When New York City Opera declared bankruptcy and went dark in 2013, its closure was blamed mostly on the global financial crisis. (Though NYCO is not dead: It was revived in 2016 and is trying to nurse itself back to health.) In Mad Scenes and Exit Arias: The Death of the New York City Opera and the Future of Opera in America, Heidi Waleson — The Wall Street Journal’s longtime opera critic — digs into the company’s finances and bad choices and comes up with a whole sea of disastrous decisions that led to its collapse. The book is being published today by Metropolitan Books; the excerpt below is exclusive to Vulture. You can also read Justin Davidson’s Q&A with Waleson here.
By the mid-2000s, New York City Opera was in a precarious financial position. For decades, it had been the People’s Opera—a place where the masses could find affordable entertainment—but now its audience was shrinking. Back in the company’s heyday, its audiences had been predominantly middle- and working-class immigrants whose connection to opera was visceral and went back to their countries of origin. But by the 1990s, their grandchildren no longer felt any “old country” attachment to opera as an art form. Those who were interested in opera would be more likely to choose the Met, with its famous singers and lavish productions. The numbers were no longer adding up. “It was a misalignment of supply and demand,” says Timothy O’Leary, who had been a member of the company’s management team. And supply was fixed: the company was locked into its union agreements.
General director Paul Kellogg and director of artistic administration Robin Thompson had worked hard to raise the standards at the company and change its image from a second-class, cheaper option company into a modern institution with a distinct artistic profile. But the shoestring budgets persisted, and the audience of the 2000s, accustomed to the elaborate production values of film and television, was less tolerant of onthe-cheap staging than the audience of the 1970s had been. And now that the company was once again in serious financial trouble, it had become harder than ever to maintain the fresh, innovative image it had presented during the early years of Kellogg’s tenure. The Kellogg formula was looking tired, and in 2005, he announced that he would be retiring.
Kara Unterberg, a young City Opera fan and Harvard Business School graduate who had trained as a singer, had joined the board the previous year. From the outset, Unterberg was aware of the company’s difficulties and felt that little was being done, at least on the board level, to address them. “So much of the board’s time was wasted,” she said, on Kellogg’s pipe dream of a new performance space: “where to build, how to raise money to build— and all this stuff was fanciful.” In her view, the board found the tangible building project easier to talk about than intractable problems like ticket sales, deficits, and the company’s artistic future. She recalls being intimidated by the City Opera board, which, she says, was very formal and not conducive to discussion. “People on nonprofit boards often don’t disagree because they are afraid to insult people,” she says. Under the leadership of Susan Baker, the board chair, “things were just presented, and if there was any kind of dissent or question, Susan had this amazing way of just getting off that topic.”
Unterberg was particularly dismayed by the board’s practice of approving budgets that included operating deficits. The budgets were also wildly optimistic, substantially overestimating both ticket and fundraising income, so that the actual year-end results showed even greater deficits than those that were projected. Nomi Ghez, the board treasurer, would disapprovingly refer to this practice as “aspirational,” but still it persisted.
The board went on approving the budgets because there were no immediate repercussions: the $55 million endowment—encompassing the $51.5 million from a fund left by the Lila Acheson and DeWitt Wallace Foundation as well as some smaller, previously granted funds—had become NYCO’s unofficial piggy bank. Starting in 2004, the company had been using it as collateral to borrow money to fund operations, paying significant interest fees.
Kellogg was staying on through the end of the 2006–07 season, and the search process for his successor had dragged on for months. A year after Kellogg’s announcement, the search committee, comprised of nine board members and chaired by VP Mark Newhouse, reported that they had interviewed eleven candidates and had five more in the pipeline. When James Robinson, the artistic director of Opera Colorado, was invited to meet with some board members, he was not sure whether it was actually a job interview:
They weren’t really talking about the company itself; they were going around the table, saying things like, “I like Baroque music, would you do Baroque music?” or “I like the standards, would you do that?” I thought, they are not asking the right questions about moving City Opera forward.
Board and search committee member Emilie Corey felt that the board’s criteria for a new general director were vague. “They wanted a star,” she says. “And there was the issue of the unions—who could work with the unions, hold back the unions, maybe even get rid of the unions, because the unions were what was costing so much money.” Even that seemingly essential search criterion did not seem to be any more important than others. Corey recalls, “There was one guy who seemed strong enough to do that. But he didn’t interview well. The board didn’t think he was polished enough. He perspired during the interview.”
