Like many arts organizations in a recession, the Metropolitan Opera is making the old cliche "you'll never make money with music" all too true.
The powerhouse institution at Lincoln Center for the Performing Arts has faced financial hurdles for many of its 130 years — but now comes a double whammy: an economic tumbler plus the challenge of supplementing earnings with gifts.
That was brutally clear in the fiscal year 2009, when the opera house lost tens of millions of dollars on Wall Street, according to tax returns filed this week.
The company finished the year with its net worth down substantially and sizable debts looming in coming years. In financial statements filed Monday, the Met listed net assets of $236 million, down from $380 million a year earlier.
The Met has been struggling to maintain artistic quality and innovation while riding a roller coaster economy.
"Since the costs of running the world's biggest opera house have always been greater than its earned revenues, the Met has regularly faced enormous financial challenges throughout its history," General Manager Peter Gelb told The Associated Press on Wednesday.
In the first year of the recession, 2008, a company counting on good investment returns didn't get them. The Met wound up scrambling for operating money just as lavish new productions were being staged under the leadership of Gelb, who became general manager in 2006.
Despite the gloomy financial picture, the company spent $8.5 million more in its 2009 fiscal year than it had a year earlier — including $4.5 million going toward developing high-definition movie theater broadcasts, which earned a modest profit while drawing a bigger, worldwide audience.
At the same time, salaries rose by more than $6 million.
Meanwhile, the opera's investment portfolios dropped in value. In fiscal 2009, financial statements listed $40.8 million in losses, after expenses and dividends, compared to a $14.3 million loss a year earlier. The opera's pension fund lost $20 million in investments.
The financial filings also appear to show a drop in donor support, although Met spokesman Peter Clark said that, overall, gifts have increased in recent years, including a 5 percent increase through the current season. Contributions and grants were listed as falling to $105 million, from $164 million.
Met officials have taken steps in the past half-year to trim expenses and boost revenue.
Stagehands who had been due a 2.5 percent salary raise in June delayed it until the 2010-11 season. And to help cover operating costs on a short-term basis, the opera was forced to dip into its endowment. It asked several donors to ease restrictions on how their gifts could be spent, freeing up $22 million.
A gift of $30 million from philanthropist Ann Ziff was announced in March, with most of the money available this year and the rest over the next four years. The gift from Ziff, whose husband was the publishing executive William Ziff and whose mother was the soprano Harriet Henders, is the largest in the institution's history.
Early in 2009, Gelb replaced four planned major revivals for the 2009-10 season with productions of standard repertory less expensive to rehearse and stage.
Some financial pressures still loom for the organization, including a $35 million bank loan due to be repaid in 2011 and a $57 million pension plan deficit.
Gelb said the Met has attracted larger live audiences with productions such as Rossini's "Armida," starring soprano Renee Fleming, and Verdi's "Attila," whose costumes were created by Italian designer Miuccia Prada, helping boost attendance to 88 percent of paid capacity last season. That's up about 10 percent over the average of the previous few years.
"The Met has managed through difficult times in the past," Gelb said. "Now, by increasing the public's interest in opera with our recent artistic successes and public initiatives, we are confident that we will thrive in the future, as well."