The stage chandelier will fall for the last time when The Phantom of the Opera , Broadway’s longest-running musical, is closing in February after 35 years. The curtain falls on the work of Andrew Lloyd Webber, with its 130 actors, crew and orchestra, 230 costumes and a replica of 6,000 beads of light from the Paris Opera.

The whole production defies gravity, really. Musical theater has been a mainstay of Broadway since the 19th century, and London’s recent revival Cabaret shows how important he is to the West End. But the business of putting on big musicals that force huge audiences to pay high prices for tickets is quite a gamble.

Cameron Mackintosh, co-producer of Phantom with Lloyd Webber’s Really Useful Group, likes to quote Alan Jay Lerner, the American musical librettist. “You know what a esteem success is, isn’t it? A fading success. The financial success of Mackintosh and Lloyd Webber with shows such as Cats and Phantom was to prevent them from doing so.

Phantom had been seen by nearly 20 million people on Broadway earlier this month, grossing $1.3 billion. It’s still running in the West End, having temporarily closed during the pandemic, and has performed to 145 million people in 41 countries since it opened in London in 1986. It may not match the classic operas as a work of art, but you can’t argue with an ATM.

However, the machine may suddenly break down, because Phantom has found on Broadway since its post-pandemic return last year, with a $10 million grant from a US government fund to revive theaters. “Phantom is a huge showman, with lots of staff and performers, costumes and wigs.” Mackintosh told me this week. “Starting it today from scratch would be prohibitively expensive.”

The greatest difficulty is not the initial investment in a new production, however enormous; is that musicals are very expensive to continue. Mackintosh compares them to yachts. “It’s like owning a boat: the happiest days are buying it and selling it. It is extremely expensive to operate. »

Musicals are a prime example of the “cost disease” in the performing arts identified by economist William Baumol in 1966. Rising wages and other costs cannot be offset by higher labor productivity, because each representation requires the same number of people for the same product. Unless you lose the luster, it’s a struggle to be had Phantom more financially efficient.

The drag became larger with high inflation. Mackintosh estimates that the weekly cost of dressing Phantom on Broadway has risen from about $850,000 pre-pandemic to nearly $950,000, with further increases in energy and other spending to come. Since he’s only averaged $850,000 a week this year, the sums don’t add up anymore.

This is reinforced by the fact that long-running musicals in cities like London and New York tend to become increasingly dependent on tourists. Locals will be drawn to limited runs of new shows and revivals such as The music man but shows such as Phantom rely more on visitors. Fewer people traveled to New York than before Covid arrived, especially from Asia.

As demand declines, tickets are reduced and the economy of the old musical sags. Phantom performed to 71% audiences on Broadway this year, compared to hamilton ‘s 96 percent, at an average ticket price of $93 versus hamilton it’s $213. News of its closing in February should make it a hotter ticket as the deadline approaches.

This likely won’t be the last time New York sees the masked man in love; Phantom could be revived in the future, perhaps in a more viable form. He will continue to tour the world on limited tours in cities from Sydney to Vienna. If the tourists don’t come Phantom, it will come to them.

“The Broadway musical isn’t dead but things will be tougher. There will be more pressure to have smaller casts and orchestras,” says Matthew Rousu, a fan of musicals and professor of economics at the University of Susquehanna The group will continue to play, but with fewer players.

This raises an existential question about the future of spectacular musicals on the scale of Phantom Where Wretched . Musicals tend to be venture-backed, with a syndicate of investors bearing the high risk of shutting down before a new production recoups its initial outlay, for a small chance of getting really rich ( Cats ‘ early London investors received a 60 times return).

The halo effect of a huge hit on Broadway has always been huge: that’s why there are so many Phantom. Reducing the size of musicals will limit the risks, but it will also reduce the chances of a novella becoming a global phenomenon and generating money for decades.

Mackintosh has done very well at the top of the big musical industry: his production company paid him a £35m dividend at the end of 2019, before the pandemic and today’s inflation spike, and then none when the crisis hit. When the curtain finally falls on Phantom he can shed a tear.

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