Financial and labor drama at the Met, and its aftermath

Act I. Behind-the-scene look at the Met's financial troubles

Though revenue had grown to $324 million, the company had run an operating deficit of $2.8 million...In two to three years, [Peter Gelb] said, if nothing was done the Met could face bankruptcy.

March 23, 2015

Photo: Victor J. Blue/The New York Times

Photo: Victor J. Blue/The New York Times

On February 26, 2014, Peter Gelb, the general manager of the Metropolitan Opera, entered the Met’s boardroom to address a group that included a nine-member committee of the Met orchestra, whose contracts were due to expire on July 31st. There was much to say. Seven and a half years into his tenure at the world’s largest and most complex arts organization, Gelb could point to an impressive record of achievement: High-definition theatrical broadcasts of Met productions in cities around the world had brought grand opera to an audience of millions and opened a new revenue stream—$32.1 million in the most recent fiscal year. To attract new audiences, he’d brought a roster of acclaimed directors to the Met stage and introduced fifty-four new productions, averaging seven per year—a Met record.

Yet the Met’s expenses had soared. In the most recent fiscal year, 2013, they were three hundred and twenty-seven million dollars—forty-seven per cent higher than when Gelb took over. Because the box-office accounted for less than a third of revenue, the Met depended heavily on charitable contributions. Though revenue had grown by nearly fifty per cent, to three hundred and twenty-four million dollars, the company had run an operating deficit of $2.8 million.

Despite a multiyear bull market in stocks, the Met’s endowment had withered to two hundred and fifty-three million dollars, from a peak of three hundred and forty-five million in October, 2007, owing in part to annual withdrawals to fund operations. In fiscal 2013, the Met drew twenty-one million dollars from the endowment, an alarming spending rate of 8.3 per cent. In 2012, the Met had tapped the bond market to borrow a hundred million dollars. Meanwhile, attendance had fallen from ninety-two per cent of capacity, in 2007-08, to seventy-nine per cent, in the 2012-13 season.

Act II. And the drama's surprising happy ending

workers agreed to a 3.5 percent cut in wages upon ratification, and another 3.5 percent reduction six months agreed not only to match the value of the labor cuts, but also to cut $11.25 million worth of other expenses

August 18, 2014

In the end, the Metropolitan Opera and two of its unions agreed that to avoid the calamities that have silenced swaths of the classical music world, they would have to scale back.

After months of harsh words and escalating threats of a lockout, the Met and the unions representing its orchestra and chorus looked into the abyss and reached a tentative deal early on Monday, agreeing to significant and somewhat surprising cuts.

The agreement — made after a tense all-night bargaining session — had compromises from both sides: The unions representing the orchestra and chorus recognized the financial fragility of the opera house and agreed to their first pay cut in decades, while management abandoned its toughest demands and agreed to make significant reductions of its own, with independent oversight.

By coming together to share the cuts, the Met’s management and its artists seemed intent on avoiding the kind of mismatch between expenses and revenues that eventually bankrupted its former neighbor, New York City Opera — while steering clear of the kind of destructive labor battle that silenced the Minnesota Orchestra with a vitriolic lockout that lasted 16 months.

Act III. A year later, $1 million surplus and talk of renaming after a donor

traditionalists may shudder at the idea of a new name for the opera house, known for more than a century as the Metropolitan Opera

September 16, 2015

Met's General Manager Peter Gelb (Photo: Sara Krulwich/The New York Times)

Met's General Manager Peter Gelb (Photo: Sara Krulwich/The New York Times)

A bigger glass lobby stretching into Lincoln Center’s plaza. Operas on Sunday. And perhaps, following the lead of its neighboring theaters recently renamed for David Geffen and David H. Koch, slapping another wealthy donor’s name on the storied Metropolitan Opera House.

These ideas, disclosed by Peter Gelb, the Met’s general manager, in an interview as he prepared to begin his 10th season at the helm of the company, suggest a renewed focus on drawing new audiences and raising desperately needed money for the opera, where attendance has struggled. If Mr. Gelb’s first decade was notable for technological innovations that broadened the Met’s reach outward — his popular “Live in HD” simulcasts of operas at cinemas reached 2.6 million people last season — much of what he would like to do in the coming seasons looks inward.

The Met has engaged Levien & Company, a project management firm that has worked on other successful theater renovations in the city, to study how it might be able to build a low glass enclosure running the width of the Met and extending 30 or 40 feet into the Lincoln Center plaza. That addition would add several thousand square feet of space that would allow the Met to redesign its box-office area, gift shop and art gallery and to possibly add a cafe.