Business of Broadway!

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Option definition

After the producer has determined the owner of the copyright, he must acquire an option to produce the work in a commercial production. An option gives the producer permission to produce the work in a specified manner (the scope) in a specific place (the territory) for a specific period of time (the term). For example, a producer may purchase an option for a Broadway production (scope) in New York City (territory) for one year (term). An option is almost always exclusive, meaning that no other producer will be given the right to produce that show during the period of the option. A producer must produce the work during the specified time or surrender the option.

Define Overcall

Although an investor is only responsible for the amount of his investment as specified in the partnership documents, a producer may ask an investor for additional money — an overcall or priority loan— in certain circumstances. If the limited partnership agreement includes an overcall provision, a producer may for additional funds up to the level specified in the documents (usually 10 percent of the total investment). The use of overcall has declined in recent years, as investors generally do not like to give money to a production beyond their initial investment.

End stage

An End stage is the same as the Thrust stage but in this case the audience is located only on the front of the stage and doesn't extend around it. "Backstage" is behind the background wall. There is no real wing space to the sides, although there may be entrances there. An example of a modern end is a music hall, where the background walls surround the playing space on three sides. Like a thrust stage, scenery primarily background.

Copyright definition

As defined by the United States Copyright Office, a copyright is "a form of protection provided by the laws of the United States to the authors of 'original works of authorship,' including the literary, dramatic, music, artistic, and certain other intellectual works.

Funding and decision making (slides)

FUNDING & DECISION MAKING- The producer will raise the necessary funds to pay for the mounting and operation of the event from INVESTORS. Decision make by The Producer.

Funding (Aldo's Slides)

Funding - NOUN: A supply of money...or money that is immediately available. VERB: to allocate or provide funds for...PAY for something. 1 : PURPOSE: To obtain requisite funds to secure the proper production and presentation of your project- A Budget is required a. To fund the Production b. To fund the production Plan c. To fund early development- front money or seed money 2 : SOURCES- PLACES TO GET THESE FUNDS a. Private Grants-Donors- Not for Profit b. Sponsorship- Difficult and rare c. Investor 3: Process of fund raising a. Formation of entity to collect funds b. Identifying Investors- who and how c. Documents to use for purpose d. Collection and allocation of ownership and share of profits.

For-profit commercial organization/structure (slides)

Generally organized as a Limited Partnership, Limited Liability Company, Developmental Partnership, Corporation, Joint Venture and run by a General Partner, Managing Member, CEO- The Producer

Royalty Pool Breakdown (Aldo's Slides)

I.- Royalty breakdown (customary estimates)- royalties are calculated on the Net Adjusted Weekly Box Office receipts. 1. Author - 6% - (Book, Music, Lyrics)- Union- The Writer's guild 2. Director - 2% -( Minimum is lower)- SSD&C 3. Choreographer - 1.5% - SSD&C 4. Set Designer - .75% -USA 5. Lighting - .75% -USA 6. Costume - .75% -USA 7. Sound - .50% -USA 8. Orchestrator - .50% -AFM 9. Arranger - .50% -AFM 10. Underlying - 1.5% ( book, film etc) 11. Executive Producer 1.5% 11. Producer - 3.0 % Total - 19.25% of NAGBOR, Company Share (on Tour).

Define Priority Loan

If the limited partnership agreement does not contain an overcall provision, the general partners may ask for a priority loan if the production requires additional funds in excess of capitalization (Priority loans) are not used to capitalize a production). A priority loan may be obtained from a general partner, a limited partner, a theater owner, or any person willing to lend money to the production. In return for the loan, the lender may be granted some of the general partner's' percentage of the net profits. Priority loans are paid back before the investors begin to receive payments.

Does the producer pay some royalties regardless of whatever structure comes to govern the production?

In addition, most royalty arrangements require that the producer pay a minimum amount to royalty participants. The producer must may the minimum amount regardless of the amount determined by the royalty pool calculation, and this minimum must be paid every week, whether or not the production breaks even. The minimum is calculated by assigning a monetary value to a royalty pool point. For example, if the minimum were determined at 220 per point, the author with six points would receive (220 x 6) as a minimum each week. Answer: Yes! There is! There is a minimum that is multiplied against the number you have in the royalty pool.

Legal structure of non-for-profit (slides)

LEGAL STRUCTURE- Organized as a Corporation run by a Board Of Directors or Trustees who hire an Executive Director and Creative Director who are accountable to BOD and must carry out the MISSION of the NFP.

LLC (textbook)

Like limited partnerships, limited liability companies consist of two parties: managing members and investing members. In comparison to the exposure faced by the general partners of a limited partnership, limited liability companies have the advantage of giving the managing members (who are usually the producers) limited liability from losses. Like limited partners, investing members are only responsible for the amount of money the put into a production. Unlike a corporation, which is usually formed for broad business purposes that may include multiple projects or productions, LLCS are often formed for a specific project of production, and are frequently dissolved when the project ends.

Main sources of funds for a non-for-profit theater (slides)

MAIN SOURCES OF FUNDS- Ticket Sales, Donations, fundraising activities, Galas, Grants, Sponsors, Licensing of their work (IP)

Define Joint Venture

Most producers form business entities to produce commercially. When two or more producers agree to produce a property together for profit, they form a joint venture. Each producer has unlimited liability in the joint venture, which means that there is no limit to the amount of losses she can incur as part of the joint venture. Producers can restrict the amount of their liability to the assets of the joint venture by incorporating themselves (creating a separate corporate entity controlled by the producers) and then creating a joint venture between the corporations, thus separating the assets of the joint venture from the rest of the partners' assets.

Question: What is included in an Off-Broadway rights package?

Off-Broadway rights packages cover the Off-Broadway production, as well as the rights to produce the work on tour in the United Kingdom. A producer may want to option the first-class rights as well if she believes that the production may transfer from Off-Broadway to a Broadway theater. In all option packages, rights to create a cast album or merchandise (known as "commercial use rights") may also be included. Same thing!

Define Proscenium Stage

Proscenium Stage: A proscenium - it can be said that it's a window that frames the play taking place on stage. This type of stage gives everyone in the audience a good view because the performers need only focus on the direction rather than continually moving around the stage to give a good view from all sides. A proscenium theater also simplifies the hiding and obscuring of object's from the audience's view, sets, performers not currently performing, and theater technology. Anything that is not meant to be seen is simply placed "outside" of the proscenium arch, either in the wings or in the fly space above the stage.

Question: What are the different kinds of stages?

Proscenium, thrust, arena, flexible, profile, and end stage.

