EXCLUSIVE: Good Night, and Good Luck has repeatedly set weekly records as the highest-grossing play in Broadway history. Nonetheless, the George Clooney blockbuster projected it will qualify for a $2.5 million subsidy from New York State, according to a production operating agreement distributed to investors.
Glengarry Glen Ross, the hit revival starring Kieran Culkin, expects $1.9 million from the state. Othello, which charges as much as $921 to see Denzel Washington and Jake Gyllenhaal, projected $2 million in state aid.
Nearly four years after Broadway reopened in the wake of a devastating pandemic-induced shutdown, it’s on track to report record box office revenue for the soon-to-wrap 2024-25 season. The rebound didn’t deter the state from extending the New York City Musical and Theatrical Production Tax Credit for a second time. Introduced in 2021, the credit, which is effectively a grant, subsidizes 25 percent of most production costs and is worth up to $3 million per Broadway show and $350,000 off-Broadway — regardless of need.
This season’s hit plays are beneficiaries of a program that could use a rewrite. “It’s not perfect,” State Senator Brad Hoylman-Sigal, a progressive Democrat who wrote the original legislation authorizing the credit, said in an interview. “But I think it’s played a crucial role in getting Broadway back to economic health.”
Hoylman-Sigal said the program makes New York more competitive with London, which offers producers an attractive combination of lower costs and generous subsidies. “It urges more investment in Broadway,” he said.
The state has issued about $230 million in NYC theater tax credits to-date, according to data from Empire State Development, which oversees the program. It’s exclusively for commercial production and doesn’t directly help the nonprofit sector, which is under extra pressure due to the Trump administration’s determination to eliminate the National Endowment for the Arts.
Advanced by Gov. Kathy Hochul, the state allocated $400 million for the next two years for the credit, up from $300 million for the past two years.
It’s been “incredibly impactful,” said producer John Johnson (John Proctor is the Villain, Good Night, and Good Luck). Grosses haven’t risen as fast as production expenses, particularly for new musicals, ensuring large investor losses. “There are still sectors of the industry finding their footing,” Johnson said. (The producer declined to comment about Good Night, and Good Luck, which Clooney also produced. )
The tax credit can make Broadway investing slightly less risky, especially for shows that lack a bold-face name on the marquee. But the credit’s excesses, while relatively rare, are egregious. The state has lavished the maximum $3 million on The Lion King (minting money since 1997), The Book of Mormon (which opened in 2011), Dear Evan Hansen (which closed on Broadway in 2022 after 1672 performances) and Wicked (still going strong after two decades and a hit movie).
The program includes a provision for commercially successful shows to repay up to half of their grants to the New York State Council on the Arts, which helps nonprofit projects across the region. To trigger the payback due the state, a show must qualify for the full $3 million credit, then generate quarterly box office sales that are double operating expenses. (The expenses in question omit advertising and marketing.)
Limited-run plays like Good Night, and Good Luck generally don’t incur the required production costs to qualify for the full $3 million tax credit. So they’re effectively exempt from repayment.
And the profitability threshold is seemingly unattainable. Even Hamilton — a once-in-a-generation supernova — hasn’t posted box office sales that are double its operating expenses since the pandemic, according to financial statements filed with the office of New York Attorney General Letitia James.
(Hamilton is a rarity in that it didn’t apply for the state tax credit. But in 2021, the Broadway company and four Hamilton tours received $50 million from another pandemic relief subsidy, the Small Business Administration’s Shuttered Venue Operators Grants.)
No state tax credit recipient has hit the threshold requiring it to repay money to the arts council, according to an Empire State Development spokeswoman.
Tom Speaker, legislative director of Reinvent Albany, which advocates for a more transparent and accountable state government, said he assumes the high bar was by design. “The people who lobbied for this don’t want to pay that money back,” he told Broadway Journal. The Broadway League, the trade association of theater owners and producers that lobbied for the credit, declined to comment about the repayment provision that’s never led to any repayment.
Is there merit to using scarce public funds to subsidize hit shows? Investors often seed several productions a season, so even with a hit, they can lose money overall. The tax credit helps keep them in the game, according to advocates of the subsidy.
Good Night, and Good Luck has passed along some of its wealth to the New York Times by buying prominent and costly print ads. While helping to sell what’s left of the show’s ticket inventory, the ads promote Clooney, who was nominated for a Tony Award for playing CBS broadcaster Edward R. Murrow.
Aside from the repayment provision, the credit is bedeviled by red tape and, in some cases, thorny tax issues. “The state helping theater is a good thing but maybe there’s a better way to do it,” said Christopher Cacace, a senior consultant and veteran theatrical accountant with CBIZ Advisors, LLC. “I wish Empire State Development or elected representatives had reached out to industry representatives to discuss what might be improved as the two renewals wound through the budget process.”
Hoylman-Sigal, who’s running for Manhattan borough president, proposed legislation that addressed repayment: Shows that receive the credit and run for two years — regardless of profitability — would be required to repay the state arts council $2,500 a week until the payments total $500,000.
Even that mild reform wasn’t adopted in the budget. Jacob Ascher, a spokesman for the state senator, said the office will continue to advocate for the legislation.
New York’s finances, like that of other states, is unusually precarious amid Trump’s threats to cut billions in federal funds. “The state definitely needs all the money it can get,” said Reinvent Albany’s Speaker, who can’t discern a rationale for subsidizing hits that don’t offer a return on the public’s investment. “You’re just giving away free money.”
