Matt Williams, a creator behind such TV shows as “Roseanne” and “Home Improvement,” stood in the back of the Sheen Center in Lower Manhattan recently, greeting dozens of Broadway producers and others who might invest in his new musical tentatively titled “Delta Blue.”
The script presentation took place a few miles south of Manhattan’s glittering Theater District, but Williams said it was unlikely the show would head there anytime soon. It would be cheaper, he said, to tour in Atlanta, Chicago, or even London.
“Let’s say it costs $12 million to produce a musical on Broadway,” he said. “To produce a world premiere in London may cost $1.5 million because they are subsidized.”
Producing a Broadway show has always been an expensive endeavor. But recent increases in labor and production costs have pushed the industry to open more shows outside New York City, said several Broadway directors, producers, and writers interviewed by Bloomberg Tax. Even Off Broadway has become too pricey for some, requiring higher ticket prices to offset spikes in theater rent, materials, and wages since the Covid-19 pandemic.
Aware of the increased costs and competition for the next big hit, New York Gov. Kathy Hochul successfully pushed to include in the state’s $268 billion budget signed last week an additional $150 million for a tax credit program that started in 2021 to prop up productions that saw a mass exodus of audiences during the pandemic. The state has set aside a total of $550 million for the incentive since it launched, arguing it remains essential to attract shows to New York and the jobs that come with them.
“There’s a whole ecosystem in London of new musicals and theatrical productions that are starting to encroach upon Broadway’s ability to thrive,” said Blake Washington, Hochul’s budget director.
The program, however, faces criticism from budget watchdog groups, state lawmakers, and even theatrical insiders who say the tax credits don’t support shows most in need of financial support. Many that have received state aid had the backing of major production companies, according to records obtained under New York’s Freedom of Information Law.
The Walt Disney Co.'s “Aladdin,” Universal Stage Group’s “Wicked,” and the Broadway revival of “The Music Man” produced by billionaires Barry Diller and David Geffen in 2022, were among the beneficiaries. In 2023, each of the three productions received $3 million in tax credits. Producers for the shows didn’t return requests for comment.
Last year, average weekly Broadway attendance rebounded to pre-pandemic levels, according to data collected by New York State Comptroller Thomas DiNapoli. The Broadway League, the national trade association for the industry, reported that the 2024-2025 season generated $1.8 billion in gross revenue, overtaking 2018-2019 as its highest-grossing season on record. Broadway’s recovery has fueled criticism of the tax credit and its expansion. That funding could instead prop up healthcare, public services, and schools, opponents argue.
The tax credit is “not an artistic grant or subsidy by which the government is trying to encourage new and emerging artists to do their thing,” said John Kaehny, executive director of Reinvent Albany, a nonprofit pushing to reduce corporate tax breaks. “This is a subsidy that is structured for large productions.”
The debate will intensify next year as major Broadway producers push to preserve the benefit set to expire Sept. 30, 2027. The Broadway League, the national trade association for the industry, hired Ostroff Associates for $5,000 per month to lobby the Hochul administration and state legislature on enhancing the tax break, according to lobbying disclosures filed with the state. The Broadway League declined interview requests for this article.
Hochul has received at least $479,000 in campaign contributions since 2022 from members of the Broadway League’s Board of Governors, according to a Bloomberg Government review.
Some New York Democratic leaders are pushing to reduce the Broadway incentive as the state faces increased financial pressure from federal funding cuts affecting healthcare and public schools. The state is staring down an estimated $6 billion budget gap in fiscal 2028.
The $150 million included in this year’s budget will allow the Empire State Development Corp., which oversees the distribution of the tax benefit, to continue issuing tax credits to eligible shows after it ran out of funding in December 2025, forcing it to close applications to the program. But many state lawmakers continue to debate the merits of the program as its 2027 sunset nears. State Senator James Skoufis, chair of the Committee on Investigations and Government Operations, led an unsuccessful push in this year’s budget negotiations to place new restrictions on the types of shows that can qualify for state aid.
“People are more and more internalizing, the more we do with stuff like this, the less we can do of education aid, of more childcare, of infrastructure,” said Skoufis, a Democrat. “The pie is limited.”
‘A Pure Giveaway’
New York’s tax credit covers up to 25% in production costs, far less than the UK’s 45% credit for shows there.
The New York credit is limited to specific Manhattan theaters. Producers can receive up to $3 million in tax credits for shows staged at houses with at least 500 seats within Manhattan’s Theater District. Shows with at least $750,000 in production costs are eligible for up to $350,000 in credits, so long as they’re staged in Manhattan venues with at least 100 seats.
A production can only receive the tax credit once, but there’s no limit on how much a production company can receive across an entire portfolio of shows, according to the Empire State Development Corp.