Define Sole Proprietorship

Sole proprietorship is the least complicated type of producing entity. A sole proprietorship is the producer herself, who finances the production with her own money. A sole proprietorship is not a business entity; not only is the sole proprietor responsible for obtaining the funds to capitalize the production, but she is also personally liable (responsible) for all financial losses, debts, and even judgements resulting from lawsuits. Because of this unlimited personal liability, sole proprietorships are quite rare.

Tax status of non-for-profit theater (slides)

TAX EXEMPT- The NFP is tax exempt and cannot be organized for a profit making purpose. HOWEVER and Profits made (essential) must be put back into the organization.

What are different kinds of risk? (slides)

TIME RISK- that you will finish ( deals, marketing, staffing etc) early, late, never... FINANCIAL RISKS: 1.Investment risk 2. Deal risk- 3. Budget risk REPUTATION RISK:Doing the wrong show. Doing the right show, in the wrong way. Having the right show and the right team and loosing control and results in non optimization of the opportunity. LOST OPPORTUNITY- work on one thing and not be able to work on another. Risk of choices made.

What do you get when you acquire intellectual property? (slides)

The rights, vesting, the territory, compensation for use

Can you please, pretty please, walk me through everything to do with royalty pools?

WE MUST START AT THE START! WHAT ARE ROYALTIES, LET ALONE ROYALTIES IN A POOL? In the course of developing the production, the producer agrees to pay royalties to certain artistic personnel, to any originating nonprofit theaters, and to the producer himself. Royalties are payments made by the producer for the use of a specific work; these royalty payments are due to the recipients for each performance of that work. SOME royalties are calculated at a fixed rate, meaning that the producer will pay the same amount to the royalty recipient every week; some designers, as well as vocal and dance arrangers, may receive fixed-rate royalties. WHILE OTHER royalties, such as those negotiated for writers, directors, and choreographers, are just calculated as a percentage of the net adjusted gross (most designers on Broadway take part in these percentage royalties.) AFTER the production opens, these royalty arrangements are put into effect and are considered part of the weekly operating costs. HERE's the thing though... when a production is selling well, a producer has enough money to pay all royalties with enough left over to distribute payments to investors. However, if such a production is not selling many tickets, a PROBLEM arises. THE PROBLEM is... a situation can develop in which royalty recipients are receiving all the money available after the breakeven point, with all the investors receiving nothing . LET ME SHOW YOU WHAT I MEAN. For example, assume an Off-Broadway production has weekly running costs of 90,000, and a royalty arrangement that gives 12 percent of the net adjusted gross to creative personnel and others (6 percent to the author, 2 percent to the director, 2 percent to the originating theater, and 2 percent to the producers). IF the net adjusted gross for the production is 100,000 for the week, the royalty payout would be: 100,000 (net adjusted gross) - 90,000 (weekly running costs) = 10,000 (profit) - 6,000 (6 percent of net adjusted gross to author) - 2,000 (2 percent of net adjusted gross to originating theater) - 2,000 (2 percent of nets adjusted gross to producers) = $-2,000 DO YOU SEE THE ISSUE? Not only does the royalty arrangement now allow for investors to be paid back, but it leaves the production with a weekly operating deficit of 2,000, which must be addressed by the cash reserve. HERE'S WHAT WE DID TO FIX THIS! In order to address this problem, producers and royalty participants developed the THE ROYALTY POOL. THE ROYALTY POOL allows the profit to be split between the royalty participants and investors. This split is determined on a case-by-case basis, typically through negotiation with the author. (Off-Broadway, the agreement with SSDC typically determines the split, allotting 60 percent to the investors, and 40 percent to the royalty participants. AFTER the profit is split, the royalty participants receive a percentage of the amount designated for them in proportion to their percentage of the royalties as a whole. BRINGING IT FULL CIRCLE to THE EXAMPLE ABOVE... the author receives half (6 percent, called six "points") of the total royalty percentage (12 percent), so he would receive half of the amount designated for royalty participants (he has 6/12 of the participant pool). SIMILARLY, the director, originating theater, and producers would split the remaining amount equally because each was entitled to 2 percent (2 points), which would be converted to 2/12 of the participant pool. Using the above, the math would now look like: 100,000 (net adjusted gross) - 90,000 (weekly running costs) = 10,000 profit - 6,000 (60 percent of profit to investors) - 2,000 (6/12 of profit to author) - 66.66 (2/12 of profit to director) - 666.67 (2/12 of profit to originating theater) - 666.67 (2/12 of profit to producers) = 0 dollars! THE PRODUCTION HAS PAID BACK SOME INVESTMENT, AND THE PRODUCTION IS NO LONGER RUNNING ON A DEFICIT! Answer: All of the above!

Work for hire

Work for hire: If an author creates a work as part of his duties to an employee, or if an author agrees to grant copyright to an employer as part of his contract for producing the work, that work is considered work made for hire. If a work is made for hire, the employer, not the author, holds the copyright. Most films are created as works made for hire; the studios or producers generally hold the copyright to the film, not the screenwriter or the director.

What are the components of the rights? (slides)

a. Exclusivity of use and purpose b. Term of that exclusivity-specified period of time to present and use. c. Right to extend option to present the work. d. underlying rights- Novel, Movie? e. Payment of Option- Advance. f. Residual rights- sharing with author on future productions-

Commercial definition of Broadway (slides)

defined as-40 specific theater of 500 seats or more located between 34th (41st) street and 56th street and fifth and 9th avenues . To be TONY eligible ( Highest Honor in the Theatre) a production must play one of these Theaters and meet other requirements. (not for profits on Broadway- Lincoln Center, Roundabout Theatre, Manhattan Theatre Club)

Who are all the different people that collaborate in the business of Broadway?

1. Actors- Equity a. Actors, Stage Managers, Asst. Stage Managers 2. Company Manager- ATPAM 3. Production Manager- IA (Tech Director- IA) 4. Show Crew- Pink Contract - IATSE a. Departments as house crew-Carpentry, Props, Electrics, Wardrobe 5. Musical Director- AFM 6. Orchestra contractor- local 802 7. Director/Choreographer- SSD& 8. Designers- United Scenic Artists ( set, Costumes, Lighting, Sound, Affects) 9. Music Arranger 10. Orchestrator 11. Dance Arrangements, Vocal Arrangements 12. Author

Who are all the people involved creatively?/Structure of the creative team - slides

A PLAY AUTHOR- The writer of the play THE MUSICAL AUTHOR- Book, Music, Lyrics DIRECTOR and his team( assistants) CHOREOGRAPHER- and assistants SCENIC DESIGNER-and assistants COSTUME DESIGNER- and assistants LIGHTING DESIGNER- and assistants SOUND DESIGNER- and assistants PROJECTIONS DESIGNER-and assistants SPECIAL AFFECTS DESIGNER- ETC ORCHESTRATOR ARRANGER MUCIC SUPERVIOR & MUSIC DIRECTOR

Limited partnership (textbook)

A limited partnership consists of general partners and limited partners. In the customary theatrical model for a limited partnership, the limited partners are investors who usually put up 100 percent of the capital and receive some percentage of the profits after recoupment (when the investment has been paid back). Additionally, they are only liable (responsible) for the amount of money they invest, and they have no say in the management of the partnership The general partners manage the partnership, are personally liable or responsible for all losses over and above the amount of the capital investment of the limited partners, and also receive a percentage of the profits after recoupment. To avoid unlimited personal liability, the general partners or producers may incorporate, so that their corporate status protects them.

