In a Broadway landscape where many productions struggle to remain open for an entire season, The Phantom of the Opera’s nearly 35 year-long-run feels like an eternity. Or, at least, it did. Phantom opened on Broadway in January 1988 and has since played around 14,000 performances. However, in September 2022, the producers historically announced its closure, saying that the production would end in early February 2023. Almost everyone assumed Phantom would run forever, taking the production’s presence for granted. Unfortunately, no show can escape the perpetual economic challenges of staging a Broadway musical. This sudden announcement motivated many to buy tickets to see the iconic production before it left the Majestic Theatre. The sudden influx of ticket sales led producers to announce an extension of Phantom’s run into April 2023. This scenario begs two questions, (1) why exactly is Phantom closing in the first place, and (2) why exactly is it extending its run? I hope to provide satisfying answers to both.

Firstly, two primary factors play into why Phantom is closing, one explicitly relating to the production while the other pertains to the economy as a whole. The first factor is a decline in ticket sales. While ticket prices remained relatively stable, after playing to nearly 14,000 audiences, prospective audience members began to diminish, affecting the number of attendees and decreasing profit. Looking at the production’s finances, the downward trend in attendance has been clear for the past several years; however, this came as news to much of the community as after 35 years, nobody was monitoring the production’s finances closely. While a decline in ticket sales influenced the decision, the nail in the coffin for Phantom was the increase in inflation. The musical was still making a profit on paper, but when money is worth less, it becomes difficult to support the production.  When put in the context of the show’s incredibly high operating costs, these two factors led to Phantom closing. The production’s big draw is its large set pieces and awe-inspiring spectacle, and while its technical feats are impressive, they are also very costly. As inflation made achieving these feats that much more expensive and ticket sales decreased, the show could no longer support itself, forcing producers to close the historical production. But why now are they extending the run?

In short, Phantom’s extension is a classic example of the relationship between supply and demand. When Phantom announced that it was closing, fans everywhere who thought it  would be on Broadway forever felt compelled to buy a ticket. When the show seemed like it would run indefinitely, there was no pressure to buy a ticket, but as soon as a closing date was set, the “supply” of the production decreased, and therefore, the “demand” for it increased accordingly. In response to the increased ticket sales, the producers intelligently raised prices because the demand for tickets was now high enough to demand higher prices. When the producers realized that the remainder of the run was going to sell out, despite inflated ticket prices, they had the security to extend the run into April, as they calculated that the increased ticket sales combined with the increased ticket price would offset the inflated production costs. This enabled them to turn a profit and milk Phantom one last time before closing. Plus, there’s no real risk of extending the run. At the end of the day, to not extend the production would be throwing away money.

Overall, the end of Phantom’s time on Broadway has been eventful, to say the least. The initial closing announcement took many by surprise, although declining ticket sales and general inflation had been gradually affecting the production for some time. Then, as a result of the sudden increase in ticket sales and the increased ticket price, the production was able to make more money through an extension, demonstrating how closing a production can strategically increase a show’s profit margin in the short term. Post-Phantom, I predict that more Broadway productions will begin utilizing preemptive closure as a marketing tactic to boost ticket sales/price. More shows may aim to close sooner and charge more expensive ticket prices to avoid renting the theater space for as long. This would allow them to increase their profit slightly while decreasing their expenses. Whether this would be a positive change is up for debate, but it certainly makes sense from a producing standpoint.

Feature image via https://us.thephantomoftheopera.com/