Time ticks towards Peter Gelb’s Götterdämmerung
mainThe Met manager will have breakfasted with a smile this morning over Maureen Dowd’s mini-profile in the New York Times. The doyenne columnist, a Times protegée of his father’s, wrote fondly, almost maternally, of the embattled opera manager.
Peter Gelb will have stopped reading before he got to any critical comment. As a former PR man, he mistrusts journalists and never believes hat he reads unless it is totally fawning.
Nor does his listen to his own PR advisers, making one blunder after another in his public utterances these past few weeks.
What Peter Gelb believes in is Peter Gelb. And that faith is about to be sorely tested.
Unless he can reach some form of agreement with the unions in the next 36 hours – a prospect as remove as an Israel-Hamas love-in – Peter Gelb will lock all unions members out of the Metropolitan Opera and shut it down for the forseeable future.
The outlook beyond that does not look good for Gelb. If the unions force him to climb down after weeks or months of shutdown, he’s finished. If he manages to bring them to heel, the Met that he will manage after the lockout will be – like the Minnesota Orchestra – a restive, unhappy company that will only be appeased – as in Minnesota – by the blood of its manager.
Either way, Peter Gelb will be toast. He has 36 hours to get himself out of the open fire.
I wonder if there is any chance the Board may blink first? Might someone put up an amount equivalent to Gelb’s savings covering the next year with the Unions agreeing to continue working under the old contract till next summer? I’ve no idea. But I don’t discount it.
It is interesting that in all of this discussion, no one is pointing out that the Met’s budget is over twice as large as its European counterparts.
The Vienna State Opera does even more performances than the Met and at similar quality. It’s budget is $130 million compared to the Met’s $311 million — almost 2 and half times smaller.
The Opéra National de Paris runs TWO houses on a budget of $270 million, the 2700-seat Opéra Bastille and the 1970-seat Palais Garnier. (It also runs a small scale theater for contemporary works in the 500-seat Amphitheatre under the Opéra Bastille.) So that would come to $135 million for each Paris house compared to $311 million for the Met’s single stage.
The costs of living in Paris are similar to NYC. The Vienna State Opera even has the VPO in the pit. These comparisons show that something is fundamentally wrong with the cost structures at the Met.
Neither the Met nor the unions want to mention the house’s grotesquely disproportionate budget because both sides want to continue to hog funds that under a better funding system would be divided much more democratically in the larger cultural community.
Vienna actually does more operas and less performances. They also hire an awful lot of singers from Eastern Europe at low salaries to fill out casts. I remember seeing an Aida with two Italian leads and the balance of the cast filled out with Bulgarian singers you never heard of. Under Mr. Gelb, the Metropolitan Opera has been flying in top singers at high fees, transport and lodging for comprimario roles. It’s one of the points one, or more of the unions have mentioned as a cost saving measure, to hire local.
However, you are quite correct, the budget at the Metropolitan Opera has increased ridiculously beyond the rate of inflation at the hand of the current steward.
The payroll at the Met is $200 million per year. That’s 30% more than the ENTIRE budget of the Vienna State Opera. If the Met were to have a budget similar to its European counterparts, salaries would have to come down. I feel a lot of solidarity with the workers, but I can’t get around these numbers.
Europeans would also find it ridiculous that the Artistic Director of a house is paid $1.2 million a year or that stage technical directors (4 of them at the Met) receive $500,000 per year. So much absurdity has been grandfathered into the Met that it will be a long and arduous process if things are ever straightened out. Even if Gelb is successful with his demands (unlikely,) it will only scratch the surface of what needs to be done. Severe problems will still remain.
… all of which points to a protracted lockout.
Unless both Gelb and the unions realize that they have a more posh situation than any house on the planet, that all this public mud slinging is killing them both, and that they need to shut up and make an agreement soon.
