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The Show Must Go On: The Legal Issues on Broadway Arising Out of COVID-19

Matthew Windman July 17, 2020 in  COVID-19

The Show Must Go On: The Legal Issues on Broadway Arising Out of COVID-19

By Matthew Windman

During the first week of March 2020, before concerns over the spread of COVID-19 reached fever pitch, the 30 shows that were running on Broadway at the time collectively grossed $26.7 million. The lucrative spring theater season had just begun, and 16 new shows were scheduled to open before the end of April in order to be eligible for the 2020 Tony Awards.

At the time, COVID-19 was not being completely ignored. Both the Broadway League (the trade organization representing Broadway theater owners and producers) and Actors’ Equity Association (the labor union representing actors and stage managers on Broadway and at professional theaters nationwide) released statements about monitoring the situation. Hand sanitizer dispensers were added to theater lobbies, and actors stopped signing autographs and interacting with fans at stage doors.

On Wednesday, March 11, 2020, matinee and evening performances went forward, and it seemed to be business as usual. The new musical Six was set to officially open the following night, and Tracy Letts’ new play The Minutes would be opening a few days later. Then The New York Times reported that a Broadway usher had tested positive for COVID-19.

Less than 24 hours later, an industry that during the 2018-19 theater season had grossed $1.8 billion, sold 14.8 million tickets, and contributed an estimated $14.8 billion to the local economy was instantly shut down pursuant to a statewide ban on public gatherings of 500 or more people. Not coincidentally, Broadway theaters have 500 or more seats. (It is hard to believe now, but Broadway did not shut down during the Flu Epidemic of 1918). A handful of small Off-Broadway theaters continued to hold performances, albeit at half-capacity and with social distancing and sanitation measures in place, until non-essential gatherings were banned altogether under the “New York on Pause” executive order.

It was soon confirmed that Hangmen and Who’s Afraid of Virginia Woolf?, which were still in previews as of March 12, 2020, would not resume performances. Disney Theatrical Productions also announced that Frozen (which had opened on Broadway approximately two years earlier) had closed for good. The producers of many other Broadway shows that were either in previews or about to begin previews (including productions by the not-for-profit groups Lincoln Center Theater, Roundabout Theatre Company, and Second Stage) have announced tentative plans to resume performances after the shutdown ends. A revival of The Music Man starring Hugh Jackman has shifted its opening night to Spring 2021.

While the 41 theaters of Broadway remain dark, the New York theater community has been left to grapple with challenging legal issues relating to governmental directives, contracts, insurance coverage, refunds, presenting live and prerecorded content on the internet, and what health and safety measures will be needed once the theaters can reopen.

Existing contracts will likely be closely scrutinized as to whether payment or performance is excusable under a force majeure clause or some other common law defense such as impossibility or frustration of purpose. As per the website Broadway News, theater producers are still technically required to make rent payments to theater owners (including major Broadway landlords such as the Shubert Organization, the Nederlander Organization, and Jujamcyn Theaters). However, to prevent the shows from closing for good during the shutdown, theater owners may decide that it is in their best interest to renegotiate or forgive rent and other contractual obligations during the shutdown.

On March 18, 2020, the Dramatists Guild of America (an organization representing professional theater writers) released a statement bringing attention to the fact that some theaters were asking playwrights to return advance and option payments for productions that had been cancelled or postponed due to COVID-19.  “Our request to the theatrical community is to stop scapegoating the dramatists at this unprecedented time, and our advice to dramatists confronted by these demands is to just say no, with the full knowledge that it was unfair for you to be put in this position in the first place,” wrote Ralph Sevush, executive director of business affairs and general counsel for the DGA.

Whether theater owners and producers can obtain insurance coverage for financial losses resulting from the shutdown will, of course,  depend on the particular language of their policies. According to the website Broadway News, theater owners generally take out insurance to protect their theaters against physical damage, while the producers of individual shows obtain policies guarding against the cancellation or interruption of performances. As per Reuters, it is expected that going forward, insurance companies will not be willing to provide pandemic insurance coverage to the theater industry.

People who had purchased tickets for performances that got cancelled should not have experienced any difficulty in obtaining refunds – although it may have taken longer than expected. Under the New York Arts & Cultural Affairs Law, with limited exceptions, ticketholders are entitled to refunds after an event is cancelled or rescheduled. By extending the Broadway shutdown in successive increments (originally to April 12, 2020, then to June 7, 2020, then September 6, 2020, and now January 2, 2021), producers have been delaying their obligation to provide refunds.

Some of the most significant legal questions stemming from COVID-19 have involved streaming theater-related programming, such as informal, Zoom-style play readings and concerts performed by theater artists from their homes, which numerous theater companies have produced in order to remain on the cultural radar. In one notable case, Red Bull Theater, a well-regarded Off-Broadway company, was forced to postpone a free livestreamed reading of the 17th century tragedy ‘Tis Pity She’s a Whore following objections by Actors’ Equity that Red Bull had not received Equity’s permission to produce the reading, leading some to wonder whether Equity actually had jurisdiction over the reading since it was not being performed at a theater.

