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# Recoupment

Recoupment occurs when a Broadway production earns enough profit to pay back its initial investors their full original capital contribution.

In the commercial theater world, recoupment is the 'break-even' point. Before a show opens, investors provide the upfront capital—the money needed for sets, costumes, rehearsals, and theater deposits. Once a show is running, it must pay its weekly operating costs, often called the 'nut.' Any money left over after those expenses is considered profit, which is distributed to investors until they have received 100% of their initial investment back.

## Why some hits never recoup

A show can be a 'hit' in the eyes of the public—playing to packed houses every night—and still fail to recoup. This usually happens because of high weekly operating costs. If a show costs $800,000 a week to run and only brings in $850,000, it only clears $50,000 toward recoupment. If that show cost $15 million to mount, it would take nearly six years of sold-out performances just to break even. This is why managing the weekly nut is as important as selling tickets.

## Post-recoupment profits

When a show officially recoups, its financial structure changes. At this point, the production begins to pay out 'net profits.' Generally, these profits are split 50/50 between the investors and the producing team. According to The Broadway League, only about one-quarter of Broadway shows actually reach this milestone, making it a celebrated event often marked by a 'recoupment party' for the company.

Source: The Broadway League, 'Broadway's Economic Contribution to New York City.'

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Related terms

## Keep exploring the theater glossary

-   [Weekly Grosses Weekly grosses are the box office receipts reported by Broadway productions each week, detailing ticket sales, attendance, and theater capacity. ](/glossary/weekly-grosses)
-   [ATPAM (Association of Theatrical Press Agents and Managers) ATPAM is the labor union representing professional managers and press agents who oversee the business and communications of Broadway and touring productions. ](/glossary/atpam)
-   [Bridge Loan (Theatrical) A theatrical bridge loan is a short-term financing arrangement used to cover immediate production expenses before the full capitalization of a show is raised. ](/glossary/theatrical-bridge-financing)
-   [Capitalization Capitalization is the total amount of money raised from investors to cover all costs required to open a theater production. ](/glossary/broadway-show-capitalization)
-   [Creative Team The collective group of artists, including the director, designers, and writers, responsible for the artistic vision and execution of a production. ](/glossary/creative-team)
-   [Most Favored Nations (MFN) Clause A contractual provision ensuring a party receives terms equal to the best terms offered to any other comparable party in a production. ](/glossary/theatrical-mfn-clause)

From the stage

## Behind every term is a real production

Suzanne Gilad has produced Broadway and Off-Broadway theater for over two decades. Read her notes, see her work, or get in touch.

[Read the notes](/notes)[All glossary terms →](/glossary)

Suzanne Gilad 

Grammy & five-time Tony Award–winning Broadway producer, author, editor, speaker, and arts-education advocate.

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