When programming or presenting a season, what the nonprofit programmer or artistic director keep in mind?

As an example, let's examine Playhouse Square Center's mission to present and produce a wide variety of quality performing arts, advance the arts in education, and create a theater district that is a superior location for entertainment, business, and housing, thereby strengthening the economic vitality of the region." The mission or goal of the nonprofit organization must have a public purpose. In the case of nonprofit presenters and producers, the artistic process must engage the community. "The mission and of Roundabout Theatre Company is to team great theatrical works with the industry's finest artists in an effort to reenergize classic plays and musicals." Harold Wolpert: "When you select your season of plays, you must have a balance between what an artistic director wants to do and what a theater can afford to do." Answer: To serve its mission!

Budgeting of non-for-profit theater (slides)

BUDGETING- Budget on a calendar year but season is generally fall between July to June of next year ( Theatre season). ( present works in a "season"- presenting a show for a defined period of time an dpresnet a select number in a year.

Define Front Money

Because of the mini-max provision, a producer may need to raise front money to cover expenses that are incurred before the limited partnership becomes active. Front money pay for expenses related to acquiring the rights to the property, legal fees, and other initial administrative expenses that need to be paid even if the production does not come to fruition. No more than 4 investors may contribute funds as front money; if more than four investors are needed, then another limited partnership or LLC must be formed solely to provide front money to launch the production. As compensation for this high-risk investment, investors providing front money are usually given a percentage of the general partners' profits.

Why must the nonprofit organization's artistic programming support its mission?

Because that's what it means to be a nonprofit! Otherwise, they'll lose their status!

Corporations (textbook definition)

As in nonprofit corporations, a board of directors also governs commercial corporations, which is the structure used by a few large producing organizations. For example, Disney Theatrical Productions, a division of the Walt Disney company, produces and books it own productions and licenses its shows to third-party producing partners around the globe. The Walt Disney Company has a board of directors that governs the corporation. Governance may include hiring and firing the CEO as well as others officers, and reviewing financial reports.

What are the steps done in developing sources of intellectual property?

Define the property wishing to be acquired b. Acquire property- define what level of completion property has achieved. c. establish steps for further development required. d. A "retreat"- a private and concentrated meeting between writers, director, Producer and possible other creative team members- to align on project to be produced- share ideas- early collaboration. e. Workshop/ Showcase/29hr Reading- To test material- rehearsal and presentation-investors/partners? f. Regional Theatre presentation- pre-Broadway try-out? Enhancement? g. Pre-Broadway out of town try out? h. New York/London-other first class city opening.

Who are all the people involved business-wise? (slides)

Producer 2. Legal Counsel 3. Theater Owners 4. Partners / Investors 5. General Manager 6. Press Agent 7. Advertising Agency 8 Marketing Agency 9. Production Management 10. Booking Agent 11. Promoting Organizations 12. Attorney General Office

From where may productions be transferred?

Productions are usually transferred from nonprofit theaters or from commercial theaters in other cities (often London).

Parts of a Theater (Aldo's Slides)

The Building- a building for the housing of dramatic presentations Sections of the Theatre: a. The Stage-Up stage, Down Stage, Stage right, Stage Left, Apron, Wings, The Fly floor, The Grid b. Back Stage-Dressing rooms, Managers office, Stage doorman station, Crew rooms, Green room c. Front of house- Orchestra Pit, Orchestra seating area,Mezzanine and Balcony ( if any) seating area, d. Lobby areas- restrooms, Bar and concessions and souvenirs stands e. Outer Lobby- Access to Box Office windows. f. The Marquee- Exterior signage

Profile theater

This type of theater is usually used in existing or "found" space theaters, for example converted from the original theater usage. The audience is often placed on risers to either side of the playing space with little or no audience on either side of the "stage." Actors are usually staged in profile to the audience. It is often the most workable option for long, narrow spaces. Scenically, it is most like the arena stage; some background staging possible at ends, which are essentially sides. A non-theatrical form of the profile stage is a basketball court, if no one is seated behind the hoops.

Profits (slides)

100% of all operating profits first go to pay back the investors. After "recoupment" of total investment, future profits are shared 50% to Producer, 50% to Investors.

Define Thrust Theater Stage

A thrust theater stage is known by its arrangement which consists of being surrounded by audience on three sides. The fourth side serves as the background. Often times, the playing area is of square or rectangular shape, usually raked and surrounded by raised seating.

What are the different sections of a theater?

Front of house, house, and backstage or offstage.

If a nonprofit organization earns a profit, what must it do?

If the nonprofit organization earns a profit, it must invest it back into the organization to serve its purpose! Answer: If the nonprofit organization earns a profit, it must invest it back into the organization to serve its purpose!

Question: What is NAGBOR?

NAGBOR is the gross box office receipts in a given week, as adjusted for certain deductions. Such deductions may include, but are not limited to, city and/or state taxes, credit card charges, and group sales discounts. Answer: NAGBOR is what John Breglio calls simply "the net gross" as opposed to the "gross gross."

Who are the theater staff? (Aldo's Slides)

Theatre Staff- Broadway houses are completely Unionized- Pay based on 8 shows per week over 6 day work week over a 7 day period. House Manager- ATPAM Treasurers- Box Office - Local 753 Ushers, Ticket takers and doormen- B-184 Stagehands- Local 1 Electrics, Carpentry, Fly, Props- 4 departments and no crossing of line Musicians- Local 802- was a minimum at one time no matter what scored for Building Engineer- local 30 Porters, cleaners and matron-Local 54 Stagehands crew- Additional Crew "showcall" DoorMan- Stage door security.

Question: Are there exceptions to the magical, magical nature of the pool?