The Met directors work next door to Wall Street, and I suppose there’s an American idea about what the director of a leading institution should earn in the middle of all that fundraising. Gelb is still making peanuts compared to the banksters, though, both on the Wall Street and in Vienna.
The increase in the Met’s budget has been about $100 million
$60 million of that is compensation, i.e., salaries and benefits.
$10 million has been in increased spending on new productions
The remaining $30 million includes the various new media programs, notably the HD program which returns a profit to the Met of $10 million a year or so.
Gelb is seeking to cut back slightly on overtime and benefits, i.e., from the largest segment of the increased budget. Now explain to me again why, if you’re looking to save money, you shouldn’t start by looking at your biggest ticket items first?
We need some hard documentation for these numbers, and possibly some elaboration as well.
Annual reports for the Met yield the following information:
Financial Year 2006 Expenses: $222 million
Financial Year 2013 Expenses: $327 million
Growth in Expenses 2006-2013: $105 million
Financial Year 2006 Labor and Benefits Expenses: $186 million
Financial Year 2013 Labor and Benefits Expenses: $259 million
Growth in Expenses 2006-2013: $73 million
So the Met spent $105 million more in 2013 than they had in 2006, of which increase $73.0 million was higher expenditures for “Labor and Benefits.”
$73 million / $105 million = 69.5%. That is the proportion of increased expenditures that was devoted to “Labor and Benefits.”
The Met’s documentation breaks down the expenses further into “Union,” “Administrative” and “Non-Union” categories. “Union” compensation increased from $154 million in 2006 to $215 million in 2013, a growth of $61 million, or about 72%.
Of the 2013 “Union” compensation, $214.5 million went to the chorus, orchestra, stagehands, seamstresses and various other unionized employees. $24 million went to “solo artists,” which is to say everyone from Anna Netrebko down to “La cena e pronta.”
Of the $327 million the Met spent in 2013, $214.5 of that amount went to salaries and benefits of union employees. That is 65.6% of the Met’s gross budget, or as close as makes no difference to Peter Gelb’s figure of “2/3.”
The Met spends 66% of its budget on union compensation, a cost that has grown 72% in seven years. And do you wonder that this expenditure should be the company’s first target in cost savings?
Thanks. Finally some numbers to show the growth of union employee costs — 72% in 7 years while the overall budget has increased 47.2%. Union labor thus rose 25% more than the overall growth of the budget.
Before targeting union salaries, however, we need to know if the 72% increase was in part due to poor administrative practices, such as faulty planning that might have caused unnecessary overtime costs. Excessively complex and unreliable stage machinery in the Ring production could also be a factor in creating a surge in OT costs.
So was the surge in labor costs an anomaly during this period or something systemic that will continue to be a problem even with better planning? We need to know how much of the labor costs could be reduced through better planning, and only then determine how much might still be necessary to cut through pay reductions. And finally, we need a breakdown of how the surge was distributed. Did it go mostly to instrumentalists, choristers, or to stage hands (and which kind of stage workers)? In short, which groups accounted most specifically for the increases? Should cuts, if necessary, be across the board, or should they target specific areas where costs rose faster than others?
So we’re closer now to some clarity, but still not out of the woods.
And there’s an even more complex set of questions that cannot be objectively resolved. Labor grew 25% faster than overall growth, but was that perhaps essential to maintaining artistic standards given the increased competition among top orchestras for the best players? I feel the salaries in top orchestra have gotten out of hand and that unhealthy practices have evolved in the presumably non-profit symphonic world. When are organizations going to say enough is enough? Philly, for example, is now the lowest paid of the top 6, and yet in my book they are still the best.
Menlo’s numbers have huge arithmetic errors. My post showing this is out of sequence and appears several posts below her post with the false numbers.
We should remember also that the Paris Opéra budget has to include all the costs of the Paris Opéra Ballet with about 180 dancers. To accompany all the productions of opera and ballet, the Opéra’s orchestra has 174 members. So the total number of full-time musicians and performers on the payroll is considerably greater than at the Met, plus it runs two Houses as William Osborne points out.
