A Familiar Battle at the Met

It is disheartening to see that even though we have finally resolved the Minnesota Orchestra labor dispute, the thinking that inspired the lockout is showing up in other arts organizations around the country. And it is particularly disheartening to see this line of thinking infect the Metropolitan Opera in New York—the country’s premier opera house.

The latest, and arguably the most irritating example of this line of thinking was a recent interview between Manuela Hoelterhoff of Bloomberg News and Peter Gelb, General Manager of the Met.

Essentially, Gelb’s argument (cheered on by Hoelterhoff) is based on three main points: 1) opera is too expensive, 2) unions are the primary source of opera houses’ financial troubles, and 3) opera is dying anyway, and everyone will have to retrench. Conveniently, the only solution to these three problems is massive cuts, primarily borne by union workers.

With respect, these wrong-headed ideas about how to run an arts organization are fundamentally flawed. I just lived through a brutal labor dispute brought on by these same ideas here in Minnesota, and I can’t let Mr. Gelb’s  and Ms. Hoelterhoff’s assertions go unchallenged.

* * *

“We all love vacation, but 16 weeks fully paid? Really?”

Seeing this quote is tiresome… and to my mind seems unworthy of a major arts writer. We went over this same bit in the Minnesota Orchestra dispute, and I commented on it often (such as this early blog entry, that looked at the Orchestra’s full-page ad complaining about how good the musicians actually had it). The equivalent would be in saying that NFL football players only work for a couple of hours on a Sunday, 16 weeks a year, and whining that they never do anything else. Of course football players do more—they work out to stay in shape, the learn patterns, run drills, and are involved in marketing and outreach activities for their teams.

Similarly, musicians don’t get a real “vacation” from music—if they want to maintain their technique and endurance, they need to practice daily. If they take a break, they certainly feel it when they return. And I note that this goes for singers as much as it goes for instrumentalists.  The paid time off allows musicians to recover from the rigors of performing, reducing the possibility of injury and extending their careers.

But there’s a another disturbing aspect to a statement like this. Like I said, the lack of vacations is a basic fact of life for professional musicians. I understand that the general public may not realize this… but people in the industry certainly do. The only reason why someone from inside the industry would say something like this is because they are deliberately engaging in a PR assault on the musicians. I can see why Gelb would say something like this in this context… but Hoelterhoff? Here in the first sentence of the article, she has completely undermined any credibility she might have had.

“But we need a rational, modest cost reduction. Else we’re facing bankruptcy in a couple of years.”

If I had a dollar for every arts leader who spouted this bankruptcy threat… well, I could finance a new version of Wagner’s Ring all by myself. Yes, arts organizations face financial difficulties. But threats of “bankruptcy” tend to proliferate on the eve of new contract negotiations. And always, this catastrophe is either two or five years away, and cannot be stopped by any force on the planet other than union contract concessions.

Sorry, Mr. Gelb.  Too many negotiators have poisoned the well before you.  I would need significant financial proof to believe you… and to my knowledge you haven’t provided anything of the sort.

“The percentage of operating costs covered by donations is 48 percent. That’s unsustainable. It’s not a business model.”

This sentence is as tired a cliché as the previous one. Essentially, Gelb is tossing out a Big Scary Number, and saying this will lead to Really Bad Things. And of course he uses the hot industry buzzword, and condemns this model as “unsustainable.”

A few observations.

Regarding the fact that donations account for 48% of revenue… why is this number bad? Why does that number inherently mean the organization is heading into bankruptcy?

In all non-profit arts organizations, there are three general sources of revenue: contributions, earned revenue, and endowment/investment income. Every arts organization tries to balance these three areas as best they can, but there is no optimum balance that works for everyone. No golden ratio. Each organization finds a balance that works for that organization.