There IS an exception, HOWEVER, to the rule. There IS an exception. When the net adjusted gross of the production rises above a certain level, the royalty pool calculation will actually result in bigger royalties than paying the royalty percentage off the net adjusted gross. AS AN EXAMPLE, we can examine the royalty pool payout for the previous production using a net adjusted gross of 180,000. 180,000 (net adjusted gross) - 90,000 weekly running costs = 90,000 profit- 54,000 (60 percent of profits to investors) - 18,000 (6/23 of profit to author) - 6,000 (2/12 of profit to director (16.7 percent of royalty amount) - 6,000 (2/12 of profit to originating theater) - 6,000 (2/12 of profit to producers) = 0. IF, and ONLY IF, the producers had made the royalty payments as a percentage of the net adjusted gross, the payout would be: 180,000 (net adjusted gross) - 90,000 weekly running costs = 90,000 profit- 10,800 (6 percent of net adjusted gross to author) - 3,600 (2 percent of the net adjusted gross to director) - 3,600 (2 percent or net adjusted gross to originating theater) - 3,600 (2 percent of net adjusted gross to producers) = 68,400 to distribute to the investors. Answer: Yes, yes there are! When the net adjusted gross of the production rises above a certain level, the royalty pool calculation will actually result in bigger royalties than paying the royalty percentage off the net adjusted gross.

What are investors?

They put their money into a show, and expect to get their original money and then some back in return!

What is risk? (slides)

To take or run a risk is to expose oneself to this possibility

The Theater as an enterprise

● TICKETS AND CONTROLS: All ticket sales are controlled by theatre . In essence the theatre is a partner in many ways and controls a great deal of the labor, ticketing as part of the Theatre License Agreement a. Box office receipts ( Sales) remain with the theatre and funds are paid out to show at the conclusion of every performance week- Called a "Settlement" b. Theatre control and governs all activity in the theater. No use of theatre can be allowed without owner approval. c. Theatre controls all house staff and production must seek approvals to use them within agreement. d. License agreement ( theatre rental- spells out rights and obligations of each party e. Theatre must approve all theatre marketing ideas and prices. ● THEATRE LICENSE AGREEMENT: a. RENT- weekly approx. $25,000 plus a percentage of the box office over break even or from the first dollar b. PROCESSING FEES- The theatre processes labor and charge back to the show...add approximate; 18 % c. Credit Card processing- 4-5%- keeps the difference d. A restoration fee- $2-$3 per ticket added on top of ticket price e. Computer use charge

What is the goal of a for-profit performing arts organization?

"A commercial production primary intent is to return a profit to its investors. It's not just to put a show on that people will like. It's to put a show on that actually will make money back for the people that put in. "The goals of the commercial venture are to first pay back its investors, then make a profit, and then make something with artistic integrity." "The commercial theater's main purpose is to make money through the exploitation of a single property (or a play or a musical). The production is support and funded by investors, and investors are generally looking for a return on their investment. For instance, if a play gets awful reviews on Broadway and tickets are not selling, the investors will generally close the show to cut their losses. However, if it is a hit, the show will run for as long as possible in order to return the highest profit to the investors."

Commercial definition of off Broadway

100 to 499 seats- Eligible for Drama desk, Obie, outer critics and as commercial as Broadway- Also has not for profits producing in it ( The Public Theatre ( Funk, Jelly's , Chorus Line, Elaine Stritch..., Carolina change, Second stage (Avenue Q)

Define enhancement deal. How is enhancement money used? When a production is enhanced at a nonprofit theater, what responsibilities does the commercial producer have? When a production is enhanced at a nonprofit theater, what responsibilities does the nonprofit theater have?

A producer can also enter into an agreement with a non profit theater to produce a production as part of the nonprofit theater's season. The producer licenses the necessary rights (gives permission) to produce the production to the nonprofit theater and contributes money to enhance the production; these additional funds allow the nonprofit theater to create a more elaborate physical production or hire more actors and musicians as the production requires it. This contribution by the producer is known as enhancement money. When a producer negotiates an enhancement deal with a nonprofit theater, the theater agrees to produce the property with the addition of the enhancement money in exchange for royalties and/or net profits from future commercial productions; the nonprofit theater may also receive the right to invest in or become of the producers of the commercial production. Typically, an enhancement deal includes a royalty of 1 - 2 percent of the net adjusted gross receipts and will also include a percentage of any profits. The percentage of profit received by the nonprofit organization may range from .5 to 10 percent. In addition to mounting the production, the nonprofit theater and the commercial producers may work closely together to manage the marketing and press campaign for the nonprofit production. However, the nonprofit theater is in complete control of the production itself and makes all artistic and production decisions, including decisions about the involvement of the commercial producers in the enhanced production. Example: avenue q! Lots of stuff! Answer: Commercial production gives money to help out!

Define Limited Partnership/Limited Partner

After forming a joint venture, the producers may decide to form a limited partnership in order to raise the funding needed for the production. In a limited partnership, investors are known as limited partners. The limited partners contribute 100 percent of the money needed for the production but are "passive investors;" limited partners do not have any say in the business operations. The producers are the general partners and are not required to contribute money, but have total control over the activities of the partnership (General partners, however, may also become limited partners and contribute funds).

Question: What is the budgeting process like for a commercial production budget?

After the general manager is hired by the producer, he gathers all the available information about the production, including the script, the director's concept for the production, and any preliminary set, lighting, and design costume concepts. For any union personnel that will be hired, the general manager must obtain the current collective bargaining agreement for the applicable union to get the most accurate salary and benefit costs. The general manager uses this information to create the production budget, which is then shown to the producers for approval. The producers give feedback on the budget, and the general manager then makes all necessary adjustments and corrections. As contracts are signed and designs are finalized, the general manager then incorporates this info into the production budget and revises it. The production budget is generally finalized by the first week of rehearsal, with only minor adjustments after that point. Answer: By the general manager!

Licenses definition

After the option is exercised, the production may then be licensed for other producers, such as tour producers, schools, and community theaters. Licenses are typically nonexclusive (or exclusive only by region), and the producer who acquires the license receives no participation in future productions of the show. Licenses are typically available for a fee and contain more specific provisions than options; licenses may detail performance dates, location, ticket prices, and number of seats in the theater.

Question: What type of budgeting system should financial managers use, if possible, and why is it preferred?

All budget items should be estimated using zero-based budgeting, if possible. Zero-based budgeting requires that the financial manager calculate any estimated figures from scratch, with minium reliance on prior-year budget entries. Zero-based budgeting is preferred because it allows the organization to create the most accurate budgeting picture for each project. Answer: Starting from scratch.

Question: How are production entities regulated?

All commercial producing entities are subject to governmental regulations, which vary depending on the specific type of entity. State laws the protect investment in securities also govern theatrical financing and are known as Blue Sky Laws. Blue sky laws differ from state to state, but typically require the registration of the investment offering in order to prevent fraud. The federal government also regulates some kinds of theatrical financing; the Securities and Exchange Commission requires specific registration documents for limited partnerships and liability companies in order to prevent fraud. Producers should consult with a lawyer when forming any commercial producing entity to ensure that all applicable regulations are followed. Answered: By the law!

