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June 1999 Article

Exclusively Found in the Insider Viewpoint of Las Vegas

Two or Four Wall…
How Showrooms Really Work!"

By:  Dick Feeney

One of the questions I am asked often is to explain the difference between a two and four wall deals as it pertains to selling a show to a casino. In what I will refer to in the real world, a four wall would begin with a landlord leasing or renting an empty space consisting of four bare walls, thus the term. The person or business leasing the space would then pay rent per square foot and/or a percentage of revenue. The lessee would then be financially responsible for putting in all the improvements such as fixtures, equipment and furniture they would need for their business, whether it is a restaurant, bar, gift shop, etc. They would supply all the working capital necessary to run the business. A similar arrangement usually occurs when a show plays in various theaters or none gaming venues, with the exception of the theater usually already existing.

In the showbiz / casino world things are a bit different. From a producer’s standpoint usually the preferred deal would be when the casino buys the show. This would include an amount to the producer covering all costs including the cast salaries, costume and set amortization and of course some built in profit. The casino would also supply at its expense the technical crew, stage hands, orchestra, maitre'd and captains, advertising and of course the theater rent free.

A casino four wall deal unlike a real world four wall comes in many variations, but usually means the show gets the theater rent free but no weekly money guarantee. The show’s producer and thus cast works off either all or a percentage of revenue from ticket sales. The casino may or may not pay for advertising, stage crews etc.

A two-wall deal is a variation on a four-wall contract that means the casino pays the producer enough money to cover the cost of the show (the cast) but no profit. They figure the profit on what is called a profit override based on the success of the show meaning ticket.

Since most show deals involve negotiations between different producers, properties and often changed management, there are variations that I like to refer to as one or three wall deals. In fact I was once offered a deal so ridiculous that I jokingly referred to it as a five-wall. I was to pay all the pre-production costs to mount the show, all running expenses, stage crews, advertising and even rent. If the show turned out to be a success and I had made what the owner thought was enough money, he had the option of owning the show himself and kiss yours truly goodbye. Naturally I took the deal and got back on the turnip truck I fell off for the long ride home.


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