Monday, December 1, 2008
There was an interesting story in the Sunday edition of the Dallas Morning News. It concerned the amount of royalties that nonprofit theatres charge when serving as the premier venue of a new play. Essentially, nonprofit theatres charge 40% of all future earnings (aka, subsidiary rights) from a play that premiers at their theatre. Here are the opening two paragraphs:
When Mr. Lucas agreed to make the off-Broadway premiere of his play Prayer for My Enemy part of the Roundabout Theater Company's 2008-09 season, he said he didn't realize that the Roundabout's standard contract would require him to sign over 40 percent of his subsequent author royalties for the play for 10 years. (In other words, if Mr. Lucas were to collect, say, $50,000 from Prayer over the next decade – a respectable sum for a well-received new play – the Roundabout would receive $20,000 of it.)
A veteran playwright, Mr. Lucas (Prelude to a Kiss) said he knew that nearly all nonprofit theaters exacted a percentage of an author's future earnings from a new play – known as subsidiary rights – in return for producing its premiere. What startled him was the 40 percent, standard for commercial productions but a figure he considered "far too high" for a nonprofit.
What struck me most was a quote attributed to playwrights to the effect that tax exempt nonprofit organizations "are supposed to serve the playwright" and therefore should not be taking such a big cut even if it is the nonprofit's initial efforts and risks that cause the play to really take off, thereby enriching the playwright (as is the argument of the nonprofits):
Many nonprofit theaters argue that they deserve a [big 40%] cut because they increase the value of a new play with a first-rate New York production. To many playwrights, however, including Richard Nelson, author of Goodnight Children Everywhere, that argument is too one-sided.
Not only that; this might be an argument better made quietly. It seems to raise a private benefit issue, sort of like that in Aid to Artisans (though the government lost that one).