"I was reading a script in a cab the other day, and the driver asked me if I were an actress. When I told him I was a producer, he wanted to know if he could invest $100 in one of my shows.
"He'd saved the money to buy his wife a present, but he thought it might be nice to buy her a piece in a Broadway production instead."
Dasha Epstein -- who has helped produce such hits as "Same Time Next Year" and "They're Playing Our Song" -- did not need the cabbie's money.
But had it been another producer -- and had the cabbie been able to come up with a few thousand dollars more -- the driver well might have joined the growing roster of Americans of moderate means who have become financial backers of Broadway shows.
Costs of producing a Broadway spectacle are rising sharply.
"In the last five years, the cost of putting on a musical has tripled," said Richard Barr, coproducer with Charles Woodward of "Sweeney Todd." Not too long ago, several hundred thousand dollars "would have been luxurious," Barr said. Last season, according to George Wachtel of the League of New York Theaters and Producers Inc., the average new musical cost $971,000 to produce, 39 percent more than two seasons earlier. The average drama cost $315,000, up 37 percent.
As costs are rising, the number of affluent angels who willingly pony up the full, or a substantial part, of the cost of a show are declining.
Producers who 15 years ago would have contacted five individuals for funds today are seeking out the little guy who is willing to put up $2,000 or $2,500 to become limited partners in their productions.
Even though most Broadway shows fail to return the initial stake, let alone turn a profit, small investors seem eager to buy in. "There's a big pool of money out there in the hands of theater lovers who don't care if they lose a couple of thousand dollars if, in return, they can be part of a Broadway production," said one producer.
Just like the giant personal corporations of the 19th Century whose need for funds outran the personal wealth of their founders, many Broadway productions have gone public.
In increasing numbers, producers are taking out ads in the New York Times seeking potential investors. Other producers who so far have shunned advertising nonetheless rely on word of mouth to attract the $2,000 limited partner.
Although a few producers have advertised for partners for several years -- mostly in Variety or the Wall Street Journal -- Barr and Woodward's success with "Sweeney Todd" has encouraged others to follow in their footsteps.
After Barr and Woodward placed an ad in the Times two years ago advertising a "New Stephen Sondheim Musical Open for Investment," the pair got 1,500 responses and 150 eventual takers who put up between $1,800 and $18,000 each.
"All told, there are 250 limited partners, 150 of whom got the idea from the Times ad," Barr said. The production raised $225,000 from the Times ad and the rest from more traditional sources such as wealthy individuals or corporations.
The "Sweeney Todd" ad had all the panache of the so-called tombstone ads securities firms take out to advise prospective investors of an upcoming sale and offer them a chance to send in for a prospectus. So far as the Securities and Exchange Commission is concerned, that's exactly what the Broadway ads are.
Since then, the display has become a bit more bouncy. Last week an advertisement for a musical that plans to open next spring pictured Bill "Bojangles" Robinson strutting in his top hat and cane. The musical, "Bojangles," is budgeted at $1.25 million.
"The phone has been ringing from all over," said Tom Mallow, who is forming the limited partnership. "We've had calls from California, Texas, Chicago, Boston, all over."
Victor Kamber, a top AFL-CIO official, is one of those whose eye was caught by the "Bojangles" ad.
Kamber, special assistant to AFL-CIO building and construction trades President Robert Georgine, has invested in three productions so far and sent away for three more prospectuses, including one for "Bojangles" in the last month.
Like many backers of Broadway productions, Kamber subordinates his investment objectives to his love of the theater. In his first two investments -- one in a play whose name he cannot remember, the other in a musical "Hellzapoppin'," starring Jerry Lewis -- he lost his entire stake.
"I dreamed that 'hellzapoppin' was going to be the 'Hello Dolly' of the decade," Kamber said. Instead, Lewis left the show before it got to Broadway, the company closed and Kamber lost his entire $2,000 investment.
But when he saw the ad for "Sweeney Todd," listing Angela Lansbury as one of the stars, his interest was piqued again.
Kamber said he has not recouped any of his investment yet, but Barr said the musical, which opened March 1, should return the full investment to backers by next March. After that, any profits the show makes will be split evenly between the financial backers and the general partners: Barr, Woodward and their associates. That is the standard arrangement for Broadway productions.
