They Told Me Not to Take that Job: Tumult, Betrayal, Heroics, and the Transformation of Lincoln Center (52 page)

Private and Confidential

THE NEW YORK CITY OPERA: A ROAD TO RECOVERY

A WHITE PAPER WRITTEN FOR GEORGE STEEL, GENERAL MANAGER AND ARTISTIC DIRECTOR OF THE NEW YORK CITY OPERA AND SUSAN BAKER, THE CHAIRMAN OF THE BOARD

               
New York City is at least a two-opera town, a cultural capital that needs and deserves the creative tension between the edifice of grand opera and the productions of a far more iconoclastic opera company.

               
We have always admired the City Opera’s artistic brio. It’s going to take a lot of business brio to keep going: a commitment to living within its limited means, a return to the spirit of its modest origins as the “people’s opera” and, especially, a clearer kind of thinking—artistic and managerial—than we’ve seen in recent years.

               
Editorial,
The New York Times,
June 25, 2009

THE CHALLENGE

I. FINANCIAL

The Opera’s current endowment is somewhere between $10–16 million down from $57 million in December 2003. That’s about 30–45% of an annual season’s budget that is expected to be in the range of $30–35 million.

Moving to this desired “equilibrium” of about 10 productions annually will require an operating budget of at least this size, with commensurate levels of earned and contributed income. An endowment of the current size will generate annual income of only between $500,000–750,000.

Building back a robust paid audience in ample quantity after the house has been essentially dark for two seasons and raising annual funds at needed levels will be a major challenge. So, too, will be the elimination of any accumulated deficit, the restoration of a healthy cash reserve and the replenishment and then growth of endowment.

II.
  
GOVERNANCE

The number of trustees and their level of involvement in terms of both service and financial support falls considerably short of what the Opera requires.

Public reports suggest that there is a $50,000 annual expectation of each trustee. While that sum is less than it needs to be, former staff allow that even it has been honored in the breach by some Directors.

In virtually every case of a nonprofit turnaround from a state of dire financial conditions, the revitalization of the board of directors has been indispensable. Mayor John Lindsay and his work as Chair of the Lincoln Center Theater. Marshall Rose at the New York Public Library. Peter May at Mt. Sinai Hospital. Helene Kaplan at the American Museum of Natural History. These institutions illustrate how “turnaround” can be catalyzed by fresh lay leadership, by able staff and by determined, energetic board recruitment.

III.
  
REBUILDING STAFF STRENGTH AND MORALE

The New York City Opera’s staff has been through six very tough years. The extensive, failed search for a new home both downtown and at the American Red Cross site. The damaging comments about hall acoustics associated with Paul Kellogg. The management interregnum that followed the announcement of his resignation. The failure to resolve outstanding issues with Gerard Mortier on mutually acceptable terms. Two seasons of darkness and before then poor box office and financial performance, generally. Media coverage filled with negative comments and forecasts.

All of these factors have weighed heavily on the few veterans who remain with the company and may well serve as barriers to the recruitment of gifted newcomers.

Creating and sustaining a committed management team will be a key to recovery.

IV.
  
REDUCING, CONTAINING, CONTROLLING COSTS

Clearly, union negotiations on salaries, fringe benefits and work rules will be a high priority for this labor intensive arts organization. The same observation applies to bargaining for lower costs with all suppliers. The extreme financial condition of the New York City Opera demands that its historical partners join in shared sacrifice, the better to create a robust, healthy company with which to do business in their future.

V.
  
A THREE YEAR OPERATING PLAN AND BUSINESS MODEL

The driving forces leading to the Opera’s deficit are structural, not cyclical. The current recession may exacerbate the difficulties. It did not create them. And, a return to positive economic growth in the country will not of itself eliminate them.

Management must produce a credible, steady state, three year plan of artistic merit and of balanced budgets. And render explicit the financial assumptions on which it is based.

Pointing to extenuating circumstances wins no allies. Patience is running out. So is time.

Staff, working together in close partnership with an expanded and revitalized board of directors must redeem the promises of that plan and reinstate the Opera’s credibility, artistically and financially.

VI.
  
A CAMPAIGN TO REBUILD CONFIDENCE AND REPAIR DAMAGE AMONG KEY STAKEHOLDERS

The views of the New York City Opera by foundations, corporations, individual donors, media and the government of the City of New York need remedial attention. Past plans have gone awry. They were viewed as unrealistic. Deficits have grown. The attention of the audience has strayed. Management has changed.

It is therefore critical that the board of directors and staff rally around a common, realistic plan, explain and interpret it early and often, and execute it well.

THE OPPORTUNITY

To summarize, the New York City Opera needs a sound, credible operating, a fundraising strategy of real energy and heft, a marketing plan to win back its traditional audience and woo newcomers, an expanded, revitalized, generous board of directors, and a driven, determined, highly skilled management team.

VII.
  
