On February 26, 2014, Peter Gelb, the general manager of the Metropolitan Opera, entered the Met’s boardroom to address a group that included a nine-member committee of the Met orchestra, whose contracts were due to expire on July 31st. There was much to say. Seven and a half years into his tenure at the world’s largest and most complex arts organization, Gelb could point to an impressive record of achievement: High-definition theatrical broadcasts of Met productions in cities around the world had brought grand opera to an audience of millions and opened a new revenue stream—$32.1 million in the most recent fiscal year. To attract new audiences, he’d brought a roster of acclaimed directors to the Met stage and introduced fifty-four new productions, averaging seven per year—a Met record.
Yet the Met’s expenses had soared. In the most recent fiscal year, 2013, they were three hundred and twenty-seven million dollars—forty-seven per cent higher than when Gelb took over. Because the box-office accounted for less than a third of revenue, the Met depended heavily on charitable contributions. Though revenue had grown by nearly fifty per cent, to three hundred and twenty-four million dollars, the company had run an operating deficit of $2.8 million.
Despite a multiyear bull market in stocks, the Met’s endowment had withered to two hundred and fifty-three million dollars, from a peak of three hundred and forty-five million in October, 2007, owing in part to annual withdrawals to fund operations. In fiscal 2013, the Met drew twenty-one million dollars from the endowment, an alarming spending rate of 8.3 per cent. In 2012, the Met had tapped the bond market to borrow a hundred million dollars. Meanwhile, attendance had fallen from ninety-two per cent of capacity, in 2007-08, to seventy-nine per cent, in the 2012-13 season.
As Gelb faced the orchestra committee, he pulled up a PowerPoint presentation and enumerated the dismal statistics. In two to three years, he said, if nothing was done the Met could face bankruptcy. To avoid the fate of New York City Opera, which was forced to close down in 2013, he wanted sixteen-per-cent labor-cost cuts from the orchestra union and from many of the Met’s fifteen other unions, the three largest of which represented the orchestra, the chorus, and the stagehands.
Jessica Phillips, a clarinetist who, at thirty-seven, had just been elected chairman of the orchestra committee—and who would play a major role in the orchestra’s upcoming contract negotiations—was shocked at the mention of bankruptcy. The Met was among the world’s foremost cultural institutions, backed by wealthy board members. It had survived other crises, including the Great Depression. Even if Gelb’s numbers were accurate, did they justify cuts in salaries and benefits for the orchestra and other union members?
After the meeting, Phillips and the other committee members speculated about whether the problem was Gelb’s management. They had heard rumors of misallocated expenses and exorbitant cost overruns, which they vowed to look into. Gelb’s pay-cut demands all but insured an ugly contract dispute. “This is going to be bad,” Phillips told the orchestra. “Like nothing you’ve ever seen.”
I met with Peter Gelb several times last fall in his office on the ground floor of the opera house. It is spacious but sparely furnished, with few mementos of his career in classical music and opera and no photos of celebrity singers, conductors, or directors. We also spoke by phone on several occasions. We’d met in passing before. (I’m a subscriber and have been a patron of the Met, on a modest scale.) Gelb was approaching his ninth season as the Met’s general manager. Still youthful at sixty-one—an avid tennis player despite two hip replacements—he exudes enthusiasm for his job.
“The challenges are huge,” he said. “I’ve always been aware that classical music and opera face an uphill struggle.” The core repertoire hasn’t changed much in generations, many operas last for hours, and they’re mostly sung in foreign languages. Even in English, audiences need supertitles to understand the words. Top ticket prices at the Met can run four hundred and seventy-five dollars. “The audience is much smaller than it was twenty or even ten years ago,” Gelb said. “We are attracting a younger audience, but they don’t buy subscriptions. I have to keep us economically sound. Every night, we have to fill thirty-eight hundred seats. We’re doing everything we can, but it’s tough.”
Gelb had never run an opera company or a nonprofit cultural institution, let alone one as large and complex as the Met. But he had deep cultural roots in New York. His father, Arthur Gelb, oversaw cultural coverage and was a renowned managing editor at the Times; his mother, Barbara, was the niece of the violinist Jascha Heifetz. His first job as a teen-ager had been as a part-time usher at the Met, and he worked for the classical-music impresario Sol Hurok. After dropping out of Yale, he worked in music publicity and, later, at the classical-music talent agency Columbia Artists, where he produced numerous broadcasts for “The Metropolitan Opera Presents” series on public television.
More important, he’d shown a flair for widening the audience for classical music. He took the Boston Symphony to China after the Cultural Revolution, arranged Vladimir Horowitz’s widely publicized return to the former Soviet Union, and, as president of Sony Classical, produced a series of film soundtracks and crossover hits. “We wanted energy,” William C. Morris, the chairman of the Met’s executive committee, told me. “He was the strongest candidate. His mandate was to be more aggressive in promotion and marketing, bring in more producers and directors, and attract bigger and younger audiences.”
Gelb is conversant in the intricate finances of the Met’s operations and knowledgeable about the repertoire, but he comes most to life when talking about directors and their stage concepts. Because much of the material that the Met has to work with is from the nineteenth century—every note is circumscribed by a dead composer’s intentions and, in most cases, more than a century of performance tradition—a general manager can make his mark only in creative new stagings. Were Gelb little more than a museum curator, one gets the impression that he wouldn’t find the job much fun. “The one thing I know is you can’t be complacent,” he told me. “Just going along with things may be a way to be popular, but I’ve had to come at this with a missionary zeal.” He has dedicated himself to bringing novel ideas to the Met’s stage. “The thrill for me is seeing new productions, new singers, and how they can excite an audience,” he told me. “That hasn’t diminished one bit.”
