They Told Me Not to Take that Job: Tumult, Betrayal, Heroics, and the Transformation of Lincoln Center (33 page)

Regarding item 2, when was opera ever taught in elementary and secondary schools? Even in the days before the performing arts were virtually eliminated from the primary and secondary school curriculum in New York City, opera was rarely if ever embraced as a subject.

On item 3, spokesmen for the English National Opera, The Royal Opera, and the Opera Bastille all denied that their companies had been adversely affected by the same trends afflicting the Metropolitan Opera. On the contrary, the leadership of these European companies asserted that recent seasons had been good to excellent from an attendance and earned income perspective. Quite unusually, they publicly parted company with Gelb. They left little doubt of their view that he was incorrect in lumping the financial condition of their institutions with his own.

As for item 4, Superstorm Sandy was a temporary phenomenon at worst and did not seem to have badly damaged other Lincoln Center
constituents or Broadway in any kind of serious way. There seemed to be a touch of futility in citing it as an important cause of a full year of disappointing results at the box office.

On item 5, the Dow Jones Industrial Average, the S&P, and the Nasdaq were all hitting record highs. The real estate market in New York City was booming. The bull market in stocks and in commercial and residential real estate offered huge opportunities to recruit new, wealthy trustees and to solicit major gifts from existing supporters and prospects. As a veteran fund-raiser, I find it difficult to imagine a more receptive and upbeat environment in which to tap the generosity of the affluent.

What’s more, tourism remained at record highs, and the hotel business was booming. Were vacationers and expatriates attending the Met Opera in ample, or even anticipated, numbers? Was the Met Opera winning its fair share of their time and resources?

What troubled Met Opera loyalists, myself included, was that the faultfinding all seemed to be “out there,” in the economy, in the school system, in demographic trends, in competition for contributed income, even in extreme weather, rather than “in here,” in the Met Opera’s own economic model, its soundness in formulation and execution.

To fail to acknowledge Gelb’s energy, drive, innovativeness, and entrepreneurial flair would be churlish. But all who care about the future of the Metropolitan Opera are entitled to ask how this desperate financial condition arose, and whether the steps taken to date are nearly enough to address it successfully.

O
NE ENGAGED AND
interested party that shared this concern was the Met’s unionized workforce.

The Met’s proclivity until the run-up to the negotiations in the summer of 2014 was to act as if economic matters were well in hand or at least under control. Downplaying or sugarcoating realities was now at an end. It was past time to blow the whistle. And ironically, it was Gelb who became the whistle-blower in chief, issuing dire warnings about the Met’s financial future.

Savvy union members were not buying these sudden Cassandra-like cries of a change in fortune. Tino Gagaliordi, the president of Local 802 of the American Federation of Musicians, asked why such significant
costs needed to be cut by the Met from union wages, benefits, and work rules to manage what until recently Gelb had contended was a minor deficit in the last fiscal year:

It is our hope that the mediated negotiations will finally yield transparency on the part of Met management, requiring it to prove why it needs upwards of $30 million in cuts to address a deficit of $2.8 million.
¹

The reason was simple. As Wakin and Munk had reported years before, the Met treated its endowment quite casually, moving funds from the balance sheet to the operating statement so as to pay bills and to claim that budgets were balanced or very close to it. By 2012, realizing that this practice was no longer practical, the Met was compelled to issue $100 million of bonds to help satisfy pressing cash needs.

Now, it was claimed, the day of reckoning had come. The endowment had reached the point where it was less than half a year’s expenses, leaving aside entirely the need to pay back borrowed cash, or to address the alarming unfunded liability of pension funds, or to satisfy deferred maintenance and equipment needs. Gelb turned to the unions as a critical source of assistance.

They weren’t flattered by the attention. What they wanted instead were clear answers to these questions:

       
1.
   
Why had the Met’s budget ballooned in the Gelb years, from $220 million to close to $330 million?

       
2.
   
Isn’t it true that the HD movie opera initiative, however it may have worked elsewhere in America and around the world, actually reduced attendance in the opera house from those residing in New York, New Jersey, and Connecticut? If so, might a blackout of some highly popular operas in the tristate region encourage live attendance?

       
3.
   
Why didn’t Gelb better control overtime costs?

       
4.
   
Wasn’t Gelb’s scheduling of rehearsals excessive and largely controllable by him?

       
5.
   
Where is it written that the Met Opera must put on twenty-three different shows each season? Why not twenty-one or
twenty or nineteen? And why not slightly fewer new productions or new operas? And isn’t there room for more coproductions, in which two or more companies split the cost of new operas?

These questions must have rankled Peter. They suggested that treating the unions as a scapegoat for the Met’s travails was unfair. Surely, the unions claimed, management changes were also in order if the Met’s financial condition were to improve and stabilize. These questions indicated a few significant pathways to cost cutting. I’ll add one in the form of revenue enhancement.

If, over time, the Met can organize its productions so as to free up a consistent week to ten days in its venue, then one or another televised award show is likely to commit to a very lucrative multiyear arrangement. Whether it be the Tony Awards or the MTV Awards, the Oscars or the Emmys or the CMT Awards, the Met is a highly desirable place for such televised productions. Its sponsors all have deep pockets. Just one or two such extremely lucrative rentals every year could help contribute to the Met’s annual revenue needs and reach a national audience in the bargain.

I am confident that this opportunity is real. For several years running, I received phone calls from City Hall asking me to determine which of our venues could be made available consistently for several mega-televised events. Because its seating capacity nears four thousand and because of its front- and back-of-house versatility, the preference of interested parties was to use the Met Opera House. But it was always unavailable.

