Why Broadway Performers Are Paid More

A recent New York Times article discussed a meeting being held to protest a “tiered wage” that averages $1,000 per week for performers in touring productions of Broadway musicals — compared to a “full wage” of $1,800 for the Broadway productions of the same show.  

Why shouldn’t the pay be the same for the same effort?  The article gets the answer correct: the pay must equal the marginal revenue product for the production to be profitable; and even compared to performances in cultural capitals like Austin, Tex., the revenue-per-seat-filled on Broadway is much higher. A touring company just cannot, as the article notes, make a profit or perhaps not break even paying the same wages as on Broadway.  Perhaps not fair to the performers, but this is good economics.  With this difference in pay, however, the quality of the touring companies is unlikely to be as good as the Broadway company.


Well, they could still make the pay equal, they would just have to pay the Broadway performers less, perhaps something like $1,200 for everyone instead of a $1,000 / $1,800 split. In that way the Broadway performances would be subsidizing the the touring performances, which is actually probably arguably appropriate, since it's probable that the touring performances contribute to the overall profitability of the Broadway shows as a form of "advertising". (But this probably goes both ways as well).

The other issue is that it is probably more expensive to put on the touring shows, because more work is required to put on a traveling show than a stationary one. (Though maybe the cost of doing business in NYC counters this effect?)

But this is just another example of the "winner take all effect", but actually on a minor scale.

It's likely that the Broadway spots go to the performers who are marginally better, let's say 0.5% better to put a bogus number on it, but as a result, they get significantly better pay. Actually, as I said, this is a very minor case, it's nothing like Hollywood, where the people who gets the parts may just be marginally better performers, but get exponentially higher rewards.



Actually, that's not correct. Touring productions are separate entities from the Broadway production of the same show. They don't share expenses or capitalization, and each production is organized as a separate and distinct LLC. So, it's not really the case that a more profitable Broadway production of a show can subsidize a tour of the same title.

Enter your name...

And even if it "could" be done, why "would" you? Given a choice between "Broadway only, and rake in the bucks" or "Broadway plus touring, earn less money for more work", why would you choose to have a touring company at all?

The net result would be fewer touring companies, fewer people getting see the performances, and fewer jobs for the enormous supply of actors.


What's the cost of living for the performers?

In a touring company - are the performers paying their full cost of living and transit?

I honestly don't know, but if you are on the road 75% of the time - even if you are calling NYC your 'home' you can get away with a lot less in rent by subletting or sharing space, and you probably aren't paying NYC rates for food and transportation...

I don't believe the pay alone covers the full benefits package and difference in costs.

Voice of Reason

Um...it's the same reason that major leaguers aren't paid the same as minor leagues. How can you compare the pay of the best of the best to the mediocre?


This raises a point: how much of the quality of a show is due to the quality of the performers? Wouldn't most shows be just as good with any set of competent performers?

Enter your name...

Not really.

If you've seen much Shakespeare, then you should know the answer: The plays don't really change. The "classical" versions are pretty similar in staging, costuming, and so forth. But the overall experience varies quite a bit, even with professional/generally competent actors.


Touring companies also aren't charging $300+ a seat.


Wait, at a certain level, actor quality doesn't matter? Just like teachers, I guess. And like when someone says, 'I love you.' Or when you see an awesome Led Zeppelin tribute band. It's the same words and sounds so why place a higher value on the one that is performed... with more... skill/originality/authenticity/creativity?
To be fair, you said 'any set of competent actors', not that the quality doesn't matter at all. So we are talking about the small difference between good and great. Or great and really great. But here is another analogy. Both my 99 Camry and someone else's 67 Corvette Stingray will go 120 miles per hour and arrive at the same destination. But one is worth more. Where does the increased value come from? Famous-ness? The driver's feeling? The appearance? It's not fuel efficiency. So maybe it's that when you hit the accelerator on the Corvette, you're entire experience is colored by the confidence you feel - you know you're in good hands, and you can marvel at the performance instead of notice all the shakes and rattles along the way.
I know the comparison is imperfect. I know there are very high quality touring productions which are often populated by a rotation cast of Broadway actors as well. But I also know that there is a tremendous difference between excellent and astonishing. And it is fair to pay more for it and be paid more for it. Another disclaimer, I've never driven a 67 Stingray, and I am a professional actor. And I've never gotten my Camry past 90.



I haven't the data to evaluate Led Zepplin tribute bands vs the original, though I can say that the value I'd place on either is zero, or perhaps even negative - but of course that's a matter of personal taste. But to take a parallel example, if I'm buying a recording of say a Beethoven symphony. do I care which particular orchestra performed it?

As for the Corvette vs Camry question, how are you defining worth? Is it not what (some) people are willing to pay? And is that not in very great part due to subjective things like advertising? So yes, IF some of the actors in a performance, whether Broadway or travelling, are 'stars', you cn charge more due to the advertising factor. But whether the performance is objectively better... well, that's like asking whether name-brand is better than generic.


Thinking on this a little further, aren't these all variants on the wine bottle problem? (Where 'experts' can't usually tell the difference between moderate & expensive wines if they can't see the labels.) If you did a blindfold test between the original Led Zeppelin and a good tribute band, do you think you could tell the difference?

And if you ever have the opportunity, take your Camry and a '60s Corvette for a few laps around a track. You might be surprised :-)


I wish that the Broadway shows I've seen could measure up to the touring productions of the same that I've seen... For some reason, it's been opposite what you would expect. At any rate, I think it really comes down to fact that the New York tourist who wants to see a Broadway show has a higher marginal willingness to pay than the typical touring show customer, say in Boise, ID or Indianapolis, and are likely to reflect that. New York has higher costs all around, and since many of the touring company cast members don't call New York home, their reservation wage is probably a lot lower. (Also, actors tend to be the type to place a high premium on 'loving what they do' and forego a compensating differential for it).


I have a friend who is a performer and equity member, an additional complaint is that all the other theatrical trade unions are not making similar concessions, and that such economic accommodations - if they are truly needed - should be shared across the associated professions.


so the appropriate questions are,
what explains the lower marginal productivity?
are those performers generally of 'lower quality' (if so, how much does this quality translate into something the customers experience) ??
or is it simply because people care less about musicals outside broadway?