Gelb is not alone among opera chiefs in his approach, although the increasingly dominant role of the director in reinterpreting familiar story lines has been widely contested. The pianist András Schiff has written:
Gelb told me that he isn’t interested in novelty for its own sake, and chooses only directors who respect the narrative integrity of a work. But he was soon engulfed in controversy over a new production of “Tosca,” which opened the 2009 season. The updated version brought the Swiss director Luc Bondy to the Met for the first time, replacing Franco Zeffirelli’s sumptuous re-creation of Rome’s Church of Sant’Andrea Della Valle with a dark, stripped-down set in a production that featured prostitutes and simulated sex acts onstage.
The production marked a turning point in Gelb’s relationship with the board, particularly some of its older, long-standing members, who viewed themselves as guardians of Met tradition. Especially offended was James S. Marcus, an honorary director and former chairman. He and his wife, Ellen, had already taken offense when Gelb, at a dinner at the Met’s Grand Tier restaurant, seemed to grow impatient and asked for the check before the Marcuses could order dessert or coffee. Marcus said the new “Tosca” was “barbaric” and told Gelb it was “the worst production I’ve ever seen in my life.” (He subsequently gave ten million dollars to support a vocal program at Juilliard.)
Jacqueline Desmarais, one of the Met’s longtime managing directors and donors, was also upset after seeing “Tosca” and confronted Gelb just before a board meeting. Desmarais is in a position to single-handedly resolve the Met’s financial plight. When her husband, the Canadian financier and conglomerate head Paul Desmarais, Sr., died, in 2013, he left a fortune estimated by Forbes at $4.6 billion.
At a subsequent board meeting, Desmarais raised her hand and asked, “Will I ever see the old Zeffirelli production of ‘Tosca’ in my lifetime?”
“The obvious answer was ‘How soon do you want it?’ ” a board member who was present recalled. Desmarais is eighty-six. But Gelb replied that that was not the way the Met was going artistically. (Gelb does not recall the exchange.) Zeffirelli’s “Tosca” remains mothballed. The controversial Bondy production will be retired after five seasons, and a new version is in the works.
The following year, the Met opened the first parts of Wagner’s “Ring” cycle, the eighth full cycle the Met has produced and the touchstone for any opera manager’s career. Gelb pulled out all the stops: bringing on the Canadian director Robert Lepage, of Cirque du Soleil; incorporating elaborate scenic digital projections; and designing a forty-five-ton machine with twenty-four moving beams. To accommodate the weight of the machine, the Met stage had to be reinforced, at a cost of $1.4 million. Overtime costs, especially for Sunday rehearsals, which are paid at double time, soared as singers waited and technicians tinkered with the set, which suffered technical failures even on opening night. Time spent on the “Ring” cut into rehearsal for other productions, pushing those, too, into costly overtime. (The company says it budgeted for the complexities of the production, including the overtime costs.) The Met has said that the “Ring” cost twenty million dollars, all paid for by a gift from Ann Ziff, the board chair. But some board members who have tried to account for the direct and indirect costs estimate that the total ran as high as forty-five million dollars.
Critics were ruthless. “Pound for pound, ton for ton, it is the most witless and wasteful production in modern operatic history,” Alex Ross wrote in this magazine. The production offended musical purists and many in the Met’s orchestra and chorus. The clanking of the machine interfered with Wagner’s score and was distracting to the musicians and the audience.
New York opera lovers “are elegant; they’re smart; they want to be transported,” Jessica Phillips told me. “They love pomp and circumstance. They want the best of the best. The orchestra isn’t against innovation, but the ‘Ring’ isn’t a place where you want to take big risks.”
Even some board members who appreciated Gelb’s aesthetic were concerned that the elaborate stagings put the safety of musicians at risk. Deborah Voigt, in her first “Walküre” appearance as Brünnhilde, in 2011, stumbled while climbing a plank and slipped to the ground. When an elevated platform collapsed during a performance of “Faust,” the veteran mezzo-soprano Wendy White fell eight feet. The production, directed by Des McAnuff, a Tony Award-winning stage director making his Met début, moved the action to the atomic era. To many critics, the conceit was incomprehensible. White was hospitalized and hasn’t returned to the Met’s stage.
Phillips told me, “Peter has said over and over that the production is what’s most important.” She and others in the orchestra held a different view. “Opera is the pinnacle of art forms because it’s all three: music, singing, and staging.” She complained that the acclaimed directors Gelb hired don’t understand opera or the acoustics of the Met. They couldn’t anticipate how their productions would sound with full orchestra, or how they would affect singers. “That’s where all the friction started.”
When Gelb took over as general manager, in 2006, the Met’s endowment stood at three hundred and six million dollars, which comfortably exceeded its expenses that year. Nearly all nonprofit institutions with an endowment spend some of it each year; five per cent or less is considered prudent. But before Gelb’s arrival the board had moved to a fixed draw, rather than a percentage, in order to simplify future planning. Then, with Gelb at the helm, the board raised the amount of the draw from sixteen million to twenty-one million. The move was based on the assumption that the endowment would keep growing. Instead, its value plunged during the global financial crisis, and the large spending draw continued, exceeding five per cent and eating into the endowment’s principal. “That was a mistake,” Morris acknowledges.
