Troubling news is on the horizon for New York theatre investors. The NYC Musical and Theatrical Production Tax Credit, a post-pandemic relief program that has been providing up to $3 million in tax credits to Broadway shows, has reportedly run out of money far earlier than expected, according to reporting by The Broadway Journal and confirmed by Playbill.
The program, which subsidizes 25% of production costs (capped at $3 million on Broadway and $350,000 Off-Broadway), had received a $100 million, two-year extension earlier this year, though shortly thereafter, it was discovered the program likely only had funding for half of that two-year period. And now, the program is reportedly not even accepting applications for productions that begin performances after September 15, with the funding expected to completely evaporate by "early October," per Empire State Development, which administers the program. The group says $365 million of the $400 million total allocated to the program has been allocated, which they attribute to the support of more than 39,000 jobs and the generation of approximately $2.7 billion in New York City spending.
A fall audit of the program has the potential to free up additional funds, which would be distributed via a new application process. A statement from Broadway League President Jason Laks appears to hold out hope that the program could continue in some fashion beyond even that glimmer of hope.
“The New York City Musical and Theatrical Production Tax Credit continues to be vital to the funding of Broadway productions," reads Laks' statement, provided to Playbill. "Our tens of thousands of workers and every producer on Broadway are grateful for the governor, the NYS legislature and Empire State Development [which administers the program]. The success of this past Broadway season is a direct result of the State sustaining the tax credit program to incentivize private investment in productions. Despite driving tourism and economic activity, productions still struggle to recoup the investments required to bring a show to Broadway. There’s a lot of concern right now given the reports on the tax credit program’s funding status, but we know that the governor and the state legislature understand how important Broadway’s success and the work of our thousands of employees are to the economy of the city and the state. We will continue to work with them to sustain this vital program.”
The loss of the subsidy places an already precarious Broadway investment landscape in further turmoil. Though we just wrapped a season that saw historic revenue highs, Broadway has always been and remains among the riskiest investments out there, with the vast majority of productions failing to turn a profit. That situation has been exacerbated by the losses of the COVID-19 pandemic and accompanying shutdown of live theatre, and a related drop in domestic and international tourism.
