The show goes on: How Signature Bank’s bailout saved Broadway
One of crypto’s major banks, Signature, experienced liquidity issues following the loss of its major client FTX, leading to a sharp drop in stock price and a bank-run situation. Among its depositors were real estate and law firms — but no one was talking about how Signature’s collapse threatened to break the leg of New York’s musical theater scene.
According to an unnamed insider who spoke to Broadway News, Signature was one of two banks favored by the Broadway industry. Signature reportedly held 40-50% of Broadway shows and several supporting businesses — with show budgets regularly hitting the $10 million mark, the bank’s collapse would have severely impacted show biz.
“Broadway is all about relationships,” the accountant said. “Very often, a particular general manager or producer will have a relationship with a particular bank and that’s where they will do all their banking.”
- Broadway shows are set up as individual companies.
- Because of the scarcity of banks capable of catering to their needs, producers usually held all of a show’s funding in one bank.
- This put Broadway in quite a pickle while Signature was going under.
“We could have seen a situation where everything was frozen and possibly shows could have closed the following Sunday — or even the Thursday, really — if there was no payment there,” John Gore told the outlet. Gore is the chairman and CEO of the John Gore Organization, which presents, distributes, and markets Broadway shows.
Read more: US gov’t creates moral minefield after SVB and Signature bailout
“Some Broadway and touring theaters had also actually put the advances for the shows — their ticket sales — with Signature Bank,” Gore explained. “It would’ve basically created a systemic failing in Broadway itself.”
Of course, the catastrophies of Signature and Silicon Valley Bank’s collapses were averted. Thanks to an unprecedented bailout by the US government, all deposits were insured.
It looks like the show will go on — hopefully with a new banking strategy this time.
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