Advance royalties

All option payments are an advance against royalties, which means that the payment will be subtracted from any royalties owed to the authors after the production recoups. The APC also specifies the royalty due to the author from the Broadway production. Because the author's contract is usually the first to be negotiated, it is generally considered the starting point for determining the royalty structure for the entire production.

Elements of Time (slides)

Ally or Enemy? When is it which? * Why is time such a critical factor in this art form? On a given day, at a given time, hundreds to thousands of people will assemble in one place see a performance-no pressure here right? * Availability of: Creative Staff Theatre Actors Staff Funding Economic environment Audience

When booking a season, what must the commercial presenter keep in mind?

Although commercial producers and presenters do not have a mission to support, they must also keep the balancing act between artistic process and budget in mind. Commercial producers find products that will make money for their investors. As commercial presenters and producers have a goal of recouping their investment on a show and earning a profit, taking artistic risks is likely not an option. Alison Spiriti of Live Nation: "We construct a season that makes sense aesthetically, as well as financially. Our goal is to increase our subscription base and advance ticket sales, thus mitigating our risk on any deal. There needs to be a mix of blockbuster, midsize, and less expensive ones. Answer: money!

Arena theater

An arena stage is characterized by a central stage surrounded by an audience on all sides. The stage area is also often raised to improve sightlines.

What is the role of a commercial booking and touring organization?

Another way for a producer to earn a profit is to tour a production. A tour is a production that moves from one location to another. If a producer chooses to tour a commercial attraction, he will engage a for-profit booking and touring company, such as On the Road, to create a profitable tour for the play or event. Answer: The booking and touring organization will book the event in theaters throughout the country by working with presenting organizations to present the tour. As both the commercial producer and for profit booking, and touring company are organized to make a profit, their participating principals are allowed to benefit.

What is the role of a commercial producer?

Commercial producers organize the project (known as the property), find investors who put up the money for it, and either manage the project or, most frequently, hire a general manager to manage it.

Question: What kind of budgets do commercial productions use?

Commercial productions generally use two types of budgets for expenses: the production budget and the weekly operating budget. Production budget: The production budget details all of the costs of a production from conception through opening night; it may include one-time expenses that continue after the first performance but are not weekly expenses, such as an advertising campaign that begins a month before opening and is scheduled to run for the first two weeks of performances. The production budget also includes the opening and closing costs, the cash reserve, and bonds and deposits, as described in chapter 4. The weekly operating budget: This budget estimates the expenses, also known as running costs, that will occur on a weekly basis once the show has opened. Running costs include weekly salaries, rent for the theater, and ongoing maintenance expenses. Answer: Commercial productions generally use two types of budgets for expenses: the production budget and the weekly operating budget.

Name the various legal structures under which a for-profit performing arts organization may be formed (textbook)

Cooperation, Limited Partnership, Limited Liability Company (LLC)

Question: Define the following: copyright, work for hire, public domain, license, option, and advance against royalties.

Copyright: As defined by the United States Copyright Office, a copyright is "a form of protection provided by the laws of the United States to the authors of 'original works of authorship,' including the literary, dramatic, music, artistic, and certain other intellectual works. Work for hire: If an author creates a work as part of his duties to an employee, or if an author agrees to grant copyright to an employer as part of his contract for producing the work, that work is considered work made for hire. If a work is made for hire, the employer, not the author, holds the copyright. Most films are created as works made for hire; the studios or producers generally hold the copyright to the film, not the screenwriter or the director. Public domain: If a work is no longer under copyright protection, it is considered to be "in the public domain" and can be exploited by anyone. The plays of William Shakespeare and the poetry of Emily Dickinson are examples of works in the public domain. Generally, works created before 1923 can be considered to be in the public domain, but a producer should always check on a work's copyright status if there is any doubt about copyright protection. Option: After the producer has determined the owner of the copyright, he must acquire an option to produce the work in a commercial production. An option gives the producer permission to produce the work in a specified manner (the scope) in a specific place (the territory) for a specific period of time (the term). For example, a producer may purchase an option for a Broadway production (scope) in New York City (territory) for one year (term). An option is almost always exclusive, meaning that no other producer will be given the right to produce that show during the period of the option. A producer must produce the work during the specified time or surrender the option. Licenses: After the option is exercised, the production may then be licensed for other producers, such as tour producers, schools, and community theaters. Licenses are typically nonexclusive (or exclusive only by region), and the producer who acquires the license receives no participation in future productions of the show. Licenses are typically available for a fee and contain more specific provisions than options; licenses may detail performance dates, location, ticket prices, and number of seats in the theater. Advance above royalties: All option payments are an advance against royalties, which means that the payment will be subtracted from any royalties owed to the authors after the production recoups. The APC also specifies the royalty due to the author from the Broadway production. Because the author's contract is usually the first to be negotiated, it is generally considered the starting point for determining the royalty structure for the entire production. Answer: All of the above!

Mission of commercial theater (slides)

Create a Live Event that will garner much praise and MAKE A PROFIT. Does not need to serve a public purpose and is NOT TAX EXEMPT.

What is the front of the house, and what does the front of house consist of?

Definition: In the performing arts, front of house (FOH) is the part of a performance venue that is open to the public. In theatre and live music venues, it is the auditorium and foyer, as opposed to the stage and backstage areas. In theatre, the front of house manager is responsible for ticket sales, refreshments, and making sure the auditorium is set out properly. Lobby: The lobby is a room in a theatre which is used for public entry to the building from the outside. Ticket counters, coat check, concessions and restrooms are all usually located in, or just off the lobby. Box Office: A place where tickets are sold to the public for admission to a venue. Marquee: Signage stating either the name of the establishment or the play and the artist(s) appearing at that venue. Answer: The front of the house is part of performance venue open to public. Consists of the lobby, box office, and marquee.

What does the backstage area consist of?

