The $30 million founding father: How ‘Hamilton’ got federal aid

By Michael Paulson

“Hamilton” is the biggest Broadway hit in years, and until the coronavirus pandemic shuttered all of its productions, it was making a lot of money: It has played to full houses since it opened in 2015, and on Broadway it has been seen by 2.6 million people and grossed $650 million.

So why is the show getting $30 million in relief from the federal government, with the possibility of another $20 million coming down the road?

The answer is that, before the pandemic, “Hamilton” had five separately incorporated productions running in the United States — one on Broadway and four on tour — and, under the rules set up for the government’s Shuttered Venue Operators Grant program, which provides pandemic relief for the culture sector and live-event businesses, each was eligible for $10 million to help make up for lost revenue.

The practice of separately incorporating touring productions is standard in the commercial theater business, and other shows similarly applied for $10 million in assistance for each production running before the pandemic. But “Hamilton” stands to get the most money because it had the most touring productions.

As of this week, “Hamilton” has been approved for $10 million each for the Broadway production and two touring productions; it has not yet heard about the other two tours.

Aware that a large amount of federal aid going to a megahit could raise eyebrows, the show’s lead producer, Jeffrey Seller, agreed to explain why “Hamilton” qualified for it, and to describe how the money would be used, as intended, to restore the show’s five American companies to financial health. (The show also had a London production that was not eligible for the American relief program.)

“Remember when Chrysler and GM were about to go bankrupt? In the same way that the federal government came in to bail out auto companies, it’s doing the same thing for all of show business with this legislation,” he said. “It’s returning us to health and it’s protecting the well-being of our employees.”

Seller said that none of the money would go to the show’s producers (including him) or its investors, and none would be used as royalties for artists (including the show’s creator, Lin-Manuel Miranda).

Instead, he said, the money will be used to remount the shuttered productions, and to reimburse the productions for pandemic-related expenses.

The reopening expenses are varied — a month of rehearsals to get actors, musicians, stagehands and others ready to perform again, as well as longer workshops for new cast members. Plus there are the costs of repairing and replacing equipment, transporting people and sets, hiring COVID safety personnel, and marketing the shows.

And the pandemic expenses, incurred throughout the shutdown, included financial assistance, health insurance coverage, and, in some cases, housing aid for those who had been employed by the productions at the time of the shutdown. Seller said “Hamilton” had continued to pay health insurance costs for all former employees throughout the pandemic, and had made emergency cash grants as well.

There were more mundane expenses as well, including $784,000 in rent for the show’s Broadway theater (yes, Broadway landlords continued to seek rent from producers during the pandemic), as well as warehouse storage for costumes, and flights for cast and crew who needed to get home when the touring stopped.

“‘Hamilton’ has spent many millions of dollars during a time in which it was earning no income,” Seller said. “Our goal is for ‘Hamilton’ to be in the same financial position it was in when we suspended operations on March 12, 2020.”

The rollout of the Shuttered Venue Operators Grant initiative, a $16 billion federal aid program designed to help get cultural organizations back on their feet after the pandemic forced many to close, has been plagued by delays and confusion. But the Small Business Administration, which is administering the program, has begun announcing grant recipients, and there are indications that Broadway and its affiliated businesses could fare well.

As of Monday, the administration said that among the entities getting $10 million, which is the maximum available for a single grant, were two Broadway landlords, the Nederlander Organization, which controls nine Broadway theaters (one of which houses “Hamilton”), and Jujamcyn Theaters, which controls five, as well as the Roundabout Theater Company, a nonprofit that runs three Broadway houses. David Byrne’s Broadway show, “American Utopia,” was also among those getting $10 million.

Nederlander affiliates that run commercial theaters in Los Angeles and Chicago each got $10 million. Three Broadway touring productions managed by NETWorks were given grants — $10 million for “Fiddler on the Roof”; $9.8 million for “Waitress”; and $9 million for “The Band’s Visit.”

Even a nightspot frequented by Broadway fans and artists did well: Feinstein’s/54 Below got $3.6 million.

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