Wednesday, May 13, 2020

There's a Lot of Nail-Biting Going On Right Now.

And it's because of the four-step State of California roadmap for restoring various types of events:

(graphic shows four stages of response to the pandemic; the full text is at the link)

Stage 4: End of Stay Home Order. Reopen areas of highest risk; e.g. concerts, conventions, sports arenas.

We're currently just shading into stage 2: lower-risk workplaces, in which we'll "Gradually reopen retail (curbside only), manufacturing & logistics. Later, relax retail restrictions, adapt & reopen schools, child care, offices & limited hospitality, personal services."'

There's no specific timeline for this; the state is wisely relying on public health metrics to determine what is safe. Here are the full criteria for moving fully to stage 2 (alas, a PDF).

What does this mean? It seems to me that it is very unlikely that we'll be attending concerts and opera performances in September. Note, also, reports that certain big tech companies have told their employees that most can choose to work from home until January 1. 

This can only be causing varying degrees of concern on the part of arts organizations' managers and administrators, as well as a lot of consultation with investment advisors. Endowment portfolios must have been affected by the stock market gyrations of the last couple of months, and different organizations, with their different budgets and income sources, will be affected differently.

If you're an organization with a $300 million/year budget and an endowment that started around the same amount, you're in a very different position from an organization with a $75 million/year budget and a $275 million endowment. If you're an organization that kept a famous singer/serial harasser as your general manager, presumably for prestige and his fund-raising abilities, you might find yourself wondering why his fund-raising prowess didn't manage to get the endowment above $22 million, especially when your annual budgets run around $40-45 million. 

That last sentence - the ratio of budget to endowment - is why I am expecting LA Opera to go under rather than survive the ongoing economic crisis in the arts. I have similar expectations of the Baltimore Symphony, which has had ongoing financial problems, with terrible management, and whose music director isn't renewing her contract. 

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