Definition: The areas of a theatre that are not part of the house or stage are considered part of backstage. These areas include dressing rooms, green rooms, offstage areas (i.e. wings), cross-overs, fly rails or linesets, dimmer rooms, shops and storage areas. Green room: The lounge backstage. This is the room where actors and other performers wait in when they are not needed onstage or in their dressing rooms. Crossover: A crossover is a hallway, room, or catwalk designed to allow actors in a theater to move from wings on one side of a stage to wings on the other side without being seen by the audience. Sometimes this is built as a part of the theater, sometimes exiting the building is required, and still other times the set includes a false wall to create a temporary crossover. A trap room, orchestra pit, or even the front of house can be used as crossovers. Fly System: A fly system is a system of ropes, counterweights, pulleys, and other such tools designed to allow a technical crew to quickly move set pieces, lights, and microphones on and off stage quickly by "flying" them in from a large opening above the stage known as a fly tower/flyspace. Catwalk: A catwalk is an elevated platform from which many of the technical functions of a theatre, such as lighting and sound, may be manipulated. Dimmer room: The room backstage which contains the dimmer racks which power the lighting rig in the theatre. Often dimmer racks may not be housed in dedicated room, instead they may be in a mechanical room, control booth, or catwalk, or even on the side of the stage as is often the case on Broadway, touring shows, or at corporate events. When the dimmers are stored onstage, this area of the stage is known as the "Dimmer Beach". In the UK it is known as "Dimmer City". Shops and storage areas: Depending on the space available a theatre may have its own storage areas for old scenic and costume elements as well as lighting and sound equipment. The theatre may also include its own lighting, scenic, costume and sound shops. In these shops each element of the show is constructed and prepared for each production. Call board: Literally a backstage bulletin board which contains information about a theatrical production including contact sheets, schedules, rehearsal time changes, etc. Trap room: A large open space under the stage of many large theatres. The trap room allows the stage floor to be leveled, extra electrical equipment to be attached, and most importantly, the placement of trap doors onto the stage (hence the name). It is usually unfinished and often doubles as a storage area. It is often also used as a substitute for a crossover. Answer: Greenroom, crossover, fly system, dimmer room, shops and storage areas, call board, trap room.

The Budget (Aldo's Slides)

Developing and maintaining a Budget- The proper development of a budget with the input of the creative team will not only establish and improve environment for financial gain and participation of investors, it also assures integrity of the process everyone signed on for. 1. General Manager- Engage professional early on in process. 2. Build the budget from the very first day of your planning 3. Establish parameters that you project will live within. 5. The Body count- Using a professional and effective industry budget template on a department by department basis build your budget. a) The Production Budget - line items & elements b) The Operating Budget - line items & elements c) The Pro - Forma d) Controlling & maintaining the budget e) Unions & rules - Economic issues relating to budget-Actor's Equity, AFM, IATSE,SSD&C, USA and more f) Engaging creative personnel g) Deal structures: Creative - fee, advance and royalty, weekly royalty

What is the duration of copyright protection for works created after January 1st, 1978? For joint works or works made for hire created after January 1st, 1978? For works created before January 1st, 1978?

For works created after January 1st, 1978: if a work was created after January 1st, 1978, copyright protection is in effect for the duration of the author's life plus seventy years after his death. For joint works or works made for hire created after January 1st, 1978: In the case of a joint work created by two or more parties, copyright protection lasts seventy years after the death of the last surviving author. For works made for hire, copyright duration is "95 years from publication or 120 years from creation, whichever is shorter." For works created before January 1st, 1978: If a work was created and published before January 1st, 1978: the duration of copyright protection is ninety-five years from the date a work was published with a copyright notice or the date a work was registered with the United States Copyright Office. Answer: Either the duration of the author's life plus 70 years, 70 years after the death of the last surviving author, or 95 years from the copyright notice or the date a work was registered with the United States Copyright Office.

Public domain definition

If a work is no longer under copyright protection, it is considered to be "in the public domain" and can be exploited by anyone. The plays of William Shakespeare and the poetry of Emily Dickinson are examples of works in the public domain. Generally, works created before 1923 can be considered to be in the public domain, but a producer should always check on a work's copyright status if there is any doubt about copyright protection.

Question: What is included in a first-class rights package?

In an option for a Broadway production, a producer typically acquires a package of rights that will go into effect when the option is exercised (the show is produced). She options the Broadway rights themselves, known as the first-class rights, which may also cover a first-class touring production or a production in the United Kingdom (usually London). In addition to the first-class rights, other territories may be included in the rights package, including the right to produce the work in other English-speaking countries like Australia and Canada, or countries in Asia or Europe; rights for these territories require separate payments. And subsidiary rights! Answer: the right for a Broadway production, which may also include touring company rights and rights for a London production.

Define Limited Liability Company

Instead of creating a limited partnership, producers may choose to form a limited liability company. An LLC provides the same limited liability for its investors (called investing members) as a limited partnership, but allows the investing members to materially participate in the business without losing the liability protection. An LLC may have an unlimited number of investing members.

Mission of non-for-profit (slides)

MISSION- The NFP Is defined by the MISSION created by the B.O.D. and must serve a PUBLIC PURPOSE ( activities in a mission can include producing plays, musicals, new writer works, educational opportunities, creating opportunities and training for writer, dircetors, designers and others in the theatre etc.)

How are non-profit goals defined? And what are some examples of nonprofit goals?

Non-profit organizational goals are defined by the mission, which is the public purpose of the organization. Or, phrased differently but similarly, the mission of a non-profit is the guiding principle of the organization. A goal is the desired result that an organization strives to attain. The mission of a non-for-profit organization can encompass a number of goals including: producing or programming performances or series of performances as an ongoing concern; creating educational activity, ranging from professional training to exploration of the the arts; creating programs for local schools, seniors, and patrons; and raising money to support the renovation of existing facilities, construction of a new facility, and ongoing operational support. Each of these goals exist to serve the mission of the nonprofit organization. Answer: Non-profit goals are defined by the mission of the organization, the guiding principle or public purpose of the existence. The goals exist to serve the mission. Such goals can be producing or programming performances or series of performances as an ongoing concern; creating educational activity, ranging from professional training to exploration of the the arts; creating programs for local schools, seniors, and patrons; and raising money to support the renovation of existing facilities, construction of a new facility, and ongoing operational support.

What is a nonprofit presenting organization? And what are some examples?

Non-profit presenting organizations purchase a series of pre-packaged (pre-produced) events (both commercial and nonprofit) to appear before their local communities for a specific run. Events are "purchased" directly or indirectly through a booking agent; the booking agent sells an attraction to a presenter and negotiates the terms of the engagement. Presenters pay the costs needed to present the show, including performance fees, transportation, freight, hotel, etc. Presenters typically do not directly pay any costs associated with the creation of the production (e.g. design fees, scenery construction, rehearsal costs). Such organizations include the Brooklyn Academy of Music in Brooklyn, NY. Playhouse Square Center in Cleveland, Ohio, and the Ruth Eckerd Hall in Clearwater Florida, as well as the Lincoln Center for the Performing Arts. Nonprofit presenting organizations purchase a series of pre-packaged (pre-produced) events to appear before their local communities for a specific run. Events are "purchased" directly or indirectly through a booking agent. Presenters pay the costs needed to present the show, but do not typically pay the costs associated with its creation. Such organizations include the Brooklyn Academy of Music in Brooklyn, NY. Playhouse Square Center in Cleveland, Ohio, and the Ruth Eckerd Hall in Clearwater Florida, as well as the Lincoln Center for the Performing Arts.