New York has awarded $33.5 million in tax credits to 19 shows this year — 13 Broadway productions and six Off Broadway productions, according to the Freedom of Information Law records. It takes about a year for an applicant to get approved for the tax credit, so most of the support went to productions that opened in either 2024 or 2025. But only two shows, “Buena Vista Social Club” and “Maybe Happy Ending,” are running today. Each received $3 million in credits.
Tax incentives can help producers recoup their financial investment, said Mary Maggio, a Tony-award winning producer behind Broadway revivals of “Sunset Boulevard” and “Company.” It costs between $15 million and $40 million to stage a Broadway musical, depending on the size of the cast and special effects, according to a review of dozens of capitalization forms producers submitted to the Securities and Exchange Commission over the last several years. Broadway plays range between $4 million and $9 million.
Once a show starts to turn a profit, the proceeds are split among producers and investors minus ongoing show expenses. Co-producer titles are typically reserved for those who invested in the show, either personally or by raising funds.
“There are many shows that we go into with all the best expectations and hopes and, for whatever reason, they do not work out,” Maggio said. “We’re passionate about theater, and we want to be supportive. But you know, the tax credit really does help.”
Lead producers aren’t required to disclose if they made a return on their investment, but some announce to the media when they do. At least three of the shows awarded tax credits last year made a profit, according to public statements made by producers.
The play “Glengarry Glen Ross” starring Kieran Culkin and Bob Odenkirk recouped its $7.5 million capitalization, producers told Bloomberg Tax. The play also broke a box office record at the Palace Theatre, grossing $2.4 million the week ending May 11, 2025. The state granted it $2.7 million in tax credits, according to a review of the recipients obtained under New York’s Freedom of Information Law.
Broadway’s “An Enemy of The People” earned Jeremy Strong a Tony award in 2024 and recouped its $5.5 million capitalization, the Brad Pitt-founded Plan B Entertainment told national media outlets. It earned roughly $2.3 million in tax credits from the state.
“All In: Comedy About Love” ran 10 weeks and earned back its $4.8 million capitalization. It featured a rotating cast of actors, from John Mulaney to Jimmy Fallon, and received about $1.5 million in state tax credits this year. “Saturday Night Live” creator Lorne Michaels was a producer.
Seaview Productions, a lead producer for “An Enemy of The People” and “All In: Comedy About Love,” didn’t return a request for comment.
“This has turned into a pure giveaway. The industry does not need this incentive,” Skoufis said. “They’re filling their seats, with few exceptions.”
State tax incentives flowing to major productions like Walt Disney’s mega hit “The Lion King,” which earned $3 million in 2023 and has become one of the longest running shows since its 1997 opening, are hard for even proponents of theater subsidies to defend.
“Where you need to spend that money and support are those smaller theaters, those theaters that have a vision,” Williams said. “I don’t know why you would subsidize a Walt Disney musical.”
The state requires “highly successful productions” to contribute up to 50% of the tax credit to the New York State Council on the Arts cultural program fund. But none of the productions have hit the state’s target, which requires them to generate more than 200% of their ongoing production costs, according to Empire State Development Corp.
Manhattan Borough President Brad Hoylman-Sigal, who helped created the program as a Democratic state senator, said the state should keep the subsidy but the program should be restructured to return some of the credit when a show turns a profit.
“It’s not meant to increase profit. It’s meant to keep shows mounted and keep people employed and contribute to the creative sector,” Hoylman-Sigal said. “If a show is a hit, then they should commit to supporting the tax credit by refunding some of what they received, if not all of it.”
London Calling
Not all of the shows that received state support were hits. At least three closed earlier than planned, including the Audra McDonald revival of “Gypsy,” which earned $3 million in credits and moved up its closing date by almost two months last year. The musicals “Dead Outlaw” and “Tammy Faye,” which each received more than $2 million in support, also closed after a few weeks of regular performances.
Assemblymember Tony Simone, who represents the Theater District, said the subsidy is needed to counter stiff competition from London, where it’s less of a financial risk to take a chance on new material and where the credit doesn’t expire or have monetary limits.
“We give subsidies and stuff all the time in corporate tax cuts to places like Goldman Sachs,” Simone said. “Why wouldn’t we give a tax incentive to ensure that Broadway thrives?”
“The Devil Wears Prada” with Vanessa Williams, which opened in London in 2024, recently extended its run at the Dominion Theatre to early 2027. And this month, “Sinatra: The Musical,” about the life of the old, blue-eyed singer who crooned longingly about “New York, New York,” opens in London’s Aldwych Theatre.
Clayton Howe, a general manager for Across the Pond Theatrical Management, a firm that helps support theatrical productions in the UK and US, said steeper subsidies take pressure off the need to inflate ticket prices to cover rising production costs.
“If you’re going to choose between Phantom of the Opera and some new show in New York for $168, you’re probably going to want to go see Phantom again, as opposed to taking your risk on a new show,” he said.
In London, Howe said, tickets go for about £60 pounds, or about $80. “So, it’s outstanding what the concept of a government-subsidized theater can do.”
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