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The Washington National Opera got a new lease on life yesterday, in the form of a long-awaited takeover by the Kennedy Center. The esteemed but cash-strapped institution, part-time home of Placido Domingo, has been waiting for a financial rescue for some time. The nonprofit WNO went from earning a positive net revenue of $2.5 million in 2008 to a $1.2 million net loss the following year, when it laid off 8 employees and instituted rolling furloughs. Its debts total $12 million, and its 2010-2011 season was cut back to just five productions, down from eight a few years before.
The deal is officially termed an “affiliation” rather than a bailout, though as mergers go, it’s more the kind that Chrysler got from Fiat or Greece is getting from the EU. The WNO gets to keep its own board and manage a separate endowment, but all other finances will be absorbed into the Kennedy Center’s budget. Programming decisions being made jointly between Kennedy Center President Michael Kaiser and the Opera’s as-yet-unnamed replacement for outgoing director Domingo, who leaves for Los Angeles in June, just before the arrangement takes effect. The hiring process will similarly be overseen by both the Kennedy Center and Opera board of trustees.
The WNO has received taxpayer support in the past, including $397,000 for music education in D.C. Public Schools and a $650,000 annual grant from the National Capital Art and Cultural Affairs Program, the maximum amount allowed. Last year it received a Congressional earmark of $200,000 secured by opera loving Senator Thad Cochran, a Mississippi Republican. Conservative groups such as Citizens Against Government Waste singled out the Washington National Opera from the more than 5,000 earmarks in the 2010 federal omnibus bill as among those they considered to be most outrageous, along with a $655,000 payout to the Institute for Irritable Bowel Syndrome Research.
Merging with the federally subsidized Kennedy Center relieves the WNO of the sole burden of fundraising, a nice arrangement it will share with the National Symphony Orchestra. But the arrangement will not come without restructuring cuts, and both parties signal more layoffs are likely. At the very least, the Opera has no shortage of expertise with bailouts: WNO president Kenneth Feinberg just happens to be the Treasury Department’s Special Master for Compensation, aka “Pay Czar” for the TARP program.