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Financial Toll: Dallas Opera Cancels 2011-2012 Production

I have a sinking feeling that this isn’t going to be the last of these kinds of announcements. The Dallas Opera has just announced that “as part of a careful, multi-year plan to balance and stabilize company finances as rapidly and prudently as possible” they will be canceling the planned production of Katya Kabanová, which was part of the company’s 2011-2012 season.

“The Dallas Opera is committed to preserving its proud legacy through careful balancing of artistic goals with sound financial management,” says Dallas Opera Chairman Dr. Kern Wildenthal.  “Although our General Director and CEO, Keith Cerny, assumed this role little more than a year ago, he has repeatedly demonstrated his commitment to cutting costs while enhancing the company’s artistic reputation.  He has the full backing of the Board of Directors as we navigate this challenging period in the company’s history.”

The elimination of the production will take the opera’s season down to four full operas, with the new chamber opera series taking up the fifth spot. In addition, the production of Wagner’s Tristan and Isolde will be an opera in concert and not a full staging of the German giant’s work. And the opera came close to loosing the fifth production as well:

Urgent appeals for an infusion of cash necessary to preserve the fifth production garnered an immediate response from more than a dozen generous donors, including Crow Holdings—which led the effort with a remarkable pledge of $500,000.

Here’s the full release:

The Dallas Opera Announces The Cancellation of One Production Slated for the 2011-2012 Season

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Subscribers will be Given Full Refunds

On Cancelled Performances of Katya Kabanová

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Major Donors, Led by Crow Holdings, Respond Positively

As TDO Takes Proactive Steps to Off-Set Deficits

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DALLAS, JULY 22, 2011 – As part of a careful, multi-year plan to balance and stabilize company finances as rapidly and prudently as possible, the Dallas Opera is today announcing the cancellation of one of the scheduled productions in our upcoming “Tragic Obsessions” Season: Katya Kabanová.  The recommendation by Dallas Opera General Director & CEO Keith Cerny was ratified unanimously by the Executive and Finance Committees, meeting in joint session this week.

Single tickets for the 2011-2012 Season have not yet gone on sale; however, affected subscribers (FLEX and Full Season) will be given full refunds for the performances impacted by TDO’s (“The Dallas Opera’s”) decision.  An email containing detailed options will be sent to current Dallas Opera patrons by the end of the day.

“The Dallas Opera is committed to preserving its proud legacy through careful balancing of artistic goals with sound financial management,” says Dallas Opera Chairman Dr. Kern Wildenthal.  “Although our General Director and CEO, Keith Cerny, assumed this role little more than a year ago, he has repeatedly demonstrated his commitment to cutting costs while enhancing the company’s artistic reputation.  He has the full backing of the Board of Directors as we navigate this challenging period in the company’s history.”

In October of 2009, the company moved from a less-than-optimal opera performance space into the critically acclaimed Margot and Bill Winspear Opera House at the AT&T Performing Arts Center in the Dallas Arts District.

While this move benefitted the company in important ways and contributed significantly to both the critical and popular success of our subsequent productions in the new, purpose-built venue, the change also had a dramatic impact on the number of patrons who could be accommodated at any given performance, falling from more than 3,400 to a seating capacity of 2,200.  This, combined with the increased intrinsic operating costs of a new, state-of-the-art venue; overtime pay and other expenses related to the decision to perform in repertory; and a commitment to preserve the high level of artistic quality that our audiences rightly expect and deserve, resulted in sharply higher production costs for the Dallas Opera.

Whereas TDO could previously accommodate patrons for a popular opera in four performances, it now takes up to six, resulting in a longer and more expensive rehearsal and performance cycle, as well as increased costs for conductors, principal artists, chorus, technicians and stage crews, based on the number of performances and/or hours worked.

In short, to produce five fully-staged, world-class productions for the same number of patrons in our new, more intimate facility requires an annual budget increase of approximately $4 million above the previous $12 million level, or roughly 33%.  Additionally, virtually all of this increased revenue must be obtained through additional ticket sales and philanthropic donations during one of the most difficult economic environments in modern memory.

“In preparation for the design and construction of the new opera house,” explains Dr. Wildenthal, “committee members toured top opera facilities around the world and examined a variety of seating options ranging from as few as 1,600 seats to as many as 2,800.  Their conclusion was that the best size for the new opera house would be 2,200 seats, and it was to that end that Margot and Bill Winspear committed their remarkable $42 million dollar gift to the Dallas Center for the Performing Arts.

