James Abruzzo
serves as Executive Vice President and Managing Director, Nonprofit Practice, at DHR International. He has over 25 years of experience as a consultant to nonprofit organizations. Mr. Abruzzo is also Co-Director and Co-Founder of The Center for Nonprofit and Philanthropic Leadership at Rutgers Business School. He lectures frequently at major business schools in the U.S. and abroad.
Leadership at the Metropolitan Opera

“An account’s nightmare”

Peter Gelb is General Manager of the Metropolitan Opera, one of the worlds largest and most complex arts organizations. Since his inauguration in 2006, he launched a number of new projects to attract new and younger audiences. But the debts are still growing and as the Met is the most lavish privately financed opera house in the world, the opinion of the wealth and patronaging older opera lovers play an important role when it comes to management decisions.
Opera is an accountant's nightmare. No house ever breaks even, indeed, every time the curtain goes up, a lot of money is lost. This quote isnt from the March 23, 2015 James Stewarts profile of Peter Gelb, but rather it is a quote from The New Yorker 1966 profile of Rudolf Bing, the General Manager of the Metropolitan Opera at that time. So not much has changed in 50 years. Or has it?

Performing arts leadership is a demanding profession. The most successful leaders have: refined artistic taste and training; the behavioral skills to assuage artists, boards, management teams, unions, critics, sponsors and patrons; and the ability to create an atmosphere where the great artists, who can choose to perform anywhere, choose their venue. Success requires honed instincts, emotional intelligence and extraordinary business acumen coupled with a high tolerance for risk. The arts leader is neither the singer nor the composer, conductor nor stage designer, but more like the lion tamer at the circus, whose goal is to get the most exciting show from the lions sometimes at great risk.

Bing could have been describing Gelb when he said, The head of an opera company finds himself pitted against his artists (except for a few who have just been given coveted parts), against his board of directors (who are required to do something about the steadily mounting deficit), against union officials (who want more money for the unions' members), and against his public and the critics (who rarely agree with what he is doing). Running a deficit business, the manager is forever compelled to compromise between his artistic conscience and his sense of economic guilt.

But compromise he must. James Stewart provides a muddy analysis of the Mets finances. The reader must do the math to learn that the operating expense was approximately $225 million when Gelb started and the board raised the endowment draw from about 7% of the corpus to a fixed amount equivalent to 9% or $21 million; but with the budget at $327 million, a steady draw of $21 million represents only 6% of costs covered. In effect, the return on the endowment is not keeping pace with the expenses.

Mentioning that when Gelb took over the amount of endowment comfortably exceeded the operating budget is like declaring that the length of the runway comfortably exceeded the length of the plane. But how much runway does a plane comfortably need to land? During Gelbs tenure the Mets deficits continued to grow. And Stewart gives Gelb credit for the obvious; it was his [Gelbs] idea, not the boards to reduce costs.

But can we expect anyone to turn around a ship traveling in the wrong direction? Perhaps it says more about the state of the leadership of the performing arts that the Met board chose someone as under qualified as Gelb. Imagine the board of the Met Museum, or the National Gallery in London, choosing not a curator or art scholar; not someone respected by his peer museum professionals globally; but someone who never lead an opera company let alone any nonprofit arts organization. The directors of the worlds great museums are credentialed, trained, experienced, work together on global projects over many years, and have the taste and skills to manage complicated institutions; the same qualities shared by the directors of many successful opera companies.

In 1966 Bing said that Giuseppe Verdi read most attentively the reports of the box office. These, whether you like it or not, are the only documents which measure success or failure, and they admit no argument and represent not mere opinion but facts. If the public comes, the object is attained. If not - no. The theatre is intended to be full and not empty."

But great art, like other sophisticated delicacies, takes a willing and educated palette (or ear) to appreciate. A classic vintage wine or an exotic umami dish may only be appreciated after multiple tasting experiences. So too with great art - the difference between the dolt and the epicure is often in the education and the effort. An opera or an opera company should not be judged by attendance alone. New, innovative works take time to be understood and appreciated; the Dadaists were at first derided; the premiere of Le Sacre caused a riot. Unfortunately for Gelb, his new, daring productions that were meant to excite an audience experienced plunging audience numbers in years following their premiers; and while attendance dropped costs rose.

If the business model is unsustainable, if the critics dont like it, if the board is unhappy and the audiences are diminishing, maybe, just maybe, the man is not doing a good job.
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