Like Kamber, most Broadway investors buy into productions more out of a desire to be a part of the theater than out of any expectation of a grandiose return on their investment. "It's a good tax write-off," Kamber said philosophically.
Gail Harrity, 28, the associate director of the American Society of Travel Agents, just sent off a check for $2,500 to producer John Hart to buy a one-eighth percent share of the profits of "Onward Victoria," a musical that Hart said he hopes to open next spring. It is Hart's first try as a producer.
"I'm well aware of the risks. I'm going in with the assumption that I will lose everything," Harrity said.
Hart said that he has about $750,000 of the $1 million he needs to raise Jan. 1, and he anticipates about 150 backers for the show, including many small ones such as Harrity.
The musical -- based on the life of the 19th Century feminist Victoria Woodhall -- came to Harrity's attention because her friend, Robert Browne, is an associate producer.
Hart chose not to advertise to attract backers, relying upon word-of-mouth instead. "We've been lucky, the show has gone over well at backers auditions," he said. At a backers audition, potential investors gather to hear the producer sketch out the play.
At an audition in Washington early last month, "Two actresses and two actors sang nine of the 16 songs," Harrity said. "I don't know much about music, but four of the songs really got to me. Two I didn't like, and the rest were good but didn't grab me. But they've got good people working on the production and I really believe in Robby Browne. No matter what happens, I think it will be fun."
Even if Harrity came away from the audition feeling good (and the producers outlined big risks, she said), a quick reading of the prospectus -- cleared by both the SEC and the New York attorney general -- would have sobered her up.
The prospectus, which differs little in tone from those sent potential investors by "Sweeney Todd" or any other production, warns that most Broadway shows result "in a loss to investors . . . These securities should not be purchased unless the investor is prepared for the possibilities of total loss."
Nevertheless, even with these dismal prospects, producers say that small investors are responding to their offerings.
Bill Dempsey, an associate producer of "If, If, If," which put an ad in the Times last summer, said that response was "excellent, surprisingly high." The production was cancelled long before it went into production when Dick Van Dyke bowed out. Backers got their money back.
Mortimer Gottlieb, whose "Romantic Comedy" is playing Broadway now, said he is being approached constantly by individuals who want to put some money into his productions. But Gottlieb, who used to rely soley on the backing of the late Denver Post publisher, Helen Bonfils, said he likes to limit his partners to about 50. "When you get to 150 or more, that's too many people to worry about," he said. He has 55 limited partners in "Romantic Comedy" who have anted up between $2,000 and $12,000 each.
Although producers say that they are having little problem finding small backers, many are concerned that the pool is smaller than it appears.
Barr attributes much of his success in attracting little investors to "Sweeney Todd" to "being the first to tap the market."
Although many of the investors seem more concerned with the glitter of Broadway than the return on their funds, "If a guy gets burned too many times, he probably won't come back if he's got limited resources. And I want these folks for future productions, too," said one producer.
Perhaps to speed up the time in which the backers can recoup their outlay, producers have raised ticket prices sharply. For some musicals, such as "Sweeney Todd," top prices are $25. Overall, the price of tickets for musicals has increased 23 percent in the last two years, while it costs 28 percent more to see the average dramatic production, according to Wachtel of the Producers League.
Even so, last season at least, audiences flocked to Broadway. According to New York Attorney General Robert Abrams, the 1978-79 Broadway season, which ended Memorial Day, was "one of the strongest in years."
Still, strength is measured in terms of smaller overall losses rather than larger profits. And three new productions last year lost more than $1 million each: "Alice," "Carmelina" and "King of Hearts." Only two new shows had a profit in their first season, although more (such as "Sweeney Todd") should show a profit as their runs continue.
Although figures are scanty, many new musicals seem to be having problems so far this season. "That scares me a little," said Harrity. "But it's exciting, stocks are boring and I knew it wasn't a great investment."
Well she should have. Her father, Robert Johnstone Harrity, of Pennsylvania National bank, just listed backing a Broadway production as one of the worst moves an investor could make.