Broadway hit “Hamilton” is turning into an ATM machine for investors

That’s rare. Only about 25% of Broadway shows are profitable. But the ones that are — like “Hamilton” — typically make A LOT of money. That’s why investors keep going back. 

Before there was “Hamilton,” there was “Fun Home.” 

“Fun Home” was the darling of the 2015 Tony Awards. It took home five prizes, including Best Musical. The moment was historic because “Fun Home” was Broadway’s first musical with a lesbian protagonist. 

Mark Severs and Jesse Horwitz, both investors in the show, remember the night well. When “Fun Home” won the top Tony Award, the couple did shots with other investors — and saw dollar signs. 

“We thought about [“Fun Home”] as an investment. It was attractive in that it was different than a traditional stock, mutual fund or ETF,” says Severs. The show skyrocketed in popularity after the Tony win. Severs and Horwitz have only seen it twice because it became so hard to get tickets and they didn’t want to compete with paying ticket buyers.

It’s not cheap to invest in Broadway

Investing in Broadway isn’t cheap. Shows cost millions to put on. Typically, producers and directors don’t want to deal with a ton of people, so they look for a handful of investors who can put down a lot of cash. 

Severs and Horwitz invested $25,000 in “Fun Home,” the lowest option available to them. 

Broadway works a lot like a private equity investment or a rental home. You give the show money up front. Then you get checks every few weeks from the ticket sales. The longer the show goes, the more money you make. 

“The old adage about Broadway is in many ways true, ‘You can’t make a living, but you can make a killing,'” says Broadway producer Kimberly Loren Eaton, who helped raise money for “Fun Home.” 

Note: This CNN Business article excerpt from 2016 shows that the trends we observed then still apply – Chris Spencer, producer