As it confronts a deep financial crisis, the Metropolitan Opera has depleted its endowment — traditionally a sacrosanct rainy day fund — by a third.
Its general manager, Peter Gelb, has sought a cash infusion from Saudi Arabia, a much trumpeted effort that has dragged on for months.
At one point, Gelb even courted Elon Musk, promising only half jokingly to help the tech billionaire produce an opera in outer space if he gave money to the Met.
“I wrote to him and I said, ‘I would love to talk to you about the Met,’” he said in a recent interview. “‘We would love to be part of your Mars expedition, and we’ll produce an opera for you on Mars.’”
Musk did not respond.
The weakened state of the Met’s finances is evident in the sort of ideas Gelb is pursuing to rescue the 142-year-old opera company, the largest performing arts organization in the country.
He wants to find a sponsor willing to pay to affix its name to the Met’s 3,800-seat grand opera house in Manhattan. Think Barclays Center, but for classical fare. Inside, he plans to add corporate boxes, like they have at Madison Square Garden. He even plans to sell the two famed Chagall murals that grace the theater — as long as the buyer agrees to leave them on the walls.
But the opera’s financial troubles remain acute.
This year, there have been salary cuts and layoffs. Moody’s downgraded the opera’s credit rating twice last year to below investment grade, calling its monthly liquidity “extremely thin.”
And next year tens of millions of dollars of short-term debt is coming due, a good chunk of it collateralized by the Chagalls.
Gelb said that, while he recognizes the opera’s financial challenges, he does not view the situation as desperate and believes he has a solid plan to address it.
“We believe,” he said, “that the prudent course of action was to take money from the endowment while we’ve scrambled to find a new business plan that could prevent us from having to take future draws.”
Others described the situation as more urgent.
“They are really not doing well,” said Laurence Scot, a nonprofit accounting expert in New York who looked through the opera’s financial records. “They are bleeding money and basically staying afloat by using investment income for operations.”
The core problem has been ticket revenues, which were weakening even before the coronavirus pandemic shuttered its theater with a devastating financial impact. Box-office receipts last year were down $20 million from a decade earlier.
Revenues from the Met’s live broadcasts of opera in theaters, once viewed as a major revenue generator, are down more than $10 million annually compared with 2019.
Given the size of the Met’s $326 million budget, the largest of any opera in the world, the revenue shortfall has led to a widening budget deficit. To close the gap, the Met for the first time has made extraordinarily large withdrawals from its endowment, which shrunk from $340 million in 2022 to $212 million today. The diminished size of that investment portfolio has hindered its ability to throw off meaningful earnings.
Some people doubt that an institution like the Met could ever close and think that with his usual aplomb, Gelb will produce a saving twist in his next act.
“The stakeholders that care about the Met are vast,” said Hannah Grannemann, an associate professor of arts administration, “whether you think about the City of New York or you think about donors. A bailout is possible — someone could come in with a large amount of money to save it, if it indeed is at that kind of brink.”
Others ask whether Gelb, 72, who has been general manager since 2006, is the person who can reverse the current financial crisis.
“I think they need to get rid of him and find somebody else because they shouldn’t be in these kinds of dire straits,” said Anne Midgette, formerly The Washington Post’s chief classical music critic, “and draining the endowment is not the answer.”
For years, the Met’s spending has remained robust, even as revenues shrunk. Gelb staged edgier productions by contemporary composers, which he says have been successful in attracting donors and new audiences. But the box-office results have been mixed, and start-up costs for new productions can be high.
Gelb defends his leadership and his progress in expanding the opera’s audience, citing his introduction of live opera broadcasts. “I think that’s proof that I was the right person for the job, and I still am,” he said.
He noted that the budget has not grown significantly in years despite increased shipping and production costs. In addition, he is convinced that audiences yearn for high-quality grand opera, which does not come cheap.
Gelb’s new revenue plan includes renting out the opera house for shows that are not opera: Michael Kors models strutted down the main stairwell in a fashion show last month. A musical starring Sting arrives in June. Gelb has even asked Bob Dylan’s manager if the singer is interested in performing.
“The plan is to never give up trying to find a solution to the predicament,” Gelb said.
