Multi-million dollar loan has LA Opera singing a happy aria
December 8, 2009
The operatic repertoire is full of passion, suspense and dizzying turns of fortune—kind of like what’s been going on at LA Opera, which is fending off financial uncertainty even as it gears up for its most ambitious year ever.
Los Angeles County stepped onto center stage in the hero’s role on Tuesday, guaranteeing a $14 million loan to keep the opera afloat.
“We are absolutely thrilled that the County of Los Angeles has recognized the important and prestigious role that a world-class opera company plays in our community,” said Plácido Domingo, LA Opera’s general director. The board’s support, he said, “will enable us to continue as a prominent and vital element in the cultural life of Los Angeles and in furthering this region’s stature as an international cultural center.”
The cash infusion will keep the opera going through June, 2012, when the company expects to repay the loan from more than $30 million in pledges made since June by donors responding to the opera’s urgent fundraising plea.
“They’re passionate and they put their money where their mouth is,” Supervisor Zev Yaroslavsky said of opera fans. As a result, the new financing arrangement carries “very minimal risk,” Yaroslavsky said, adding that the alternative simply is unacceptable. “This is one of our major tenants at the Music Center,” he said. “If they go, it sets off a chain reaction of events that could topple the Music Center.”
The financial crisis, coming at a crucial time in the 25-year history of the LA Opera, is not unique to this company, said Music Center CEO Stephen D. Rountree, who during the past year has also been serving as LA Opera’s chief financial officer. “Opera companies are always pressed but [LA Opera] had their operations in order until the recession hit,” Rountree said. “Ticket sales are down across the country.”
For example, the Washington National Opera, which also has Domingo as general director, recently announced cutbacks in staff and programming.
The LA Opera also has been scrambling to dig out of its deficit, cutting staff by 20% and administrative costs by 22%, Chief Executive Officer William Fujioka said in his letter to the board. “It also reduced the number of productions in its 2008-2009 season from 9 to 6, and gave fewer performances—48, instead of 67.”
Fujioka said the new loan arrangement “does not put the county in jeopardy whatsoever.” The county will issue bonds that will be purchased by a single financial institution, Banc of America, Leasing & Capital, LLC, which will then provide the money to LA Opera. The county itself is not putting up any cash but is guaranteeing the loan in the unlikely event that the opera’s anticipated donations fall through—something opera and county officials say as highly unlikely.Rountree said that having Domingo—“the leading spokesman for opera in the world”—in Los Angeles, has proved invaluable in raising the donations. The county stepped in to assist in a similar manner during the construction of Disney Hall, until private donations could bridge the funding gap.
The opera company, whose musical director is James Conlon, is gearing up for performances in June of the Ring Cycle, the four operas that comprise Richard Wagner’s “Der Ring des Nibelungen.” The operatic masterwork is at the heart of the 10-week Ring Festival LA, which begins next April and is expected to draw international attention with its broad range of musical performances, art exhibits and seminars.
And on that point, art is poised to triumph over money.