The Financial Stress of the Performing Arts

Posted: Monday, June 6, 2011 by Damian De Luca in Labels: , , , , ,
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Successfully conducting an art organization such as the New York City Opera or the Philadelphia Orchestra is not always about carefully selecting an appealing repertoire of plays, dances, and pieces of music. It’s not always about recruiting talented performers or hiring creative personnel for the purpose of staging the most exceptional works. Artistic vision is definitely not the only aptitude required to flourish as a theatre company. Nowadays, the world of opera and other performing arts seem to struggle against both the industry’s instability and the nation’s economic crisis. The time has come for art organizations to showcase their financial skills and focus not only on achieving artistic excellence, but also on efficiently managing cash flows, creating appropriate capital spending strategies, and conducting expenditure analysis. Thus, the role of chief administrative officers becomes more decisive than ever — especially considering that nonprofit cultural organizations are facing a serious decline of financial contribution. These organizations strongly rely on endowments to schedule their programs season after season. Even though some of these companies may attempt to find innovative ways of raising additional funds, their hope of survival seems to be determined by their financial intelligence. 

The New York City Opera is experiencing a financial situation that puts its future at significant risk. The organization is facing a $5 million projected deficit for its 2011-2012 season while having to deal with an endowment that has declined from $55 million to $9 million (CBS News, 2011). After announcing its retirement from the renowned Lincoln Center and facing vehement negotiations with its singers, musicians, and production staff, the City Opera is still striving to efficiently revise its budget (Moody, 2011). Moreover, former vice chairman of Philip Morris International in Switzerland and NYCO’s latest board chairman, Charles R. Wall, has contributed $2.5 million to minimize the company’s deficit and promote further contributions (Wakin, 2011). Accordingly, if opera-lovers decide to visit NYCO’s website they will come across an entire page dedicated to a fundraising campaign called Chairman’s Challenge 2011. Essentially, the City Opera encourages visitors to make a contribution on or before June 30, 2011 and help the organization overcome its crisis. 

Although some art organizations are confronting bankruptcy and other financial concerns, we can’t deny the fact that many others, like the Chicago Lyric Opera, have managed to stay solvent (CBS News, 2011). Under the same economic circumstances, these last companies seem to have withstood due to clever strategic planning, appropriate staffing, and careful finance controlling. As stated before, running this type of organization is not only about the quality of art. Blinded by the objective of expanding its artistic horizons, the NYCO has committed a series of mistakes along the way. In the 2008-2009 season, although the market was crashing and ticket sales were dwindling, NYCO’s former general manager and artistic director, Gerard Mortier, urged the board to renovate NYCO’s theatre (ABC News, 2010). Mortier essentially forced “the company to go dark for the 2008-2009 season, with only six unstaged performances elsewhere. Total revenue dropped to $17 million in 2009, compared with $37 million the previous year, the audits show” (Dobnik, 2011, ¶ 30). Unfortunately, as you may have realized, artistic success isn’t the only thing that matters. 

It’s important to understand that the performing arts constantly face more risks than most other industries. Therefore, we must admit that we are willing to bear the responsibility of continuously handling uncertainty because we like what we do; we love music, dance, and acting among other forms of art. However, if we expect to succeed in this business, we must also realize that art is not the only thing we must preserve; we need leaders that recognize talent and true expression but at the same time master budgeting and financial management skills. 

Finally, there’s no doubt in my mind that the City Opera will overcome its financial issues. There are plenty of individuals with the capacity to lead and manage this cultural venture. As George Steel, the actual general manager of NYCO, would say: “This is certainly a serious transition for the opera (...) but the thing that makes me optimistic is that I can see a balanced budget model for the company that will provide a foundation for sustainable growth” (Moody, 2011).

References

ABC News. (2011, May 19). Board of Troubled NYC Opera Meets to Talk Future. Retrieved June 5, 2011, from http://abcnews.go.com/Entertainment/wireStory?id=13637998&page=2
BWW News Desk . (2011, May 19). NYC Opera Facing Financial Deficit. Retrieved June 5, 2011, from TalkOperaWorld.com: http://opera.broadwayworld.com/article/NYC-Opera-Facing-Financial-Deficit-20110519
CBS News. (2011, May 19). Board of troubled NYC Opera meets to talk future. Retrieved June 5, 2011, from http://www.cbsnews.com/stories/2011/05/19/ap/entertainment/main20064326.shtml
Dobnik, V. (2011, May 20). Board of troubled NYC Opera meets to talk future. Retrieved June 4, 2011, from Associated Press Archive
New York City Opera. (2011). Chairman's challenge 2011. Retrieved June 5, 2011, from http://www.nycopera.com/supportus/challenge.aspx
Moody, N. M. (2011, May 20). NYC Opera to leave Lincoln Center, cut staff. Retrieved June 5, 2011, from Associated Press: http://hosted2.ap.org/APDEFAULT/4e67281c3f754d0696fbfdee0f3f1469/Article_2011-05-20-Music-NYC%20Opera/id-06540ac151ea4aebb30a9af2410b9034
Wakin, D. J. (2011, April 7). Facing financial instability, City Opera seeks to plug $5 million deficit. Retrieved June 5, 2011, from The New York Times: http://www.nytimes.com/2011/04/08/arts/music/new-york-city-opera-seeks-to-cover-5-million-deficit.html

Photo retrieved from http://www.nycopera.com/supportus/challenge.aspx


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