Lezlie Sterling / lsterling@sacbee.com

Robert Tannenbaum

$500,000 gift helps merged Sacramento opera and philharmonic survive

Published: Saturday, Feb. 1, 2014 - 11:28 pm
Last Modified: Wednesday, Feb. 12, 2014 - 11:33 pm

A gift of $500,000 has saved the current season for the Sacramento Philharmonic and Sacramento Opera, but the merger of the two groups last summer hasn’t resolved its ongoing financial issues.

That much was clear in documents the Sacramento Region Performing Arts Alliance – the umbrella entity of the merged groups – supplied to the Sacramento City Council asking for a $350,000 forgivable line of credit.

That appeal was to be heard by the council this Tuesday but was withdrawn after the SRPAA received a surpise $500,000 gift from the Joyce and Jim Teel Family Foundation.

The organizations merged July 1 of last year and scaled back the opera and orchestral programs to become more financially sustainable. Despite the merger, the SRPAA has remained on the economic brink and was considering canceling the remainder of the current season or even outright closure.

General Director Rob Tannenbaum, who came on board in July, said he inherited an organization with no operating surplus funds in the bank.

Soft ticket sales and lagging contributions resulted in a $348,477 deficit by the end of the fiscal year.

“We had no other option but to approach the city, or close our doors,” Tannenbaum said.

The threat of season cancellation or closure is not a new event for arts nonprofits in Sacramento. In April 2012, the Sacramento Philharmonic issued a fundraising plea to make up a $150,000 deficit.

In that instance, interim Executive Director Jane Hill said that if the funds were not procured the orchestra would cancel the remainder of its 2011-12 season and likely close its doors.

The Sacramento Ballet and the Sacramento Opera, also faced with big budget gaps, have used similar public fundraising campaigns in the recent past. In each instance the organizations were able to raise the funds needed to stay afloat.

The SRPAA has had a tough time selling enough tickets, Tannenbaum said.

Most orchestras derive 40 percent to 45 percent of their income from ticket sales and the remainder from contributions.

“We’re at 28 percent on the ticket sales,” Tannenbaum said.

The Teel Foundation gift will allow the orchestra and opera company to continue the 2013-14 season as planned, including a full-scale production of Verdi’s “Il Trovatore” at the Community Center Theater on Feb. 28 and March 2.

A future loan from the city, drawn from the city’s general fund, is still a possibility, said City Manager John Shirey. “I’m still willing to recommend a revolving line of credit so that when they do get into cash crunches they don’t have to take the next drastic step of bankruptcy,” Shirey said.

The City Council last approved a similar type of loan in 2011 when it provided a $300,000 revolving line of credit for the California Musical Theatre, he said. To date, that credit line hasn’t been used.

The resolution that was to have been heard by the council Tuesday included Tannenbaum’s plan to evolve the Sacramento Opera, ending its decades-long practice of staging large-scale operas at the Community Center Theater.

Instead, the company would operate under an “Opera on the Go” paradigm that would include a series of 26 chamber operas, sung in English, as well as flash-mob-type performances in locations like the Amtrak station, malls and at sporting events.

The long-standing model of presenting large-scale operas is not sustainable, said Tannenbaum.

“The traditional ‘country club’ model of opera and philharmonic presenting cannot pay for itself through a combination of ticket sales and moderate donations,” Tannenbaum said.

He does not believe the organization can expect more than moderate donations. Most of its biggest donors, excluding what was given by the Teel Foundation, are in the $20,000 to $40,000 range. Large-scale opera companies require six-figure donations, Tannenbaum said.

Cutting costs by offering more outreach performances away from the concert hall has become almost standard practice for opera companies and orchestras since 2008. However, the Sacramento Opera may become the first regional opera company to drop out of the large-scale opera game entirely.

“I can’t think of any opera company that has gone from grand opera to chamber opera completely,” said Marc Scorca, president and CEO of Opera America, the largest advocacy organization for the art form. “We do see a number of opera companies that are re-allocating resources to varying their offerings to include some grand opera along with chamber opera.”

The SRPAA’s dire financial straits came as a surprise to some of its musicians, who feel they have been kept in the dark, said Sacramento Philharmonic principal bassist Thomas Derthick.

“We did not know that the problems were so immediate and that the options being considered were so rash,” said Derthick, who has performed with the orchestra for the past 32 seasons.

“They came this close to the edge and this close to a radical change of direction, and no conversation took place,” he said.

The SRPAA is meeting with its musicians Thursday on what steps to take next – and a major point of the discussion will likely be the new “Opera on the Go” operating model.

That proposal isn’t exactly music to Derthick’s ears.

“If we’re looking for a business model, the first thing I’d ask is what are we going to provide the community?” he said. “Because the community knows us best through the very things we might be thinking of getting rid of.”

Call The Bee’s Edward Ortiz, (916) 321-1071. Follow him on Twitter @edwardortiz.

Read more articles by Edward Ortiz

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