Gelb seems to believe that the percentage of earned revenue has to increase relative to the whole, or the organization will fail. That certainly is an option. But consider that you could achieve that same result simply downplaying your fundraising efforts—a bad fundraising year will, by definition, mean that earned revenue brings in a larger percentage of income. But would that be a prudent thing to do? Too often, an overreliance on earned revenue indicates that an organization isn’t doing a great job raising money.

But an overemphasis on earned income can harm an organization in other ways, too. For one, it sets a trap where the arts organization has to over-perform—constantly producing a barrage of new performances to bring in revenue. This in turn puts a terrible burden on the group’s organizational capacity, and put undue stress on its artists in order to earn cash to pay the bills. Plus, organizations that rely too heavily on earned income can face situations where they have to essentially price themselves out of the market.

That situation is also unsustainable.

So the more important question is, what is your ideal ratio between earned income, donations, and investments? Again, there is no right answer, but the way you answer has significant implications for the organization, and ultimately its mission. If you seek to change these ratios, you will need to get significant buy-in from all stake holders within the organization—trying to dictate this top-down almost always ends in disaster.

As we saw here in Minneapolis.

“Our most recent budget was $327 million. Unionized labor compensation was about $214 million.”

Again with the Big Scary Numbers. Mr. Gelb, you are correct that “union compensation” looks enormous. But as I pointed out again and again during the Minnesota Orchestra dispute, this money isn’t going into some black hole—opera is your product. That is what you do. This is no different from a restaurant owner complaining that he or she has to keep spending all this money on ingredients. Let me ask this, what do you think your money should be spent on?  Administrative overhead? Or maybe executive compensation?

I also note that Kevin Case has run your numbers and brings up a good point. You say you are looking to reduce the union workers’ compensation by 16%. Based on the $214 million that you just mentioned, this would mean a cash savings of $35 million. But as you’ve stated previously, your deficit is only $2.8 million. Why are you trying to cut $35 million to solve a $2.8 million problem?

And it also has come to light that your salary is $1.8 million. I don’t want to live someone’s life for him, but I wonder what would happen if you said, “This year is tough. We’ve got to turn this place around—and to make sure that happens my annual salary next year will be one dollar.” First, that would reduce the size of the deficit by half.  And I can almost guarantee that because you made such a powerful gesture, many others would follow suit.

“The audience is shrinking.”

Again, this is not just mendacious, it’s just plain lazy. “Classical music is dying!” is one of those tired tropes that is bandied about all the time. I concede that opera (and classical music generally) are niche artforms… but at this point, almost all music is a niche artform.

And really—the fact that one institution is having difficulties doesn’t mean an entire artform is dying. More to the point, the fact that one arts manager is having difficulties doesn’t mean an entire artform is dying.

And it’s funny to note that shortly after Gelb warned about opera’s audience decline, counter-factual evidence came roaring in. Asked about Gelb’s claims, Alex Beard, chief executive at the Royal Opera, responded “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,” he said. Further, John Berry, artistic director at English National Opera, rejected the glum analysis, too: “We are having a tremendous season here, and our audiences are not dying – they are getting steadily younger.”

There is good news on this side of the pond, too. The Houston Grand Opera recently reported a record year in terms of fundraising and ticket sales (notably, with a new production of Wagner’s Ring of its own… with live musicians), and has ended each of the past four years in the black. In its last reported year, the Lyric Opera in Chicago saw a 15% increase in the size of its audience over the previous year. And in terms of community engagement, the city of San Diego rushed in to save its opera company from financial ruin, tossing out the company’s CEO and recalcitrant board members when it was clear they were not pulling their weight.

It is interesting to note that based on studies done by the NEA, the total number of classical music ticket buyers has remained remarkably stable over time. The only reason that it seems that a smaller percentage of people attend concerts is that the population of the country as a whole has continued to grow.

I recognize that in a labor dispute, people strive to strong, borderline-extreme positions so they have more leeway to negotiate. And I realize that some opera companies are indeed in trouble. But the blanket indictment of an entire artform to bolster your case is ridiculous.

“Shrinking the budget, however, means less for unions. Seems an odd thing for them to argue for!”