Mark Weinstein, a former City Opera executive, recalls that, during his interview for the general director post, the board seemed very focused on moving out of the New York State Theater. Then, in May 2006, that project came to an abrupt halt when a deal to incorporate a performance space into a new building on Amsterdam Ave. fell through. But no sooner had one magic bullet disappeared than another one took its place. In the spring of 2006, Susan Baker attended a dinner at the French consulate in New York. She was seated next to Gerard Mortier.
Mortier, who was then the general director of the Paris Opera, was a legendary figure in Europe. Belgian-born, he had begun his career by putting the backwater Brussels Théâtre Royal de la Monnaie on the map with his modernist approach to opera and dance, which included providing a nurturing environment for the fledgling Mark Morris Dance Group (he also left large deficits behind). In his next post, as the director of the Salzburg Festival, where he succeeded the legendary Herbert von Karajan, he spent the 1990s deliberately and happily ruffling the feathers of its traditionalist audiences, taking aim at its elite stuffiness with provocative stagings of classics, like a Die Fledermaus that featured Nazis, incest, and cocaine, and a Così fan tutte in which Karita Mattila, as Fiordiligi, had to sing “Come scoglio” while holding the leashes of two men, scantily clad in leather and chains, crawling on all fours and nipping at her heels. At Salzburg, Mortier also championed such composers as Kaija Saariaho, whom he persuaded to write a first opera, L’Amour de loin, and directors like Peter Sellars, whom he engaged to mount major projects like the resurrection of Messiaen’s huge and challenging opera Saint François d’Assise. After leaving Salzburg, Mortier launched the Ruhrtriennale, a home for avant-garde, genre-breaking productions. True to form, his tenure at the Paris Opera was controversial and attention-getting. He was also approaching his sixty-fifth birthday, when he would be obligated, by French law, to retire from his post.
“Susan met Mortier and fell in love,” says Emilie Corey. A world-renowned impresario, brilliant producer, and charming person—what could be more game-changing for City Opera than Gerard Mortier as general director? “From the minute she met him at the French consulate, this was in process,” Jane Gullong, then the company’s development director, recalls. “She asked me what I knew about him, and said she was going to Paris to talk to him. I don’t think she consulted any other board members.”
Alexander Neef, a longtime protégé of Mortier, recalls that Mortier was “flattered and intrigued” by Baker’s wooing but not yet persuaded that moving to New York was feasible. “He said no a number of times. I think he was pretty aware of what it would mean to become a [lesser] neighbor of the Met, when in Paris he was more like an equal—these two are the biggest opera companies in the world, in terms of volume of activity and budget size. [In 2006–07 the budget of the Paris Opera was about $240 million; it gave over 350 performances, both opera and ballet, in two theaters, each year.] New York fascinated him, but I think he struggled with the idea.”
Baker was ready to promise her big fish whatever he wanted, and he wanted a lot: Mortier insisted that if he were to accept the post, he would need a budget of $60 million per season. Such a figure was way out of line with NYCO’s finances. Its most recent operating budgets were in the neighborhood of $40 million, and income was not keeping pace with even that number. The development department was raising $14 million annually, and the company’s actual income added up to just over $30 million. The resulting deficits were being masked by a one-time gift and withdrawals from the endowment—and neither solution was sustainable in the long term. Reaching a $60 million budget would require at least another $20 million in annual fundraising. Despite all indications to the contrary, Baker assured Mortier that this could be done.
Having spent his entire career in the state-subsidized theaters of Europe, fundraising was a new concept for Mortier. On one of his early visits to NYCO, he asked the staff how much of the annual fundraising was guaranteed. The answer—“None of it”—was a surprise to him. But Baker persuaded the board to go along with her choice, $60 million guarantee and all. “Susan could convince you that a white wall is actually black,” Corey says. “She is a very compelling person. She’s smart. And she talks a lot. She can talk people into things almost by hypnotizing them.” Mortier impressed the search committee, Corey says, and at a subsequent cocktail party, he charmed all the guests, which persuaded the board that he could raise money. He was officially hired in February 2007.