Opera: Plush but Pricey
Financial strategies mattered less decades ago when fans clamored to buy a year’s subscription just to ensure getting a seat. The opera’s box-office revenue fell to $70 million last fiscal year, down from about $90 million a decade earlier, or only about a fifth of what it takes to cover operating expenses. The average number of patrons is not down considerably, although many have been drawn to performances by discounted tickets. The average ticket price last fiscal year was $133, down from $147 a decade earlier.
For years, experts have chewed over the reasons for opera’s decline. Less arts education. Shorter attention spans. (Operas often last three hours or more.) More competition from the internet and other forms of entertainment. An aging audience.
Mark Gould, former principal trumpet who was in the Met’s orchestra for nearly three decades, said the company was doing everything it could, “but I don’t think most people in the general population can name an opera singer except Pavarotti — and he’s been dead for 20 years.”
The perception of opera as a musty art form fueled a topical discussion last week when a clip went viral of Timothée Chalamet suggesting that “no one cares” about opera or ballet anymore. The Met responded online by posting a glossy highlight reel.
Gelb’s idea that the Met must spend to attract patrons was seconded by David Devan, former general director of Opera Philadelphia.
“Since Covid, people are coming back,” said Devan, who is now a consultant for arts institutions, “but they’re not coming back for anything that even looks good or excellent — it has to be dazzling.”
Also, unlike a Broadway theater, the Met typically — and expensively — presents several productions at the same time. That requires changing out sets, sometimes in just an afternoon between matinee and evening performances.
Gelb said that so much of the budget (at times as much as three-quarters) is devoted to labor costs that cutting it substantially is difficult. The pay of most of the Met’s 2,000 full-time employees is set by contracts with 15 unions, including the stagehands who are essential in making opera work.
“Opera is really expensive to put on,” said Marc Scorca, former president of Opera America. “It takes as many people today to produce a Verdi opera as it did in 1872.”
And seemingly small changes in work schedules can be costly. To find a new audience, the Met in 2019 began performing on Sundays, which were typically dark; but that meant paying stagehands double time.
To save on labor costs, the institution contracted out some sets for new Met productions, which had been built almost entirely in-house for decades, and had them constructed by non-union contractors as far away as California and Wales. The move angered the opera’s unions, but Gelb asserts it has saved money, even with the costs of transporting mammoth sets over long distances in trucks and boats.
One of the recent outsourcing efforts backfired, though, when the Met hired a contractor to build an ambitious set for this season’s production of “Tristan und Isolde,” which opens this week. The company had offered the lowest bid, Gelb said, but it had trouble meeting its deadline.
The opera company scrambled for another builder, and several donors gave $1.4 million to make up for the extra expense.
This year, when the financial picture darkened, Gelb laid off 22 administrative staff members and trimmed the salaries of 35 other non-union employees who make more than $150,000 a year. The pay cuts ranged between 4 percent and 15 percent. Gelb, who last year made nearly $1.4 million, said the move cut his salary by $150,000.
The number of performances has also been reduced to rein in costs. Next season the Met will present 194, down from 227 about a decade ago.
Two Decades at the Helm
When he was hired by the Met, Gelb was considered something of an outsider in the world of opera. He had spent a decade as president of Sony Classical, and he spoke of a need to innovate the art form to attract a younger audience.
Gelb says the average age of people buying single tickets has dropped to 44 from around 65 when he came in. “If you come to the Met, you will see a completely different audience today than you would have seen three or four or five years ago,” he said.
After recommendations over the past two years from Boston Consulting Group, the Met is focusing a bit more on what the consultants called “blockbuster” works that have traditionally performed well for years — such as “La Traviata” — and extending their runs to avoid the cost of constantly bringing sets in and out of the theater.
Also under consideration, Met officials said, is a rethinking of how they invest the endowment funds. Starting in 2023, the Met began to dip further and further into its endowment. As a rule, institutions try to draw no more than what endowment funds earn annually in interest so that the principal remains untouched and available for emergencies.
Many organizations will take maybe 5 percent each year to put toward operating expenses. The Met took out more than 20 percent last year.
“There can be reasons this is the right decision, but you can’t continue to spend at that rate,” said John MacIntosh, an expert on nonprofit finance at SeaChange Capital Partners.
