A tax credit program that helped fuel Broadway’s recovery has run out of money.
Starting in 2021, NYC Musical and Theatrical Production Tax Credit allowed commercial productions to subsidize 25 percent of their production costs, totaling up to $3 million per Broadway production or up to $350,000 per Off-Broadway production. The $400 million program, which was expected to last through early 2027, is now expected to allocate all of its remaining funds by October 2025.
About $365 million of the program funding has already been allocated, and the program is expected to be sunset after the remaining funding is distributed, according to Empire State Development, which runs the program.
The Broadway League, a trade association of producers and general managers, held an emergency meeting on the matter Tuesday. At the meeting, members were told that the remaining funding was already spoken for, and that some productions that had already submitted applications would receive money, while others may not, according to a person familiar with the matter. But members were encouraged to continue submitting applications in case more funding emerges.
It was also understood by members on the call that the League found out about the funding issue after submitting a Freedom of Information Act request, according to the source.
The program has said it will not accept applications for productions with a first paid public performance date after Sept. 15, 2025.
The tax credit played an important role in Broadway’s recovery, particularly as productions sought to convince investors to put money in new productions. The tax credit was often included in recoupment charts for Broadway shows, and helped assuage concerns about getting a return.
“I think that this was a mitigation to investors. That was very helpful for producers raising money, and now, when it goes away, I think it’s going to be more challenging,” said Robert Fried, a longtime Broadway accountant.
While it had been a great aid for some shows, particularly for lower budget plays, there’s also been some controversy around the program, as the program did not take a show’s success into consideration, and blockbusters such as The Lion King, Wicked and the Hugh Jackman-led Music Man also received funding. And while the overall Broadway industry had seen shaky grosses in the first few years post-pandemic, the most recent season marked the highest-grossing on record, surpassing the highs set in 2018-2019.
The program was initiated in 2021 under Gov. Andrew M. Cuomo, with an initial $100 million in funding as a way for the industry to emerge from theatrical shutdown in March 2020 due to the coronavirus. Gov. Kathy Hochul then tripled the funding to $300 million and then increased the funding once more to $400 million as part of the 2026 state budget. As part of the latest funding increase, the program was also extended through 2027.
The program came with requirements, which stipulated that shows implement a New York State-approved diversity and arts jobs training plan, which led to the hiring of 160 fellows at productions, and productions were also required to open up some performances to low-income residents.
“The NYC Musical and Theatrical Production Tax Credit has played a key role in driving the city’s economic recovery in the wake of the COVID-19 pandemic. By supporting live performances across Broadway and Off-Broadway, the program has helped bring audiences back, boost tourism, and create good-paying jobs across the five boroughs,” a spokesperson for Empire State Development said in a statement.