Paul Kellogg would depart after the spring, but Mortier would not be starting full time in New York until the beginning of the 2009–10 season, when his contract in Paris was up. During this interim period, Mortier would visit New York every other month and work on planning his inaugural season. For these intervening two years, Susan Baker decided that she would run the company herself (aided by Jane Gullong, who was promoted to executive director). As a management strategy, this left much to be desired, particularly since Baker had no significant administrative experience. She was also entirely focused on Mortier and his future plans, to the exclusion of the immediate challenges of keeping the company functioning. Whatever changes Mortier would put in place for the future, there were two years of opera seasons to put on before his arrival, and the financial picture remained bleak. By the time the season began in September 2007, the company was already projecting a $9 million operating deficit. The minutes of the September 20, 2007, board meeting contain the dispassionate statement: “Ms. Baker stated that she hopes that a new business model would allow City Opera to operate without these deficits in the coming years.”
This “new business model,” as yet undetermined, was to be the result of radical changes that Mortier planned to institute. First, he wanted to run operas in stagione rather than repertory. And he’d decided that the New York State Theater was not the liability that Kellogg considered it to be—that a renovation could solve its structural and acoustical problems.
However, a stagione system, with dark nights between performances, required more theater time than would be available, and, in any case, Mortier had another, even more radical idea: He would use multiple theaters of different sizes and configurations. Some of the spaces that he and his team scouted presented challenges. The Park Avenue Armory, for example, was raw space, not yet the trendy, unconventional performance mecca it would later become. The Guggenheim Museum theater had no real orchestra pit; the Rose Theater at Jazz at Lincoln Center had a challenging load-in and backstage setup.
The 2009–10 season of operas to be presented in those spaces would also be completely new in every respect. The season, which the company dubbed “The Good Old Twentieth Century,” was to be Mortier’s calling card, with every title from the twentieth century or later. His signature offering was a gigantic production of Messiaen’s lengthy Saint François d’Assise from the Ruhrtriennale, staged in the Armory. Philip Glass’s Einstein on the Beach would be remounted, in its famous Robert Wilson production, and Wilson’s Pelléas et Mélisande would come from Paris, as would Krzysztof Warlikowski’s staging of The Makropulos Affair. Even more exotic pieces included Reigen, an opera that had premiered at the Monnaie in Brussels in 1993, directed by Christopher Alden, which would be at the Guggenheim, and the world premiere of Bernice Johnson Reagon’s The Parable of the Sower (later completed by her daughter, Toshi Reagon), to be directed by Peter Sellars, at the Armory. The plan was to mount some eighty performances in six theaters, most of them with less capacity than the 2,700-seat State Theater. There would be many fewer tickets to sell, potentially giving City Opera a rarity factor for the first time in many years. Starting in 2009, City Opera was to have an entirely new identity— cool and fabulous. All they had to do, Baker calculated, was get through the next two years.
A meeting with the Andrew W. Mellon Foundation, resulting in a promise of $2.5 million for the inaugural season, had encouraged Baker and Mortier to believe that more foundation support would be forthcoming. But it would be up to the development department, headed by Jennifer Zaslow, to manage the heavy lifting for that $60 million season. The fundraising consultant Dory Vanderhoof’s analysis of City Opera’s donor database promised a staggering capacity of $19.7 billion in charitable contributions. Vanderhoof told the board that in his experience, a campaign could be expected to yield 5 to 10 percent of that capacity—that is, $230 million to $460 million. The next step, he said, was identifying one thousand households with $1 million in capacity, and winnowing the list to the best three hundred prospects. This was heady stuff for the company that had raised, at most, about $14 million in annual giving and had never seriously contemplated an endowment campaign.
By December 2007, yet another facet of the new vision for City Opera had come into focus. Ongoing negotiations with the New York City Ballet about renovations to the New York State Theater had reached an agreement. The renovations would include Mortier’s priority—a new, larger, moveable orchestra pit—as well as a new stage lighting and media system. They would require the theater to be closed for much of the 2008–09 season.
During her time at Goldman Sachs, Susan Baker had specialized in collateralized debt obligations, and she was adopting a similar high-risk, high-reward strategy with City Opera. Taking the company out of its theater for a year was yet another giant step in the transformation that she believed Mortier could effect.