What is the legal structure of a nonprofit performing arts organization? (textbook)

Nonprofit organizations are structured as corporations. The corporate status is granted by the state government, and the tax-exempt status is a federal designation, which is approved in turn by the state. As part of their incorporation, nonprofit organizations are governed by a board of directors or trustees, who are usually volunteers and don't receive compensation (although they may). They are tax-exempt organizations structured like organizations and governed by a board of directors.

Question: What kind of budgets do nonprofit organizations use?

Nonprofit organizations, which typically present a season as opposed to a single show, use two different budgets: the annual operating budget, and the capital budget. The Annual Operating Budget: The annual operating budget lists all of the revenue and expenses for the organization for the entire fiscal year, including both programming and administrative expenses. Revenue may include income from ticket sales, as well as donations from individuals and foundations. Expenses include administrative salaries; production expenses, fundraising, marketing, and publicity expenses; and any additional project expenses, such as educational activities. Some nonprofits may also use an engagement or production budget, which details the expenses and income for a particular show, but these budgets are folded into the annual operating budget for the entire organization. The Capital Budget: The capital budget lists all expenses that are expected to last for more than one fiscal year; these expenses are amortized over time, meaning that the value of the item is expensed over the fiscal years that the item will last (e.g., a computer system that is expected to last for five years has its cost split over five years, as opposed to being recorded as an expense the year that it was purchased. This budget includes the building (if owned) and any expenses related to the building, as well as computer equipment, theatrical equipment, and furniture. Renovations and additional purchases of real estate are also part of the capital budget. This budget is separate from the annual operating budget. Answer: The annual operating budget, and the capital budget.

Question: What is a nonprofit producing organization? Give some examples.

Nonprofit producing organizations create or produce their own productions from scratch; they select the piece to be performed, as well as the performers (dancers, actors, musicians, singers), designers, composers, directors, choreographers, and so forth. They create and rehearse the physical production. A producing organization will then perform the play, dance, or opera in one of its venues or in a venue it rents for that particular show for a specified time. Some examples: the Guthrie Theater, Ford's Theater, the Bill T. Jones/Arnie Zane Dance company, and the San Francisco Ballet. Answer: As opposed to a nonprofit presenting organization, a nonprofit producing an organization creates and presents a show from the ground up, rather than just buying a prepackaged show. Some examples: the Guthrie Theater, Ford's Theater, the Bill T. Jones/Arnie Zane Dance company, and the San Francisco Ballet.

Subsidiary Rights (textbook defition)

Options also include subsidiary rights due to the original author of the work for subsequent uses of the work. A producer's share of the subsidiary rights is granted by the author in exchange for the contribution that the producer makes to the work in producing it. If an author licenses a musical, then all subsequent stock and amateur productions for a specific time, as well as television or movie versions of the musical, might be included in the subsidiary rights package, giving the producer a financial stake in all of these subsidiary rights.

How does a commercial presenter differ from a nonprofit presenter?

Profit presenter: If a commercial presenter, such as the Fox Theater in St. Louis, Missouri, makes a profit, the presenter will keep that profit. Non-profit presenter: However, as noted previously, if a nonprofit presenter makes money on the touring event, the profits must be redistributed within the organization to fund presenting activities. In the case of nonprofit presenters and producers, the artistic process must engage the public or the community. An example of a nonprofit presenting organization with a strong mission and artistic process is the Brooklyn Academy of Music (BAM). Making profits! And serving their respective missions!

What is a workshop?

Question: What is a workshop? A workshop is a production of the entire show staged in a rehearsal room by a director (and choreographer, if necessary), presented after four or five weeks of rehearsal to an audience of approximately fifty to one hundred people. A workshop may cost up to 400,000 depending on the show . Answer: Part of the process of developing a show!

What rights does copyright protection give to the author(s)?

Question: What rights does copyright protection give to the author(s)? Copyright protection prohibits the exploitation of the author's work by giving "the owner of the copyright exclusive right to do and to authorize others to do the following: to reproduce the work in copies or recordings, prepare derivative works based upon the work; to distribute copies or recordings of the work to the public by sale or other transfer of ownership, or by rental, lease, or lending; to perform the work publicly, in the case of literary, musical, dramatic, and choreographic works, pantomimes, and pictorial, graphic, or sculptural works, including the individual images of a motion picture or other audiovisual work; and in the case of sound recordings, to perform the work publicly by means of a digital audio transmission. A copyright covers only the tangible expression of an idea, not the idea itself. For example, two authors - Andrew Lloyd Webber and the team of Maury Yeston and Arthur Topit - decided separately to create musical versions of the novel The Phantom of the Opera. Both works were copyrighted, and neither would be considered as infringing on the other's copyright unless the work itself (i.e., the libretto or the score) were copied). Answer: Exclusive rights to use it in a lot of ways!

Describe the ways that producers find and develop property?

Some commercial productions are commissioned directly by a producer. A producer has an idea for the show (such as producing swing dancing as a theatrical event, as in Swing!). He acquires all the necessary rights (legal permissions) to produce this idea. Typically, the first part of the creative team to be brought in to the potential production is the writing team, which would include playwrights or librettists, composers, and lyricists. After the script is created the rest of the creative team is hired, and the financing and production of the show commences. It can take from two to seven years from the conception of the idea to realize a production in this way. Other production begin from an existing script. In this case, a writing team has created a project that is attractive to a commercial producer, who then acquires the rights to produce the project. Generally, such productions require additional time to develop into a finished, commercial piece, even though the major work on the script, libretto, or music has already been done; a production with rights acquired from its original creators usually takes three to five years to open. This is what happened is Richard Frankel's involvement with The Producers. The least expensive way to develop property is to transfer a property that has already been produced to a commercial theater. Answer: Commissioning a piece, beginning from an existing script, or transferring a property that has already been produced to a commercial theater.

Flexible theater

Sometimes called a "Black Box" theater, these are often big empty boxes painted black inside. Stages and seating not fixed. Instead, each can be altered to suit the needs of the play or the whim of the director.

What are the different parts of the stage itself? Spatially speaking?

Stage right and stage left! Remember that stage right and stage left are from the actor's perspective! So, if you're in the house watching a rehearsal, and a director says "watch out for the character entering stage left!"... you should look to your right!

What is the primary role of a nonprofit board of directors?

The board is responsible for hiring the executive director, for creating the committee structure (smaller groups of board members with a specific focus, e.g., nominating committee, fundraising, etc) and for establishing the executive committee, which is usually comprised of all the chairs of the subcommittees. Although the board of directors is responsible for the general oversight of the organization, it should not have an active role in the day-to-day operations. Although the board has a legal duty to make sure that the organization has a budget and stays on course, it should not be picking your reason or be involved with the day-to-day running of the organization. Answer: Budget and overall governance.

