Hit hard by a cash shortfall and lackluster ticket sales as it tries to lure audiences back amid the pandemic, the Metropolitan Opera said Monday that it would withdraw up to $30 million from its endowment, give fewer performances next season and accelerate its embrace of contemporary works, which, in a shift, have been outselling the classics.
The dramatic financial and artistic moves show the extent to which the pandemic and its aftermath continue to roil the Met, the premier opera company in the United States, and come as many other performing arts institutions face similar pressures.
“The challenges are greater than ever,” said Peter Gelb, the Met’s general manager. “The only path forward is reinvention.”
Nonprofit organizations try to dip into their endowments only as a last resort, since the funds are meant to grow over time while producing a steady source of investment income. The Met’s endowment, which was valued at $306 million, was already considered small for an institution of its size. This season it is turning to the endowment to cover operating expenses, to help offset weak ticket sales and a cash shortfall that emerged as some donors were reluctant to accelerate pledged gifts amid the stock market downturn. As more cash gifts materialize, the company hopes to replenish the endowment.
To further cut costs, the company, which is giving 215 performances this season, is planning to reduce the number of performances next season by close to 10 percent.
The Met’s decision to stage significantly more contemporary operas is a remarkable turnabout for the company, which largely avoided newer works for many decades because its conservative audience base seemed to prefer war horses like Puccini’s “La Bohème,” Verdi’s “Aida” and Bizet’s “Carmen.”
But as the Met staged more new work in recent years that dynamic has begun to shift, a change that has grown more pronounced since the pandemic: While attendance has been generally anemic, contemporary works including Terence Blanchard’s “Fire Shut Up in My Bones” last season and Kevin Puts’s “The Hours” this season drew sellout crowds. (Verdi’s “Don Carlo,” by contrast, ended its run this month with 40 percent attendance.)
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From now on, Mr. Gelb said, the Met will open each season with a new production of a contemporary work.
It will begin next year with the company premiere of Jake Heggie’s “Dead Man Walking” and the season will feature its first performances of Anthony Davis’s “X: The Life and Times of Malcolm X”; Daniel Catán’s “Florencia en el Amazonas” and a staged production of John Adams’s “El Niño.” And Mr. Gelb said that the Met was rearranging next season to bring back “Fire Shut Up in My Bones” and “The Hours,” with its three divas, Renée Fleming, Joyce DiDonato and Kelli O’Hara, reprising their roles.
“Opera should reflect the times we’re in,” said Yannick Nézet-Séguin, the Met’s music director. “It’s our responsibility to generate new works so that people can recognize themselves and their realities on our stage.”
Mr. Gelb said that the company’s change in strategy was possible in part because major stars are increasingly interested in performing music by living composers. “It’s a big shift in terms of opera singers themselves, embracing new work and understanding that this is the future,” he said.
The Met has drawn many of the most illustrious singers of the day since Enrico Caruso ruled its stage, and it gave the world premiere of several Puccini operas and the American premiere of works by Richard Strauss and Wagner. It returned triumphantly last year after the long pandemic shutdown, which cost it $150 million in anticipated revenues. Audiences were back, though still lagging. Donations were up. And the determination of the whole company, including its artists and stagehands and ushers, was on full display: even as Omicron shut down many theaters last season, the Met never missed a curtain.
By summer, however, the company, which has an annual budget of $312 million, making it the largest performing arts organization in the United States, began to feel the strains of the pandemic more acutely.
Ticket revenues last season from in-person performances and the Met’s Live in HD cinema presentations were down by more than $40 million compared with before the pandemic. Paid attendance in the opera house has fallen to 61 percent of capacity, down from 73 percent. Donors have stepped in to fill much of the shortfall: During the pandemic, they have pledged more than $150 million in extra emergency funds. But amid the market downturn, some were hesitant to quickly deliver those gifts.
“When the economy shudders, major donors shudder along with it,” Mr. Gelb said.
The company had avoided dipping into its endowment in the early days of the pandemic, even as many other struggling opera companies and orchestras did, partly because it had taken the painful step of furloughing workers, including its orchestra and chorus, without pay. But now it has withdrawn $23 million from its endowment and can draw another seven million.
A recent cyberattack that left the Met website and box office unable to sell new tickets for nine days has added to the company’s woes.
But as more private donations come in — in the beginning of the new year the company expects to take in an additional $36 million in cash above its normal contributions — it hopes to replenish the endowment before the end of the fiscal year, at the end of July. It is unclear if that will be possible.
The Met’s decision to turn to its endowment undoes some of the work it has undertaken in recent years to build it back up. A few years ago the company announced a fund-raising drive to double the endowment, and took steps to lower the amount its draws from it each year down to 5 percent of its value, from 8 percent.
The Met is not alone in finding it difficult to emerge from the pandemic.
Portland Opera in Oregon, which is struggling with a prolonged decline in ticket sales, has reduced its staff and cut in half the number of operas it stages each season to three from six before the pandemic. “The situation currently facing Portland Opera is not unique, but it is still a crisis,” said Sue Dixon, the company’s general director, who said that the cuts were necessary in the short term but would hurt the company’s ability to grow back.
The Philadelphia Orchestra has seen paid attendance hovering at around 47 percent this fall, down from about 66 percent before the pandemic, though a recent uptick in sales has provided some optimism. “Many people are not back in the habit,” said Matías Tarnopolsky, the president and chief executive of the orchestra and the Kimmel Center. “We need to remind them that it’s not only a beautiful and extraordinary and special experience, but it’s also easy and inexpensive.”
Dayton Contemporary Dance Company, a troupe in Ohio, canceled its holiday shows this month because of tepid demand and rising production costs. And the Philly Pops, a 43-year-old orchestra, has announced plans to dissolve next year, citing mounting debt and a sharp decline in subscriptions during the pandemic.
The prospect of a recession next year is further rattling arts groups and raising fears that weak attendance could extend into next season and beyond. Federal assistance, which helped many companies survive the pandemic shutdown, has now largely dried up.
“We’re still in this period of great uncertainty and anxiety,” said Simon Woods, the president and chief executive of the League of American Orchestras. “The need to build new audiences is more urgent than ever.”
For many opera companies and orchestras, the pandemic has accelerated the decline of the subscription model for selling tickets, which was once a major source of revenue.
At the Met, subscriptions are expected to fall to 19 percent of total box office revenues this season, compared with 45 percent two decades ago. As single tickets become more popular, and some older subscribers stay at home because of virus fears, the average age of the Met’s audience has dropped to 52, from 57 in 2020.
Mr. Nézet-Séguin, who became the Met’s music director in 2018, succeeding James Levine, who led the company for four decades, said the company would remain committed to the classics even as it embraced innovation. And he said that the company could try to appeal to different audiences with an array of works, both old and new.
“I want everyone to feel welcome at the Met,” he said. “Will they fall in love with every opera we do? Of course not. But I don’t want anyone to say, ‘The Met is not for me.’”