Metropolitan Opera Association, Inc.

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Metropolitan Opera Association, Inc.

Lincoln Center
New York, New York 10023
U.S.A.
Telephone: (212) 799-3100
Fax: (212) 870-4508
Web site: http://www.metopera.org

Nonprofit Company
Incorporated: 1932
NAIC: 711110 Theater Companies and Dinner Theaters

Since 1932 the Metropolitan Opera Association, Inc. has run New York City’s internationally acclaimed Metropolitan Opera. With an annual operating budget of approximately $200 million, the Metropolitan Opera stages more than 200 performances during the course of a season that runs 30 to 32 weeks. In addition to the more than 800,000 people who attend performances at the Opera’s home in the Lincoln Center for the Performing Arts, millions more across the world partake through weekly radio broadcasts and occasional television productions, as well as through touring shows and recordings. A separate organization, the Metropolitan Opera Guild, helps raise a significant portion of the approximately $70 million in contributions made to the Metropolitan Opera each year. The Guild also handles the Opera’s merchandising. Because ticket sales only cover 40 percent of the Met’s operating budget and government grants only account for less than 2 percent, fundraising and ancillary income are of paramount importance. After enduring many periods of financial struggle during its 120 years of existence, the Metropolitan Opera has never been healthier than it is today.

Creation of the Metropolitan Opera: 1880

In the 1840s in New York as many as four theaters presented opera, creating what was deemed New York’s first golden age of opera. With its opening in 1854, the Academy of Music, located near fashionable Union Square, became the leading opera house, the place where high society gathered to admire itself. As post-Civil War industry produced a generation of nouveau riche, however, the Academy’s 18 boxes were unable to accommodate the newcomers who, in any case, were less than enthusiastically received by the old-line Knickerbocker aristocracy. The Academy’s begrudging offer to build 26 additional boxes was considered inadequate, and in April 1880 the Metropolitan Opera was incorporated by several wealthy benefactors. In all, 70 shareholders were enlisted to provide the $1.7 million required to buy the land and build an opera house at 39th and Broadway. The mansions of the wealthy and the entertainment district, which had been marching uptown for many years, would soon leave the Academy in the backwaters of Manhattan. By 1886 it abandoned the field to the Met, as New York’s reconstituted high society and new opera house reigned virtually unopposed for the next 20 years.

From the outset, the Metropolitan Opera house, which opened in 1883, was considered inadequate, despite its fine acoustics. The configuration of the building’s property lines resulted in cramped dressing rooms, and limited rehearsal and storage space. In fact, scenery stored under the stage contributed greatly to a fire that in 1892 destroyed the interior of the theater. The expense of rebuilding also led to a new organization, the Metropolitan Opera and Real Estate Company, which would in effect act as landlord to the independent producers who actually ran the opera season, presumably at a profit. The shareholders of the Metropolitan Opera and Real Estate Company, who paid for taxes, maintenance, and repairs of the theater through a yearly assessment, received use of a box for every performance of the opera season in lieu of rent. It was this subsidy that would permit the producers to return a profit, or at least keep losses to a minimum. The Metropolitan Opera Company became the official producing entity in 1908.

For three seasons in the early 1900s the Metropolitan Opera faced stiff competition from a maverick impresario named Oscar Hammerstein and his Manhattan Opera House. Although Hammerstein did not curry favor with high society, his opera house, which featured exciting new French opera and fresh talent, began to draw fashionable patrons. In what was nothing less than an opera war, both Hammerstein and the Metropolitan Opera spread their operations to other cities. In the end, Hammerstein was choked by debt and on the verge of ruin, yet the Metropolitan Opera generously paid him $1.2 million to quit the business. Although grand designs of controlling opera in other major cities, including Chicago and Philadelphia, were never realized, the Metropolitan Opera firmly established itself as America’s major producer of opera and a true international venue.

For 20 years, until the stock market crash of 1929, the Metropolitan Opera would enjoy a period of artistic achievement and financial stability. Until 1920 the major attraction was tenor Enrico Caruso. Gustav Mahler and Arturo Toscanini became principal conductors at the Met, which presented the American premiere, and in some cases the world premiere, of many notable operas. Along with the U.S. economy, the Metropolitan Opera thrived in the 1920s, so much so that it could decline the offer of funding from the Juilliard Foundation, created by textile mogul and longtime Met boxholder A.D. Juilliard. The Met’s lack of interest in meeting Juilliard requirements would free up the funding that would be used to establish the Juilliard School of Music. Rising production costs during this period were offset by increased ticket prices and new sources of secondary income: The Victor Talking Machine Company paid an annual fee to sign Met singers for recordings, and NBC paid for the exclusive right to bring Met singers to the radio. In addition, the Metropolitan Opera rented out its house, sold the rights to its concessions and programs (plus a share of advertising revenues), and earned $15,000 a year from a piano endorsement. Times were so flush that building a new opera house seemed almost a certainty. The collapse of Wall Street in 1929, however, would delay that dream for many years.

