In 2021, Broadway reopened after being closed for 18 months because of the COVID pandemic. And one of the reasons it was able to get back on its feet was because of a tax credit created by New York State, where up to 25% of a show’s production expenses — up to $3 million — were eligible for that credit. But now it’s going away.

“It was instrumental in getting us back after the pandemic,” said Jason Laks, president of the Broadway League, which represents producers and theater owners. Laks said old shows and new shows received the credit and it helped them run, “because nothing was assumed that we'd be able to get back up and that the audiences would come back and feel comfortable coming back and be excited about coming back. And luckily, they did.”

Broadway shows from “Wicked” to “The Lion King,” as well as new productions, availed themselves of this tax credit. “I think it became a little bit of a drug for Broadway that it really couldn't kick because productions were depending on it to sell shows to investors,” said Philip Boroff, editor of the newsletter Broadway Journal, which tracks theater finances. “And investors were depending on it, to reduce the risk; so that theoretically, at least, a show that flopped would return something to investors.”

Broadway’s a very risky business: only one out of ten shows returns its investment. Last year, five new musicals which opened in the spring closed early, losing around $100 million. It’s very concerning, explained Boroff, especially because that tax credit is about to go away: “The business of musicals, especially new musicals, is very precarious right now, and losing that tax credit doesn't help.”

While the credit was supposed to go through 2027, the funds run out in October. So, Jason Laks said the Broadway League has been lobbying to replenish it, “to keep the investment coming. Because without investment, there is no Broadway.”

And this is even more important given the decline in international tourism which makes up 21% of Broadway’s audience. “The international tourism is huge,” Laks explained. “I mean, in so many ways, as goes New York, so goes Broadway. And it's reciprocal: as goes Broadway, so goes New York City.”

Still, with big stars like Keanu Reeves, Lea Michele and Kristin Chenoweth slated to perform this fall, Broadway’s producers hope they can help fill the theaters and fill the coffers, tax credit or not.