@ WO, that Vienna figure seems low. Munich is higher. Are we comparing apples to apples here?
The Wiener Staatsoper receives 56.4 million euros from the government each year and they earn 49.9 million from ticket sales and other income because they sell 99.7% of their seats. Those numbers push it up to a yearly budget of about $135 to 140 million depending on how the exchange rate is calculated.
See: http://kurier.at/kultur/buehne/dominique-meyer-die-staatsoper-ist-arm/52.323.654
Both the Staatsoper and the Met do around 300 performances per year, but the Staatsopera does it for less than half the price — $135 million vs. $320 million.
I keep seeing various numbers for the Met’s budget ranging from $311 to $327 million. Not sure which numbers are accurate.
I wouldn’t be surprised if the budget for the Munich Staatsoper were higher than Vienna’s. The musicians in Germany are generally better paid than in Austria though still far from what the Met Orchestra is paid.
Thank you.
The “European counterparts” are not responsible for providing health insurance to their employees, for a start, and the work rules at the Vienna State Opera allow the use of independent contractors for a lot of their chorus work. I’m not sure what the employer contribution to pension plans is in the European houses, but the Met is uniquely burdened with that expense among American theaters.
Health insurance and choral contractors (whatever you mean by that) do not account for the Met budget being 130% higher.
BTW, you really are exposing yourself as an Internet sock puppet for the Met, though meat puppet is the technical term since you are using a name that makes you seem like an actual person. In any case, I find the information and perspectives interesting even if jaundiced.
Even the NY Times are getting critical of Gelb in recent articles.
http://www.nytimes.com/2014/07/30/arts/music/labor-struggles-at-metropolitan-opera-have-a-past.html?ref=music
http://www.nytimes.com/2014/07/29/nyregion/countdown-to-lockout-for-unions-at-the-met.html?ref=music
As for Maureen Dowd, she’s so capricious in her comments that she deserves no credibility.
HOLD IT just a minute. There’s a huge error in Menlo’s numbers! She notes that union labor costs rose from $154 million in 2006 to $215 million in 2013 and said that’s a 72% increase. Actually, its a 39.6% increase.
Overall growth in the budget was 47%, so union labor increased 8% less!!! Add to that my questions above about the possible poor planning and administration that might have caused the increased labor costs.
This strongly suggestions that production costs might be the first line of attack in reducing the budget and that cuts in labor might need to be less draconian that the Menlo’s false numbers suggest.
You are correct about this one mathematical error. Labor costs have increased about 40% over 7 years, or something faster than 5% per year. That does not change the fact that labor costs, then and now, account for two out of every three dollars spent by the Met, or that the Met spends more on salaries and benefits for their employees than most opera companies do for their entire operations.
The other numbers all stand, I take it?
Probably, but I would need to look over the many numbers very closely, which I don’t have time to do right now.
In any organisation dependent on 1,600 full-time and 1,800 part-time employees to deliver the product, of course labour costs are going to be by far the largest single line item in the budget. And I suspect you are correct that the Met’s labour costs are in themselves greater than the budgets of most other opera companies. But you include overtime in these costs, and most of us have been saying since Day 1 of this series of discussions that the Met’s casual disregard in respect of controlling overtime costs – a line item over which the management has near-absolute control! – has contributed to much greater increases in overtime working in recent years than in the past.
In the “Wagner diva asks singers to reduce their Met fees” thread, it is reported that the published base pay for choristers is around US$104,000. Yet one of Gelb’s arguments is that choristers are taking home $200,000 or more. If you take out the overtime payments, though, the percentage increases you talk about drop probably quite considerably. So Gelb and his management team can reduce some of these payments at a stroke through much greater planning efficiency and greater control over directors and designers! One of Gelb’s Production Managers is on record as saying “We don’t like to say ‘no’ to directors” in respect of changes to designs. Perhaps it is time they did!