Is it really that confusing? Allow me to explain it succinctly. Yes, it’s nice to get a large check based on a big bump of temporary work. Many people, however, prefer to have steady employment so they have long-range financial security and can plan their financial future. These people don’t want to get a big check for hand-painting a massive, artificial field of poppies today, only to have their jobs be permanently lost to budget cuts tomorrow.

Or is this simply a straw man argument?

“[S]ome productions were much less expensive than the shows they replaced.”

I feel like I should ask the obvious question: Why not cut costs further, save even more money, and bring production costs in line with your actual budget? Let’s think about this in another way. Let’s say financial times are tough, and you can no longer pay $5,000 a month for your housing. It doesn’t help to move into a place that charges $4,000 for rent, if you know you can only afford $2,500. In this case, bragging that you’ve saved money on rent is foolish—you’re still over budget.

“H: How expensive was that immense field of poppies that filled the stage? There is now an anti-poppy plank in union land. You spent too much on the poppies!

“G: We did not. And if Dmitri had wanted to have a house instead of a stunning poppy field, it would have cost more than 169,000 bucks.”

Ah, those poppies. Gelb (and for that matter, Hoelterhoff) completely miss the point of the argument. They were very, very expensive. Gelb doesn’t even try to deny that they weren’t. His whole justification is that they were the complete set for that scene, and any other scene would have been just as expensive—if not more so.

But again, see my point above. The common sense response is, so what? So the only options are to spend $169,000 on an artificial poppy field, or $200,000 on a specially-built country house? There is no other option? Think of all the choices that led to the infamous poppy field—should we do this opera, at this time, with this production team, led by this director, with this amount of resources? The management made a whole series of decisions with financial implications, and now seems to be blaming “the union” because everything ended up being so expensive.

Good Heavens, it’s like it’s the first time in human history that there has been a tension between art and money. And the first time in human history that someone has proposed keeping an artistic production to an agreed-upon budget.

Look, that $169,000-poppy field has sparked such anger because it perfectly embodies the reckless spending that the management has been doing right up to the moment it claimed the Met was going to go bankrupt. Those infamous, moving metal monoliths in Wagner’s Ring cycle are another example. Both are emblematic of a culture that spends money too freely, and then astonishingly tries to blame others for the resulting financial troubles.

And on a final note, may I point out that the severely minimalist “New Bayreuth” productions of Wagner’s operas during the 1950s were triumphs—both financially and artistically? I can’t fathom that there is no director who could try a less-is-more approach.

[Rehearsal]

As others have mentioned, the work rules surrounding rehearsals and performances are always complex for the general public to understand… with a result they get demagogued all the time. As I am not a chorus member for the Met, I hate to make sweeping blanket statements about the choristers’ contract or workload (I can’t help but notice that Gelb suffers no compunction about doing so, however).

But let me say this. Gelb seems to indicate that there are only three performances of an opera during a week, based on rotating repertoire. That might be true, but why is he looking at things in such willful isolation? There are other, concurrent performances that often rely on overlapping personnel. As a result, singers frequently work five or more performances, totaling 70 hours a week or more. Does that factor into why they get so much overtime pay?

“We’re changing the service structure to treat a rehearsal like a performance.  Donors will not keep throwing money down the rabbit hole.”

Again… so you claim that donors don’t want to waste money on paying the chorus members for their professional services, but they do want to spend it on hand-crafted poppies and moving metal monoliths? I’d be fascinated to see your research that indicates this. Was this based on focus groups? Interviews? Donor surveys?

“We don’t plan to slash soloist fees. They have contracts.”

So… no one, ever, has reviewed or renegotiated a musician’s contract. What an astonishing disingenuous answer. A contract is a framework for a mutual agreement, not a Holy Writ. And they do get re-negotiated when needed—the Minnesota Orchestra freely re-negotiated details of their contract after the market crash of 2008, and offered to do so again leading up to the lockout.

