Go Live!   Go Professional!

Knowing how to properly manage risk and being aware of the possible outcomes an investment might have are two of the most fundamental matters of finance. There are countless business books that provide a thorough examination of how risk can be analyzed, avoided, reduced, or transferred. These activities typically involve conducting market research, setting financial goals, using several mathematical equations, and considering an array of financial vehicles. However, the best way to completely understand risk is to experience it. Thus, reaching the point where you are capable enough to play with risk, it’s not a matter of learning the theory, but, most importantly, a matter of assiduously putting it into practice. According to Robert Kiyosaki (1997), American businessman and author of Rich Dad Poor Dad, “financial genius requires both technical knowledge as well as courage” (p. 110). Consequently, many people attain financial success as a result of their bold decisions and their full awareness of the game’s rules. On certain occasions, these people may experience failure, however, they are daring enough to continue taking risks. This happens time and again, particularly in the live entertainment world. I’m certain that everybody can recall productions that have taken huge financial risks; some have succeeded and generated millions, such as the unshakable Wicked; others have fallen short like Broadway’s version of The Little Mermaid.

Julie Taymor. Credit: AP Photo; Reuters

In a like manner, the theatrical — and extremely problematic — version of Spider-Man: Turn Off the Dark has required an unbelievable investment of approximately $70 million, which is definitely a record in the history of Broadway (Fleming, 2011). Regardless of having one of the most talented creative staffs, including director Julie Taymor and acclaimed musicians Bono and The Edge, the main reason that brought Spider-Man into the limelight was its 183 preview performances (Brantley, 2011). The production — which has finally opened on Tuesday at the Foxwoods Theatre — has suffered numerous difficulties during the nine-year preparation period that includes injuries during rehearsals, several technical issues, strong disputes between staff members, countless postponements, and an unexpected resignation by Julie Taymor (Healey, 2011). According to The Daily Beast, Laura Penn, the executive director of the Stage Directors and Choreographers Society, stated that Julie Taymor has received only $125,000 for her nine years of work (Bernstein, 2011). When explaining the reasons why the musical might be heading to court, Penn argued, “People assume it’s an $85 million production and she [Ms. Taymor] made $10 million or walked away with a settlement in the six figures. And it’s just not true” (Bernstein, 2011, ¶ 5). Since Taymor is one of the best creative minds in the industry she was not only hired to direct Spider-Man, but also to write the script, which entitles her to receive royalties. However, it seems that producers of the show are not providing her with income statements, box-office receipts, and operating costs reports. Thus, the situation is likely to move toward arbitration.

As you may have noticed, the popularity behind Spider-Man basically relies on what’s happening behind the curtain rather than what’s actually happening on stage. I keep wondering how can disagreements occur when the production has a group of exceptional talented artists, a groundbreaking budget, and a story that has sold billions in movies and comics. Unfortunately, the press has destroyed the quality of the show and it seems that producers will have to keep on spending money on the marketing campaign to compensate for their faults. Nevertheless, I believe the situation has reached the point where operating costs are too high and the production will have to struggle to break even. Furthermore, the technical design of the show is probably too intricate to tour across the country and, therefore, it will prevent the production from obtaining additional income.  The truth is that nobody knows how this saga is going to end. Still, it’s amazing how investors are bold enough to have the intention to set records while others are fighting against the recession. After all, this is what financial risk is all about.