Still, by 2013, it was hard to blame the Met’s financial problems solely on the financial crisis. Audiences weren’t coming back, despite the new productions and the excitement that Gelb had brought. Ticket prices went up ten per cent, and then had to be rolled back. “We were headed on a disastrous course,” Gelb told me, and he realized that he and the board would have to take action.
The Met has a history of strong-willed general managers, powerful board chairs, and compliant board members. Some members join because they love the opera and enjoy the perks: prestige, social and business networking opportunities, and special access to stars, directors, conductors, and musicians. In return, they are expected to make substantial annual contributions—five hundred thousand dollars is the minimum expected for the highest-ranking members. Most give far more. They don’t join the board to pore over financial statements or make trouble at board meetings.
At the top of the board’s pyramid were the eleven members of the executive committee, who include Ann Ziff, the chairman; Mercedes T. Bass, the vice-chairman; Morris, the chairman of the executive committee; and Kevin W. Kennedy, the president and chief executive officer.
There are forty-three voting members, known as managing directors, followed by nine honorary directors, who attend meetings but don’t vote; forty-nine advisory directors; thirty-three members (directors); and twenty-one young associate directors—a hundred and fifty-five people in all.
Gelb met with Ziff and Kennedy at regularly scheduled meetings, and often consulted with Morris as well. Morris and Kennedy, a former Goldman Sachs partner who became board president in 2011, were both Wall Street veterans. (Several directors speculated that Bass has been somewhat sidelined now that her “capacity,” as it’s known in fund-raising circles, has been diminished by a divorce. Bass says her giving has actually increased.)
“I’m a businessman,” Morris told me when we met recently at his private-equity office, across from Grand Central. (A wig worn by Angela Gheorghiu as Carmen is on display in the entranceway.) “But when I first came on the board I had trouble understanding how this worked. I shock new board members when I tell them our gross margin is negative one hundred per cent—for every dollar of ticket revenue, we lose a dollar. It’s not a business. There are no shareholders. Directors of the Met are opera lovers, and the return they’re looking for is to provide what directors and opera lovers want, which is to be the best opera house in the world.”
He added, “We were having a very bad year. The board is constantly putting pressure on Peter to live within our means.”
Gelb told me that it was his idea, not the board’s, to reduce costs and seek union pay cuts. With his approval, the board formed a fifty-eight-member strategic-planning committee, which met over the spring and fall of 2013 and concluded that the Met needed to reduce costs and launch a major fund-raising campaign. But donors weren’t going to give to something they considered a “bottomless pit,” as Gelb put it.
And some board members were troubled by the lack of a credible long-term financial plan. Among those was the managing director Bruce Kovner, a hedge-fund magnate who has an estimated net worth of five billion dollars. He’s also an avid classical-music lover (he has piano lessons from time to time with Emanuel Ax) and a generous donor.
Kovner had a series of private meetings with Gelb. He didn’t quarrel with Gelb’s artistic vision, but he was concerned by the mounting deficits. He stressed that if the Met’s revenues and expenses weren’t better aligned, the long-term viability of the Met was threatened. Kovner was especially adamant that unionized labor costs, which account for two-thirds of the Met’s expenses, be curbed. (This past summer, along with several other managing directors, he offered to fund the costs of any shutdown, and the Met worked out month-by-month estimates of what a work stoppage might cost, which ran to millions of dollars.) Although Kovner had given the Met ten million dollars to help modernize its backstage operations, and has made additional annual contributions, he was reluctant to give more or assume a leadership role on the Met’s board without a sounder fiscal plan.
Kovner was not the only managing director troubled by the Met’s finances. Beth Glynn, a member of the finance committee who was a partner at the money-management firm Neuberger Berman, has, with her husband, Gary Glynn, endowed two orchestra chairs and donated eight million dollars to the Campaign for the Met. According to Glynn, at one committee meeting, when she asked about the opera’s pension obligations, Morris interjected, saying that anyone who had been paying attention would already know the answer. Glynn rephrased the question. At a different board meeting, she asked about the employment contract of James Levine, the Met’s revered music director since 1976. Morris refused to divulge the contract’s terms. The discussion became heated, with an angry Morris raising his voice—an act of incivility that shocked some committee members. (Morris denies that the incidents occurred.)
Kevin Kennedy called Glynn to make amends, but she resigned from the board in April.
Labor strife is not new at the Met, though the last work stoppage was thirty-four years ago. In 1966, threats of a strike nearly derailed the opening of the Met’s new opera house at Lincoln Center. There were management-led lockouts in 1969 and again in 1980, leading to truncated seasons and a disastrous plunge in ticket revenue. But, for all the often contentious negotiations, the Met’s unionized employees had not agreed to a pay cut in decades.
The previous round of contract talks, in 2011, had been handled, as they had for most of the previous twenty-eight years, by Joseph Volpe, who had been kept on as a paid consultant after leaving the general manager’s post. Despite periods of strain, Volpe had earned the unions’ trust. A former master carpenter at the Met who rose through the ranks, he was the first general manager to have been a union member. There’d been no strike or lockout during his tenure. (One of Volpe’s sons is the master electrician at the Met.)
As is often the case with strong-willed leaders and their successors, Gelb and Volpe had never really gotten along. Years earlier, they had clashed while Gelb was working as a TV producer at the Met, and Volpe had once threatened to throw Gelb across Lincoln Plaza. Although Volpe hadn’t stood in the way of Gelb’s appointment, he subsequently chafed under what he saw as Gelb’s gratuitous public criticisms of his tenure.