One $5 million withdrawal last year helped to address the disappearance of a $10 million donation that the Met had been counting on for cash flow. The money had come in from a board member, Matthew Christopher Pietras, but the Met was informed that the funds actually belonged to Pietras’s employer, a member of the Soros family. After he was asked for an explanation, Pietras killed himself.
The president and chief executive officer of the Met board, Tod Johnson, said in an interview that the board viewed spending the endowment as a last resort.
“We didn’t see any other option,” he said.
Now, he said, the question of how the endowment has been invested has become a subject of internal review. Like many nonprofits, the Met’s investment strategy for years reduced its position in the stock market in favor of alternative assets in private equity and hedge funds.
Leaders of the Met said they hoped for higher returns and to protect against stock market volatility. But they ended up minimally invested in U.S. stocks at a time of strongly rising values. In July 2024, when the Met’s endowment still held $275.6 million, only $12.5 million of it was invested in U.S. stocks. That portfolio ended up earning 6.8 percent in the following year, while the S&P 500 rose 16 percent.
The strategy is now being reviewed, said Johnson, the co-founder of a New York investment and consulting firm. “There’s not going to be more of that happening,” he said.
Johnson is among the board members who have reached into their own pockets as the Met’s finances have struggled. He extended a $20 million personal loan to the company in 2024 and said he intends to forgive it.
Still outstanding is $3.7 million owed on one bank loan and another $62 million owed on a line of credit. The line of credit comes due in February 2027 but Gelb said it would be refinanced.
Some analysts said it was risky to rely heavily on borrowing to help fund operations. “There are dark clouds on the horizon created by the accumulation of short-term debt for this organization,” said Sean Delany, who formerly led the Charities Bureau in the Office of the New York State Attorney General.
Gelb remains confident that significant financial help will ultimately come from Saudi Arabia, which has expressed interest in having the Met perform at a cultural center on the outskirts of Riyadh each winter for five years. The Met announced a memorandum of understanding with the kingdom last fall but, months later, a contract to close the deal has yet to be signed. Gelb, who declined to detail the sort of money involved, said he was waiting for final approval from the Saudi government, though the U.S.-Israeli war with Iran has complicated matters.
For some critics, the Met’s efforts with Saudi Arabia, given its record of human rights abuses, position on gay rights and implication in the 2018 killing of Jamal Khashoggi, a Saudi dissident, underscored the opera’s weakened financial condition.
“Setting aside the morality of the agreement and the government in question,” said Jeffrey Nytch, a professor of arts entrepreneurship, “I think it’s a sad statement that our country’s largest performing arts organization — one of its most distinguished and in one of the richest cities in the world — has to turn to a foreign government for what amounts to a bailout.”
Gelb has said the Saudi deal is necessary to cover a “substantial portion” of the Met’s financial needs through at least 2032 and to avoid further tapping the endowment.
Gelb, whose contract expires in 2030, said other revenue initiatives in addition to naming rights and pop performances could involve shifting “Live in HD” more toward at-home streaming to accommodate new viewing habits. He says he is in talks with arts and music schools that may be interested in paying to make the Met their “East Coast laboratory campus.” He is also developing a new pitch for donors, one that focuses on how in a complicated, factionalized world, the Met is a source of “cultural enrichment and enlightenment.”
Also on the horizon, he said, is a major gift of possibly $100 million or more from a deceased donor who bequeathed the Met a portion of the proceeds from the upcoming sales of two companies. Gelb also pointed to the optimism created by the production of “Tristan und Isolde” that is selling so well that the Met added another performance date.
Even Gelb’s critics concede that he has had a long run of finding pots of gold. But is he running out of rainbows?
“What they’re doing is basically trying to turn over as many rocks as possible to see if there’s any money underneath,” Nytch said.
Gelb, though, says he knows what he wants to find most under one of those rocks: an uberwealthy opera lover.
“What we really need,” he said, “is one of these triple-digit billionaires to give us a billion dollars.”
Maureen Farrell contributed reporting. Kirsten Noyes contributed research.
Graham Bowley is an investigative reporter covering the world of culture for The Times.
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