How a Licensing Agreement is Leading Broadway’s “Beetlejuice” to Death’s Door
The Broadway musical Beetlejuice is set to take its final bow on the Great White Way on June 6,[1] despite the show’s recent financial success. For the performance week ending January 5, 2020, the musical adaptation of the famous Tim Burton film[2] grossed over $1.4 million, breaking the all-time box office record for a seven-performance week at the Winter Garden Theatre.[3] In addition to its impressive ticket sales, the show has amassed a large following of devoted fans, called “Netherlings,” and its cast album has been streamed online 100 million times.[4] So why exactly is the musical being forced to shut its doors while at the height of its success? How can this legally be allowed to happen? Enter the stop clause.
Every Broadway theater is owned by a landlord, usually a corporation. The largest of these corporations is the Shubert Organization, which currently owns 17 Broadway theaters,[5] including the Winter Garden Theatre.[6] If a show’s producers want to use a specific theater for performances, they must enter into a licensing agreement with the theater’s landlord.[7] Landlords will enter into licensing agreements rather than leases so that they can avoid any duties they would otherwise owe to producers under landlord-tenant common law,[8] as well as maintain control over the front-of-house, the box office, and all theater employees (such as janitors and ushers).[9] The licensing agreement gives the producers a limited right to use the space for their production.[10] If a landlord like the Shubert Organization wants to unilaterally terminate its licensing agreement with a production, it may do so by enacting the agreement’s stop clause. A stop clause allows a landlord to evict a production from its theater in the event that the production’s box-office receipts fall below a specified amount, called the stop clause sum, over a consecutive two-week period.[11] Landlords make money by taking a percentage of a production’s gross box office receipts, so they want to make sure that, in the event that a production is suffering financially, they can empty the theater for a new—and hopefully more profitable—show.[12]
When Beetlejuice first opened on Broadway in April 2019,[13] it was met with largely negative reviews and poor ticket sales.[14] The show’s box office receipts fell below its stop clause sum of roughly $819,000 in May, shortly after its opening night.[15] This allowed the Shubert Organization to enact the stop clause in its licensing agreement with Beetlejuice’s producers and set the show’s closing date for June 2020.[16] However, the show saw a steady increase in ticket sales following its televised performance at the Tony Awards this past June,[17] eventually grossing more than $2 million in one week during the recent holiday season.[18] Now that Beetlejuice is finally on the road to financial recovery, why wouldn’t the Shubert Organization want to continue hosting the musical at the Winter Garden Theatre?
The answer lies in the one man who holds more financial power than Broadway’s favorite poltergeist: Wolverine. Hugh Jackman is set to star in the upcoming Broadway revival of The Music Man, which will begin preview performances in September 2020.[19] Scott Rudin, one of Broadway’s “most powerful producers,” worked tirelessly to secure the Winter Garden for The Music Man.[20] Considering the likelihood that The Music Man, with Jackman as its main attraction, will make more money in just one year than Beetlejuice could in three years,[21] the Shubert Organization is no doubt willing to accommodate Rudin. Some even speculate that the Shubert Organization set Beetlejuice’s stop clause sum at $819,000, an “inordinately” high amount, so that it could more easily force Beetlejuice out of the theater in time for The Music Man.[22]
So is this the end of Beetlejuice? Some have considered the possibility that the show could move to another theater.[23] However, given Beetlejuice’s highly elaborate set design,[24] combined with the rarity of available Broadway theaters,[25] the chances of Beetlejuice finding a new home seem dim. Unless a miracle can soon breathe new life into Beetlejuice, the show’s Broadway run must prepare itself for “The Whole ‘Being Dead’ Thing.”[26]
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