“Everyone involved in the process understood that it would mean higher costs per production.  But given the artistic excitement generated by our magnificent new venue, the chance to develop groundbreaking world premieres and to attract top-tier artists, and the newly acquired ability to perform in repertory, it was generally believed at that time that we could raise the additional monies to balance TDO’s budget in the new house, with increased ticket revenues and annual fund donations compensating for the higher cost structure.

“In our successful first season, we did just that, raising more than enough money to cover TDO’s operating costs.  However, we were unable to sustain that pace in our second year in the Winspear, calling into question the feasibility of existing plans for subsequent seasons, in the midst of an entrenched, nationwide recession.

“Good governance requires us to reduce the number of main-stage productions and performances presented over the next several years, in order to bring the company’s financials back into balance.  We are determined to accomplish our financial goals while upholding artistic standards worthy of one of the great, new opera destinations in the world.

“In time, we expect to grow the Dallas Opera back to five first-rate productions—and beyond.

“Few experts in 2003 (when the decision was made to proceed with plans for the construction of the Winspear) could have predicted that we would complete the new opera house during the early stages of the longest and worst U.S. economic recession since the 1930s.  Now that we have two years of performing experience in our new home and can more accurately project a new steady-state in the current economy, it is essential to address the opera’s budget shortfalls immediately and responsibly.

“We are confident the community will understand and support this decision.”

All previous contract commitments for the upcoming season will be honored.  Assuming baseline annual giving holds steady, the company’s deficit for the 2011-2012 Season will be less than last year, although still significant due to pre-existing contracts that must be honored.  The Dallas Opera will continue to pursue rigorous efforts to balance revenue and expenses while the economy recovers, with the target goal of completing a season with a balanced budget by 2014-2015.

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During the 2009-2010 Season, TDO’s subscription and single ticket sales were especially strong and donors showed their enthusiastic support for the company move, raising record amounts for the Dallas Opera’s new administrative offices in the Winspear Opera House and for the company endowment, as well as for annual support.

Furthermore, the phenomenal excitement surrounding the world premiere production of Jake Heggie and Gene Scheer’s Moby-Dick in April of 2010, as well as the success of the new Winspear Opera House as an ideal performance venue, generated tremendous ticket demand for the new composition and for other performances that season, resulting in sold-out houses.

Although the Dallas Opera experienced an especially successful second season in the Winspear (from an artistic perspective), ticket sales and donations failed to match 2009-2010 figures, causing the company to experience a significant financial shortfall.  This, in turn, has necessitated a careful review of estimates for our coming seasons, resulting in lower projected revenues.

“During the course of my year with this company,” says General Director & CEO Keith Cerny, “I have spent much of my time working with the TDO Board and staff members to develop a workable business model for the company in its new home—one that balances artistic excellence and innovation with fiscal responsibility on an ongoing basis.

“I believe the company is making a very prudent and responsible decision and I am extremely grateful for the strong support demonstrated by our Board members throughout this complex and demanding process, when it initially seemed from our early analysis all but certain that the company would be forced to cut two main-stage productions from the planned season line-up for 2011-2012.”

“However, an extraordinary outpouring of philanthropic generosity has occurred in the past week that, in fact, now will enable the Dallas Opera to raise the curtain on five of our six originally planned productions (including the chamber opera, The Lighthouse, which will be performed next March in the Wyly Theatre).

“Urgent appeals for an infusion of cash necessary to preserve the fifth production garnered an immediate response from more than a dozen generous donors, including Crow Holdings—which led the effort with a remarkable pledge of $500,000.  There was also extraordinary generosity shown by Diane and Hal Brierley, Amy and Vernon Faulconer, Joy S. and Ronald Mankoff, Dr. and Mrs. Tom G. Mayer and Mr. James R. Seitz, Jr., who, along with others in this stellar group, raised more than $1.25 million.

“Speaking for myself and for the Dallas Opera as a whole, I wish to express our deepest appreciation to these generous donors for their amazing support for our opera company and the art form, as well as their commitment to the future of the performing arts here in North Texas.”

“The fact that special donations totaling more than a million dollars have been committed in just the past five days is truly inspiring,” adds Mr. Cerny, “These magnanimous gifts to the Dallas Opera will become a gift to the entire community, when the curtain rises on the five dynamic productions of our upcoming season.”

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Image: Katya Kabanova at the English National Opera (via)

One comment on “Financial Toll: Dallas Opera Cancels 2011-2012 Production

  1. It is the audience who sees and hears the marvelous music of voice and orchestra and they should be on the minds of the CEO and board. You need to be extravagant with all productions and take risks as Callas did. You need to solicit such peoplr as the Disney family or Kodak or investors with 9 figures. The Met opera shows how it can be done. The audience deserves more of the lyric theater.