The Met raids endowment cash to cover constant losses
OperaPeter Gelb has drained another $40 million from the endowment as ‘additional emergency funds’ to cover losses from most of his pet projects.
He said: ‘Under the extraordinary financial challenges and circumstances that we’re facing, we believed it was the prudent thing to do. The alternative would be not to perform.’
Yup, it’s that bad.
The Met still has $255 million in the fund, not yet on the breadline. Performances have been cut from 215 last season to 194.
But Gelb can’t keep tapping the piggy-bank twice a year, can he?
What will it take for him and the Board to wake up from denial? Long before this latest desperate move, I would have been on the phone with the powerful Manhattan real estate sector. The house needs to be reconfigured; that is, sliced by half. The other half they could use for something else. Or sell it. Or rent it. Then they need to find important voices and artists worth our while. That’s a tall order given the unprecedented worldwide pandemic of poor to bad singing. Good luck to them.
Daft plan, I am afraid.
The new Carmen must have not been cheap from what I’ve read
I cant see it being there long it’s had mixed reviews I’ll have a bit of idea when I see the HD cinema tomorrow
Well that plan should use up pretty much the rest of the endowment. Good job you’re not running the place…………
And slicing the house in half helps how? With only 2000 seats, for some reason it costs less to hire all the singers and instrumentalists for Traviata?
So spend more on “better” singers and conductors, but cut your potential revenue by 50%. Sounds like a solid plan. And I’m sure there are lots of organizations looking to “rent” half an opera house . . . .
Not at the fixed union running costs at the Met. Not likely except for Taylor Swift. Ppl
I always thought the Met obscenely large (remember the great European singers who refused to appear there or had very limited guest appearances – Schwarzkopf, Fischer-Dieskau – because they were afraid of damaging their voices in such a barn?).
It’s also an eyesore! An architect friend once referred to it design as “Montana Whorehouse”.
The best idea would be to gut and repurpose the interior: a main stage (house of about 1.500 seats), a smaller stage (100 seats), decently-priced cafés, areas designated for community use. Sort of like the Barbican Centre.
This will never happen. The Chagalls will next be sold-off as the company scrapes the bottom.
You have a funny way of doing math.
A production costs x dollars whether the house sits 1 or 100,000.
“important voices and artists worth our while” cost even more to a production.
The cost of splitting the house in half is greater than any sales price the Met could possibly fetch, nevermind the acoustic risks to the remaining house. (It cost the NY Philharmonic $500 million to reconfigure its space, to lukewarm reviews.)
and fire him finally who has ruined the house
So reduce their revenue potential by half? Good move. And sorry, this “bad” singing thing is absurd. Granted, there’s nobody as distinct as Pavarotti – he was a once-in-a-century voice. But otherwise today’s singers are every bit as good as those of that supposedly golden generation you long for – and much better actors. And of course the MET Orchestra is far superior to that of those good old days.
Sliced by half? Do you suppose the musicians, chorus, stagehands, etc. would then take a 50% pay cut?
Drawing $40 million from about $300 million at once seems like a lot? If the trend continues does that mean the Met is going out of business in 6 years?
The Met could begin by cutting the senior administrative staff which is woefully bloated. Yes, it would be difficult–if impossible–for Peter not to have a coterie of sychophants to cater to his every whim, but the top-heavy corporate structure is about to topple.
The excesses on stage actually dwarf the fixed expenses.
They might as well not perform given the garbage that Gelb and Yannick program. I heard Yannick conduct the great Philadelphia Orchestra at Carnegie Hall 2 nights ago. It was what I thought , was a very good program: Stravinsky’s Petrouchka, Weill’s 2nd Symphony and Gershwin’s Rhapsody in Blue. Yannick whips through everything he conducts. The Gershwin was not the actual piece, but the Grofe orchestration with sections where the jazz pianist Marcus Roberts played solo improvised sections that head nothing to do with Gershwin. Yannick stood there with his mouth hung open as he listened to Roberts. The audience went berserk. It was depressing.
Gelb is on his way to completely destroying the Met.
