Work a Las Vegas Stage, Earn $150K in a Week

June 16, 2008 — -- You can lose $15,000 a day in Vegas without even hitting the tables. Instead, try taking the stage … if you dare.

"You're a freaking idiot if you try to do this," says comedian George Wallace, who has been making crowds laugh six nights a week for the past six years at Las Vegas' Flamingo Hotel. "I rent the stage, the staff and the advertising space — it's all on me."

What Wallace does is called 4-Walling, a process whereby an entertainer rents a stage for at least one year and pays for all his or her own promotion. What the performer gets in return is ticket sales.

David Saxe, the producer of more than 150 Vegas shows, said that even with stage rent running at $10,000 to $20,000 per week, one-person acts with low overheads can make $150,000 a week.

"But if you bomb," he said, "then you can end up losing $15,000 every night on a one-year contract."

In today's tough economy, 4-Walling is no small gamble. Sixty-three percent of Las Vegas visitors attended shows in 2007, according to Kris Tibbs, senior research analyst at the Las Vegas Convention and Visitors Authority. That represents a significant decline from all previous years, including 2006 — when show attendance was 13 percent higher — and 2004, when it was 19 percent higher.

Hotels, meanwhile, have taken a hard-line approach when it comes to working with 4-Wall shows.

"Four-Wall used to include in-house advertising and in-house ushers," Saxe said. "Now it just means, 'Here's the room, now pay us the rent.'"

To 4-Wall is not a new phenomenon: It has been around since the late 1980s, when the mob was replaced by corporate bean counters. They decided money was being lost in the showroom, with hotels paying $500,000 a week to the Streisands and Sinatras of the world and struggling to recoup that outlay.

Today, there's huge demand from performers looking for stage space, which gives hotels the luxury of changing shows when they please. While acts like Wallace are relatively affordable, the speculation is that big production shows like Spamalot and Cirque du Soleil may prove too expensive for the visiting public.

"If people aren't coming to these shows, then the hotels will just close them down and shift their target from the high-end to the value-oriented customer," said Keith Schwer, director of the Center for Business and Economic Research at the University of Nevada, Las Vegas.

Economists like Schwer are keen to point out that while Vegas bigwigs are prepared to drop room prices to put heads in beds, doing so does not mean they are panicking. He says that the weakened U.S. dollar makes the city more affordable for overseas tourists so businesses don't actually suffer.

"Forty million people visit here very year," Schwer said. "There is and will remain sufficient critical mass for shows."

Taking advantage of low interest rates to borrow and build, developers have gone all out. The $8.4 billion City Center is one of the new projects that will bring 44,000 additional rooms to the Las Vegas area in the next four years, making a total of 179,174 rooms. As Schwer puts it, you could bring over the entire state of Wyoming with three people to a room and they'd have extra towels.

Like the developers, it seems that the show guys in Las Vegas are willing to gamble that the storm will pass. They join the developers in taking advantage of market uncertainty; it seems for many that life is dull without risk.

"I've hired more sales people, more advertising and I'm going for broke," show producer Saxe said. "I'm going to try and capture more of the market in this downtime."

In Vegas the show goes on — for now.

Daniel Heimpel contributed to this report.