On January 16, 2014, the Met announced that Gelb would replace Volpe as the head of the negotiations, after the two had clashed over strategy and plans for deep cuts. Whether Volpe quit or was fired is a matter of interpretation (Volpe still receives payment from the Met in return for being available for consultation). Gelb hired Howard Robbins, who advised the National Hockey League owners during their 2012-13 lockout of the Players’ Association, as the Met’s labor lawyer. Robbins’s name is synonymous with tough management.
The message wasn’t lost on the orchestra. In February, after Jessica Phillips had been elected head of the orchestra committee, she was performing as part of the onstage band in a dress rehearsal of Berg’s “Wozzeck.” Gelb was watching. Afterward, he shook her hand and said lightheartedly, “I don’t know whether I should offer congratulations or condolences.”
Unlike most musicians, Phillips earned a degree in political science, from Barnard, before studying at the Manhattan School of Music. Her husband and her mother are lawyers, and she often consulted them. She’d studied a history of Met labor negotiations written by Sandor Balint, a violinist and longtime chairman of the negotiating committee, who joined the orchestra in 1956, when orchestra members played seven performances a week and had no health insurance, sick pay, pension, or job security.
In response to Gelb’s pay-cut demands, Phillips and the orchestra’s lawyers and advisers offered to freeze salaries and benefits, but Gelb rejected the offer. Phillips’s committee began preparing for a strike or a lockout. She advised orchestra members that they needed at least fifteen weeks’ pay in liquid assets, to cover the seven weeks between the contract-expiration date and opening night, in September, and the first eight weeks of the season. That was a month longer than the lockout in 1980 had lasted. They formed a public-relations and social-media committee and made plans for concerts to raise money and to reach out to other orchestras. (In 2013, Met musicians sent financial aid to members of the Minnesota Orchestra during their fifteen-and-a-half-month lockout.)
On May 15th, the Met issued a statement defending its demand for union pay cuts. It noted that in fiscal year 2013 the average annual cost of pay and benefits for a regular full-time chorus member was three hundred thousand dollars and for a regular full-time orchestra member two hundred and eighty-five thousand dollars. The statement didn’t mention the stagehands’ pay, because their union leadership had given Gelb the impression that they would be amenable to cuts. The top three stagehands earned more than four hundred and fifty thousand each. (In April, in a gesture of good faith, Gelb had cut his own pay ten per cent, to $1.4 million.)
But the disclosure of the seemingly high salaries for that year was deemed misleading by the orchestra and chorus members. “We did seven overtime operas that year, which is unheard of,” Phillips said. “Peter chose to do the ‘Ring,’ ‘Les Troyens,’ ‘Don Carlo,’ and ‘Parsifal’ ”—all multi-hour epics—“in the same season. That hadn’t been done in the thirty years for which we had records. This inflated our salaries, and then it was used against us.”
The unions countered that the base pay for an orchestra musician was just under a hundred and sixty thousand dollars, and for chorus members it was a hundred and four thousand dollars. (The Met had stated that the average salary was two hundred thousand for both groups.) Average Met orchestra salaries are the highest in the United States, but not when adjusted for the cost of living in the New York City area.
The Met’s memo also placed its financial hardships within the context of a broader problem: “As the global audience for opera continues to decline, the last year has seen the demise of New York City Opera and the collapse of other opera companies in the US and abroad.” That assertion offended the musicians, since the notion of a “global decline” of opera was unsubstantiated by any hard statistics. Most union members in both the orchestra and the chorus put the onus on Gelb, citing financial mismanagement.
The chorus union had already staked out a hard line. Once they learned of the proposed cuts, they refused to meet with Gelb in the opera house and insisted on neutral territory. (They chose the Stanley H. Kaplan Penthouse, across from the opera house.) The members lashed out at Gelb. “They said they’d destroy me, make my life miserable,” he recalled. “I was uneasy, but I didn’t really believe them.”
In an e-mail to Gelb on May 28th, Alan Gordon, the executive director of the American Guild of Musical Artists, which represents the chorus, the principal singers, the dancers, and the production staff at the opera, went directly at him: “Actually, the cost reductions the Met needs to adopt are reductions in your run-away, unregulated spending and excessive draws on the endowment.” The failure of New York City Opera was the result of a “nonsense business plan imposed by the management” and “similar out of control spending.” The union would coöperate, Gordon wrote, only if Gelb accepted some measures of union oversight, “to control your astronomically increased spending” and “to reverse the waste, excess and extravagance that have thus far been the hallmark of your current administration.”
Orchestra members, too, had considered demanding Gelb’s ouster. But to disprove Gelb’s thesis Phillips believed that the orchestra union, Local 802 of the American Federation of Musicians, needed more information.
The orchestra-committee members interviewed their backstage colleagues. The stagehands described one set—a field of red poppies in a new production of “Prince Igor”—that required multiple trucks for transit to storage facilities, causing transport and storage costs to soar. (The Met said that there was nothing “exceptional” about the transportation costs.) In “La Sonnambula,” petals that dropped from a bridge were purple; someone wanted them changed to white. They were changed. Then they were changed back to purple. In a dimly lit 2007 production of “Peter Grimes,” Gelb ordered the chorus to make multiple costume changes, each of which incurred additional charges under the work rules and added up to more than a hundred thousand dollars. One person involved in “Peter Grimes” told me, “They changed from one set of gray rags into another set of gray rags.” Individually, none of these incidents amounted to much—Gelb said that the petals, for example, cost no more than fifty dollars—but the orchestra representatives argued that they indicated a pattern of management indifference to costs.