Plus, I can’t help but notice the slight deflection there—in response to the question, “are you looking to slash soloist fees?” Gelb answers “They have contracts.” He doesn’t say “no,” but just mentions the word “contract.” He’s clearly hoping that that readers will assume that contracts are eternal, unbreakable documents, and fill in the remaining details of the story in their own minds based on these assumptions.

So.  Is Gelb trying to cut fees, either with currently-scheduled singers or future performers?  We don’t know.  We only know that the singers in question have contracts.

“I do not ask any director or designer to design for video cameras.”

Again, this is disingenuous. Mr. Gelb, I understand that you don’t contractually demand that directors design sets and costumes specifically for those audiences watching your live simulcasts. But isn’t it assumed? My goodness, these telecasts are one of the Met’s signature programs—as you mention yourself, they’ve been around for six years and have been seen by more than 15 million people.

It’s astonishing that you seem to think that these hugely popular simulcasts somehow don’t influence the production values of your performances—either consciously or unconsciously. How could directors not be thinking about the unique benefits and challenges of those broadcasts?  Numerous stories have emerged that because of the new simulcasts, sets, props, makeup, lighting and costumes that were previously designed to be seen 200 feet away now need to be designed for the movie screen and HD cameras.  And workers are forced to work into overtime to make sure these new, far more elaborate design elements are ready to go.  To me, these stories are logical, and I haven’t heard compelling evidence that they are untrue.

So, be upfront.  The simulcasts are a great idea, but they absolutely have an impact on the organization’s finances, human resources, and institutional capacity.

* * *

In the end, there are two fundamental problems with this article—and Gelb’s position as a whole. I’m sad to say that in reading this, I feel his whole argument lacks both good data and ultimately, passion.

Much of the info he uses is just plain sloppy—it consists of the same tired clichés and nuggets of unsubstantiated “conventional wisdom” that always get trotted out in labor disputes. All of Gelb’s assertions are undermined from real data coming from other organizations around the country. Yes, opera companies and classical music groups have challenges. But many are thriving, with strong fundraising and ticket sales. So the “it’s just impossible!” meme wears thin.

And, there is no passion in his arguments either. On the one hand, his arguments are generally lazy, as if his heart wasn’t even in it. Worse, he presents a fundamentally bleak vision of opera in the future.  Given his bleak opinion of the artform, I can’t imagine why he should be leading a major opera company. I don’t know why he would even want to lead a major opera company.

This is all made worse by the counterargument of San Diego. This was another company that specialized in operas on a grand scale. And, San Diego also had a CEO who saw problems looming, but had no answers… and tried to pull the plug and get a big payout.

Well, the community wasn’t about to stand for it.

The public rallied together and forced the CEO out, along with the board members who supported his plan for closure. Then, the reconstituted board sat down with all the stakeholders, and laid out all the facts. No hiding behind classified documents—the leadership said what the actual problems were and asked for help. And the community responded. They collectively found a way to make it work.

Mr. Gelb, If you were really trying to save a dying institution, I suspect you’d do something similar—you’d gather all the stakeholders, share all the data you had to show the truth of your statement, and you would start asking for help. Since your only concern seems to be about extracting concessions from “the unions,” I can only conclude your goal is simply… to extract concessions from the unions.

And that won’t save the Met.

 

[Correction: The budget numbers discussed by Kevin Case above have been corrected for accuracy.]

Xochipilli

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21 thoughts on “A Familiar Battle at the Met

  1. Another wonderful, well stated response to the PR mumbo jumbo that is all too commonplace in our industry. Thank you!

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  2. Finally someone sheds light on the truth. I had no idea choristers worked such grueling schedules! Craziness. Gelb has lost his mind if he thinks he can win this one.

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  3. Well said.

    And to the sloppiness and lack of passion, these are terrible traits for a Met general director. Isn’t fundraising one of the principal job responsibilities? He is supposed to be schmoozing, hobnobbing, playing golf, and wooing donors in high society. Sounds like that is not his strong point. So he blames the budgetary problems on everything else but his own failings.