Agree with your review of the Philly performances – the Petrushka was absolutely sensational and the Weill interesting and very well played. The Gershwin – I don’t mind the piece but didn’t like the performance. There’s a really awful recent article about R in B in the NYT incidentally
Ticket are already very expensive. Your recommendation would put opera out of reach for many
$35 is not “very expensive” at all. Some tickets are expensive but are less than most Broadway shows. Try getting a ticket to the Lion King which has been running the same show for 25 years………….
Where is the Met’s board of directors?
Palm Beach
The more I think about this situation the madder I get. Would an individual invade their hard earned retirement accounts because they couldn’t live within their means?
I would have to do the research, but this exact same headline for the Met has been repeated several times in the past during the “leadership” (yes, air quotes) of Peter Gelb.
** Met Board** cut your losses and cut the cord NOW.**. During the month of February the company has a hiatus. Use that time to make some decisions to ensure the company’s survival that don’t include eating your own tail.
Yes, use the hiatus like the Premier League transfer window…………and make a transfer!
Or just stop hiring directors to update and radicalize standard repertory works and cut Gelb’s salary in half.
The fact that the audience has become younger may merely be reflective of the fact that the older, once loyal, audience, is not interested in the DEI (diversity, equity and inclusion) repertoire which includes operas about prize fighters, black nationalists, and crusaders against the death penalty. This season’s paltry offerings of the traditional repertory, poorly cast at that, may be reflective of a death wish.
Does Norman have actual data that the losses are mostly from Gelb’s pet projects? If so, I’d like to see it.
I used to supply Norman data from within the house right off the daily reporting. Gelb projects always were the bottom feeders. The person, now deceased who used to supply the numbers to me called Gelb’s productions, “throw aways” and “Gelb’s folly” as they would not last beyond a season, or two at most. The MET generally would get their money back with “shock and awe” sets amortized over many years. Now you get cheap projections and stale sets and costumes you see in Euro regional productions. When did you last see a MET production that shocked, or awed you? It’s been before Gelb’s tenure for me.
Peter Gelb is and always has been the problem since day one!!!! What kind of hold does he have on the members of the Board? Fire Gelb before he raids the remainder of the endowment. You know he will!!!
They’re just so happy to have their names as directors. They have failed to recognize that their participation requires responsibility, at least at the Managing Director and Executive committee levels.
AL, if I understand this statement correctly, you’d want the real estate sector in Manhattan to volunteer their services or donate (why them?) to help reduce the size of the Met auditorium in half? So the Met would need to raise something in in the vicinity of 500 to 600 million dollars, seeing how much it cost to renovate David Geffen Hall, which is smaller and less complex, and that’s the way to save the Met? Also, how do you sell the upper half of the Met? Where do you envision the Met performing while this change is being made, is this with all new productions for these different venues, who’s paying for that, etc etc, the questions are endless
Really, just as you think you’ve heard it all….
There’s more in the article. There are attendance numbers, which are about 15% higher than they were exactly a year ago at the same time. Many shows are selling well, and the abridged Magic Flute in English was 87% sold out. The average age of single ticket buyer is 44. You know, just pointing out the positives which were, as always on SD, left out.
Attendance does not equal sold seats, especially at full price.
The fact that the audience is younger may just mean that the older loyal audience has stopped coming because many offerings have become depressingly bad, or consist of new operas that are forgettable ephemera.
Lots of papering going on in those attendance #’s. On any given evening, one can roll bowling balls down the aisle and not hit feet. Especially with Gelb’s new operas not to audience taste.
House was always capacity or near capacity when Sutherland, Corelli, Tebaldi, Nilsson, Pavarotti, Price, etc were singing. Sometimes sets were old and raggedy. And people came. Conducting was hit or miss sometimes yet people came. There is hardly a mystery why. Opera is metaphor and mystery. The minute it got “real” the myth was shattered, singing declined and divas became ordinary people – the mystery of those sacred beasts in their bubbles popped. It reminds me of Joseph Campbell and the Power of Myth.
With the loss of our finest belcanto artists, opera just isn’t what it once was. A pity the present lot never took the time and trouble to properly train.
Yes, the house needs to be reconfigured, the union contracts renegotiated and the repertoire needs revitalizing. But where is the magician who can do all that. Peter Gelb has done the best he or anyone else could have done but there are no easy solutions without serious radical change.
So the Met might close permanently under Trump? That would be delicious revenge.