In investment banking, the money can always be found, and Baker believed that Mortier’s vision and celebrity would open the purses of the wealthy to pay for this new, cutting-edge, high-quality City Opera. With Wall Street healthy and climbing, why shouldn’t it be a success? Hadn’t City Opera’s newly diversified investments increased their returns by 18 percent in the last fiscal year?
Michael Gary joined the City Opera fundraising team in the summer of 2007, coming from the New York Botanical Garden’s development department. When he was offered the job, his colleague at the Botanical Garden, Claudia Keenan, who had previously worked for City Opera, warned him not to take it. “She said, ‘They have a $9.5 million deficit, it’s systemic, they’re going to crumble,’” Gary says.
I didn’t care. I was so excited and jazzed by the idea of Mortier. I thought hiring him was a brilliant idea. I thought he was going to set up a dialogue between the Met and City Opera in a way that had never really happened, because Mortier’s forward-looking vision was in stark contrast to the more traditional values of the Met. It could create a citywide conversation about art and what it meant. And opera would be at the center of it.
A heady thought, but how could this radical vision fit into the realities of the New York City Opera? It was up to Susan Baker to singlehandedly reconcile the two. Having landed this starry fiancé, she had to keep persuading both parties—the company and Mortier—that the marriage was possible. And as the long engagement unfolded over 2007 and 2008, she kept careful control over all interactions between the general director–designate and the company.
Mortier, who was still running the Paris Opera, came to New York every other month for several days, and during this time Baker was his constant shadow. When he met with the senior staff, she was always present. NYCO’s music director, George Manahan, who had been offered an ongoing contract to conduct one opera with the company each season, says, “I remember going into meetings with him and [orchestra manager] Dave Titcomb, and he would say, ‘George, won’t it be wonderful when you conduct Elektra with 110 musicians in our new pit?’ And Susan Baker would always be sitting next to him, taking notes. We didn’t get private face time.” Michael Gary recalls, “She was in constant communication with him. I can’t tell you how many meetings I was in where she would get a call from him, and she’d get up and walk out and take the call. My gut tells me she was probably parceling out access to him.” Staffers found Baker’s demeanor around Mortier to be odd—“Girlish,” one called it, “like the little girl talking about the big boyfriend.”
Even the board was kept at arm’s length. “The board was terrified of Mortier,” Kara Unterberg recalls. “Susan was propping him up, saying we are so lucky that he is coming and we don’t want to do anything to jeopardize his coming. [There was] the fear of his leaving, the fear of disappointing him, because “He is so special, and he will save the day. We are so lucky that he would even think of us. We don’t want to upset him.”
Shielding Mortier from any bad news, or potential objections, was in keeping with Baker’s secretive leadership style. One staffer compared her performance at board meetings to a “geisha dance,” complete with a Japanese fan that she would sometimes use to cover her face:
She would put the agenda facedown on the table; then she would turn it up, just glance at it and say, and say, very quietly, so people could barely hear her, “We’re now going to have a resolution of the next item on the agenda. Can we have a vote on that?” followed with a flutter of the fan. The normally very talkative, smart people on that board, who were very invested in the company, said nothing in these meetings. There was no discussion. It was like she sucked the energy out of the room. People did not feel empowered to speak—or to challenge her.
Monumental decisions, such as moving the company completely out of the State Theater for a year, or red-flag items like budgets showing huge deficits, were passed without debate.
The key challenge for the Mortier regime was, as always, the money. Robert Meya, who joined the company’s development department in June 2008, points out that the challenge was probably even greater than the board realized. “Nonprofits define budget by expenses, not revenues,” he says. “City Opera’s expense budget was in the $40–$45 million range. But revenues were more like $30 million. Mortier was promised an operating budget of $60 million. They were actually doubling their projected revenue. That is impossible, even for extraordinarily well-run organizations.”
