Broadway Journal

SEC PROBES BIG BROADWAY FUND’S ‘OUTSIZED’ RETURNS (EXCLUSIVE)

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By their own account, the founders of the Broadway Strategic Return Fund turned an overlooked investment niche into a bonanza.

Hunter Arnold, John Joseph and Curt Cronin established their hedge fund in January 2016 to invest in U.S. and U.K. live theater productions, plus tours, cast recordings and other ancillary businesses. With “few professional investors participating through a highly organized and disciplined investment process,” the fund’s Sept. 30, 2021 Due Diligence Questionnaire said, the founders believe “there is an untapped opportunity for outsized profits.”

The year-old marketing document declared, “$100,000 invested at [the] fund opening is currently valued at $416,280.” That’s double the rate of return of the Standard & Poor’s 500 Index over the same period — a remarkable result for an industry in which roughly 80 percent of commercial theater productions fail to fully repay their investors, let alone turn a profit.Continue Reading

RUDIN ON THE SPOT: SPOTCO LAWSUIT TURNS TO DEPOSITIONS

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EXCLUSIVE: With the Broadway production of To Kill a Mockingbird  adjourned indefinitely, a real-life court battle between its producer in exile and original advertising agency is heating up.

Scott Rudin, who’s kept a low profile following reports about his volcanic temper and bullying of employees, must answer questions under oath by Aug. 31 about his financial relationship with the theater ad agency SpotCo, according to filings in New York Supreme Court. The video deposition would be made public only if it’s introduced as evidence in SpotCo’s lawsuit against Rudin and entities he controlled.Continue Reading

FOUNDERING ‘PARADISE SQUARE’ GHOSTED GROUP SALES CHIEF, LAWSUIT SAYS

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EXCLUSIVE: Paradise Square has had a bumpy road to Eden.

Nominated for 10 Tony Awards, the second-highest total of the season, it was Broadway’s worst-selling musical in the week ending on May 8, posting just $194,000 in ticket sales. Since its first preview on March 15 at the Ethel Barrymore Theatre, it hasn’t come close to its weekly breakeven — $599,000, per an estimate in its 2019 operating agreement. (Comparably sized musicals usually cost more to run.)

A new lawsuit against Paradise Square Broadway LP filed in New York Supreme Court, not far from where the Civil War-era musical is set, provides a window into the Garth Drabinsky production. It’s the Canadian producer’s first show on Broadway since he was convicted in 2009 in Ottawa, Ontario, of defrauding Livent Inc. shareholders of nearly half a billion dollars. Publicly-traded Livent, which Drabinsky co-founded, filed for bankruptcy protection in 1998.Continue Reading

RUDIN ANGLES TO RETAIN ‘MORMON’ PROFITS AS LAWSUITS FLOURISH (EXCLUSIVE)

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Five months after announcing that he would “step back from active participation” on his Broadway shows, producer Scott Rudin is still negotiating the terms of his exit from his biggest hit, The Book of Mormon, a person familiar with the situation told Broadway Journal.

Rudin is battling his former partners, the South Park creative team of Trey Parker and Matt Stone, who with their business associate Anne Garefino are the remaining lead producers of The Book of Mormon. (London-based producer Sonia Friedman is also heavily involved in the U.K edition of the musical, which Parker and Stone wrote with composer-lyricist Bobby Lopez.) Continue Reading

‘REBECCA’ PRODUCER SENTENCED TO FIVE YEARS OF PROBATION IN CHILD PORNOGRAPHY CASE

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Ben Sprecher, who has produced shows and managed theaters in New York since the early 1980s and is best-known for a Broadway musical that collapsed before it could open, was sentenced Thursday afternoon to five years of probation for possessing child pornography. He’ll be required to publicly register as a sex offender in any state in which he resides.

Judge J. Paul Oetken accepted the recommendation of the producer’s court-appointed lawyer, Martin S. Cohen of the Federal Defenders of New York. Citing the seriousness of the crime, the Justice Department had sought a prison term of 78 to 97 months. The U.S. Probation Department recommended a year and a day of incarceration.Continue Reading

ESCAPE FROM MANDERLEY: ‘REBECCA’ PRODUCER SETTLES WITH PRESS AGENT

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Ben Sprecher/Steven Hirsch

EXCLUSIVE: Broadway’s oddest and most enduring financing-scandal-turned-courtroom-drama has closed.

After six years, 471 legal filings, one trial and another that had been on tap, Rebecca  producer Ben Sprecher has ended his effort to hold his former press agent accountable for the collapse of his musical. Last month, Sprecher settled his personal lawsuit against publicist Marc Thibodeau, obviating a second trial concerning the aborted Broadway show.Continue Reading

‘REBECCA’ PRODUCER SEEKS NEW TRIAL AGAINST PRESS AGENT

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Ben Sprecher/Steven Hirsch

EXCLUSIVE: Ben Sprecher‘s six-year campaign to hold his former press agent accountable for the collapse of his musical and reputation has been cleared for another courtroom showdown.

Earlier this month, an appellate court declined to intervene in the producer’s lawsuit against publicist Marc Thibodeau, opening the door for a second trial relating to the aborted musical Rebecca.  At issue are emails that the press agent sent to a prospective backer in September 2012, linking Sprecher to a fraud.

Sprecher is “radioactive in the theater community and unable to find work,” the producer’s lead lawyer, Erik Groothuis of Schlam Stone & Dolan, wrote in an October 2018 brief in New York Supreme Court. Thibodeau “torpedoed both the musical, and my career with it,” Sprecher said in a 2017 sworn statement.Continue Reading

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