On July 25, 2014, the musicians of the Metropolitan Opera, Local 802, handed a very detailed, sixty-page document to Gelb that was highly critical of his management of the Met and of his artistic choices. Gelb could have thanked the union, his highly praised musical colleagues, and treated with respect their constructive effort to identify cost savings. He could have promised to review these detailed proposals and to consider them on the merits. Instead, within twenty-four hours the Met responded in a point, counterpoint style, conceding nothing and rejecting every union argument and proposal.
²

It was as if for Gelb there was only one way to run the Metropolitan Opera. His way. Message sent. Message received. Message rejected.

Being at the helm of a complex institution is not just a matter of juggling facts and figures and reaching sound decisions. It is more than finishing tasks and completing transactions. It is certainly more than always trying to win arguments and prove that you are correct. It is about building relationships and creating trust.

I
N THE CASE
of Volpe and Gelb, appearances are deceiving. They seem to be an unmatched pair. But in my capacity as the president of Lincoln Center, I found it was their similarities and not their differences that struck home.

True, Gelb is to cultural royalty born. His father, Arthur, served as the cultural editor of the
New York Times
when that position was truly powerful. His mother, Barbara, was the stepdaughter of the playwright S. N. Berhman and the niece of violinist Jascha Heifetz. The Gelbs wrote two definitive and much-praised biographies of the playwright Eugene O’Neill. Their son, Peter, worked for Sol Hurok, the legendary impresario. He also served as Vladimir Horowitz’s manager, as the public relations director of the Boston Symphony, and as the president of Sony Classical. By contrast, Volpe began his career as a carpenter at the Met and rose up through the ranks.

For me, the major differences end there. Neither Volpe nor Gelb attended college (nor, for that matter, did Rudolf Bing, their famous predecessor). Each is, by his own admission, a control freak. In reading about and personally observing their respective tenures (Volpe characterizes his as a reign), there is seldom a favorable reference to the colleagues with whom they worked closely at the Met or elsewhere around the world. They both behave as if they are one-man shows. In discussing the Met, they do not just personify the institution; they personalize it. They seem to conflate themselves and their views with its interests. In hundreds of news and feature stories about Volpe and Gelb, it is difficult to find nouns like
team
,
colleague
,
partner
,
collaborator
, or
coworker
.

In my judgment, each has attempted personally to resolve too many issues and hammer out too many decisions. For management gurus like Peter Drucker, such overreaching unilaterally displaces experts in an organization who are likely to be closer to the issues and the problems at hand than is the CEO. Delegating smartly not only resolves matters
nearer to their source, but leaves the CEO with fewer decisions, those for which he or she is most needed and most knowledgeable. It preserves valuable time for that which only the CEO can accomplish, like high-end fund-raising and important donor cultivation:

The least effective decision makers are the ones who confidently make too many decisions. The effective ones make very few. They concentrate on the important decisions. And even people who work hard on making decisions often misapply their time. They slight important decisions and spend excessive time making easy—irrelevant—decisions.
³

For all of their apparent differences, neither Volpe nor Gelb seemed to enjoy company in reaching decisions or in executing them. If either played a musical instrument for a living, I am confident that each would prefer to be a solo artist. Chamber ensembles are not for them.

L
ABOR NEGOTIATIONS REQUIRE
, by definition, sitting down with one’s counterparts and bargaining. Gelb deserves credit for calling into question union costs that have grown increasingly unaffordable and work rules that have become both rigid and expensive. Yes, his hand was forced by the Met’s dreadful economic condition. Even so, acknowledging that under his watch the greatest opera house in the world had allowed itself to arrive only two to three years away from going out of business could not have been easy. Nor could being subject to merciless criticism of his management by his own workforce.

The unions merit some praise as well. By pointing to ways and means under Gelb’s control to reduce and contain costs, they refused to allow themselves to be perceived as the only or even the principal cause of the Met’s financial woes. They attempted to be constructive.

Ultimately, both parties seem to have offered important concessions, and what would have been a disastrous lockout or strike was avoided.

On the union side, singers and orchestra members agreed to take a 3.5 percent cut in pay immediately and an equivalent cut six months later. There would be no pay increase until the second half of the last year of a four-year contract. That upward adjustment in 2018 will be 3 percent. The Met claims that all of its other unions agreed to a roughly
comparable wage savings package. Technically, that may be true. But the stagehands, while taking an immediate cut of 3.75 percent, then receive raises of 2.5, 3, and 3 percent in the fourth, fifth, and sixth years of their new contract.

These are significant, historic concessions. While nowhere near the 17 percent Gelb claimed the Met Opera required, they are the first pay cuts experienced by the Met unionized workforce in decades, and they will result in millions of dollars of savings.

What all of the unions refused to yield on is also very significant. No changes to health-care benefits. No changes to pension benefits. No changes to work rules. Each of these categories of cost offers plenty of room for give and take that could have saved meaningful sums overall. Their complete rejection by the unions must have come as a bitter pill to Met management. And so did this most unusual provision: apparently the Met agreed that any return on its endowment above 8 percent will be equally shared with union employees, 50:50.

The plot further thickens as one reviews the rest of the Met’s part of this bargain. It agreed to cut $11.25 million in expenses each year in addition to the savings yielded from the cuts to union wages. The Met also agreed to retain Eugene Keilin, an independent financial analyst who had been hired originally to analyze the Met’s books and to assist the federal mediator in negotiations. Now he will stay on, reporting to both labor and management and paid by both of them equally.