The development team was hopeful that foundations, which tend to like cutting-edge projects, would be a healthy source of funds. The quick response from the Andrew W. Mellon Foundation encouraged those hopes: its president, Don Randel, had met with Mortier and committed $2.5 million on the spot for his initial season. The Alice Tully Foundation came up with $1 million, and the Mary Flagler Cary Charitable Trust, a longtime supporter, promised $500,000. But others were not as forthcoming. Neither Mortier nor Baker was comfortable asking for money, and an experience with the Starr Foundation was a case in point. Mortier and Baker met with Florence Davis and Paula Lawrence, the president and vice president of the foundation. Michael Gary, who went along, says:
When you sit down with a foundation you are there to ask for money—to pitch something, to explain why it’s a great project and why you hope they will support it. It’s pretty cut and dried. This meeting felt like we were at tea—very slow to get moving. Then Susan introduced Gerard who proceeded to speak for 35 or 40 minutes just on his biography. Florence Davis looked at her watch repeatedly during the meeting. Then she got up and excused herself. I was mortified. We were there to ask for half a million dollars, and this could not be going worse. Paula was able to pull out of Mortier something about the program. Then, the meeting was almost over, and I was thinking, are they going to make the ask or not? So I said, “What we’re here for is to ask you for half a million dollars to support”— whatever it was. Mortier turned beet red. When we got into the elevator, he turned to me immediately and excoriated me for broaching the topic of money. To her credit, Susan defended me, and said, “That’s how it works here, Gerard.” But it should have been decided before we went who was going to do the ask.
The Starr Foundation did not give a grant.
Robert Meya was surprised to see how little else had come through. “We were trying to tap the people [outside the company] who might have affection for Mortier’s artistic style,” Meya says. “We set that into motion, but you don’t just start giving millions of dollars to Mortier’s artistic vision before he has even shown up if you are not one of the insiders on the board.” Since the board insiders weren’t committing, no one else was, either. And Mortier’s idea of art as intellectual endeavor was proving a tough sell in New York. As Mark Moorman, a development staff member, recalls, people “said, ‘It’s too much, I don’t want to be lectured to. It’s not a school.’ Mortier wanted to compete with Gelb—‘They’re doing the Ring cycle, we’ll do the anti–Ring cycle!’ He would say this to people and their response would be, ‘Why would you do that? Who wants to go and see that? How much is it going to cost?’ ”
In October 2007, the Dow Jones Industrial average had reached a high of 14,000. As the subprime mortgage crisis emerged, the Dow began to decline, then imploded. By March 2008, Nomi Ghez reported that City Opera’s investments were down 4 percent. In May, board vice-president Mark Newhouse reported that personal fundraising meetings with board members to try to shore up the faltering annual fund had brought in an additional $1.2 million—a positive sign for the current year, considering the economic downturn, but only a drop in the bucket in the face of the $40 million in contributions that would be needed for Mortier’s inaugural season in 2009–10.
In May 2008, Alexander Neef, who had been working closely with Mortier on the plans for his first season, and had been expected to move to New York as Mortier’s second in command, accepted a job as general director of the Canadian Opera Company in Toronto. Having gotten the measure of City Opera and its fundraising capabilities, he had started talking to the Canadian company, which was known as a more stable operation, earlier that year. “It already seemed to me that for me and my family, it would be very hazardous to leave a completely safe job in Paris, relocate everybody to New York and hope for the best,” he explained.
Some staffers who had been initially dazzled by Mortier found that the doubts they had suppressed were now beginning to resurface. While the plans seemed exciting and transformative, and Mortier’s skill as an experienced impresario and man of the theater resonated with those on the artistic side, the disconnect between the reality of the past and his vision for the future was easy to see, particularly as the company struggled with its finances. And by the end of the summer, Mortier finally got wind of the fact that the board had not secured the funds to cover his first season—the only commitments had come from foundations, and they were far from enough.
His response was a feint. The famous Bayreuth Festival, founded in Germany by Richard Wagner for the presentation of his operas, was in the process of deciding on its future leadership. Wolfgang Wagner, the composer’s great-grandson, had announced his intention to retire as the festival’s director and wanted his 30-year-old daughter, the stage director Katharina Wagner, to succeed him. The succession was up to the festival’s governing board, however, and in late August, Mortier offered himself as a candidate, teamed with another descendant of the Wagner family, Nike Wagner, to strengthen his bid. The Bayreuth board quickly named Katharina and her half sister Eva as co-directors, but Mortier had made his point. It was, he confirmed later, in email messages to members of the press, a deliberate warning message to the lukewarm members of the New York City Opera board.