Gelb maintains that orchestra and chorus members haven’t been privy to the sometimes intense arguments he’s had with directors over costs. “I’ve brought in a lot of directors with great artistic vision, but we’re constantly cutting them back,” he said. “I’m in the auditorium every day to make them feel loved and supported despite the cuts.”
Sir Richard Eyre, who directed a new production of “Carmen” in 2010 and the 2014 opening-night production of “The Marriage of Figaro,” said, “Gelb did rein me in.” The budget for his production of “Carmen” was cut substantially after the financial crisis. “It’s not an open checkbook,” Eyre said. “I can’t speak for other directors, but in my experience I haven’t found any profligacy.”
He added that Gelb’s critics don’t seem to accept that opera is not just music but musical theatre. “The glorious thing about theatre is the stage,” he said. “All the energy has to go to the event onstage. Peter understands that and is hands-on in the production. He’s the only director in my experience who attends every technical rehearsal and dress rehearsal.”
Phillips’s committee members also pored over hundreds of reviews. They calculated that more than sixty per cent of two hundred and seventy reviews of Gelb’s fifty-four new productions in the past eight years were negative. (Phillips was pleased to note that the orchestra drew praise in 81.5 per cent.)
After repeated union demands, the Met turned over internal box-office data for every production. Most of Gelb’s productions sold well during their opening seasons, even obscure operas like Rossini’s “Le Comte Ory” and Shostakovich’s “The Nose.” But operas typically recoup their costs only after long runs, and productions are usually expected to be revived many times and last ten years or longer. Negative reviews and bad word-of-mouth can be financially ruinous for revivals, and in many cases ticket sales of Gelb-era revivals plunged.
This was especially evident with the “Ring” cycle. During the 2008-09 season, for the last production of the “Ring” directed by Otto Schenk, the Met filled nearly ninety-five per cent of the seats. For the première season of the Lepage version, in 2010, the results were comparable. But the 2012-13 season’s revival sold only seventy per cent of seats. Average revenue for the “Ring” revival in 2012-13 was less than sixty per cent of what would have come in had all tickets sold at list price.
Some of Gelb’s new productions fared even worse: Berlioz’s “La Damnation de Faust” (also directed by Lepage) dropped from ninety-three per cent of potential revenue to fifty-eight per cent; Rossini’s “Armida” from ninety-one per cent to fifty-six per cent; “Le Comte Ory” from ninety-five per cent to forty-six per cent; “The Nose” from ninety-four per cent to fifty-four per cent; and the controversial “Tosca” from ninety-six per cent to seventy-two per cent. Some standards of the repertoire did well—“La Traviata,” “Madama Butterfly,” and Michael Mayer’s Rat Pack production of “Rigoletto,” set in the Las Vegas of the nineteen-sixties—but they were just three of the fifty-four new productions.
Ticket buyers were still flocking to pre-Gelb standbys like the acclaimed 2004 Julie Taymor production of “The Magic Flute” (including an abridged, family-friendly English-language version undertaken by Gelb); “Aida,” a twenty-six-year-old production by Sonja Frisell; and “La Bohème,” dating from 1981, one of the last Zeffirelli productions not targeted for replacement and among the best-selling shows ever mounted at the Met. Gelb told me that “La Bohème” and “Aida” are “always the most popular operas.” He added, “They would be if we had new productions, too,” although “I think I’d be lynched if I tried to replace Zeffirelli’s ‘La Bohème.’ ”
The orchestra also noted that major European opera houses were selling ninety-five to a hundred per cent of capacity (the latter in the case of the Vienna State Opera). All are heavily subsidized by taxpayers, unlike the Met, but London’s Royal Opera, which gets a relatively modest government subsidy, also sold ninety-five per cent of capacity. (Gelb pointed out that those houses are all smaller than the Met.) In the United States, the musicians cited financially successful seasons in Houston, Dallas, St. Louis, and Seattle, although none of them have the ambitious full-year schedule of the Met or support full-time orchestras and choruses.
Alex Beard, the chief executive at the Royal Opera, told the Guardian, “I don’t want to get into a slagging match with the Met, but that is just so far from our experience. Opera is on a roll. As long as love, death, longing and despair are part of the life experience, and people want to hear great stories told through music, opera has a vibrant future.”
Phillips believed the numbers were so patently damning that she had to get them into the hands of the board members, few of whom she had ever met. She and her colleagues compiled the data into a detailed package that concluded with nine proposals to reduce costs by thirty-one million dollars a year without cutting orchestra and chorus salaries and benefits. They hand-delivered them to board members’ residences and offices.
On June 20th, the Met dashed the orchestra’s hopes with a full-page “Open Letter to Opera Lovers” in the Times, signed by twelve prominent board members. It ignored the orchestra’s arguments and reiterated the case for cuts, while also praising “our imaginative and hardworking General Manager Peter Gelb.”
Beth Glynn’s departure was the most visible sign of board dissent, but some other directors, uncomfortable speaking up at meetings, communicated their displeasure privately. “There were hard-line directors who said we should be tougher on the unions, but some said they just wanted a season,” Morris said. Among the most critical of Gelb were several honorary directors who have long histories with the Met and wield considerable influence, even though they don’t vote.
The honorary director Lawrence Lovett, an heir to the Piggly-Wiggly supermarket fortune and an amateur musician who lives in Monte Carlo, said that forty-four years ago, when he joined the board, and Rudolf Bing was general manager, “it was a group of distinguished people in their fields who also were knowledgeable about and loved music. It was not about money, although there were many wealthy people on the board. The administrators came to board meetings and sat behind Mr. Bing, and we could question them and disagree if we felt like it. Now you just listen to Mr. Gelb.”