The high water mark during this affluent period for the Metropolitan Opera was the 1927–28 season, when the company realized a profit of $141,000, with subscription revenues that totaled $55,000 per week. The 1929-30 season would see the Met lose money for the first time in 20 years, despite record receipts. With the economy in shambles the Metropolitan Opera saw subscriptions drop and tours canceled. Otto Kahn, longtime president and chairman of the Metropolitan Opera Company, was replaced by his attorney Paul D. Cravath, who also represented Westinghouse and RCA. He quickly signed a generous radio contract for the Met, which received $5,000 for each of 24 live broadcasts of operas.

The first radio broadcast of a Met opera, Hansel und Gretei, occurred on Christmas Day 1931, and was carried by the largest network of stations ever assembled at the time. The entire Red and Blue Networks of NBC were augmented by shortwave transmission over the BBC as well as Canadian and Australian networks. By the 1933-34 season the Saturday afternoon broadcasts had found a sponsor, Lucky Strike Cigarettes. A year later Listerine would back the show. Aside from the much needed revenue that radio brought the Metropolitan Opera, it also lent the company national stature. No one was sure about the number of listeners until the Met appealed for contributions over the radio. The enthusiastic and widespread support of the broadcasts could now be measured in the tangible form of money.

Establishment of Metropolitan Opera Association: 1932

As the losses mounted in the 1930s, the Metropolitan Opera had no choice but to change its approach to business. The concept that opera could be made profitable was abandoned; to produce a season was now a matter of funding, not investment. In 1932 Cravath reorganized the producing entity by creating the Metropolitan Opera Association, a nonprofit corporation that would be free of federal entertainment taxes. Because it was now deemed an educational enterprise, the Met was also able to apply for funding from the Juilliard Foundation. The 50th season of the Metropolitan Opera was only saved by a fundraising campaign that scraped together $300,000 from various sources, including $100,000 from the radio audience and $50,000 from the Juilliard Foundation.

In 1935 Mrs. August Belmont founded the Metropolitan Opera Guild to raise money for the Metropolitan Opera, as well as to develop an audience for opera through education. By 1937 regular matinee performances for students were held, and soon the Guild would bring opera to the schools. By the end of the century the Guild would contribute more than $75 million to the Metropolitan Opera. With an annual budget of approximately $17 million, the Guild would boast 100,000 members, becoming the largest organization of its kind.

Although it was far from healthy, the Metropolitan Opera saw its income steadily increase in the late 1930s, enough to ward off the very real danger of collapse as it waited for the U.S. economy to recover. Then in the summer of 1939 the Opera Association was informed that a number of boxholders that comprised the Metropolitan Opera and Real Estate Company refused to pay the annual assessment levied on their shares. Therefore, the lease on the opera house would not be renewed when it expired on May 31, 1940, and the property would be put up for sale. Cravath’s successor, Cornelius Bliss, is credited with saving the Metropolitan Opera by negotiating a selling price of $1.97 million for a property that was assessed for tax purposes at $5.4 million, and spearheading an effort to convince shareholders to accept the deal. He also initiated a million-dollar fundraising campaign to provide the financing. Thus, on May 31, 1940, the Metropolitan Opera Association assumed the title of the opera house itself.

Company Perspectives:

From its opening in 1883, the Metropolitan Opera has been one of the world’s leading opera companies. Today, the Met’s preeminent position rests on the elements that established its reputation: high quality performances with many of the world’s most renowned artists, a superior company of orchestral and choral musicians, a large repertory of works, and the resources to make performances available to the public.

Also in 1940 the Metropolitan Opera radio broadcasts finally landed a long-term sponsor in the Texas Company (Texaco), which had recently suffered bad press over its dealings, however legal, with Axis countries in the period before the United States entered World War II. Because a prominent display of philanthropy was deemed an appropriate public relations response, the oil company decided to back the Met. The goodwill that would accrue to Texaco over the next 60-plus years for sponsoring the weekly opera broadcasts cannot be estimated. Furthermore in 1940, the Metropolitan Opera would first turn to television, another medium in which Texaco would eventually serve as sponsor. An initial concert of selected material was telecast from the NBC studios. The first telecast from the stage of the Metropolitan Opera would be November 29, 1948, when ABC would present the season’s opening night production of Otello.

World War II hurt attendance and, until New York State tax laws were modified, the Metropolitan Opera was burdened with heavy real estate taxes. Another public appeal for money was made in 1943–44, but with the end of the war and the resumption of touring and increased ticket sales, the Metropolitan Opera was able to post a modest $6,000 profit. The 1946-47 season would produce $3 million in income for the first time since the 1920s, yet the Metropolitan Opera lost more than $200,000. Even though scenery and costumes were becoming threadbare as operas that had been mounted 20 and 30 years earlier were recycled, rising production costs had clearly outstripped the amount of revenue that could be generated through ticket sales and ancillary income. Periodic fundraising appeals to the radio audience in order to avert pending disaster became a way of life at the Met.

