It is the theater that the famous retired actress Nana Noodleman performed acts such as Epiphany. In Sing, a 6-year-old Buster Moon realized the dream of owning the Moon Theater, which his father made a reality by washing cars for 30 years.
Moon ownership and singing competition
Buster has been living at the theater with his assistant Miss Crawly since Buster's father bought it with the money he obtained by washing cars. Under ownership of Buster Moon, the Moon Theater has been home to various (apparently failed) shows such as "It's Frozen Fun!", "Sinister Street", "War of Attrition" and "Rosie Takes a Bow". Troubled with debt to various stage crews and a bank threatening to repossess the theater, Buster launched a singing competition with an intended grand prize of $1,000 (falsely advertised as $100,000 due to a typo on Miss Crawly's part) as a last-ditch effort to restore the past popularity of the theater.
The age of the theater is shown with small parts breaking and becoming damaged even with the slightest interaction. As Buster continues to lose money and good luck, the theater loses power due to an unpaid bill and Buster illegally siphons power from a neighboring building. After Buster offers a private performance by his contestants for Nana Noodleman's consideration of funding the competition, he and Meena take glass panels from throughout the theater and create an LED-like stage with a water-filled tank and luminescent squids.
As the private performance for Nana begins to take place, a trio of bears entered with an endangered Mike demanding that Buster shows them the money. After Buster insists that Mike must win the money first, the leader bear smashes the chest with a baseball bat which goes through the bottom of the stage. After the bears and Buster's contestants figure out there is less than $1,000 in the chest, they begin to surround him as the stage begins to crack from the weight of everyone along with the damage just caused. Upon more and more cracking, water begins to gush out in various spots. After Eddie screams "Buster, look out!" the stage completely shatters and floods the Moon Theater.
Nana Noodleman and Eddie barely escape the carnage as Meena unintentionally blocks the exit of the building with her size while balconies and other parts of the theater collapse. After the pressure of the rushing water forces Meena out, the entire front of the theater is blown out to the street. As witnesses nearby look (and record) in shock, a rumble begins to shake the ground, and the entire Moon Theater collapses and disintegrates into rubble. A shocked Buster Moon slowly walks into the rubble, finds the bucket his father used for car washing, and breaks down into tears as Miss Crawly comforts him. The bank is then officially repossessed by Judith for the SFJ Bank.
Post-destruction and concert
After the destruction of the Moon Theater, Buster Moon moved in with his best friend Eddie at his parents' pool house. As Buster eats breakfast while watching news coverage of the previous day's events, Johnny, Rosita, Gunter, Meena, Ash and Miss Crawly come to the pool house in an attempt to comfort him but fail in the process. Buster follows in the footsteps of his late father and restarts the Moon car washing business to earn money, but fails to keep a customer until Eddie helps him out. While helping a customer with their car, Buster notices Meena singing "Hallelujah" in the rubble of the Moon Theater. Buster is highly impressed and inspired to host a new, nonprofit show with all of his participants, free to view for all guests. Buster and his participants construct a new stage and seating section using salvaged parts from the rubble of the theater. Initially faced with a small crowd, Buster is still ecstatic to have the show and rounds his participants up for a supporting speech. The show, covered by news outlets, ends up being a huge success, energizing and inspiring the crowd to dance and sing along to the songs.
Lot purchase and rebuilding
Impressed with the success of the show, Nana Noodleman silently gives praise to Buster Moon from within the crowd. She signs the papers to purchase the lot of the Moon Theater from the SFJ Bank, and the theater is rebuilt. The grand reopening of the theater, along with the cutting of the ribbon, closes Sing.
Before its destruction, the following damage happened to the theater in Sing:
Buster accidentally damaged part of a pillar to the building while walking across it
An accident during a rehearsal (which injured Pete) lead to an electrical fire that was quickly put out
Miss Crawly fell through the stage floor shortly after the fire
Its destruction was recorded on a cell phone by an outside witness.