“It used to be very collegial,” Judy Laughlin, an honorary director who was a vice-president at the Met for fifteen years, told me. She is married to an heir of the Mellon banking fortune. “We all knew one another, and we’d sit down and talk things out. And we didn’t go bankrupt. Now it’s all about money.”
The largest donors continue to staunchly support Gelb. Morris, who gave fourteen million dollars to the Met’s last campaign, told me, “I wouldn’t be very optimistic about the future of the Met if we didn’t have Peter Gelb working for us sixteen hours a day.”
As for the orchestra’s presentation, “I didn’t find it either well informed or persuasive,” Morris said. The Met produced an annotated version of the report in rebuttal. It noted that data from the seven years before Gelb also showed a mixed bag of critical reception for new productions and steep fall-off for revivals after their initial seasons. Many revivals of productions that preceded Gelb’s arrival did better under his leadership than they had under Volpe’s, thanks to better casting and promotion, according to the Met. Kennedy, the Met’s chief executive, made personal calls to board members to shore up support.
Meanwhile, several disgruntled directors prodded the former chairman James Marcus to speak up, and he came to the June board meeting armed with a written list of questions. The first was whether the Met had fully examined the potential financial consequences of a lockout or a strike. Marcus noted that the opera’s experience in 1980 had proved expensive in both the short and the long term, and that many subscribers, once the habit of attending was broken, never returned. Before the Met delayed or cancelled its season, he thought that the board should have a clear idea of the likely financial impact.
Marcus felt that Gelb didn’t really answer that question or others. “He was partly responsive to about half the questions, and the others he just ignored,” Marcus told me. “That was that.” (Another board member said that Gelb listened patiently to Marcus’s “angry diatribe,” answered his questions, and added that the issues had already been considered.)
Phillips and her colleagues made their case to the media and to City Hall, where they were warmly received by Manhattan Borough President Gale Brewer. They felt that they were making progress. Later that month, Mayor Bill de Blasio called Gelb, urging him to hold off any lockout. But on July 23rd, a week before the contracts expired, Gelb sent a letter to the orchestra and the other unions that said, “Please plan for the likelihood of a work stoppage beginning Aug. 1.” He added, “I sincerely hope to avoid such an unfortunate event.” The Met also warned that, should the lockout happen, the cafeteria would be closed and that health-insurance coverage would be suspended.
The chorus union’s director, Alan Gordon, predicted “zero” chance of a settlement before the contracts expired, on the thirty-first, telling the Times, “Once he locks out employees, his relationship with the performers at the Met is over. They will never respect him again. He’ll be the captain of a ship where the crew is just waiting for a chance to mutiny.”
On Wednesday morning, July 30th, as the deadline approached and there was no movement on either side, Bruce Simon, the lawyer for the chorus union, raised the possibility of extending the negotiations. Gelb seized the opening to propose using a federal mediator, and both the chorus and the orchestra agreed. In a first for labor negotiations at the Met, the two unions decided to work together, with Simon representing both.
The next morning, the mediator, a labor lawyer and former ballet dancer named Allison Beck, boarded a train from Washington, D.C. While she was en route, the Times posted an editorial by Eleanor Randolph, “Keep the Met Open.” Randolph wrote, “The message to the Met’s management is crucial: don’t lock out the talent, represented by the unions. Don’t shorten the season or rattle the opera lovers or scare away donors who spend a great deal of money and time sustaining the excellence of New York’s great opera house.” Phillips was elated. She spent the afternoon doing radio and TV interviews.
Gelb continued to negotiate separately with the stagehands’ union, Local 1 of the International Alliance of Theatrical Stage Employees. He figured that if he could settle first with the stagehands, the others would have to follow. But on the night of the thirty-first, when the stagehands asked for Gelb’s “last and best” offer, it became clear that each side had badly misjudged the other. Gelb’s offer still contained a substantial pay cut. The stagehands were shocked, and at 9:30 P.M. they walked out.
When Phillips met the mediator, she liked Allison Beck immediately. “We were two women in this boys’ club,” she said. Phillips told Beck that she feared a lockout would irreparably damage the Met. Beck met with Gelb and his lawyer and proposed a seventy-two-hour extension, which would give her time to absorb both sides’ positions. In the wake of the Times editorial and the collapse of the Local 1 talks, Gelb agreed to extend the deadline. At 11:30 P.M., Phillips e-mailed the orchestra, “You will have health insurance for the entire month of August. You will get paid for the rest of the week.”
The next day, August 1st, Phillips gave Beck the orchestra’s report, telling her that they didn’t trust Gelb or believe that the information given by the Met was accurate. Bruce Simon suggested bringing in an independent financial expert to examine the Met’s books and prepare an evaluation.
The negotiators recruited Eugene Keilin, an opera lover and Met donor who, as the head of the Municipal Assistance Corporation, had helped save New York City from bankruptcy in the nineteen-seventies. Keilin “radiates integrity,” Phillips told me. Still, some union members were wary. If this widely respected financial authority agreed with Gelb and the board that union pay cuts were needed, the unions would lose ground.
Keilin joined the negotiations on Saturday. In the afternoon, he sat down with Gelb and Bruce Simon. That evening, Gelb and Simon hammered out another extension of the deadline, to give Keilin time for his report.
On August 3rd, Phillips and her committee spent three hours going over their findings with Keilin. He told Simon that it was one of the best labor presentations he’d seen in forty years. The orchestra demanded greater financial oversight, regular access to books and records, other spending cuts, and more transparency from the board.