Plans for a New Opera House: 1950s

The tonic that would restore the Metropolitan Opera to financial health, in the opinion of many, was a new opera house, offering not only increased seating capacity but storage facilities and updated technology. The idea had been advanced a number of times over the decades, but it finally took shape in the 1950s. Federal urban renewal legislation gave the government broad powers of eminent domain to seize property. Robert Moses, New York’s legendary and autocratic builder of parks and roadways, was in charge of the“Title I” program in the city. He identified a slum that was in the vicinity of Columbus Circle that he offered to make available to the Met. In the meantime it appeared that Carnegie Hall might be torn down and that the New York Philharmonic might be in need of a new home. The Met and the Philharmonic joined forces and turned to the Rockefeller family, whose foundation had already decided to fund the performing arts. The result would be Lincoln Center, Inc. and the building of a complex that not only included a 3,750-seat Metropolitan Opera and Philharmonic Hall (later named Avery Fisher Hall), but also a multipurpose theater (the State theater), a library, and an educational facility that would eventually become the Juilliard School of Music.

Plans for a new opera house had always assumed that the project would be funded by selling the old facility. Because of Lincoln Center, the Metropolitan Opera Association would be able to raze the old building and lease its valuable mid-town property. It was not surprising that efforts to“Save the Met” were not welcomed by the Association’s management as it prepared to move into its new theater. In the end, the old opera house began to crumble on its own accord, and the Metropolitan Opera Association was able to sign a long-term lease for the property that would create an endowment fund the organization had never been able to accumulate. Rather than a contingency fund to meet deficits, the endowment was intended to expand the opera company’s repertory and allow the production of new operas as well as the revival of older works that had limited box office appeal.

Although Philharmonic Hall was completed in 1962, the new Metropolitan Opera did not open until 1966. The finances of the Metropolitan Opera Association, however, were still not in sound shape. Banker George S. Moore became president of the organization in 1967 and began to put the Metropolitan Opera on a sound financial footing. Production budgets were adhered to and ticket prices raised. Moore cut costs, going so far as to postpone the opening of the opera season and canceling a production of Don Giovanni. When longtime general manager Rudolph Bing left in 1972, the Metropolitan Opera entered another crisis state. It lost star performers and attendance fell, as did contributions. To many observers in the late 1970s it seemed that only a massive government subsidy, as much as 30 percent of the Met’s fundraising budget, would be able to keep the Met, and American opera, alive.

It was in 1977 that the Metropolitan Opera began regular telecasts on PBS, with Texaco serving as the sole corporate sponsor. The initial show, a production of La Bohème, was seen by some four million viewers. Not only were more people now exposed to opera through television, the Metropolitan Opera was exposed to more people. Aggressive marketing and fund-raising, and tighter management would pay off in the early 1980s as the Metropolitan Opera achieved its best fiscal health since the 1920s. It was now in a position to begin work on a new $100 million endowment fund.

Unlike other prosperous times in its history, the Metropolitan Opera did not slip backwards; rather, it continued to thrive on its success. By 1989 merchandising sales alone would exceed $6 million, allowing the Metropolitan Opera Guild to contribute a record $4.1 million. In 1990 the Texaco-Metropolitan Opera International Radio Network began to deliver live broadcasts to 22 countries in Europe, thus solidifying the Met’s international presence. Also in 1990 the Metropolitan Opera Association was solvent enough to complete 82 capital projects at a cost of $15 million.

Key Dates:

1880:: Metropolitan Opera is founded.
1883:: Metropolitan Opera house opens.
1892:: Fire destroys interior of house and leads to reorganized Metropolitan Opera and Real Estate Company.
1908:: Metropolitan Opera Company becomes official producing entity.
1932:: Nonprofit Metropolitan Opera Association assumes control.
1940:: Metropolitan Opera Association buys the Metropolitan Opera house from the Metropolitan Opera and Real Estate Company.
1966:: Metropolitan Opera moves to new home in Lincoln Center.
1977:: First PBS telecast of a Metropolitan Opera production is aired.

Named general manager in 1990, Joe Volpe, who began work at the Met in 1964 as an apprentice carpenter, led the Metropolitan Opera into a new century. Under his watch the Met strengthened its position, financially and artistically, at a time when other major opera companies around the world were struggling. Thus, Volpe became the most powerful man in opera, and his job the most coveted. When Lincoln Center began to make plans for a $1.5 billion renovation, Volpe and the Metropolitan Opera Association were in a position in January 2001 to withdraw from the project and begin their own renovation plans, which would include expanding the Met’s lobby. Despite being the largest and richest occupant, contributing 30 percent of Lincoln Center’s shared operating costs (and receiving 30 percent of common revenues), the Metropolitan Opera had no more say in the renovations than the smallest of the Center’s 12 constituent groups. Volpe’s surprise notice of resignation to Lincoln Center came just a week after the city committed $240 million to the project. Although the relationship between the Met and Lincoln Center had been occasionally contentious over the years, a 99-year lease would likely insure that the two parties would work out the details over the renovations. In any case, the Metropolitan Opera Association had reached a mature enough state to fund whatever work that needed to be done. Its financial outlook, at least in the near term, appeared quite solid.