Hit hard by a cash crunch and lackluster ticket sales as it tries to bring audiences back amid the pandemic, the Metropolitan Opera said on Monday it would withdraw up to $30 million from its endowment, give fewer performances next season and would accelerate its adoption of contemporary works, which, in a change, have outsold classics.
The dramatic financial and artistic moves show how the pandemic and its aftermath continues to rock the Met, America’s premier opera company, and comes as many other performing arts institutions face similar pressures. .
“The challenges are greater than ever,” said Met Chief Executive Peter Gelb. “The only way forward is reinvention.”
Nonprofits only try to dip into their endowments as a last resort, as the funds are meant to grow over time while producing a stable source of investment income. The Met’s endowment, valued at $306 million, was already considered modest for an institution of its size. This season, it is turning to the endowment to cover operating expenses, to help offset weak ticket sales and a cash crunch that emerged as some donors were reluctant to step up pledged donations amid the slowdown in the stock market. As more cash donations materialize, the company hopes to replenish the endowment.
To further reduce costs, the company, which is giving 215 performances this season, plans to reduce the number of performances next season by almost 10%.
The Met’s decision to stage far more contemporary opera is a remarkable U-turn for the company, which largely shunned new works for many decades because its conservative audiences seemed to prefer war horses like “La Bohème” by Puccini, “Aida” by Verdi and “Carmen” by Bizet. .”
But as the Met has staged more new work in recent years, that dynamic has begun to shift, a shift that has been accentuated since the pandemic: While attendance has been generally anemic, contemporary works including “Fire Shut Up in My Bones” by Terence Blanchard last season and “The Hours” by Kevin Puts this season drew sold-out crowds. (Verdi’s “Don Carlo,” by contrast, ended its run this month with 40% attendance.)
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Now, Mr Gelb said, the Met will open each season with a new production of a contemporary work.
It will kick off next year with the company premiere of Jake Heggie’s “Dead Man Walking” and the season will feature its first performances of Anthony Davis’ “X: The Life and Times of Malcolm X”; “Florencia en el Amazonas” by Daniel Catán and a staging of “El Niño” by John Adams. And Mr Gelb said the Met is revamping next season to bring back ‘Fire Shut Up in My Bones’ and ‘The Hours’, with its three divas, Renée Fleming, Joyce DiDonato and Kelli O’Hara reprising their roles.
“Opera should reflect the times we live in,” said Yannick Nézet-Séguin, Music Director of the Met. “It’s our responsibility to generate new works for people to recognize themselves and their realities on our stage.”
Mr. Gelb said the company’s change in strategy was possible in part because major stars are increasingly interested in the interpretation of music by living composers. “It’s a big change in terms of opera singers themselves embracing new work and understanding that this is the future,” he said.
The Met has attracted many of the era’s most illustrious singers since Enrico Caruso led its stage, and it has given the world premiere of several Puccini operas and the American premiere of works by Richard Strauss and Wagner . He returned triumphantly last year after the long pandemic shutdown, which cost him $150 million in anticipated earnings. Ratings were back, but still lagging behind. Donations were up. And the determination of the entire company, including its artists, stagehands and ushers, was there: even though Omicron closed many theaters last season, the Met never missed a curtain.
In the summer, however, the society, which has an annual budget of $312 million, making it the largest performing arts organization in the United States, began to feel more intensely the tensions of the pandemic.
Last season, ticket revenue from in-person performances and Met’s Live in HD theater presentations was down more than $40 million from pre-pandemic. The opera house’s paid attendance fell to 61% of capacity from 73%. Donors stepped in to fill much of the gap: during the pandemic, they pledged more than $150 million in additional emergency funds. But amid the market downturn, some were hesitant to deliver these freebies quickly.
“When the economy shakes, major donors shake with it,” Gelb said.
The company had avoided dipping into its endowment at the start of the pandemic, as many other struggling opera companies and orchestras have done, in part because it made the painful decision to furlough workers, including its orchestra and choir, without salary. But now he has withdrawn $23 million from his endowment and can make another seven million.
Adding to the company’s woes was a recent cyberattack which prevented the Met’s website and box office from selling new tickets for nine days.
But as more private donations come in — at the start of the new year, the company expects to receive an additional $36 million in cash on top of its normal contributions — it hopes to replenish the endowment before the end of the financial year, at the end of July. We don’t know if this will be possible.
The Met’s decision to turn to its endowment undoes some of the work it has undertaken in recent years to rebuild it. A few years ago, the company announced a fundraising campaign to double the endowment and took steps to reduce the amount it raises each year to 5% of its value from 8%.
The Met isn’t alone in struggling to emerge from the pandemic.
The Portland Opera in Oregon, which is struggling with a prolonged decline in ticket sales, has cut staff and halved the number of operas it stages each season to three from six before the pandemic. “The situation facing Portland Opera right now is not unique, but it is still a crisis,” said company chief executive Sue Dixon, who said the cuts were needed in the short term. term but would harm the company’s ability to grow.
The Philadelphia Orchestra has seen paying attendance hover around 47% this fall, compared to around 66% before the pandemic, although a recent surge in sales has sparked some optimism. “A lot of people haven’t gone back to the habit,” said Matías Tarnopolsky, president and general manager of the orchestra and the Kimmel Center. “We have to remind them that this is not only a beautiful, extraordinary and special experience, but also easy and inexpensive.”
Dayton Contemporary Dance Company, an Ohio troupe, canceled its holiday shows this month due to lukewarm demand and rising production costs. And the Philly Pops, a 43-year-old orchestra, announced plans to disband next year, citing mounting debt and a sharp drop in subscriptions during the pandemic.
The prospect of a recession next year is further rattling arts groups and raising fears that low attendance could carry over into next season and beyond. Federal aid, which helped many businesses survive the pandemic shutdown, has now largely dried up.
“We are still in this time of great uncertainty and anxiety,” said Simon Woods, president and CEO of the League of American Orchestras. “The need to build new audiences is more urgent than ever.”
For many opera companies and orchestras, the pandemic has accelerated the decline of the subscription model for ticket sales, which was once a major source of revenue.
At the Met, subscriptions are expected to fall to 19% of total box office receipts this season, from 45% two decades ago. As single tickets become more popular and some older subscribers stay home due to virus fears, the average audience age at the Met has fallen to 52, down from 57 in 2020.
Mr Nézet-Séguin, who became the Met’s music director in 2018, succeeding James Levine, who led the company for four decades, said the company would remain committed to the classics even as it embraced innovation. And he said the company could try to appeal to different audiences with an array of work, old and new.
“I want everyone to feel welcome at the Met,” he said. “Are they going to fall in love with every opera we do? Of course not. But I don’t want anybody to say, “The Met isn’t for me.”