THE VITAL FEW KEY ELEMENTS OF RECOVERY

The New York City Opera enjoys a storied history and the respect and affection of many opera lovers. Identified with low ticket prices, promising American singers, venturesome repertoire not likely to be performed at the Metropolitan Opera and even an association with Mayor LaGuardia, the Opera can call on the goodwill of New Yorkers who wish to see it thrive. The recent editorial in the
New York Times
is illustrative of a civic pride that can be fully tapped.

       
a.
 
Use the official opening of the David H. Koch Theater and the excitement and media coverage it generates to launch a seat naming and “capital” campaign.

           
Formerly known as the State Theater and beloved by many, it is an oddity that virtually none of its internal spaces are named. They are of great financial value. They are assets hidden in plain sight. Waiting for a national economic recovery to capitalize on them could be a huge tactical error and, depending upon many other considerations, a campaign launched years from now may be too late for the Opera.

       
b.
 
On both the revenue and expense side the efficiency and effectiveness of both the board and staff of the City Center for Music and Dance would benefit from thorough examination.

           
The rental revenue of the David H. Koch Theater and its interior spaces has historically been de minimis and the manner in which common costs are handled needs a fresh look.

CCMD has only two customers. The New York City Ballet and the New York City Opera. Is each holding its staff fully accountable for performance? Of what added value is the CCMD board? Is the kind of advanced planning utterly necessary to rent the hall and its lobby spaces being undertaken in a disciplined fashion?

Affirmative answers to these questions are required to create and sustain a healthy financial condition for the hall.

       
c.
 
The magnificent $100 million pledge of David Koch can alter the view of many potential donors of the theater and its occupants. Under such circumstances, fundraising for both companies should be catalyzed and the halo effect of the gift put to best advantage.

       
d.
 
Clearly, the Ballet and the Opera share a home and stresses and strains in recent years in their relationship have been abundantly clear. Susan Baker and Barry Friedberg did much to diffuse tension and to frame a workable agreement for the Theater’s redevelopment.

The likelihood of a new understanding that will allow the opera to tap some $9 million it has requested as foregone earned income for its dark seasons, together with a few concessions of its own to the Ballet around scheduling and construction monitoring, will be very good news indeed. Another “green shoot” is the recent success of the Opera in securing a challenge grant to help support the 2009/2010 season. Still another, is the potential record breaking gala to open the season.

       
e.
 
The identification of new board leadership for the Opera around whom veteran and new trustees can rally is imperative.

HOW LINCOLN CENTER CAN HELP

Lincoln Center is fully prepared to assist in the identification and recruitment of new members of the Board of the New York City Opera including, whenever the Opera is ready, a new Chair.

Lincoln Center is also prepared to offer its services in substituting for all or part of CCMD’s current role from a management perspective. As the owners and operators of Avery Fisher and Alice Tully Halls and of all of the public spaces, the staff at Lincoln Center is fully familiar with both facility management and hall rental. There may be some significant savings associated with scale and scope should Lincoln Center play a management role at the David H. Koch Theater and substantial rental income is there for the asking provided both resident companies cooperate in date clearance, in sufficient advance planning and in acquiring the skills of attracting and delighting licensees of all kinds.

Toward exploring these possibilities, Lincoln Center is at the disposal of both the New York City Opera and the New York City Ballet.

APPENDIX D

Date: June 2, 2003

Contact: Betsy Vorce

212.875.5100

[email protected]

L
INCOLN
C
ENTER

for the Performing Arts

STATEMENT FROM BRUCE CRAWFORD, CHAIRMAN, AND REYNOLD LEVY, PRESIDENT, LINCOLN CENTER

Re: Looking Alteall for Avery Fisher Hall

Lincoln Center learned last Thursday afternoon, May 29, that the New York Philharmonic was engaged in serious discussions with the leadership of Carnegie Hall about the prospect of moving there permanently. We are proud to have been the home of the New York Philharmonic for over 40 years, during which time they performed before an audience of millions and reached tens of millions more through
Live From Lincoln Center
broadcasts.

Lincoln Center worked diligently to develop many alternatives that would satisfy the acoustic, programming and aesthetic needs of the New York Philharmonic, as well as of its own presentations, and was particularly flexible in offering to finance the costs of fundraising and the costs of capital planning, as well as take a leadership role in the fundraising required to realize these alternatives. Under such circumstances, and given this history, we are disappointed in the New York Philharmonic’s decision.

We also are extremely enthusiastic about using Avery Fisher Hall to bring to New Yorkers, Americans and foreign tourists the world’s best musicians and performers. We envision the opportunity to house this country’s and the world’s leading orchestras not only for three or four evenings of performance each year, but also in residence for longer periods of time.

We foresee expanding the thematic programming that has increasingly characterized our Great Performers and New Visions series. We look forward to commissioning new music, to utilizing the best of 21st century technology to enhance the audience experience and to engaging our performers with brand new audiences and with elementary, middle and high school students.

Lincoln Center’s trustees and staff, as well as its constituents, feel a profound responsibility to maintain the world-class standard of performing arts for which we have become known around the globe. The forthcoming change in the use of Avery Fisher Hall allows the fulfillment of this responsibility to take on many new forms. We relish the opportunity.