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L.A. Opera announces cutbacks

January 27, 2009 |  1:44 pm

RheingoldFacing declining donations and a budget stretched by its upcoming production of Wagner’s “Ring” cycle, Los Angeles Opera has joined a long list of performing arts institutions cutting budgets and staff.

The company said today that it had laid off 17 employees, or approximately 17% of its staff. It has also mandated a pay cut for all employees, averaging 6% but with higher-paid staffers taking an 8% cut.

“In the context of the global economic crisis, we had to take certain measures to get costs under control,” said Stephen Rountree, the company’s chief operating officer. “It’s very important to us to be prudent and responsible moving forward.”

Rountree said he expected the layoffs to save Los Angeles Opera $500,000 a year. He also said the company would soon begin discussions with its unions -- including representatives of the stagehands and orchestra -- to find ways to save money.

“It’s a crisis situation, and we have to save as much as we can. The most important thing is that we don’t sacrifice the quality on stage,” said Plácido Domingo, the Eli and Edythe L. Broad general director of the company. The tenor said he had deferred his L.A. Opera salary last year in an effort to reduce costs.

Overall, L.A. Opera plans to reduce core operating costs next season by 25%. The company’s operating budget for the 2008-09 season exceeds $60 million. For the 2009-10 season, it forecasts a budget of $50 million-plus.

Part of the savings will come from mounting fewer performances. This season, the opera is offering 64 performances. In 2009-10, it will offer 48.

The company has also postponed major projects, including the world premiere of Daniel Catán’s “Il Postino,” originally scheduled to open in September, as well as the refurbishment of the Dorothy Chandler Pavilion, which was to have begun after the 2009-10 season.

Like most not-for-profit organizations, L.A. Opera depends to a large extent on contributed income, or donations from individuals and philanthropic organizations. Each fiscal year, the opera must raise $20 million to support its basic operations.

The company said it anticipates a decline in donations next fiscal year (which begins in July) as patrons delay gifts in light of the economic recession. For the current year, the company said it is on track to meet its fundraising goal.

Ticket sales also have suffered slightly, according to the company. Revenue for the recent revival of Mozart’s “The Magic Flute,” which finished its run Sunday, came up short of projections by between $150,000 and $200,000.

The company has a relatively small endowment of $30 million. It expects to see a reduction in endowment income of about 20% during the next fiscal year.

Next month, L.A. Opera will begin its much-anticipated production of Wagner’s “Ring” cycle, a four-opera epic directed by Achim Freyer. The mega-production is budgeted at more than $30 million and represents the largest undertaking in the company’s 22-year history.

L.A. Opera is the third major U.S. opera company this month to announce drastic cuts. On Monday, San Francisco Opera said it would reduce its operating budget to $64 million from $70 million in addition to canceling two productions next season. Earlier this month, the Metropolitan Opera announced a 10% pay cut for senior staff, with further wage reductions expected this fiscal year.

-- David Ng

Photo: An image from a workshop rehearsal of Los Angeles Opera's "Das Rheingold," the first opera in Wagner's "Ring" cycle. Credit: Monika Rittershaus

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