The rest of the week, Keilin continued his discussions with both sides, and it became clear that his report would come down somewhere in the middle, with potentially damaging disclosures that would only undermine public confidence in the opera. At a dinner, Gelb and Simon settled on potential pay cuts for union members, equal cuts for management, further cuts to operating expenses, and oversight of Gelb.
On Saturday morning, August 16th, everyone gathered in the Met’s boardroom to hear the terms. It was the first time Gelb had sat down with the chorus and orchestra leaders since formally threatening the lockout. He looked exhausted. Gelb apologized for the necessity of cuts but said that the Met’s financial plight left him no alternative.
He laid out the terms of a deal. The union leaders weren’t happy—they would have to tell their members that they’d agreed to the first significant pay cuts in decades. But they acknowledged that cuts had to be made to “save the Met.” Phillips said, “We were getting a lot of what we wanted,” especially more transparency and oversight. For another forty-eight hours, the two sides haggled over the details. Gelb again threatened to lock out the unions. Some last-minute sticking points were resolved over another dinner with Simon. At 6 A.M. on August 18th, Phillips and the orchestra and chorus union leaders agreed to a new four-year contract. (Two days later, a deal was also struck with the stagehands’ union.)
The orchestra and chorus agreed to pay cuts: for the orchestra, 3.5 per cent effective immediately, another 3.5 per cent six months later—a little less than half of the sixteen per cent Gelb first asked for.
The complicated work rules could not be renegotiated under such time pressure, and the orchestra and chorus fiercely resisted any changes. Gelb agreed to cut $11.25 million of the Met’s expenses, in addition to management pay cuts. He also agreed to keep on Keilin to monitor the Met’s financial performance. Gelb could take this proposal back to the board and ask for more donations.
When Phillips got home, she burst into tears. She felt she’d let down her fellow-musicians. “I was devastated,” she said. She felt terrible about the concessions. She slept until ten, then took calls from the press. “People said this was extraordinary,” she said. “That’s when it dawned on me that this was unlike any labor agreement ever. We were willing to take cuts, but it was unprecedented that we’d gain oversight.”
No one has suggested that the new contracts will solve the Met’s financial plight. All told, the Met has estimated that the union agreement and management cuts would save eighty-four million dollars over the next four years. Assuming an annual budget of three hundred and twenty-five million dollars, that represents a cost reduction of about 6.5 per cent per year.
That doesn’t take into account the Met’s legal fees, which were surely substantial. Though some directors felt that the Met should have obtained more concessions, Morris told me that he’s convinced it was the best deal possible under the circumstances. No one wanted to see the house go dark.
A few weeks after the settlement, Gelb and Phillips had dinner at Jean-Georges on Columbus Circle. Phillips told him that morale was still low, and he asked what he could do. She stressed that the orchestra was willing to help with donors, education efforts, and public outreach. She proposed open orchestra rehearsals that board members could attend. Gelb seemed amenable. But even then he managed to stir up resentments. He cancelled a Sirius Radio broadcast of the orchestra’s upcoming concert at Carnegie Hall, despite the fact that James Levine offered to pay the twenty-thousand-dollar cost from his own pocket. Phillips said the orchestra had always viewed those concerts as a way to attract new audiences. Gelb told her that the board had questioned the need for any Carnegie concerts at all. “Then you have a problem with your board, because these concerts are good for everybody,” Phillips replied.
The season’s opening night, on September 23rd, featured a new production of “The Marriage of Figaro” by Richard Eyre. Eyre had spoken of fiscal restraint, but there were problems with his set, a rotating structure of bronze tracery suggesting the Moorish architecture of Seville, where the story takes place. (The action is updated from the eighteenth century to the nineteen-thirties.) A fire inspector concluded that the set material was highly inflammable, so the Met had to station a fire truck in the loading dock, at a cost of twenty-five hundred dollars per performance. (The Met said that this is a common practice, including at Broadway theatres.)
Worse, from the orchestra’s point of view, the set compromised the music. At one rehearsal, Eyre insisted that the designer had assured him the material would reflect sound. But the set was porous, and much sound vanished into the back of the stage. The prompter box, normally at the front of center stage, had been moved into the orchestra pit. The conductor, Levine, discovered that the placement of the box bifurcated the orchestra, and players couldn’t see each other. Gelb initially refused to move it, on the ground that it wouldn’t fit into the set. Levine insisted, and it was returned to the stage.
The incident reinforced the orchestra’s conviction that Gelb cares more about staging than music. Relations between Gelb and Levine are said to have been tense ever since, but both men insist that they have a good working relationship.
Meanwhile, Gelb’s continued efforts at cost-cutting alienated Old Guard board members. After Gelb laid off Sissy Strauss, a longtime artist liaison who took care of visiting singers and threw an annual star-studded Christmas party, Lovett, the honorary director living in Monte Carlo, fired off an angry letter to Kennedy and Ziff:
In November, the Met released its preliminary results for the fiscal year that ended July 31st: an operating deficit of twenty-two million dollars—a record in absolute terms and, as a percentage of the operating budget, the largest in thirty years. Most of the loss was accounted for by a drop in contributions from major donors.
