, that's the hotels, it's the museums and the vicinity, the parking garages, and they don't go back to work until Broadway goes back

to work. So, uh, it's not just Broadway that's hurting,

it's everybody that depends on Broadway. Yeah, I am curious some of the questions, you know, the conversations you guys are having, because it's you know, this comes in a week where we did talk to you know, someone who manages a family owned hotel down in downtown New York, and you know what they're doing, and I think Jason, they said something like twenty or thirty pc capacity, you know, and how they're doing things differently, and it is a

very different experience in terms of shoes being cleaned and everything sanitized. There is there is just no way to do Broadway physically or financially right on a smaller scale of not really making the goal always filling as many

seats as possible. That's correct. The We are a heavy, heavily unionized business and we have the best theatrical employees in the world, but they're also the most expensive, and the costs of Broadway continue to skyrocket because the world expects us to deliver the best of everything, the best sets, the best digital technology, as well as the best actors, and it's it's an expensive business to run the The history has shown that in the best years, one out

of four shows recoups on its investment, and for the long run it's one out of five shows recoup on their investments. So, uh, significantly reduced audience just doesn't work. If if we open and have audiences of or less, Broadway won't work. So we have to make sure that when we open we have ticket sales to help keep the shows open, because it would be a disaster to have the shows open and then have to close three

weeks later. Right, So, Charlotte, I wonder, because I know you're talking to producers and playwrights and all the folks who are on the creative side as well. I mean, what does this do for shows that were, you know, maybe not quite ready to go, but we're teed up to open in the second half of the year, or maybe some shows that that we're scheduled to open at the beginning of next year. Does everything get pushed? How

many things just don't happen? What's your sense of how this sort of ripples through what we see when hopefully we are able to return to Broadway early next year. Well, I mean, fortunately, um, we have only had two shows that were too open right after we closed Broadway on March twelve, and one long running show, uh decide not to come back and that was frozen. And then there were the two that aren't going to be performing. But that leaves about thirty five shows that could be coming

back when we reopen. And what happens is if they all come back, there won't be enough theaters for the shows that we're coming in because many of the shows on Broadway are what you call limited runs. They say, we're going to be running for twelve weeks or sixteen weeks. And if those shows do in fact come back, and we hope they do, then everything that was scheduled for January or the spring will be pushed back a bit. And we sure hope that all of those shows get

to come back. Those people work four to six years, sometimes more to bring their show to Broadway, so we want them to have their day. I have to say I was kind of looking forward to it. I think it was going to be a limited run. Sara Disca Parker and Matthew Broderick. Right, they were just about to open, weren't they. They were, but they are scheduled to come back in the spring. Okay, that's good to hear local residents making good on their profits. Right, Yeah, exactly what happens?

You know, I love you coming on because you do explain kind of the economics, um, and you know how Broadway works. What happens to all of those workers. You say it's heavily unionized. Do they have they been getting payments of some sort or are they getting money from the government? Like, how does it work? What happens to

those workers. Well, when we shuddered, we paid the workers for two and a half weeks, and then healthcare was covered for longer than that, and many of the unions are getting healthcare coverage still, and many are getting unemployment insurance. But there's no question everyone on Broadway, producers, the people that work in the producer's office, the people that work

in theaters, everyone is UH is experiencing difficulty. I mean most people think Broadway wow big business, big big corporations. Broadway is made up of hundreds of small little businesses that put everything they have to bring their show to Broadway. I mean, yes, you have Disney and a couple of the big shows that big companies that bring their shows to Broadway, but most are small, entrepreneurial businesses and they're all suffering as well as the actors and stage hands

and designers. There's nothing good about this shutdown. And Charlotte, you know, one of the things we talked about the last time you were with us was you know, obviously you have UH a window into this through the touring companies as well. I mean, this is a national epidemic and we're seeing it really flare up in a lot of different places. I know, I believe if I remember, you hail from Dallas, so you understand all different parts of the of the country. How is the touring business

looking amid all of this? Is it completely shut down as well? Are you seeing any movement there? Broadway tours are in two hundred and forty two cities around our country and they're all shuttered. The one slight glimmer of hope is many of the other markets where the Broadway shows two or two we're not as heavily hit by the virus. So there is some thought that some some of the cities can open up before the end of the year. And most of our cities are not as

dependent on tourism as New York City is. They have subscribers, and subscribers are very loyal to their theater. I mean, I didn't miss a show at the Dallas Summer Musicals for as long as I could remember, because that's where I learned to love Broadway, and that's that's the way people are in many of the markets across the country. So hopefully we will get some of those people back

to work before the end of the year. Do you see it as it's not until we get a vaccine or at least treatment modalities that can treat people who ultimately get the virus to keep you know, so that they they may get the virus, but they and take

something that mitigates the symptoms and the outcomes. Is that is that what will ultimately open up Broadway Charlotte, Well, we do not believe that we have to have the vaccine to open It will be great to have it, but the medical professionals that we're working with say that many other protocols that are coming close to being real

would allow us to come back. Certainly, the most critical thing for the cast and crew is the instant testing because there is no way that these performers can and stage hands and the people that work backstage can come back and we not be assured every single day that they're healthy. Because if you've never been in backstage of a Broadway theater, these are historic buildings that are spectacular, but they're not the biggest backstage areas you've ever seen.

So uh, we have to have the testing that is reliable, and we're getting good indications that those will be available

to us. Plus, there are protocols being developed all around the world that we're obviously watching and paying attention to at theaters of Global Community, and Broadway travels around the world, and the world travels to Broadway, so we're all sharing information, and our medical experts are telling us that, uh, they have cautious optimism that we can come back after the first of the year, not telling us exactly what, but after the first and uh, and we're hoping for that

to be the case. As we all know, we find out new things about this virus. Seems like every week. Sometimes it's positive and sometimes it's not, so we're very dependent on the good news. Yeah, as you're as you're talking about backstage, and I'm thinking about, uh, that opening scene of of the movie Birdman Charlotte where they're sort of going through all those narrow little halls and he's squeezing past everybody. You're right, I mean, it's just one

of these things. And we talk about sports in the same way, sort of the intimacy of it, and that's why we love it in many ways. I mean, I guess as you started out this conversation by talking about Charlotte, I wanted to ask you about New York City because we've been having so many conversations Carol and I have with so many guests about how the city may change

on on the other side of this. And given that Broadway is so critical and as you say, so interconnected with that whole environment and so many different industries and little it's a little mini economy more than a mini economy, and economy into into itself unto itself, how do you think New York changes on the other side of this just only got about a minute left, sure, I mean, I do think it would be unrealistic of us to assume that Broadway and that New York City comes back

full speed. I think we're anticipating that we will have to build up the tourism and the attendance at all things New York City. But we know that there's an enormous amount of demand for people to come back to New York and the longer we're closed, the more demand there will be. That was the president of the Broadway League, Charlotte st. Martin, and Jason. I'm not surprised. I remember our earlier conversation a month or so ago with her, and she was not hopeful, I mean her whole point.

But how do you put all of these people in a Broadway theater. How do you keep them safe? How do you keep the people, the performers on the stage safe. I mean, it's really really difficult, and it's also a financial model that you really need full theaters for it to work. Well, that's exactly what I was gonna say. This is a health problem, but also an economic problem, as everything is with the virus and the response, and

certainly that is coming to hear one Broadway. You've been listening to Bloomberg Business Week Extra, because sure to tune into Bloomberg Business Week Were you Live? Monday through Friday at g PM, Wall Street Time, Pom Bloomberg Radio. I'm Carol Masser and I'm Jason Kelly. This is Bloomberg