Some theater companies have entered into streaming agreements with Actors’ Equity to compensate actors in exchange for the right to sell “virtual tickets” to allow people to watch a performance. For instance, after the Broadway shutdown began, Off-Broadway’s Rattlestick Playwrights Theater held a few additional performances of The Siblings Play at half capacity. Then, under a temporary agreement reached with Actors’ Equity, Rattlestick made a recording of the production available online for theatergoers who had already purchased tickets for performances that were being cancelled. A limited number of additional “View at Home Tickets” for new ticket buyers were also made available, but with the proviso that the total number of online viewers could not exceed the theater’s seating capacity for each planned performance.

Most livestreamed theatrical content, however, is being presented pursuant to the approval of the Theatre Authority, a non-profit organization that permits members of Actors’ Equity to perform for free in connection with charitable fundraisers. For example, on June 27, 2020, Moliere in the Park, a new not-for-profit theater company, presented a free livestreamed reading on YouTube of Moliere’s 17th century comedy Tartuffe pursuant to a Theatre Authority agreement. According to co-founding producer Garth Belcon, the Theatre Authority allowed the company to keep Tartuffe available online for only up to four days. But after the reading received a rave review in The New York Times, the company entered into a subsequent agreement with SAG-AFTRA that allowed it to keep Tartuffe available on YouTube through July 12, 2020. (Of course, streaming content can easily be illegally “captured” and posted elsewhere online, thereby creating issues of copyright infringement.)

Throughout the shutdown, many theater aficionados have lobbied for the Theatre on Film and Tape Archive (TOFT) at the New York Public Library for the Performing Arts at Lincoln Center to make its extensive collection of video recordings of Broadway and Off-Broadway productions from 1970 to present available for free online viewing. Alas, that is extremely unlikely to happen because the library only obtains the right to record stage productions for archival purposes and make them available only to people doing research.

Notwithstanding recent anomalies such as Hamilton on Disney Plus and Springsteen on Broadway on Netflix, Broadway shows have rarely been filmed for commercial release due to prohibitive costs and a longstanding fear that filming a show will dilute the demand to see it live. However, some shows that were previously filmed and released have been made available for free streaming by institutions such as New York’s Metropolitan Opera, London’s National Theatre, and Ontario’s Stratford Festival (which assumedly already possess all the necessary intellectual property rights and union clearances).

When Broadway theaters are finally able to reopen, questions will linger regarding what health and safety measures will be needed to adequately protect both theatergoers and theater workers. Unless the issue of liability over transmissions of COVID-19 is addressed in future legislation, theater owners and producers may proactively seek to limit any potential liability. Just as the back of a baseball ticket traditionally contains a waiver of liability for any physical injuries sustained due to a foul ball, a theater ticket may soon contain a similar waiver for any claims arising from the transmission of a communicable disease.

By and large, industry professionals doubt that Broadway theaters could reopen under strict social distancing requirements. Even under normal circumstances, Broadway is a risky financial investment. It is an industry maxim that four out of five Broadway shows lose money. “Broadway theater in general – and musical theater in particular – is not likely to be economically viable with social-distancing requirements in place that cull audiences by half or more,” said Jason P. Baruch of Sendroff & Baruch, LLP, a prominent theater industry law firm.  “With the exception of the occasional one-person show, concert or small play, most Broadway shows simply will not be producible until the theaters can be filled again.”

On the other hand, not-for-profit theater companies may be able to experiment and present theater in new ways and in new spaces in compliance with social distancing guidelines. Director Michael Arden (Once On This Island) recently worked with a large group of actors to create an “immersive, drive-through, socially-distanced theater piece,” which was presented on a private, invite-only basis at outdoor locations throughout the Hudson River Valley.

Even after Broadway theaters are allowed to reopen at full capacity by the government, theater owners and producers may still have to wait for the consent of the various unions representing theater workers, including but not limited to Actors’ Equity, which has forbid its members from returning to work (i.e. auditions, rehearsals, or performances) until individual theaters create and submit health and safety plans that meet the union’s approval.

Following the shutdown, Equity hired David Michaels, former U.S. Assistant Secretary of Labor for Occupational Safety and Health, as a public health consultant. On May 26, 2020, Equity released a memo outlining four principles it believes theaters must address before its members can return to work, including control of COVID-19, the ability to readily identify infected individuals, modifying theater spaces and procedures, and working closely with others to implement these measures.

On July 6, 2020, Equity announced that it had approved plans submitted by Barrington Stage Company and the Berkshire Theatre Group, both located in the Berkshires, to present the one-man show Harry Clarke and the musical Godspell (which will be performed in an outdoor tent for only 96 audience members) respectively. The actors and backstage workers involved in these productions will be frequently tested for COVID-19, and audience members will be required to wear masks and undergo temperature scans.

Broadway shows will surely return to New York, be it in early 2021 or later, but it will not be a fast or easy process. After years of record-breaking grosses, Broadway will probably struggle to stay afloat, especially if tourists (who made up 65 percent of the Broadway audience during the 2018-19 season) are scarce and locals are wary of returning to packed, very old, indoor theaters. Just as the theater industry has struggled with serious legal and economic issues throughout the shutdown, upon reopening, it will confront similar challenges that will affect how it survives and when it will flourish again.

Matthew Windman is an associate attorney at Herzfeld & Rubin, P.C. He also writes about theater for the newspaper amNewYork Metro.