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  4. EXcellent post, Scott! I think all the points you make bear repeating over and over, even here in MN. We cannot forget those arguments and how wrong they were and are. It shocks me that Gelb is spewing them, though. I thought he was far more experienced in non-profit management than he’s making himself out to be. Why would someone do that? To pass the buck?

    New York City and its suburbs in NY and CT are some of the wealthiest places in the U.S. It seems to me that the Met needs to attract new audience to educate them about classical music and opera, and how much fun and entertaining they can be. I know nothing about the Met’s Ed. Dept. but I hope they have one that works just as closely with artistic as with development.

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  5. Brilliant article! Thank you! Yes, some artists have had their fees slashed and been told if you don’t like it, we’ll get someone else. It was bad enough that artists who have sung for years at the Metropolitan Opera weren’t able to count on their usual fee, but it was the dismissive, cold way in which it was handled. In essence, the modus operandi is no longer to retain these same artists for their unique gifts or the tremendous experience they bring to the stage. It is now about hiring someone younger and less experienced who will sing the part for less. Who’s devaluing the art form now?

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  6. Terrific, insightful blog post, Scott. It still amazes me just how persuasive “Big Scary Numbers” and “tired old clichés” can be to the uninformed. Thank you, Scott, for setting the record straight on these issues.
    So many things to like here. I particularly liked your comparison with professional sports figures and the work going on by individual athletes–behind the scenes–year-round.
    And this: “Think of all the choices that led to the infamous poppy field—should we do this opera, at this time, with this production team, led by this director, with this amount of resources? The management made a whole series of decisions with financial implications, and now seems to be blaming “the union” because everything ended up being so expensive.”
    You describe a decision-making process that honorable, successful stewards of any arts organization SHOULD be following. But if they are not, as I believe is the case you describe, then there should be accountability by those making flawed or not well thought-out or researched decisions. Better, more intelligent and/or experienced management should be at least one consideration before making the (uninvolved) labor force the scapegoats.
    I am reminded of the sign one often sees at service windows: “Lack of planning on your part does not necessarily necessitate panic on my part.”

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  7. I have so many thoughts/feelings about this “labor dispute” I have to resist ranting. This article does a great job of distilling the information and the ardor. I remember the organized campaign against us teachers. So many of the strategies are the same: out-of-context financial sounds bites in black and white language, anomie about the decline of education, symbolic images of waste. It was tough to see my profession slandered daily by Bloomberg’s PR machine but I was too busy working a 70-hr week to organize against it.
    I hope this putsch against theater labor is seen for what it is.

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  8. I have no dog in the fight other than I find the ticket prices outrageous. But trying to look at it from all sides I don’t see the current labor cost structure as sustainable. $500,000 for the most senior stagehands from what I read. In a business which loses money year in and year out. Nice work if you can get it.

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    • Hello Fred and thanks for writing in. Your point is brought up often in cases like this, and was certainly brought up often during the course of the Minnesota Orchestra labor dispute, which I commented on extensively.

      I don’t feel that the $500,000 salary for a veteran stagehand is outrageous, given the cost of living in New York, the necessary skill set for the position, and the lifetime of experience that person has. This person has to be a star in the field, and he plays an irreplaceable part at the Met… a comparison would be Le Bernardin’s fish butcher, Justo Thomas. Thomas gets a sizable salary, and he isn’t necessarily the star attraction at the restaurant, so a bean cutter might think he could be let go and replaced by someone cheaper. That would be a colossal mistake.

      To be honest, if we’re talking about the big-ticket items that are causing financial problems for the Met, there are far more important issues that need to be dealt with first, such as overspending on productions. That’s why there’s such push back; many have a sense that the cost savings brought on by Gelb’s proposed cuts would only temporarily mask the much deeper problems in the organization.

