San Diego Opera Crisis Underscores Need for Fresh Business Models

Thursday, April 03, 2014

San Diego Civic Theater, home of San Diego Opera San Diego Civic Theater, home of San Diego Opera (Flickr/Robert Sandberg)

When San Diego Opera recently announced its plans to fold after 49 years in business, a wide swath of the California arts community was stunned, including the musicians of the San Diego Symphony, which doubles as the opera company’s pit orchestra.

“It surprised everyone,” said James Chut, the music and art critic for U-T San Diego, the region’s major daily newspaper. “People were reading it online and there wasn’t even an announcement.”

On Monday, facing an outcry from employees, fans and politicians, the company’s board voted to delay the planned April 13 shutdown by two weeks while it considers its options. General artistic director and CEO Ian Campbell had previously said that it’s important to “go out with dignity, on a high note with heads held high,” rather than witness a prolonged downsizing and cutting back on quality. Ticket sales have declined 15 percent since 2010, ticket revenue has dropped about 8 percent, and big donors are harder to lure.

On Tuesday,  the American Guild of Musical Artists, the singer’s union, filed the second of two unfair labor practice charges against the company.

Chut tells Conducting Business that San Diego Opera has declined to consider alternative business models to stay afloat, relying instead on "a paradigm of grand opera that probably is from the ‘70s or ‘80s, in which regional companies represented a miniature version of the Metropolitan Opera, where you bring in big sets and big stars and have a big orchestra. If they’re going to do that business model or that artistic model, it’s probably not viable over the long run.”

Chut believes that the future of regional opera lies in nimbler alternatives, whether it’s using black-box theaters or collaborating with theater companies. He cites the Opera Theater of St. Louis and Fort Worth Opera, two regional companies that reinvented themselves as spring festivals after decades as main-season enterprises. Chut also questions the need to stay in the San Diego Civic Theater, a plush 1965 venue with seating for nearly 3,000 patrons.

“It seems like they’re tired,” Chut said of the board and administration. “The opera is in the black. They have cash reserves. They don’t have an accumulated deficit. But they are facing fundraising challenges of maybe having to raise $10 million next year."

The company has given no indications yet of next steps. But whether they can attract investors after raising doubts about the Opera's viability remains a significant question. "San Diego is the eighth largest city in the United States," said Chut. "What does it say about us if we can’t have an opera company?”

Listen to the full podcast above and please leave your comments below: What do you think is the right model for small opera companies in 2014?

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Comments [12]

David from Flushing

There was a time when the Met Opera toured the US and gave regular performances in Philadelphia. They would occasionally go overseas as well. All of this has ended because of the financial strain it caused. It was recently reported that 20% of their tickets go unsold as a strictly NYC operation.

I do not feel like rehashing the familiar death of classical music arguments. I would note that Broadway shows such as South Pacific and Oklahoma are now considered more classical than popular music. Musical tastes have clearly changed over the years and this has not been to the benefit of opera. It should not be unexpected that major companies will find themselves in difficulty under these circumstances.

Apr. 05 2014 11:22 AM
Leslie A. Miller from Belfast, Maine

Did I read , this morning, that The staffers who complained and protested are being docked two weeks severance pay?

Apr. 04 2014 04:36 PM
MB Allen

Yes, the petition continues to be very effective -- has spread worldwide, is keeping this issue visible, is putting pressure, has increased media attention on this issue. Thanks to petition, letter-writing campaign, individual efforts, outreach to city council and state legislature, the SDO Board and management will not be able to put people out of work, kill opera, and slink away with the remaining millions. By all accounts board/top management must change or there is no hope of implementing new programming, sales or business strategy, financial management. Completely closed minds at the top, now desperately offering a string of bizarre and weak excuses for why they can't cut costs (for example, give up $450k/yr office suite, swap out 1 fully staged production for a concert version, etc.)

Apr. 04 2014 01:14 PM
Mary from San Diego

The difference here between San Diego and other companies who went bankrupt is that San Diego Opera is NOT bankrupt. Ticket sales have not declined THAT much. The one thing that will save San Diego Opera is the fact that they are NOT bankrupt and can consider other options.

Apr. 04 2014 01:13 PM
Rachel from Michigan

Who says you can't scale back and still have quality opera? I work for a small regional opera company in the Midwest with a budget of less than 1 million that almost folded back in 2011. With the support of the board and the help of a new executive director (who is a certified fund raising executive), enough money was raised to help pay down some outstanding debt and keep the company going. We have seen many sold out performances and are gradually adding to our staff, season, and educational programs. We try to hire local performers for at least two of our three productions every season, which has gone a long way to cut costs. But we also bring in national and international performers (we've had Jennifer Rowley, who is currently singing the role of Musetta with the Met, sing for us twice). The key is to have sound fiscal judgment and to not go overboard with sets/costumes/etc... just because companies with larger budgets do. And an $800,000 salary?????? That's ridiculous. No one in a non-profit organization should make that much, especially if they can't manage the organization properly.

Apr. 04 2014 11:41 AM
Floria from NYC

Minnie,
I think you are absolutely right. The administrations of arts organizations gobble up the money or build new buildings with it. Probably because they are mostly business administrators rather than artists themselves and feel they should be paid like a financial institution. It reminds me of the separation of Church and State.....they are separate, yet they are joined. Yes, yes, I know not all artists can run a business, but neither can all administrators perform or create art. There has to be a balance somewhere.

Apr. 04 2014 10:30 AM
Carolyn from NYC

Dear Diana,
Don't quite see your reasoning....audiences have always gotten older....you will be getting older, too. That doesn't mean you shut down. The young will soon be old, too.

Apr. 04 2014 10:22 AM
Diana Cagle from New York City

The model of a nose in the air - upper crust audience - cannot possibly be a viable way of doing business. As folks get older the old audience is going to disappear as is happening all over. Culture needs to be affordable!

Apr. 04 2014 08:51 AM
james jagiello

this also happened to the New York City Opera...

Apr. 04 2014 03:17 AM
Bruce from chicago

The real lesson about the demise of cultural organizations as well as avatvistic corporate structures can be learned from a well-known nursery rhyme:

Humpty Dumpty sat on a wall,
Humpty Dumpty had a great fall.
All the king's horses and all the king's men
Couldn't put Humpty together again.

Opera companies didn't always exist and there is no empirical evidence to suggest they should always exist.

Apr. 03 2014 09:40 PM
Minnie from Sacramento

Unfortunately, many of these companies fold because of mismanagement. I was told today that the director of the company made a salary of $800,000.00

Apr. 03 2014 09:28 PM
Sandy from New Hampshire

Do you think the Petition, which I and many, many others signed, made a difference in their decision to delay the decision?

Apr. 03 2014 04:13 PM

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