Independent entertainment rights company Ovation Rights has entered into a long-term partnership with Grammy-winning artist and producer Alicia Keys to acquire the the economic interests previously held by the original Broadway production company of her bio-musical Hell’s Kitchen, a deal both sides say will effectively provide the production’s investors “with an immediate capital return rather than waiting for future distributions over many years.”
Noting that they “believe enormously in Hell’s Kitchen and its long-term future,” Ovation founders Jamie Hendry and Philip Green said in a statement that the transaction with Keyes “demonstrates something we think could be important for Broadway. Investors have historically had limited opportunities to realize the value of their investment other than waiting for distributions over many years.”
They continued, “We hope Ovation Rights can provide another route to liquidity by allowing investors to realize value and potentially recycle that capital directly into new productions.”
Specific dollar amounts of the deal were not disclosed, nor was a timeline on payouts to investors.
Hell’s Kitchen, created and inspired by Keys, ended a nearly two-year Broadway run last February 22, with the production then expected to return about 60% of its $22 million capitalization to investors. Additional returns were expected to come from touring and international productions.
The investment establishes Ovation Rights as a long-term partner in Hell’s Kitchen while, the company says, demonstrating a model that could have broader significance for Broadway by “providing investors with another way to realize the value of successful theatrical investments, while introducing patient, long-term capital to established productions.”
Traditionally, investors in Broadway productions often receive distributions on their investments for many years beyond original runs, through touring, international productions and other subsidiary rights. Ovation says it believes there is an opportunity “to develop a more active secondary market for theatrical investment: providing liquidity to existing investors while taking a long-term position in the future economics of proven theatrical properties.”
Ideally, the model would provide the potential to help capital circulate more freely “through the Broadway ecosystem, giving investors greater flexibility and the opportunity to reinvest in new work while introducing long-term capital to established productions.”
Keys said in a statement, “Dreaming big has always been at the heart of Hell’s Kitchen – not only in the story we tell, but in creating space on Broadway and beyond for new faces, new voices and people who may have never imagined themselves as part of this community. This partnership with Ovation Rights not only rewards the original investors who took a chance on a new, original musical, but creates exciting new possibilities for better supporting the people who take that same leap of faith on new work, new artists and new members of the Broadway community. I’m excited and inspired by what this partnership represents and by the doors it can open.”
In a separate statement, Aaron Lustbader, Executive Producer of Hell’s Kitchen, said, “As Broadway faces new challenges, the industry needs innovative ideas and new pathways for serving our investors’ collective best interests, while accelerating their return from what could otherwise be measured in decades to a much shorter timeframe.”
Lustbader said the Ovation-Hell’s Kitchen partnership, could set a new precedent for how Broadway capitalization “can blossom into meaningful returns on a faster timeline.” The approach, he adds, represents “a truly modern approach to the current issues theatrical finance faces and will, in turn, represent a threshold moment for the industry at a crucial time.”
Hell’s Kitchen features music and lyrics by Keys and a book by Kristoffer Diaz, opening to strong reviews on Broadway at the Shubert Theatre in April 2024 following its world-premiere engagement at The Public Theater. It won two Tony Awards (of 13 nominations). The musical currently is on a North American tour with “additional opportunities for the musical’s future development anticipated.”