The defined benefit pension plans that privide union workers $250k per year benefits in retirement are going to bankrupt if not already the house.
When the met opera board wakes up maybe it won’t be too late but the house is on fire to burn to the ground from mismanagement and failure to understand the unaffordable spending that goes on
Cut the operas to 140 from 194 and things will be better
Stop spreading disinformation.
I have worked in that building for a quarter century and I can’t say that I’ve ever heard of any pensioners from any of our union artists or crews retiring on $250k. Not even close. I will one day retire and count myself lucky to receive a pension even if it’s only about 15% of the fantastic amount you claim. This is precisely the kind of canard that gets passed around to discredit those of us fortunate enough to have a strong union and a collective bargaining agreement. Shame on you. Play hard but play fair.
How do you say schadenfreude in Russian?
Schadenfreudski. 🙂
Lol no, there are many other alternatives other than “not to perform”, but since when has the Met been about common sense and prudent decision making in regards to artistic values and musical integrity?
I am sure that Gelb’s (and the Met board of directors) decision to dip into the endowment fund was not made lightly. Gelb has utilized the endowment fund for exactly what is is intended for, a financial lifeline when needed. Attendance at the Met is down as are donations.
Gelb is doing what is needed in these difficult financial times.
Cutting the opera house in half is a really stupid idea. It would never happen.
The Met obviously needs to keep a far closer eye on their finances.
Will
may be some educational program will rescue it; teach children to listen to Verdi and Beethoven.
and in ten years the house will be full
Perfectly said Em. Thank you.
25 years ago I would have totally agreed. The Met (and the Philharmonic) had the clout to influence music education in public schools. That solution is now too late for the Met. Hindsight and all that.
The MET does that, Gelb brings in classes from time to time when they need to paper the house. They still go to schools, it’s just not done very well. Gelb being the operative problem.
The Met Educational team is doing a phenomenal job training teachers from around the US and beyond. They hold a national conference every year at the opera house, “MET HD Live in the Schools.” Teachers attend workshops led by experts in a myriad of fields. Context is provided for each of the operas studied at the conference. Activities that connect to literature, history, visual arts, science, etc. are hands-on and offer invaluable context. Teachers are also given access to MET Opera on Demand for their students as well as tickets to attend HD Live broadcasts in their local theaters. The MET Ed team puts together comprehensive educator guides every year and post them on their website for public use. There are lots of classroom resources (including easy choral arrangements) and ready to use activities. I have participated in the program for the last 10 years and cannot say enough about what they are doing to help teachers make opera accessible to children. It will take time, but we are growing another generation of opera- goers. My elementary students LOVE learning about opera and have often told me it was the best thing they did all year. Mr. Gelb has supported the MET Education program all these years. Please everyone – give credit where it is due.
And what do they do when the endowment is gone?
I guess everybody is sent home…
Wasn’t there a strike some years ago as a result of which in return for some wage concessions Gelb and the Board agreed the Endowment would be increased to somewhere (was it?) in the region of $500 million? Now Gelb’s disastrous reign is resulting in yet more plunder. How many times must it be repeated: Gelb and the Board have to go? But who has responsibility to make that happen?
It costs a lot of money to buy out contracts when you reprogram shows in the name of diversity.
It was rumored that in Peter’s first season he bought out artists contracts to the tune of $6 million. From a senior member of the artistic staff…
I actually get tired of these untapped accumulations of wealth called endowments. Giving money to show a larger balance isn’t quite as attractive as giving to a performance. By dipping into the endowment, Gelb shows that an endowment is not just wealth for wealth’s sake, as it so often appears, but is used to enhance the artistic product.
So do you call your retirement investments “untapped accumulations of wealth”? Same principal; your retirement savings, meted out responsibly after you stop working, allows you to maintain your living expenses. With the exception of overwhelming medical expenses, it is never prudent to touch the principal of these retirement savings.
I suggest you Google “A PRACTICAL GUIDE TO THE
NEW YORK PRUDENT MANAGEMENT OF INSTITUTIONAL FUNDS ACT”. It will help you to understand the principles and the law.
It’s all about institutional sustainability, a concept of which Peter Gelb is obviously or willfully ignorant.
