N.Y.C. Opera May File Bankruptcy
Oct. 2, 2013
The New York City Opera, an operation that has been around for approximately 70 years, is facing financial difficulties that may force it to file bankruptcy soon if increased fund raising efforts are unsuccessful. There are evidently only a few more days for the opera company to raise the $7 million required to complete its current season, including three remaining productions. To continue operations for productions planned for next year’s season, $13 million more would have to be raised.
In recent years, the scale of the opera’s operation has been dramatically reduced from 20 operas produced per season to the current four, along with a change in the status of musicians employed by the company from employees to independent contractors, a move that was the subject of controversy at the time. The yearly budget was also cut from a height of $31 million to the current level of $13 million to avoid incurring unmanageable debt. The opera company also abandoned its prior prestigious venue at Lincoln Center.
When a business or non-profit entity is unable to continue to pay its existing bills, a Chapter 11 bankruptcy allows it to attempt a reorganization and get a fresh start, getting out from unviable existing contracts and arrangements. Whether a bankruptcy filing by the New York City Opera would mean such reorganization or a shutdown is not clear. In any event, it would enable the management to take a new look at what options might be economically viable without being tied to existing contracts and commitments.
For a business or cultural entity considering bankruptcy, such a filing can represent the only remaining hope of continuing the endeavor and doing so on terms that are not economically ruinous in today’s troubled economy.
Source: NJ.com, “New York City Opera faces bankruptcy” Ronni Reich, Sep. 27, 2013