We need hard numbers and contexts before we can determine the extent to which OT is affecting the payroll and why. There is less than a 3% difference in the number of overtime operas programmed by the Met, the ROH, and the Paris Opera, but the latter two do not have such huge payrolls. Is it because they plan better, or because their stage hands are more efficient, or because their OT regulations aren’t as expensive, or many other possible factors?
It could be that there was poor planning at the Met, but it could also be that OT regulations cause exorbitant costs even with fairly standard, well planned productions of the main rep. We can’t say much without knowing the exact causes. We should also remember that union payroll costs grew 8% less than overall costs at the Met. Both sides and the mediator will need to look at the numbers and causes very closely.
This strongly suggestions that production costs might be the first line of attack in reducing the budget
Yes, by all means, the place to find economies is in the line item that represents barely 6% of the total budget, not the one that eats up 66%.
You need to provide documented numbers that show production costs are only 6% of the budget. The payroll should definitely be examined, but given the morale problems, only when it is clear that it is the last resort. Given the poor planning of OT and complex stage machinery, costs might be reduced without pay cuts, or perhaps cuts considerably smaller than those proposed. But you are right, a $200 million payroll is out of proportion to international standards and indirectly starves other institutions out of existence.
Stated budget for new productions in 2012-2013 was $21,788,000, according to this financial report published in the Wall Street Journal on January 28, 2014:
http://online.wsj.com/public/resources/documents/nymetresults0128.pdf
That number of a little over $20 million has remained consistent over the past few years, though I don’t have the 2013-2014 figure yet. My assumption is that some of the costs of the new Ring cycle were assigned to 2012-2013 when the cycle was repeated. At any rate, if the Met spent $327 million in 2013 and of that amount $22 million was spent on new productions, that works out to 6.7% of the budget, or about a tenth of what the Met spends on labor.
I would also like to challenge the statement that overtime costs are “a line item over which the management has near-absolute control!” That’s nonsense, because the way the work rules are currently written, the necessary functions of the opera house cannot be completed without incurring overtime. This has been true for decades. For example, the orchestra is required to play only four performances a week as “regular time,” but the Met programs seven performances. Similarly, even if the chorus has not sung the designated minimum number of performances in a week, they still charge overtime to rehearse. A further example is the rule that both orchestra and chorus receive overtime for any opera performance running more than four hours; obviously there are a number of important operas in the repertoire that cannot be squeezed into a four-hour window. If you’re performing the mature Wagner works, Verdi’s Don Carlos or Les Vepres Siciliennes or Berlioz’ Les Troyens, overtime is inevitable. (This past season, I am told, Vladimir Jurowski got permission to perform Die Frau ohne Schatten unabridged only after he demonstrated to Met management that he could get the curtain down before that magical four-hour mark.)
$20 million or so would be the cost of new productions, but we also need the total production costs. The new Ring, for example, was not only expensive to produce, it has also been expensive to repeat.
I agree that OT costs might represent systemic problems that need to be solved if the Met is to perform the standard rep without excessive financial burdens.
It’s reported that the stage hands and choir are taking a more low key and amenable approach to negotiations, while the orchestra is being more resistant. Status is very important to top orchestras, and they tend to rank themselves by what the players are paid. (The press has also contributed to this nonsense.) The result is that each top orchestra is trying to build a taller tower than the others. Top American orchestras have become the San Gemignano of the music world.
http://simple.wikipedia.org/wiki/San_Gimignano
You just prove my point. Management is in control of overtime. If it wishes to schedule seven performances a week, it knows the budgetary implications. If it schedules operas lasting in excess of four hours, it knows the budgetary implications. Union staff have an obligation to work if so dictated by the management! So it is not the Chorus that “charges overtime to rehearse.” The management insist on it and compensates accordingly!