      I am curious about something. Mr. Gelb’s salary is $1.8 million—do you feel that is sustainable? Or at least more sustainable than the stagehand’s $500,000 salary? Why or why not?

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      • “I am curious about something. Mr. Gelb’s salary is $1.8 million—do you feel that is sustainable? Or at least more sustainable than the stagehand’s $500,000 salary? Why or why not?”

        My guess (and it’s just a guess) is it’s in line with what he could get in a similar executive position. And it is not material to the bottom line. If Gelb wants to take a 20-25% pay cut for optics that would be great though. I think he should. $1.1 million for running a prestigious arts organization that runs at a huge deficit seems plenty to me. Lead by example as they say.

        I merely used the top level stage hands as an example because the comp number which I think I recall from a NYT article shocked everyone that mentioned it to me or vice-versa. Point me to other theater organizations where the top level stage hands are making $500,000. (Not Local 1 stagehands). I don’t think you’ll find many and to be honest even if you could it won’t save the negotiations. On the other hand, if Mercedes Bass or whomever wants to commit to keep paying $500,000 stagehands until the next round of contract talks it’s fine by me.

        If I were representing the stagehands I would hammer your point about the overall cost structure and argue that cuts must be made elsewhere or, at least, commensurately.

        But I’m not negotiating for either side so I don’t have to come up with anything. I merely gave you my gut reaction.

        You’re reference to Le B compensation made no sense to me so I didn’t address it.

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      • “I don’t feel that the $500,000 salary for a veteran stagehand is outrageous, given the cost of living in New York, the necessary skill set for the position, and the lifetime of experience that person has.”

        Good luck finding a similar position at a similar comp level. 16 weeks paid vacation ? (And from an organization that routinely losses a lot of money.) People I talk to are really stunned by that.

        I saw the Ad in the NYT. While I didn’t cross-reference the names it looks like many of the Board members are the same people that either pony up the money to support the Met deficit or get their friends to do it. They are perfectly entitled to decide that Gelb is their man and they support elaborate, new and expensive productions while simultaneously determining that the labor costs are too high. (which labor costs according to the ad represent 2/3 of the budget).

        Labor is free to tell them to stick it and find work elsewhere.

        So we can test your $500,000 is reasonable theory.

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    • Let’s not confuse salary with that 500,000 figure. A few top supervisory members of the stage crew earn that amount only after working huge amounts of overtime, necessitated by management’s schedule design. In fact members of Local 1 earn less per hour at the Met than at any Broadway theater.

      As a seasonal union employee there I am often called on to work 16 or 18 hour days. When I arrive those senior stagehands are already working. When I leave, they are still there. I invite you to figure out your base hourly earnings and then figure out how much you would earn if you worked 70, 80 or more hours, week after week for eight months of the year. Then imagine if you will the toll those hours take on your family life and your health.

      Sure, those top stagehands make a lot of money. I for one wouldn’t like their jobs.

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  9. Can we hire you to do PR for our negotiations this year? Seriously.

    Great article. These managers all learn from the same playbook at the League of American Orchestras, formerly known as AS__OL_.

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  10. Thank you for saying this. All of it. Every word. Alas, I predict that all the unions will be locked out early in August. One little fact: Gelb has retained the firm of Proskauer Rose for negotiations. That firm masterminded at least four lockouts in professional sports.

    At the Met’s website, there is still a blog posting that hints at the rigors of singing in the chorus. (http://blog.metoperafamily.org/?p=88) Gelb’s 6-7 new productions (and revivals of older but complicated) productions demand much in the way of extra rehearsal.

    It seems to me that much of the increased labor cost is due to the new productions and poor scheduling, resulting in skyrocketing overtime costs. I have no facts or figures to back it up. (But I have played in an opera orchestra professionally, and sung in an opera chorus as an extra/volunteer).

    Other opera companies cut costs by cutting numbers of performances, numbers of operas produced, and numbers of new productions (resulting in fewer expenses all around). But as you said, Peter Gelb is putting the blame on the unions, and on the unions alone.

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