Broadway investors stand to lose about $200 million on the 2023-24 season’s flops. For Jujamcyn Theaters, the Broadway landlord, it was a different story.
Jujamcyn earned a profit of $34 million on revenue of $116 million in the year ending March 30, 2024. The disclosure, in a filing in the U.K. by Jujamcyn’s new parent, ATG Entertainment, is the first time in memory that a major commercial Broadway theater owner shared its financials.
Jujamcyn’s five Broadway theaters effectively earned 29 cents of profit for every $1 of revenue. The 29 percent profit margin exceeded nearly every sector of the U.S. stock market over roughly the same period, as tracked by New York University finance professor Aswath Damodaran. Only banks earned more on average as a percentage of revenue, according to the NYU research.
In February 2023, Jujamcyn and ATG Entertainment, the multinational theater owner formerly known as Ambassador Theatre Group, issued a brief press release that they had “agreed to combine operations.” Last week’s filing from ATG’s holding company, International Entertainment Holdings Ltd., which is majority-owned by the private equity behemoth Providence Equity Partners, fleshed out the deal and both companies’ financials. Results were in pounds, which I converted into dollars, and were first reported by The Stage. ATG’s acquisition of Jujamcyn closed June 6, 2023.
The numbers underscore Jujamcyn’s successful programming and the market power of Broadway’s landlords, led by the Shubert and Nederlander organizations, with 17 and nine houses, respectively. Over the 12 months ending in March, Jujamcyn had three long-running Tony Award-winning Best Musicals: The Book of Mormon, Moulin Rouge! and Hadestown. (All are still running.) The 53 weeks in question also included five months of frenzied grosses for Funny Girl starring Lea Michele, who succeeded Beanie Feldstein as Fanny Brice in Jujamcyn’s August Wilson Theatre, now home to Cabaret.
Individual theater productions pay for box office staff, stagehands, equipment, plus fixed rent and rent as a percentage of box office, typically seven percent. “The landlord-tenant relationship in a theater lease is unbelievably favorable to the landlord,” the late CEO of the Roundabout Theatre Co., Todd Haimes, said in a 2020 interview with Cindy Lott, then with Columbia University’s School of Professional Studies. “Basically the tenant pays for everything.” (Roundabout controls three Broadway houses.)
The enduring appeal of Broadway real estate — even post pandemic — is reflected in the premium prices venues still command. ATG paid $604 million for Jujamcyn, according to the filing, $470 million of which was in cash. That’s about $121 million per theater.
The price is about 18 times Jujamcyn’s earnings — a price/earnings ratio you might expect from a slow-growing Blue Chip stock. That raises the question of how ATG expects to increase the profits of its five Jujamcyn houses. An ATG spokesman declined to comment.
Jordan Roth, the son of real estate magnate Steven Roth and producer and off-Broadway landlord Daryl Roth, was president of Jujamcyn from 2009 until it was absorbed by ATG last year. A producer himself, he’s now listed as ATG’s creative director, board member and according to the February 2023 joint press release, “the largest individual shareholder of the combined group.”
ATG’s portfolio of 64 venues in the U.S., U.K. and Germany includes Broadway’s Lyric Theatre — home of the long-running Harry Potter and the Cursed Child — and the Hudson — where Once Upon a Mattress follows a blockbuster revival of Merrily We Roll Along. Neither the Lyric nor Hudson were part of Jujamcyn.
ATG, also a ticketing and production company, took on hundreds of millions of dollars of new debt to pay for Jujamcyn, which weighed on earnings. While ATG’s operating profit rose 18 percent to $180 million in the year ending March 2024, it recorded a $53 million loss in the same period after accounting for finance costs.
Among its expenses was $1 million in “compensation for loss of office” paid to a member of the board of directors it didn’t name. In October 2023, Ted Stimpson, a veteran of tech and travel companies, suddenly replaced Mark Cornell as ATG’s chef executive officer.
Finance insiders speculate that ATG bought Jujamcyn to make the overall company more attractive to a prospective buyer. Jonathan Nelson, the billionaire founder of Providence Equity Partners, recently joined the board of ATG, a sign that he’s become more involved. ATG said in the new filing that “we continue to nurture our pipeline of potential mergers and acquisitions and are in active discussions on a number of opportunities in our core markets…”
Separately, Alexander Walsh, a London-based senior managing director of private equity giant Blackstone, recently joined the board of ATG’s holding company. The appointment suggests that Blackstone invested in ATG, confirming a report by Sky News’ Mark Kleinman that it was negotiating to buy a minority stake from the Australian-based live entertainment company TEG. Silver Lake, yet another private equity company and the owner of TEG, has vacated the board seat that Blackstone’s Walsh took over.
Blackstone may be familiar to Broadway players for another reason. In recent years, Christine Schwarzman, the wife of Blackstone chairman and CEO Stephen Schwarzman, has been a busy lead producer (Bad Cinderella) and co-producer (Merrily). A Blackstone spokesman didn’t return emails.