Peter Gelb Case Study: The Metropolitan Opera

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Introduction

The Metropolitan Opera, located in New York, NY, is cultural institution steeped in history and known for its bombastic opera productions. The original opera house opened in 1883, and eventually the large scale performances outgrew the space. Lincoln Center presented an opportunity for a new home, and since 1966 some of the most iconic moments in opera history have occurred on that stage. Between 2013-2014 the Metropolitan Opera weathered the most contentious labor negotiations in its history.

Background

Peter Gelb has been the general director of the Metropolitan Opera since 2007. By 2013, Gelb had a proud track record of accomplishments. High-definition theatrical broadcasts of Met opera productions in cities around the world brought grand opera to an audience of millions and opened a new revenue stream— totalling thirty two million in 2013. To attract new audiences, Gelb had brought a roster of acclaimed directors to the Met stage …show more content…

In 2013, they were three hundred and twenty-seven million dollars—forty-seven per cent higher than when Gelb took over. Because the box-office accounted for less than a third of revenue, the Met depended heavily on charitable contributions. Though revenue had grown by nearly fifty per cent, to three hundred and twenty-four million dollars, the company was running an operating deficit of $2.8 million.

Despite a multiyear bull market in stocks, the Met’s endowment had withered to two hundred and fifty-three million dollars, from a peak of three hundred and forty-five million in October, 2007, owing in part to annual withdrawals to fund operations. In 2013, the Met drew twenty-one million dollars from the endowment, an alarming spending rate of 8.3%. In 2012, the Met had tapped the bond market to borrow a hundred million dollars. Meanwhile, attendance had fallen from ninety-two per cent of capacity, in 2007-08, to seventy-nine per cent, in the 2012-13 season.

Labor

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