The Death Of Classical Music in America

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Even organizations that continue to attract huge audiences such as the Metropolitan Opera, the largest classical music organization in the US, have begun to struggle.

The Met reported contributions of $127.3 million in 2009, up more than 83% from $69.3 million in 2000. During that same time, box office revenue rose 20% to $93.1 million versus $77.4 million in 2000. Total expenses, however, rose during that same time from $176.3 million to $282.4 million,  a gain of 60%.  Compensation costs rose from $137.4 million to $212.9 million, an increase of 55%.   Charity Navigator says the Met’s loss for the 2009 fiscal year was $71.5 million.  The Met disputes this figure and claims its net loss was only $1.3 million.   A spokesman, Peter Clark, says he “has no idea how Charity Navigator does its math.”  Regardless, its annual report shows  that it faced a tough financial predicament as total assets declined from $495.3 million in FY08 to $422.7 million in FY09, driven primarily by investment losses.

Economic conditions adversely affected the Met’s annual fundraising, its endowment, and its pension fund, and made it impossible for the company to raise ticket prices. We responded with a series of critical belt-tightening measures; expense reductions included cutbacks in staff salaries and benefits. Meanwhile, the combination of a Board-initiated Weekend Rush Tickets program and the successful conclusion of the 125th Anniversary Fund campaign allowed us to weather the worst of the economic storm.

Other big names in the classical music world are managing to hang in there, though none appears to be thriving.

For instance, the Chicago Symphony Orchestra had a deficit of more than $15 million in Fiscal Year 2009.  The figures for FY 2010 , which have not been finalized, show ” breakeven or better results,” says  Raechel Alexander,  a spokeswoman, in an email.  She wasn’t more specific.

The Boston Symphony Orchestra, which had losses in 2008 and 2009, dipped into its Immediate Impact Fund to build budget surpluses of $279,000 in FY 2010 and another $585,000 in FY 2011.  Bernadette Horgan, a spokeswoman for the BSO,  says achieving fiscal success has not been easy.

“The organization cut $4 million from its $84 million budget for FY 2010; eliminated a planned orchestra tour of Europe for early 2010; laid off about 5% of the staff; music director and managing director took 10% pay cuts; higher paid management staff took 5% pay cuts,” she writes in an email. “The orchestra members agreed to a two-year contract extension (FY 2010 and 2011), freezing their current pay …. –a 19% cut; fees for guest artists were frozen and in a few instances reduced.”

The Cleveland Orchestra, which like Boston, Philadelphia and Chicago, has a world-renowned reputation,  has its share of fiscal woes as well.   Staff members took pay cuts which are being restored.  However, Cleveland, which posted an operating deficit of about $2 million last year probably will post a deficit in the fiscal year ending in July, a spokeswoman said.  Players staged a brief strike.

For an orchestra or classical music organization to make the 24/7 Wall St. list,  it had to either be in financial distress or have the substantial potential to be that way because of a downturn in the economic fortunes in its region.  Those that have surpluses only because of massive cost cutting were also included.  Most are either rated one or two stars out of a possible 4 by Charity Navigator.   The CN “star” system is based on financial strength and long term viability. We also based the findings on a review of financial documents and discussions with experts.  Some of the organizations are already heading out of business.

Here is our list of the most cash-strapped classical music organizations.