17 April 2009

New York City Opera Utilizes Majority of Endowment in Effort to Cope With Debt, Liquidity Issues

Embattled by the current economic climate, administrative challenges, debts and a lack of liquidity resulting from no mainstage presentations of operas during the current season, New York City Opera has depleted its endowment by some $23.5 million dollars, the New York Times reported today. A spokesperson for City Opera told the Times that the company had approximately $10.4 million remaining in its coffers.

With the approval of the New York State attorney general's office, the company withdrew $17.5 million from its endowment in October 2008, George R. Steel, City Opera's artistic director and general manager, told the Times. As reported by the paper, legal documents show that the company used nearly $9.5 million of that money to repay a loan that it took out last season to cover what it described as a "cash shortfall"; the remainder of the funds have reportedly been used to finance the company's operating costs during the current season, which found it foregoing presentations of mainstage performances while its home - the David H. Koch Theater at Lincoln Center - has undergone a renovation, but still obligated to maintain the salaries of its orchestra and chorus.

The Times also reported that the company received approval from the attorney general's office early last week to withdraw another $6.6 million from the endowment to meet its payroll and operating costs. The money borrowed from the company's endowment will be treated as loans, and restored by City Opera to its endowment at a future time.

Next season, the first under Steel's tenure, New York City Opera will present thirty-three performances of five operas, an amount significantly downscaled from what the opera has presented in recent seasons. Steel told the Times in a previous interview that he hoped the number of performances would be offset by what City Opera planned to present during its 2010-11 season. Steel estimated that the company's budget for next season would range from $25 million to $30 million, down from the approximately $42 million budgets that the company had at its disposal in recent seasons.

More information can be found at the New York Times, Bloomberg News and the OPERA NEWS Archives (here, here, here and here.

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