City Opera Plans for Bankruptcy After Years of Bungling
By Philip Boroff -
Sep 26, 2013 7:00 PM ET
New York City Opera said today that
it plans to file for bankruptcy next week after years of board
missteps and an emergency fundraising appeal that flopped,
according to the New York Times.
The move marks the end of the 70-year-old company, once dubbed “the people’s opera” by Mayor Fiorello LaGuardia and a breeding ground for young talent that included Beverly Sills and Placido Domingo.
On Sept. 8, George Steel, the artistic director and general
manager since 2009, said he needed to raise $7 million this
month and an additional $13 million by year’s end to continue.
Just $135,000 was pledged in an online Kickstarter campaign. As it’s short of its $1 million goal with four days to go, none of the roughly 1,000 people who pledged will likely be charged. Neither Steel nor his press representative, Risa Heller, returned calls to comment.
A well-attended presentation this last week of “Anna Nicole,” about the bizarre life of the model who married a rich geezer, couldn’t reverse years of board bungling and money woes.
Then the company sat out the 2008-09 season, while the New York State Theater (soon renamed for donor David Koch) was renovated. That cost momentum and subscribers.
Mortier never showed up. He and the company parted ways after both concluded that his envisioned $60 million budget -- double what it had been spending -- wasn’t realistic, it said in a 2009 filing in New York Supreme Court.
In late 2008 and early 2009, the board raided $24 million from its endowment to meet payroll and other obligations. The board had ambitions -- fanciful, in retrospect -- to pay the money back.
Under a pie-in-the-sky financial plan developed with Michael Kaiser, president of the Kennedy Center, City Opera projected that by cutting performances and increasing donations it would pay back $2 million a year to the endowment beginning in 2010.
As of June 2012, its investments totaled $5.8 million.
In October 2008, the board decided to move all its investments to cash during the financial crisis. This was a bad idea since it thus missed out on the Standard & Poor’s 500 Index’s doubling since early 2009.
The hiring of Steel was also not a winning move. His little experience included a few months at the Dallas Opera and a long stint at Columbia University’s Miller Theatre, where his bills were paid.
In 2011-12, the last year for which results are available, ticket sales were $1.1 million, down 87 percent from 2005-06. Steel’s 2011 compensation, $340,000, amounted to a third of sales.
To contact the reporter on this story: Philip Boroff in New York at pboroff@bloomberg.net.
To contact the editor responsible for this story: Manuela Hoelterhoff in New York at mhoelterhoff@bloomberg.net.
The move marks the end of the 70-year-old company, once dubbed “the people’s opera” by Mayor Fiorello LaGuardia and a breeding ground for young talent that included Beverly Sills and Placido Domingo.
The David Koch Theater at Lincoln Center. Photo: Philip Boroff/Bloomberg
NYCO General Manager and Artistic Director George Steel. Photographer: Ilya S. Savenok/Getty Images
Just $135,000 was pledged in an online Kickstarter campaign. As it’s short of its $1 million goal with four days to go, none of the roughly 1,000 people who pledged will likely be charged. Neither Steel nor his press representative, Risa Heller, returned calls to comment.
A well-attended presentation this last week of “Anna Nicole,” about the bizarre life of the model who married a rich geezer, couldn’t reverse years of board bungling and money woes.
Gerard Mortier
The crisis intensified in 2007, when the board, led by Susan Baker, a former Goldman Sachs Group Inc. executive, signed Belgian impresario Gerard Mortier to take over, although he couldn’t commit full-time upon leaving the Paris National Opera in late 2009.Then the company sat out the 2008-09 season, while the New York State Theater (soon renamed for donor David Koch) was renovated. That cost momentum and subscribers.
Mortier never showed up. He and the company parted ways after both concluded that his envisioned $60 million budget -- double what it had been spending -- wasn’t realistic, it said in a 2009 filing in New York Supreme Court.
In late 2008 and early 2009, the board raided $24 million from its endowment to meet payroll and other obligations. The board had ambitions -- fanciful, in retrospect -- to pay the money back.
Under a pie-in-the-sky financial plan developed with Michael Kaiser, president of the Kennedy Center, City Opera projected that by cutting performances and increasing donations it would pay back $2 million a year to the endowment beginning in 2010.
As of June 2012, its investments totaled $5.8 million.
In October 2008, the board decided to move all its investments to cash during the financial crisis. This was a bad idea since it thus missed out on the Standard & Poor’s 500 Index’s doubling since early 2009.
The hiring of Steel was also not a winning move. His little experience included a few months at the Dallas Opera and a long stint at Columbia University’s Miller Theatre, where his bills were paid.
Lincoln Center
In 2011, in a widely deplored move, Steel decided to extract City Opera from Lincoln Center to save money. Transforming City Opera into an itinerant company didn’t win over ticket buyers or donors.In 2011-12, the last year for which results are available, ticket sales were $1.1 million, down 87 percent from 2005-06. Steel’s 2011 compensation, $340,000, amounted to a third of sales.
To contact the reporter on this story: Philip Boroff in New York at pboroff@bloomberg.net.
To contact the editor responsible for this story: Manuela Hoelterhoff in New York at mhoelterhoff@bloomberg.net.
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