Will The Metropolitan Opera Be Forced To Sell Chagall Paintings?

Renée Fleming in the new Susan Stroman production of Lehár's The Merry Widow (Die Lustige Witwe) which opens this month at the Metropolitan Opera. It will replace the last new production they did of the operetta in 2000. (Photo: Ken Howard/Metropolitan Opera)

"New York City’s Metropolitan Opera Association had its rating cut by Moody’s Investors Service to three steps above junk and is again turning to works by Marc Chagall for collateral as its cash dwindles. The nation’s largest performing-arts organization is putting the Chagalls hanging in its lobby -- 'The Triumph of Music' and 'The Sources of Music' -- up as collateral on a line of credit with Bank of America Corp., Sam Neuman, a spokesman for the opera, said in an e-mail today. The opera is tapping the paintings anew after using a $100 million bond sale to pay off bank loans backed by the artwork in 2012. Moody’s today lowered that debt one level to Baa1 and assigned a negative outlook, meaning more cuts are possible. The Met’s deficit ballooned to an estimated $22 million in fiscal 2014, from $2.8 million in 2013, according to financial documents. The opera, which had its first performance in 1883, expects to balance its budget in the next two years by cutting expenses such as labor costs, Neuman said....In fiscal 2013, the organization had monthly liquidity of $46 million, covering 53 days of cash expenses, according to Dennis Gephardt, a Moody’s analyst. Without a $17 million draw on its line of credit, liquidity fell in half, according to preliminary fiscal 2014 results, Gephardt wrote in today’s report." And the New York Times points out: "Some of the Met’s biggest stars recently agreed to cut their fees to help the Met. This week, another cost-cutting measure was evident: It did not put up its Christmas tree."[Source]