Settling at the Met | Michael Kaiser

September 2, 2014 12:13 PM

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The biggest news in the arts world over the past month was the settlement the Metropolitan Opera reached with its many unions. The management of the company had stated that without significant cost reductions, the institution could not remain viable. The problems at the Metropolitan have been evident for years. Ticket sales have not increased yet expenses have grown significantly. This placed increasing, and seemingly unrealistic, pressure on the organization's fund-raising efforts. While the institution would report modest operating surpluses from time to time, the sophisticated observer could see these surpluses were earned only after huge draws on the Met's endowment. Prudent institutions 'take' 4-6 percent of their endowments each year as income, leaving the remainder to support future endeavors. The Met was forced to take double this amount, more than the endowment was earning, to achieve an acceptable bottom line. In other words, the Met was spending its endowment so quickly it was watching it evaporate.

The unions rightly argued that the only costs mentioned for reduction were personnel costs. Not surprisingly, the unions were up in arms. They wanted to know why other costs were not being reduced. They pointed to extravagant sets and costumes and numerous new productions. (The poppy field in Prince...

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