"Hairspray" will go down in theater history as the quintessential Broadway success story.

The production, based on Baltimorean John Waters' 1988 cult movie, focuses on a tubby teenager who wins her way onto a local TV show in 1962 and integrates the city's airwaves in the process.

Since opening last August, "Hairspray" has played to sold-out audiences -- and its advance sales, into March 2004, are at $20 million. The musical won eight Tony Awards, Broadway's highest honor, on June 8, including honors for best musical.

But "Hairspray" will go down in Broadway lore for another reason: It is a financial success.

The musical, whose lead producer is Baltimore native Margo Lion, returned its full $10.5 million budget -- or "initial capitalization" -- to its more than 300 investors just days before the Tonys.

"All the capital has been returned," said Lion, whose first Broadway production was "Jelly's Last Jam" in 1992. "From here on in is profit."

The checks were mailed to investors about six weeks under a year since "Hairspray" began its previews last July in New York, she said.

"I'm obviously delighted," said Lion, 58. "That's their goal, and now we have to give them a profit."

Steven Baruch, whose Baruch-Viertel-Routh-Frankel Group put up a quarter of the musical's initial budget, also is pleased. The group brought in 230 investors, each putting up at least $10,000. Other investors included the Houston-based Clear Channel Communications Inc. and New Line Cinema, which holds the movie rights.

Investments ranged from $10,000 to $1.2 million.

"We're thrilled to death," Baruch said. "It's been a great ride and a great opportunity."

With the nation's economy still experiencing sluggish growth and unemployment, that a Broadway musical has recouped its investment provides great hope, industry observers say. Broadway, like New York City overall, continues its slow recovery from the Sept. 11 attacks -- and the industry experienced a brief musicians' strike earlier this year that threatened to halt what progress had been made since the World Trade Center was demolished. It also continues to grapple with high ticket prices -- top price for "Hairspray" is $100 -- ever-changing theatergoer tastes and fewer new buyers.

"In today's climate, if you get your investment, recoup it and go into making a profit, that's great," said Frederic B. Vogel, a longtime Broadway producer who established the Commercial Theater Institute in 1982 as a training ground for those with serious interest in theater. "Investing in the theater is always a gamble. There are many wonderful plays that have not made back their investment."

In fact, "La Boheme," an opulent version of Puccini's opera, will close on June 29 after a disappointing seven-month run and losses of about $6 million. While the production, set updated to Paris in 1957, won two Tony Awards -- and received a special honor for its cast of 10 members -- it has only earned back about $2.5 million of its nearly $8.5 million in production costs.

"It's an enormous crapshoot," said David Sheward, managing editor of the industry publication Back Stage. "It is a great risk. You have to be a good judge of material because you don't know whether it is going to be a hit or not."

Money quest

The "Hairspray" saga began as early as 1998. The story is familar: Lion was recovering from a head cold that spring in her Upper West Side apartment in Manhattan. She watched the video and instantly saw how it could work on the stage. "The show always had a good feeling about it," she said.

She optioned the musical rights from New Line for a "very minimal" cost -- and that's when the production's money quest began. "We needed development money from the very beginning -- a couple hundred thousand," Lion said.

Those monies, used to assemble the key "Hairspray" creative team and cover other start-up costs, came from an initial group of partners. Besides Lion, they included Clear Channel -- "they were in it with me," she said -- as well as Richard Frankel, a member of the Baruch group. The play's first reading was in May 2000.