Question: How does a financial manager create a budget?

The financial manager creates a budget by estimating earned income, contributed income (if a nonprofit organization), and expenses. Earned income is the "income earned as the result of specific programs, goods, or services." Contributed income is the income donated to a nonprofit organization by individual donors, government agencies, corporations, and foundations. Expenses are costs incurred by the organization as a result of its business activity. Each type of budget contains at least one of these budget categories, if not all; for example, an annual operating budget contains both types of income, as well as expenses, but a capital budget will only contain expenses. Answer: The financial manager creates a budget by estimating earned income, contributed income, and expensesQuestion: What type of budgeting system should financial managers use, if possible, and why is it preferred?

Question: How does the general manager make the weekly operating budget?

The general manager estimates the costs of such budget items as salaries, sound and lighting rentals, and other weekly expenses based on the current production information, just as he does with the production budget. Other expenses, like advertising, can vary widely from week to week and need to be constantly updated as the numbers change. On the income side, weekly potential gross ticket revenue is estimated by multiplying the number of seats available in the theater by the number of performances per week, then multiplying that number by the average ticket price. Answer: by estimation!

What does the house refer to?

The house can refer to any area which is not considered playing space or backstage area. Outside the theatre itself this includes the lobby, coat check, ticketing counters, and restrooms. More specifically, the house refers to any area in the theatre where the audience is seated. This can also include aisles, the orchestra pit, control booth, balconies and boxes. Orchestra or Orchestra Pit: In productions where live music is required, such as ballet, folk-dance groups, opera, and musicals, the orchestra is positioned in front and below of the stage in a pit. The pit is usually a large opening ranging from 4-6 feet (1.2-1.8 m) wide, 20-40 feet (6.1-12.2 m) long and 6-10 feet (1.8-3.0 m) deep. Some orchestra pits have lifts or elevators that can raise the floor of the pit up to the same height as the stage. This allows for easier movement of instruments among other things. Often an orchestra pit will be equipped with a removable pit cover which provides safety by eliminating the steep drop off and also increases the available acting area above. In most cases, some sort of lattice or sound port is built into the front of the orchestra pit, to allow audience members in the front rows to hear the music while still having a wall to keep them separated from the orchestra. The orchestra pit is the closest to the audience. Auditorium: The section of the theatre designated for the viewing of a performance. Includes the patrons main seating area, balconies, boxes, and entrances from the lobby. Typically the control booth is located in the back of the auditorium, although for some types of performance an audio mixing positing in located closer to the stage within the seating. Vomitorium: A passage situated below or behind a tier of seats. Control booth: The section of the theatre designated for the operation of technical equipment, followspots, lighting and sound boards, and is sometimes the location of the stage manager's station. The control booth is located in the theatre in such a way that there is a good, unobstructed view of the playing area without causing any (or minimal) distraction to the audience (i.e. preventing distracting light leak or noise), and is generally an enclosed space. Catwalks: A catwalk is a section of the house hidden in the ceiling from which many of the technical functions of a theatre, such as lighting and sound, may be manipulated.

Define Mini-max

The money raised through a limited partnership cannot be spent until a minimum percentage of the capitalization has been raised (usually 75 percent), unless the limited partners sign an agreement authorizing the use of the funds. This minimum amount is known as a "mini-max," because of the minimum amount needed to spend the capitalization must be able to fully fund the produced show. For example, if the capitalization required for an Off-Broadway production is 3 million, the mini-max may be set at 2 million, which would be the minimum amount required to produce a production of comparable quality.

Question: What must a producer decide then considering royalties?

The producer determines if the production will be using the royalty pool formula, based on his calculations of projected royalty payments. If the producer determines that he would be able to pay a lower amount by paying a percentage of the net adjusted gross (as high-grossing productions like Wicked do), he would elect not to use the royalty pool. If, however, the production has high operating costs and low-ticket sales, the royalty pool may prove to be the most prudent way to distribute royalties. The producer must submit box office statements detailing total ticket sales and the net adjusted gross to royalty participants in order to demonstrate the need for the pool. Answer: He must make a case for which royalty structure would be best!

What are the components of vesting? (slides)

The textbook defines vesting as: "Vesting means that an employee has worked for an employer to qualify for pension benefits. Subsidiary Rights: Options also include subsidiary rights due to the original author of the work for subsequent uses of the work. A producer's share of the subsidiary rights is granted by the author in exchange for the contribution that the producer makes to the work in producing it. If an author licenses a musical, then all subsequent stock and amateur productions for a specific time, as well as television or movie versions of the musical, might be included in the subsidiary rights package, giving the producer a financial stake in all of these subsidiary rights. Ancillary Income: Ancillary income is earned income from nonperformance activities, such as concessions (food and beverage), parking fees, gift shops, rentals, merchandising, and on-site restaurants.

How may a commercial producer transfer a show originating in a nonprofit theater?

Transferring a production from a nonprofit theater to a commercial theater can be done in several ways. A producer can see a production at a nonprofit theater, and decide to transfer the production as is. In this situation, a producer negotiates an agreement with the theater company for the rights to the production; with the author(s) to obtain the commercial rights for the property; and with the creative team to adapt the work for the commercial production. The producer then determines if the physical production needs to be modified in any way for the new theater, negotiates new contracts with the cast members, and opens the commercial production. The nonprofit theater may be a coproducer of the commercial production, or it may simply receive a royalty (payment for the rights to the production) and/or a share of the net profits (revenue remaining after expenses are deducted) for the transfer without direct participation in the commercial production. However, a producer can also enter into an agreement with a nonprofit theater for an enhancement deal.

When is a work copyrighted?

Under current copyright law, a work is copyrighted from the moment of creation. As soon as an author puts pen to paper or types into a computer, that work is protected under copyright. In fact, the work does not even need to have a notice of copyright to be protected, although the United States Copyright Office recommends that the copyrighted materials contain a notice with the copyright symbol, the year of publication, and the name of the copyright holder. Doing this confers certain advantages, including the establishment of a public record of the copyright claim, which allows the copyright holder to provide evidence of the copyright in court and collect additional damages and fees in a lawsuit. Answer: A work is copyrighted from the moment of its creation.

What are the different sources of intellectual property? (slides)

a. Writer- Play b. Musical writing team- Author, composer, lyricist c. Multi-purposing sources: Books, Films, Poems, Television, short stories, comic strips..... d. Not For Profit- regional theatre that has developed a property. d. Workshop- a rehearsed but not completely staged presentation of basic materials of a play or musical. (generally looking for investors/Producing Partners e. Reading- Very basic presentation of material being read by actors. f. Creative team members of a project previously worked on. g. Partners and relationships with the creative community. h. Networking


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