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Tuesday, June 19, 2012

When Is A Surplus, Not Really A Surplus, Ask the Metropolitan Opera

Philip Boroff wrote today in Bloomberg News about the apparent financial health of the Metropolitan Opera. In an article that depicts everything coming up roses for the MET on their current tax return, one should pause and ask some serious questions. It would appear salaries are up for Mr. Levine and their Master Electrician (who we have just learned is no longer employed at the MET, his replacement, P.J. Volpe is former Metropolitan Opera General Manager Joe Volpe's son.), Gelb is maintaining at a very high level and it infers that everything is a picture of good health. Fourty-One Million of good health it would seem. The major take home quote from his article,

The Met, the largest U.S. opera presenter, spent $321 million during 2010-2011, up 8 percent. It had a $41 million surplus, reversing a $25 million deficit the prior season, as contributions and revenue surged, according to the return.

Entire Bloomberg Article

But here is the rub:

1. Monies owed to the Metropolitan Opera Pension Fund in 2011 have yet to reach the account.
2. Money was taken in the 2011 season from the endowment of the Metropolitan Opera which has yet to be repaid.
3. The note on the Chagall frescoes with J. P. Morgan Chase has yet to be repaid in full.

Employees within the Metropolitan Opera who are counting on the Pension Fund for their retirements, want to have the peace of mind that their pensions are secure and that the borrowed money has been returned. We all know from the NYCO endowment raid that that sort of "borrowing" occurs as a last resort, when all other options are exhausted, so why did the Metropolitan Opera raid their endowment too? The ludicrous loan on the Chagall frescoes which cannot be removed still is lingering and has not bee fully repaid. So they claim a $41.0 million dollar surplus on their taxes, hmmmmmmmm. It would beg to ask the question, was this was done so the Senior Management of the Opera Company look more successful than they really are?  Are they kicking the can down the road to another year to make this happen?  Once the raided funds are repaid, (of course that is entirely an assumption) the question is where does it really leave them for the 2011 fiscal year?

Of course, that is the 41 Million Dollar question!

Updated 10:59 AM 6/20/12

1 comment:

  1. Has Philip Boroff actually NOT read the New Yorker's feature article on Peter Gelb and the Met (issue of March 23, 2015)? Several of the Met's billionaire Board members said that if Peter Gelb's prodigal spending on new, "innovative" (gimmicky) stage productions is not curbed very soon, the Met will go bankrupt in 4 years.