Imagine running a business that gets you deeper into debt as you sell more of your product.
Then you have to hire some of your best people three to five years before they show up, with no idea how well they’ll do the job.
And, finally, much of the financial support that has kept your business afloat for the past several decades has been drying up.
These peculiarities shaped the battle between the Lyric Opera of Chicago and its orchestra over wages and the duration of the season, a battle that was settled early Thursday.
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It took 14 hours of hard bargaining to narrow the million-dollar gap between the Lyric Opera and the members of its orchestra. And though both sides have said next to nothing about the agreement, orchestra members will gather for their first rehearsal at 4 p.m. Friday, said Ed Ward, president of the Chicago Federation of Musicians Local 10-208, the union that represents the orchestra. Chorus members and other artistic personnel will join the orchestra for their second rehearsal, scheduled for 11 a.m. Saturday.
Around the time of Friday’s rehearsal, the orchestra members are expected to approve the settlement.
Terms of the three-year deal, however, will remain under wraps until the orchestra takes its vote, at the request of federal mediator Jim Schepker. Lyric General Director William Mason did disclose that an extra week of work would be added to the final year of the contract, expanding the season to 25 weeks from 24 weeks.
Throughout the long and often tense negotiations, orchestra members maintained that adding extra performances to the Lyric calendar hardly should have been a problem. After all, they argued, the company had just experienced its most successful sales run ever–selling out nearly every ticket to every performance weeks in advance. Union leadership also noted in an open letter Tuesday that “the cost of our dispute is substantially less than 1 percent of Lyric’s operating budget.”
Contrary to other types of live entertainment, running an opera house defies virtually every law of good business management.
“The public still assumes that if you’re selling out your performances, you’re making money,” said Susan Mathieson, Lyric’s marketing director.
In fact, the opposite is true: The more performances that Lyric Opera presents, the more money it loses.
How so?
To comprehend the answer, you have to understand the arcane way an opera company is structured (and all non-profit arts organizations, for that matter).
Lyric Opera, by some measures the most successful company in America, generates 61.3 percent of its income from ticket sales and investment; the national average for opera companies is 44.4 percent. That figure places Lyric at the top of the heap when it comes to earned income, as compared to charitable contributions.
Considering that single ticket prices at the Lyric top out at $119, with the cheapest seat at $26, one might wonder why ticket revenue can’t cover the company’s entire $34.6 million budget for 1997.
The reason is that the performing arts in general, and opera in particular, are inordinately expensive to produce. They rely heavily on labor: singers, musicians, stagehands, sound engineers, costumers, makeup artists, et al. Yet once a production has played for a few weeks, its earning potential is basically finished until the company remounts the show several years down the road. There is also some ancillary income to be made from sharing a production with other opera companies.
So while a movie or a book can make money in perpetuity, a live opera production has a remarkably short shelf life. Without contributions from individual donors, corporations and foundations, that $119 top ticket price could be almost twice as high.
“At most American opera companies, your income is about half from the box office and the other half from begging,” says Kip Cranna, musical administrator of the San Francisco Opera.
The catch is that each time an opera company adds performances, it also adds debt, since box office receipts never cover the cost of a single performance. To add a week or more to a season’s schedule is to incur the obligation of raising more donations.
But the difficulties of keeping an opera company financially whole don’t end there.
Because top-notch opera singers are in demand around the world, they’re generally signed about three years in advance, with the biggest stars (who draw the biggest box office) tentatively committing to performances roughly five years in advance.
“You have to try to decide who are going to be the stars that everyone will want to hear five years from now,” added Cranna. “But you don’t really know if they will still be in good voice then.”
All of this planning takes place, however, in a country where federal and state contributions to the performing arts have been on the decline for years.
“So the money has to come from someplace else, and although we still look to foundations and corporations, everyone else is asking them for money too,” said Lane Brooks, director of resource development at Opera America, a national association for opera companies. “We’ve learned that the best source for additional support is private individuals. But they, too, are being tapped more than ever by a variety of groups seeking money.”
That’s why even the biggest opera company in America, the Metropolitan Opera in New York, has only a 30-week season. Unlike other businesses, opera companies in America simply cannot afford to run year-round.
Nevertheless, Chicago’s opera season will be one week longer by 1999.
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Said James Berkenstock, principal bassoonist and chair of the orchestra’s negotiating committee, “We’re delighted we were able to reach this agreement, end this work stoppage and get back to the business of making music.”