The Metropolitan Opera is in trouble again, or rather, the country's largest company continues in crisis mode. After reports of a large deficit and declining ticket revenues and donations came this summer's intensely hostile contract negotiations, labor and management both raising the specter of a shutdown.
Somehow, through negotiations and mediation, contracts were reached and eventually signed, so the 2014 season could open in September. All's well that ends well? Not quite.
Two months after the season-opener, news comes that the Met's deficit "ballooned to an estimated $22 million last year, as weaker-than-expected contributions and ticket sales combined with expenses related to the company’s labor talks to create its most serious shortfall in decades." The company report as relayed by The New York Times:
The deficit for the 2013-14 season was roughly eight times that of the previous season. Calculated as a percentage of the budget, it was the Met’s biggest deficit since 1984. The 2013-14 season shortfall amounted to nearly 7 percent of its overall budget of roughly $316 million, according to preliminary financial data; the 1984 deficit was about 10 percent of the budget.
Met General Manager Peter Gelb used the bad news to explain why the company demanded concessions, and to promise a better future:
The looming operating deficit for last season was a warning call. It’s what compelled us to seek concessions in the union negotiations. Looking ahead, by adopting a leaner, streamlined business model in combination with a larger endowment, we will place the company on safer financial footing.
Meanwhile, San Francisco Opera is now doing much better, especially as viewed against the dismal situation here and everywhere in the arts after 2008 and during the Great Recession. Traditionally, budget figures are released 18 months or as late as two years after they are filed officially, but as the Met report of the last season indicates, that tradition is changing under the pressure of the need for public disclosure quicker than before.
So, when looking at San Francisco Opera fiscal situation, the available information is for Fiscal Year 2013, already a significant improvement since 2008-2009: a deficit of $811,915 on an operating budget of $68,707,049 — about 1.1%.
Looking for more recent information, SFO General Director David Gockley — who has guided the company through the period — provided SFCV with current tentative, not yet official figures: a deficit of about $360,000 on a budget of $72.7 million, meaning that the budget increased, and the deficit went down, all the way to less than half a percent.
The audited results for San Francisco Opera's FY'13 also provided these details:
Total operating revenue for FY13 fell from $32,955,687 to $30,808,345, with income from ticket sales for FY13 at $19,785,866 compared to the season prior (FY12) at $24,302,997. The decline in earned income was caused in part by the elimination of one full opera from the Company’s subscription season.Contributions to the FY13 Annual Fund reflected a 4.4% increase over the previous year and hit a new Company record level of $37,086,789 in financial support from approximately 8,000 donors. At the close of FY13 on July 31, the Company’s endowment was valued at $147,754,431 reflecting an increase of 6.4% over the previous year’s balance of $138,822,387 as of July 31, 2012.
Unless you can read through this maze of figures quickly and easily, you must admit that the business side of opera is something complex and difficult. But the bottom line (of the bottom line) is fairly simple: Gockley's planning, control, and fiscal discipline work.
Of the many other opera companies' struggle, there is news also today from Rome, where one of the world's oldest and most prominent companies faced shutting down because of money and contract problems.
An agreement has been signed between Opera di Roma and the house's seven unions, representing 460 musicians, technicians, and clerks, calling for a 10% cut in basic salary, a ceiling for earnings through overtime, a 25% reduction in bonuses for outdoor performances, and the elimination of "symphonic activity" bonuses (performances other than a complete opera).
Total cuts to the players amount to about 200 euros ($248) per month after taxes; management expects to save 3 million euros, making the company eligible for additional public funding for houses that succeed in substantially containing deficits and increasing productivity. (Will Riccardo Muti, who quit in anger, return to be chief conductor? Remains to be seen.)
Wouldn't it be nice if the U.S., the State of California, and the City and County of San Francisco followed the European system, and contributed to San Francisco Opera in recognition of "substantially containing deficits and increasing productivity"?