NY's Metropolitan Opera reports 2009 fiscal woes

June 17, 2010 The company finished the year with its net worth down substantially and sizable debts looming in coming years. In financial statements, filed on Monday, the opera house listed net assets of $236 million, down from $380 million a year earlier. Like many major arts organizations, the Met has been struggling to maintain artistic quality and innovation while riding an economic roller coaster.

"Since the costs of running the world's biggest opera house have always been greater than its earned revenues, the Met has regularly faced enormous financial challenges throughout its history," General Manager Peter Gelb told The Associated Press.

In the first year of the recession, 2008, a company counting on good investment returns didn't get them. The Met wound up scrambling for operating money just as lavish new productions were being staged under the new leadership of Gelb, who became general manager in 2006.

Despite the gloomy financial picture, the company spent more in its 2009 fiscal year than it had a year earlier. Salaries rose by more than $6 million.

Meanwhile, the opera's investment portfolios dropped in value. The organization's financial statements listed $40.8 million in losses, after expenses and dividends, in fiscal 2009 compared to a $14.3 million loss a year earlier. The opera's pension fund lost $20 million in investments.

The financial filings also appear to show a drop in donor support, although Met spokesman Peter Clark said that, overall, gifts have increased in recent years, including a 5 percent increase through the current season. Contributions and grants were listed as falling to $105 million, from $164 million.

Met officials have taken steps in the past half-year to trim expenses and boost revenue.

Stagehands who had been due a 2.5 percent salary raise in June delayed it until the 2010-11 season. And to help cover operating costs on a short-term basis, the opera was forced to dip into its endowment. It asked several donors to ease restrictions on how their gifts could be spent, freeing up $22 million.

A gift of $30 million from philanthropist Ann Ziff was announced in March, with most of the money available this year and the rest over the next four years. The gift from Ziff, whose husband was the publishing executive William Ziff and whose mother was the soprano Harriet Henders, is the largest in the institution's history.

Early in 2009, Gelb replaced four planned major revivals for the 2009-10 season with productions of standard repertory less expensive to rehearse and stage.

Some financial pressures still loom for the organization, including a $35 million back loan due to be repaid in 2011 and a $57 million pension plan deficit.

Gelb said the Met has attracted larger audiences worldwide with productions such as Rossini's "Armida," starring soprano Renee Fleming, and Verdi's "Attila," with costumes by designer Miuccia Prada, which helped boost attendance to 88 percent of paid capacity last season, up about 10 percent over the average of the previous few years.

High-definition movie theater broadcasts, which the Met spent $4.5 million developing, are now also earning a modest profit. "The Met has managed through difficult times in the past," Gelb said. "Now, by increasing the public's interest in opera with our recent artistic successes and public initiatives, we are confident that we will thrive in the future, as well."