Baker did her best to shore up the relationship between Mortier and the company after this public display of pique. Michael Gary remembers the tense September board meeting, at which Mortier forcefully issued an ultimatum: The company would come up with the $60 million, or he would not come. Unterberg remembers that Mortier was angry; she says, however, “The board had never voted on that $60 million. It was just a number Susan told him.”
Meanwhile, the company continued to hemorrhage money and, with no real ticket income in sight, found itself short on cash for the 2008– 09 season. In early October, eleven staff members were laid off, and it was announced that Jane Gullong, the company’s executive director, would depart at the end of the year, her position having been eliminated by Mortier. A few weeks later, the dire cash flow situation led to a two-day furlough for all company employees except some finance and development staff, who were frantically soliciting donations in order to cover the payroll and enable the rest of the staff to return to work. To make matters worse, the economic downturn was now a crisis, with bank failures, including the Lehman Brothers bankruptcy filing in September, and steep stock market declines. The board, already jittery about Mortier’s expensive plans, became more so. Even Mortier recognized that circumstances had changed, and he agreed to work with Giles to cut the budget for 2009–10. They got it down to $54 million.
The staff was left in the dark. On October 22, the senior staff sent a memo to the executive board begging for a meeting to clarify the plans for the future. “We need guidance as to who is leading the staff of City Opera until Gerard’s full-time arrival in New York,” the memo pleaded. “Most importantly, we want to discuss the scope of our future plans to understand our way forward in the short term and long term, and how we convey this information to the larger staff.”
On November 4, 2008, the second shoe dropped: Mortier was out. The board, finally facing facts, had offered him a budget of $36 million—less than the smallest opera company in France, as Mortier put it, and a long way from the $250 million budget he was accustomed to at the Paris Opera—and he would not take the job under those circumstances. Mortier told Dan Wakin of the New York Times that he suggested the company borrow money to put on a first season that would show potential new donors what the company could do. The board refused.
Some company staffers, including George Manahan and David Titcomb, had always assumed that Baker would donate the money for the first season herself, and believed that Mortier thought the same. This would have been a logical assumption, given that she was not only the board chair but also Mortier’s champion. But Baker never offered any financial pledge. Instead, she apparently expected the major donations to come from others—such as unspecified billionaires in Dubai and Abu Dhabi, or New York philanthropists with no previous connection to City Opera—who would be so impressed by the prospect of Mortier, or the triumph of his initial season, that they would sign on, though no actual overtures had been made. The reality, of course, turned out to be more complicated. The endowment investments in hedge funds had produced exciting returns for a year, but the economic crash put to rest any hopes that they might provide the magic solution. The board had effectively taken those endowment funds to Las Vegas, spun the wheel, and lost.
The folie à deux of Baker and Mortier would have enormous consequences. It fed the confusion about New York City Opera’s identity. Operational decisions that were made in deference to Mortier’s ego cost the company a substantial percentage of its audience. And the “silver bullet” fantasy of a billionaire savior meant that the already overwhelming financial problems were never addressed and would only get worse. From the time that she took over the chairmanship of the City Opera board in 2004, Susan Baker appeared to be out of her depth, harboring ambitions that did not correspond to reality. The choice of Mortier represented the pinnacle of Baker’s magical thinking. His price tag was impossibly high, and Baker did not raise the money, even as she promised him that it was all under control. She ensured that doubts about the City Opera’s financial capacity were kept from him, even to the extent of paying for some of his first-class airfares and hotel rooms herself. She made bad deals to give him what he wanted, like the renovation of the New York State Theater with no guarantee of compensation during the dark season. Baker’s confidence in her own acumen seemed to be her undoing. As one staffer put it, “She believed that she could be the puppet master and that no one was as smart as she was. She thought she could keep pieces of information from people, and that she was somehow going to make it all work out. It was a terrible strategy.”
The collapse of Baker’s elaborate Mortier fantasy was the beginning of the end. A few years later, when things had gotten even worse, Alan Gordon, the notably pugnacious head of AGMA, representing the company’s singers, choristers, dancers and stage directors, would tell Opera News, “They ought to hang Susan Baker in front of the State Theater.”
Adapted from Mad Scenes and Exit Arias: The Death of the New York City Opera and the Future of Opera in America, by Heidi Waleson (Metropolitan Books). Copyright © 2018 by Heidi Waleson.