The most interesting part of the news, though, isn’t mentioned here – he said he has expectations of a “transformative” donation in the near future. If that’s true – if somebody is about to give him half a billion or so – then the house could breathe easy. For a while anyway.
Gelb has held out this promise before. All the prospects have fallen through. It’s all wishful thinking to keep the naysayers at bay. If you haven’t noticed, he’s always trying to buy time. Time’s up…
I will be shocked if the Met House is substantially reconfigured because, as others have mentioned, it could cost a billion dollars.
However, a one billion dollar gift to the endowment would allow the company to operate at a loss for a very very long time.
Shift the focus away from equity and back to excellence. A new chapter will begin. The public is losing interest. Fast.
Cutting $40 million from the endowment means a loss of about $2 million per year in investment income by the endowment going forward.
The NY State AG Leticia James legally had to approve that, as with all major NFP transactions. Wonder how it was posed to her.
Actually, and correct me if I’m wrong, but according to the NYS Charities Bureau in 2011, “…unlike prior law, it allows institutions to spend endowment funds below their original dollar amount (“historic dollar value”) without court approval or Attorney General review, if the institution’s board of directors concludes that such spending is prudent.”
The revised NYS guidelines give boards of directors broader authority to spend donor-restricted endowment funds than they had under prior law (from 1978).
Please Google “A PRACTICAL GUIDE TO THE
NEW YORK PRUDENT MANAGEMENT OF INSTITUTIONAL FUNDS ACT” for the complete guidelines.
It appears that the onus (and blame) is on the board of the Met.
Let’s keep Letitia James out of this one…
Running a great musical company has always been an expansive ballancing act. Fewer people have now a taste for the old fashioned Opera – and most of them do not like the new brand. They have good reasons: Non of the current composers on offer is a new Mozart, Verdi or Wagner.
Why doesn’t Peter just get his friends Ann and Mercedes to bail him out? I guess even they can’t get him out of the jam.
Mess. Ziff and Bass have been very generous. Extremely generous. The unfortunate thing about their leadership on the board has been their failure to use their financial clout to control the worst impulses of Peter Gelb. They and others still could. They just need the courage of the convictions.
Peter will eventually depart (sooner than later) with a secure retirement. He will leave behind a fiscal mess that only the board can untangle. The available proven “fixers” like Borda are few and far between–and in semi-retirement themselves.
Let’s look at pay and benefits for all people. Let’s look at bringing opera to the people. The MET needs to bring opera back to the schools. Expand education. Compete with Broadway. Sell half price tickets or BOGO. What speaks to the people? Sadly, many of the new operas are just too modern. People, even young people want to sing a melody. Limit the new productions. Bring in operas like Jesus Christ Superstar. You might laugh, but technically it’s an opera. Sung from beginning to end. Mass by Bernstein. Bring in pop stars that enjoy opera. Lady Gaga might fill the house if she’s cast in a role that she can handle. Americans are not sophisticated anymore. Open the house to upclass artists.
It all started when he cut the opera in the park.
Everyone should have know them that the man is an elitist incompetent and had no interest in bringing an a be audience who loves to ear the music.
He wanted his directors to “modernize” the company, and here are the consequences.
He lost the audience who would bring their kids and who who help form future audiences and now he’s lost two generations of opera goers.
Does the 44 year old average include the children who came to the abridged magic flute in English?
Gelb never brought in a focus group of ticket subscribers to hear what what they like and don’t like. It went downhill from there. He continues to make colossal mistake after mistake, after mistake.
That is not true. The fact that he ignored what was learned is another matter.
Stop with the false assertions.
Gelb raided the pension fund around 15 years ago and never paid it back. The big spender went to the most expensive outfit to change the font a few years back, has had to pay extra to have sets not made by the now defunct scene shop sent back to be refitted on several occasions at great cost, redocorated his office, spoent a fortune on an interior decorator and architect to redo the the shop at massive expense, turning it from a cozy place to shop to a dreary cold place to shop, hired an expense DEI director at a huge salary who is a drain on funds, for instance pushing an opera about a black gay boxer. What audience did the MET have for that. After the first performance, you could run bowling balls down the aisle and not hit feet. The guy should pack up his tent and leave, he’s the problem. The MET used to be a place of shock and awe, now it’s tepid at best.