The company has withdrawn nearly $40 million in additional funds from its endowment to cover expenses, but sees signs it may be emerging from its post-pandemic woes.
The Metropolitan Opera, still reeling from the disruption brought by the pandemic, said on Thursday that it had withdrawn nearly $40 million in additional emergency funds from its endowment as it works to survive one of the most trying periods in its 141-year history.
The move came after the Met took $30 million from its endowment fund last season to help cover operating expenses amid weak ticket sales and a cash shortfall. Nonprofits usually try to avoid drawing down their endowments, which are meant to grow over time while producing investment income. The Met’s endowment fund is now worth about $255 million, down from $309 million in July.
“For most people the pandemic is over. For arts institutions, we’re still in it,” said Peter Gelb, the Met’s general manager. “But we see a way out. There is light at the end of the tunnel.”
The company pointed to several signs that it may be turning the corner.
Paid attendance has risen to about 73 percent so far this season from roughly 63 percent at the same point last season, and is nearly back to what it was just before the pandemic hit. The Met’s Live in HD cinema broadcasts — which contributed more than $15 million to the company’s bottom line before the pandemic, but are currently only breaking even — are beginning to draw larger crowds. And as the Met presents more contemporary opera, it is attracting younger audiences: The average age of single-ticket buyers for in-person performances has fallen to 44 from 50 before the pandemic.
The Met expects cash gifts of more than $100 million to help replenish the endowment over the next few years. The company is also working to land a “transformative” gift, Gelb said. He declined to provide details, saying only that he hoped it would come “sooner rather than later.”
Gelb said that the Met “obviously can’t make a habit” of dipping into its endowment, but that the withdrawal would help the company while ticket revenues recover and as it waits for expected donations.
“Under the extraordinary financial challenges and circumstances that we’re facing we believed it was the prudent thing to do,” he said. “The alternative would be not to perform.”
The Met is hardly the only performing arts organization still struggling to emerge from the pandemic. Across the United States, regional theaters are staging fewer shows, giving fewer performances, laying off staff and, in some cases, shutting down. Orchestras and dance and opera companies have in recent months slashed budgets, sold real estate and trimmed their seasons to try to stay afloat.
But the Met faces acute challenges. Mounting live opera is expensive, requiring lavish sets, star singers and a much larger orchestra and chorus than the biggest Broadway shows can boast. Inflation has added to the opera company’s burden, with the costs of shipping and materials increasing sharply. And ticket revenues last season from in-person performances and movie-theater broadcasts were down by about $25 million from before the pandemic.
In addition to tapping its endowment, the Met said it would institute measures to cut costs and increase revenues that were suggested by Boston Consulting Group, which conducted a study of the company’s operations on a pro bono basis.
The Met has already begun giving fewer performances: 194 this season, down from 215 last season. It plans to change its scheduling over the next few years so that each opera has a more condensed run; they currently can have two or three short runs that may be spread out in the fall, winter and spring. Doing so will allow the company, which sometimes presents as many as four different operas in the course of a week, to have fewer operas in rotation at any given moment.
And the plans call for scheduling more of the Met’s most popular titles, like Puccini’s “La Bohème,” on weekends, when they tend to bring in substantially more revenue than less familiar works. These changes, along with other cost-cutting measures and more targeted marketing efforts, are expected to net the company about $25 million to $40 million each year.
Even before the pandemic, the Met, the largest performing arts organization in the United States, with an annual budget of about $312 million, faced existential questions, as the old model in which subscribers would buy tickets to many productions each year faded.
The pandemic, which forced the company to shut down for more than a year and a half, exacerbated those troubles. Many of the Met’s patrons, who are older, stopped attending live performances and cinema broadcasts as frequently, leaving the company looking for new audiences.
This season, the Met accelerated its embrace of contemporary works, which have made up a greater share of the repertory in recent seasons.
Modern operas have proved over the past few years to be more of a box-office draw on average than the classics. In December, Anthony Davis’s “X: The Life and Times of Malcolm X” ended an eight-performance run with 78 percent attendance — outselling “La Bohème,” which had 74 percent attendance. Others fared less well: Jake Heggie’s “Dead Man Walking,” which was promoted heavily and given the coveted spot to open the 2023-24 season, ended its nine-performance run in October with 62 percent attendance.
Later this season the Met will bring back Terence Blanchard’s “Fire Shut Up in My Bones” and Kevin Puts’s “The Hours,” hoping to replicate their success in earlier seasons, when they drew sellout crowds.
Next season, the Met will present four contemporary operas, down from six this season. “Grounded,” about the toll of drone warfare by Jeanine Tesori and George Brant, will open the season in September. John Adams will conduct the Met premiere of his latest opera, “Antony and Cleopatra.” And Heggie’s “Moby Dick” and Osvaldo Golijov’s “Ainadamar” will also be on the agenda.
Gelb said he was confident that the Met’s bet on contemporary opera would pay off, adding that ticket sales could surpass prepandemic levels next season. “We’re demonstrating that accessible, new work that is emotionally impactful can be as successful or more successful than revivals of classics,” he said.
While works like “La Bohème” and Bizet’s “Carmen” continue to draw crowds, and a holiday version of Mozart’s “The Magic Flute” had 87 percent attendance over 13 performances in December, there has been less interest in other staples of the repertory. A nine-performance revival of Verdi’s “Un Ballo in Maschera” ended in November with 56 percent attendance; an eight-performance run of Wagner’s “Tannhäuser,” with a starry international cast, finished with 64 percent attendance.
Gelb said that the company would continue to present an array of classics and revivals: Richard Strauss’s fairy tale opera “Die Frau ohne Schatten,” for one, will be staged in the 2024-25 season.
The recent withdrawals have undone some of the Met’s halting attempts to rebuild its endowment, which has long been seen as too small for an institution of its size, and meant that the smaller fund did not benefit as much from the recent stock market rally. The Met, which has been authorized to draw an additional $40 million from the endowment, has withdrawn $36 million so far.
Asked if he was concerned about the dwindling endowment, Gelb said: “It’s what keeps me up at night.” He said the latest withdrawals were necessary because the company was “fighting for our survival.”
“The endowment is there certainly not to be raided,” he said, “but to be used in a time of crisis rather than going out of business.”
Across the country, opera companies of all sizes are still grappling with the effects of the pandemic as they face smaller audiences because of shifting habits and lifestyles, rising costs and the loss of government aid that kept many alive during the pandemic.
Opera Philadelphia eliminated five staff positions this season and slashed its budget by about 15 percent. Seattle Opera, seeing a steep drop in subscriptions, has significantly reduced its slate of performances, and Portland Opera recently said it would sell its headquarters to help pay off debt and replenish its endowment. Tulsa Opera scaled back its season, moving some performances to smaller venues. And Syracuse Opera, facing ticket sales that were still more than 40 percent below prepandemic levels and difficulties securing sponsors, announced in November that it was canceling the rest of its season and furloughing staff.
“We’re competing with traveling Broadway shows and popular concerts,” said Camille Tisdel, the chair of Syracuse Opera’s board. “Families have only so much money to spend, and during the pandemic, people really got used to being at home.”
The Met has so far avoided serious disruptions to its operations. But there are still fears that without a significant infusion of cash in the near future, there could be more turbulence.
“I believe ultimately we are going to find a winning path,” Gelb said. “We have very loyal audiences and very loyal new audiences who believe the Met is a thrilling and exciting cultural institution. And ultimately that is how we’re going to fight our way out of this difficult hole that the pandemic has helped put us in.”
Source: Music - nytimes.com
