Atmosphere inside the National Theatre in Washington, D.C., on January 4, 2012 (Photo by Jahi … [+]
The Washington Post via Getty Images
After almost four decades, the Nederlander family has regained control of the National Theatre.
Earlier in the week, James L. Nederlander of the Nederlander Organization, which operates nine Broadway theaters, joined forces with Jam Theatricals, which presents touring productions of Broadway shows, to create a new company that will oversee season ticket subscriptions at 26 theaters across the United States. Operating under the leadership of the Nederlander Organization, the combination of the two theatre companies seemed like “a perfect fit,” commented Nederlander.
However, as part of the deal, Nederlander will also get another chance to manage the National Theatre in Washington, D.C., after losing control of the large venue to its rival, the Shubert Organization, in 1980.
The Nederlander Organization first took control of the 184-year-old theater in 1972 when the business started to expand its operations outside of Detroit, Michigan. “I have a great feeling for the future of the theater,” commented Nederlander’s father, James M. Nederlander, when he signed a 22-year lease for the historic house.
However, in the aftermath of the race riots in 1968 and the exodus of families from the downtown area to the suburbs, the National Theatre struggled to attract large audiences, and the Nederlander Organization decided to sublease the venue to a not-for-profit organization named the New National Theatre Corporation. Roger Stevens, the chairman of the neighboring Kennedy Center, led the group, and booked touring productions of popular Broadway shows like A Chorus Line.
Yet, the National Theatre still struggled to make money, and other directors of the not-for-profit organization began to voice their concerns about its management. Stevens was shown the door five years later amid accusations that he had embezzled funds, and the New National Theatre Corporation terminated the remaining lease with the Nederlander Organization.
The organization set up a committee to find a new company to manage the historic house, and reviewed 27 different proposals. The Nederlander Organization submitted a bid. “But, they got eliminated by our search committee very quickly,” recalled its new leader, Maurice Tobin, because “[t]he Nederlanders and Stevens were together on a lot of shows.”
In 1980, the New National Theatre Corporation announced that the next company to control the 1,676-seat theater would be the Nederlander Organization’s competitor, the Shubert Organization.
The Nederlander Organization did not take the news well, and filed a 72-page brief in federal court to block the transaction. Following a 1958 settlement with antitrust regulators, the Shubert Organization could only acquire an interest in a theater “upon an affirmative showing to this court that such acquisition will not unduly restrain competition,” and the Nederlander lawyers claimed that the deal would give its competitor too much control in cities where producers often test shows before bringing them to Broadway.
“The overwhelming number of try-outs were in Washington, Philadelphia, and Boston,” and “Washington was the leader,” argued attorney Jonathan Weisgall for the Nederlander Organization. “Washington is not in a vacuum,” he insisted, adding that, “[i]n legal terms, this is an extension of their New York power.”
But, the judge dismissed the argument, explaining that, “if Shubert were allowed to manage the National Theatre its control of first class theatres in Boston, Philadelphia and Washington — which are the key “try-out” cities — and in New York, would be increased by only 2.2%.” “This increase has not been shown to have an anti-competitive effect, and it pales in the face of the evidence of pro-competitive effects in Washington which others, including the [government], suggest would occur were Shubert’s application granted,” the judge continued.
The Nederlander Organization insisted that the government should investigate the Shubert Organization for other unlawful anti-competitive behavior. But, the judge did not buy its arguments, and approved the deal for the National Theatre.
“The Shubert made a proposal to the National, and Nederlander made a proposal to the National,” explained Alvin Stein, an attorney for the Shubert Organization. “The National concluded that the Shubert made the most attractive proposal,” and “the Nederlander reaction is that of a disappointed suitor,” he said.
Following their bitter clash in court, the Shubert Organization cancelled all of the house seats set aside for the Nederlander Organization in its Broadway theaters. “I don’t want any courtesies from him, and I don’t care to extend any to him,” stated Gerald Schoenfeld, the chairman of the Shubert Organization at the time.
The Shubert Organization spent $1.6 million renovating the National Theatre, and managed it through highs and lows for over 30 years. Jam Theatricals took over the reins after the lease expired in 2012, and it has since presented musical concerts, magic shows, and other special events alongside touring productions of Broadway shows.