Lord of the Ringing Cash Registers.

In the Broadway musical version of The Producers, Nathan Lane explains the main rule for investing in a stage musical: "Never put your own money in a show." But apparently putting taxpayers' money in a show is all right. The producers of the new musical version of Lord of the Rings, opening at Toronto's Princess of Wales Theatre this Thursday, raised $3 million from the government of Ontario. The governor of New York wouldn't usually put money into a Broadway show, but every resident of Ontario is helping Frodo sing and dance.

The Ontario Ministry of Tourism provided the funding, and Guy Lepage, its media relations officer, is upbeat about the future of the show despite its mammoth $27-million budget. As of last week, Lord of the Rings had amassed advance sales of $18 million. It's a good total, but not comparable to the record-breaking US$27-million advance racked up in New York in 2001 by the lower-budgeted Mamma Mia! But although Rings co-producer David Mirvish has admitted to the Ottawa Citizen that the advance is "not enough to guarantee the success of the show," Lepage told Maclean's that "we're investing in a product that we're very confident is going to sell."

Perhaps not confident enough to risk a loss, though: the $3 million is a loan, not a direct investment. While governments often grant money to theatrical productions, they are usually "arty" productions that couldn't be produced with private funds and aren't expected to be profitable, like Shakespeare productions or depressing plays with confusing endings. With Lord of the Rings, things are different: the $3-million loan will be repaid, with interest, by the producers of a big commercial property. In other words, the government of Ontario is not subsidizing art and culture, but lending money to a huge event.

The loan has drawn fire from the Canadian Taxpayers Federation (CTF), a taxpayer advocacy group, which promptly blasted Ontario Premier Dalton McGuinty, calling him "Lord of the Squanderers" in a press release. Tasha Kheiriddin, Ontario director of the CTF, fumed: "At a time when the province has a 1.6-billion-dollar deficit. . . he spends millions of dollars on singing hobbits?"

Was the loan a sound decision? Critics have been all too happy to point out that eight out of 10 musicals fail to make back their costs. But there are other potential benefits to having a big musical in town, even if it doesn't make money. The producers have contracted to keep the show in Toronto for at least nine months, which means at least nine months of people coming in from out of town and, hopefully, boosting the local economy. Lepage says the benefits have already begun to trickle in: since previews began on Feb. 4, "Hotels and restaurants are already reporting more American patrons."

The hope is that Toronto will take on New York when it comes to attracting the dollars of theatre-going tourists. This was tried before in the 1990s, when producer Garth Drabinsky and his Livent company unveiled a series of big splashy musicals like Kiss of the Spider Woman and Ragtime. But those shows faded away, and so, eventually, did Livent. Since then, Toronto has still had a thriving theatre culture; what it doesn't have is the kind of theatre that can draw buses full of out-of-towners with disposable income.

The Tourism Ministry and the Mirvishes are hoping Lord of the Rings will change that. Private groups are also getting in on the act. Tourism Toronto, an association of hotels and other local businesses, will spend $3 million advertising and marketing Lord of the Rings to potential tourists around the world. If Toronto becomes known as a theatre town, the reasoning goes, then economic benefits will naturally follow. "The show's producers estimate that Lord of the Rings is going to generate $700 million a year in economic activity for Toronto and Ontario," Lepage says.

Which means that, ultimately, it hardly matters how good a product Lord of the Rings turns out to be: the mere presence of a huge, hyped musical in Toronto will bring in money from other sources. Which is why the $3-million loan came from the Tourism Ministry. Though, Lepage adds, "The Ministry of Culture is certainly interested." Big, expensive theatre is as much about tourism dollars as about culture. And, as Max Bialystock discovered in The Producers, there are ways to profit from a stage show even if it's not a hit.

PHOTO (COLOR): LORD OF THE RINGS has its big opening in Toronto this week. The show is scheduled to run for at least nine months.

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By Jaime J. Weinman