Gelb told the board in January that attendance was stabilizing this season at about seventy per cent of capacity. By mid-February, box-office revenue was running about two million dollars behind budget. Whatever the artistic and political merits of “The Death of Klinghoffer,” the controversial opera by John Adams about the murder by Palestinian terrorists of a Jewish passenger on a cruise ship, it sold seventy-four per cent of capacity—not bad for a contemporary opera but a dismal turnout for a new production. Some revivals of Gelb productions have fared worse. A performance of “Les Contes d’Hoffmann” sold just forty-six per cent. “Don Giovanni” and “La Traviata” sold seventy per cent and seventy-three per cent, respectively, which is low for such stalwarts of the repertoire. Attendance at pre-Gelb-era standbys has also faltered this season. The Met said that attendance at Taymor’s full-length “Magic Flute” averaged just sixty-one per cent; at Zeffirelli’s “La Bohème” it was seventy-eight per cent. Despite the weak box-office results, Gelb said the Met is on course to have a balanced budget this year, thanks to cost cuts and increased fund-raising, including funds for the new campaign. Cost cutting and fund-raising have their limits, though. As the Met has put it, “The level of giving simply cannot continue to grow faster than our rising costs.”
“You can’t continue with a very weak box-office when opera houses all over the world are filling their seats,” Bruce Crawford, an honorary director and former general manager and president, said. Bruce Kovner said, “I adore the Met, and it’s one of the great cultural institutions in music and the world. I want to see it succeed. But I want it to do better than it is, especially on its finances.”
Last year, the Met had to draw down seventeen million of its thirty-million-dollar line of credit and, to renew it, had to pledge a security interest in the two Chagall murals at the front of the opera house—“The Sources of Music” and “The Triumph of Music.” That leaves only thirteen million dollars. In December, Moody’s Investors Service downgraded the Met’s bond rating, citing its “weakened financial profile” and “deep operating deficit” leading to “a marked decline in unrestricted liquidity.” In February, Bank of America agreed to extend the Met’s credit line only after it agreed to pledge two Maillol bronzes, “L’Été” and “Venus Without Arms,” on display on the Grand Tier.
The piecemeal pledging of the Met’s tangible assets has contributed to a sense of financial desperation, even as artistic standards remain high. “The musical quality is superb,” Crawford said. “It’s hard to fault that. And the fund-raising has been in great shape. It’s everything else that’s a problem. Cash flow is a huge problem.”
“The Met has way too small of an endowment compared to the budget,” Ann Ziff said. “It’s difficult to find donors who don’t need to have their names on something who will build the endowment. That’s tough. It’s not sexy to give to an endowment.”
Gelb has proposed, and the board has embraced, a six-hundred-million-dollar fund-raising campaign, which earmarks three hundred million for the endowment, sixty-four million for desperately needed capital improvements to the opera house, and two hundred and thirty-six million for operations. The goal is a sustainable spending rate of five per cent of the endowment, which would generate an additional fifteen million annually; this would put the opera on better financial footing and silence many of Gelb’s critics.
But in January Gelb told the board and union representatives that, so far, in the “quiet phase” of the campaign, he had raised sixty million dollars, which falls far short of the three hundred million typically required before launching such an ambitious public campaign. (The amount now stands at seventy million.) How much of that ends up in the endowment remains to be seen. Included in the seventy million is a recent gift of eleven million in cash from Morris, much of which is going toward current operating costs. The board secretary, Judith-Ann Corrente, gave ten million and was named the campaign co-chair after Mercedes Bass, who led the previous two campaigns, declined to lead this one.
Ziff pledged fifteen million. “I completely stand behind Peter’s vision,” she told me. “So often when somebody comes into so solidly established an organization as the Met, which is the largest in the world, and has such a different vision, people get jealous, and they resist change. They don’t like it. They don’t want him to succeed. They speak in a derogatory way.”
Some board members told me that they remain reluctant to make any more donations until they see fundamental changes in the board’s governance and in Gelb’s leadership.
Kennedy, the board president and chief executive, was also seen as a potential major donor. (He and his wife, Karen, have given nearly thirty-eight million dollars in the past.) But on March 6th, after the executive committee met by telephone, Morris informed directors that Kennedy would relinquish his post in May, leave the executive committee, and be nominated as an honorary director. The executive committee voted that Corrente be nominated to replace him.
In Morris’s e-mail to directors, Kennedy was quoted praising Gelb’s leadership. Several directors told me they were shocked by Kennedy’s departure and worried about the loss of someone with his financial expertise. When I reached Kennedy by phone, he said he had no comment. One person who spoke to him said that he was “worn out” by the labor negotiations and had decided to step down last fall, after the settlement.
Whatever the outcome of the fund-raising campaign, Gelb said he’s adapting to a prolonged period of fiscal austerity. He told me that he is “watching every penny,” and finding savings both large (delaying a revival of “The Ring”; reducing the average number of annual productions from twenty-six to twenty-four) and small (substituting cheaper costumes for singers who “cover” roles and are rarely seen onstage). “I’m willing to learn and change if change is what’s needed,” he said.
Still, Gelb’s vision for the Met seems unshaken. When I asked him which of the budget cuts had caused him the most pain, he said it was having to reduce the number of new productions from seven to six. “Six is the minimum,” he said. “Other top companies are doing more, and Paris is doing ten. With new productions, you get on the front page of the culture section. Revivals get much less attention.”
Even so, the Met can’t sustain many more twenty-two-million-dollar annual operating deficits. Many of the people I interviewed worry that neither Gelb nor anyone on the board seems to have a backup plan. As one board director told me, “There is no Plan B.”
When I asked Morris what the Met board would do if Gelb’s strategy doesn’t work over the next few years, he said, “We’re going to keep producing opera as long as we have the means. If those means decline, the quality will decline. And if the means aren’t there we will no longer be putting on opera.” ♦