But I am having trouble again with your figures! You stated very clearly above that total expenditure in 2012/13 was $327 million. That online wsj page you just quoted actually lists total expenditure at $311 million. $16 million is quite a difference! Which is correct? Also, you state above that labour and benefits expenses totalled $259 million. Now how on earth can that be, I wonder? The wsj makes it clear that TOTAL costs for the New York season were $200 million (is there any other season?). So how can labour costs be 29% higher than total costs?
There’s more. You state above that guest artist fees totalled $24 million. Where are these listed in the financial results? I certainly cannot see a line item for that amount. So presumably that $24 million has to be included in the New York season cost of $200 million. And since most guest artist contracts do not include provision for overtime, that should be deducted from the $200 million BEFORE you have the figure for Union staff remuneration. Yes? Or are Ms Netrebko and her colleagues members of a US Union? If not, we are actually looking at Union staff costs of around $176,000, are we not?
You have tried to confuse the issue by comparing figures seven years apart. Let’s get back to basics and instead try and isolate just how much is being paid to Union staff in the last season for which figures are available. Whatever it is, it is clearly NOT $259 million!
The figure in the last line of the penultimate para should of course be $176 million.
[…] piece is warm and sympathetic (Norman Lebrecht called it “maternal”)—this is not unexpected, as she used to work for Gelb’s father. What strikes me […]
Re the comment above from @William Osborne and @Mikko – “Europeans would also find it ridiculous that the Artistic Director of a house is paid $1.2 million a year . . .”
Gelb is not paid to be Artistic Director, as far as I am aware. He is listed in the Met’s own website as just General Manager. Did the Board actually appoint him Artistic Director, or is this the role he has merely assumed for himself?
His salary covers his position as General Manager. In his first year he was paid a package amounting to $1.1 million. In his second it went up 36% to $1.5 million according to the company’s financial statements. In 2012 that jumped to $1.8 million, although he has since taken a voluntary pay cut of at least 10%. Also at the Met, in 2010/11 James Levine earned $2.1 million as Music Director.
Compare these figures with the Royal Opera House. In the last set of published figures (2012/13) Alex Beard the CEO earns $430,000. Sir Antonio Pappano the Music Director earns $960,000.
So the Met pays its CEO about 4 times that of his counterpart at the ROH. Guess who’s getting far better value for money!
(Note: Music Director income is usually split between a fee for duties as MD and conducting fees. I assume that as Levine has been conducting less during his long illness, his total remuneration will have gone down.
Since the Met doesn’t have an artistic director, the General Manager assumes that role.
They can’t fire Gelb, but they could better define his role. His basic goals have been correct, but he needs better advice, and most specifically, from a good, experienced Artistic Director. The salary for one might be a bit high, but she would save the Met millions through her experience, like knowing to avoid things like the Ring Machine boon-doggle. A good Artistic Director could also move the Met at least partially away from its exorbitantly expensive star system and move it a little more toward an ensemble house — which generally have higher artistic standards anyway. She could also define over-all programming in a way that would bring the ridiculous overtime costs under control. In short, it’s time for the Met to begin behaving a little more professionally.
I think a team of Peter Gelb as Business Manager and Pamela Rosenberg as Artistic Director might work. Rosenberg’s vision in SF was very good, but she didn’t understand how to work with America’s private and anachronistic funding system. Under her direction the Stuttgart Opera was considered one of the best and most innovative houses in Europe. Especially important in SF were her efforts to create a second, studio format venue – something the American opera world desperately needs.
Rosenberg has exactly the expertise needed to continue the efforts to lead the Met out of its provincialism. It’s always a good idea to separate the financial and artistic leadership, with the financial person generally having the last say. The idealism of art always needs a practical grounding which is missing when one person occupies both positions. A Gelb/Rosenberg tug-of-war would work well and spur creativity at the Met on all levels, especially since Rosenberg also has a great deal of experience with financial issues as well. And Gelb has done an excellent job with fund-raising.