Authors: Reynold Levy
But once Paul Kellogg, the artistic director, declared the New York State Theater artistically unfit for the New York City Opera, the die was cast. Although the company had for more than forty years somehow been able to work reasonably well notwithstanding the venue’s purported acoustic deficiencies, for unfathomable reasons Paul believed it could no longer do so. The audience, in effect, was told that staying away was entirely understandable.
Its members heeded that advice—in droves—with deleterious consequences for the company’s finances, its morale, and its very future.
The entire board of directors and staff of the Opera were badly distracted by edifice wanderlust and allowed themselves not to notice as attendance eroded, seasons were contracted and curtailed, and the endowment became a piggy bank to finance consistent and alarmingly high operating deficits.
These were the years when Beverly Sills left the chair of Lincoln Center, sworn to retire, only to emerge ninety days later as the president of the Metropolitan Opera.
When the mayor, Mike Bloomberg, read me the riot act over an anonymous disclosure to the
New York Times
of a $15 million gift he had pledged to Lincoln Center two years before to launch redevelopment.
When Joe Volpe, the general manager of the Metropolitan Opera for sixteen years, did all within his power to stop the physical redevelopment of Lincoln Center. He often behaved boorishly, just as his reputation would lead one to expect. Volpe, joined by a small but powerful
group of naysayers, failed to halt what would ultimately be a $1.2 billion-plus physical transformation of Lincoln Center, but not for want of trying. For many and varied reasons, Volpe’s retirement was welcomed, and everyone looked forward eagerly to his successor.
Peter Gelb was greeted in 2006 by an inbox overflowing with challenges. His marketing innovations were lauded. The live transmission of opera to several thousand movie theaters in the United States and around the world was widely praised. His management of the challenge of music director James Levine’s frequent illnesses and convalescence was much admired.
But his artistic direction of the Met was deemed highly uneven. It received very mixed reviews. In any event, whatever appeared on the Met’s stage never wanted for attention.
For me, many of Gelb’s artistic choices were brave and the results often memorable. However, there was far less to debate about the Met’s economic fortunes under Gelb’s leadership. They continued a decline that was well under way during Volpe’s last years in office. During Gelb’s tenure, the Met’s annual budget, already in very shaky condition, climbed from roughly $215 to $330 million. Deficits also grew, or were closed by invading the corpus of a badly eroding endowment.
What was wrong with the Met’s business plan? How could its operating statement and balance sheet have eroded so badly since 2006, even as record fund-raising occurred? Was anyone pressing Peter Gelb for a major course correction?
It was frustrating to run the risk of being held accountable for the travails of resident organizations like the New York Philharmonic, the New York City Opera, or the Metropolitan Opera, over which Lincoln Center had little control. In the case of the New York Philharmonic and the New York City Opera, Lincoln Center extended every effort to point the way to artistic and financial solvency, orally and in writing. We could propose, but only those proud, independent entities could choose whether to act on our recommendations. Many were airily dismissed, and others were simply ignored.
There were many bright spots during this period as well, artistic and otherwise.
Lincoln Center’s geography was redefined by its newest constituent, the Wynton Marsalis–led Jazz at Lincoln Center. In 2004 it opened to
critical acclaim three stunning, Rafael Vinoly–designed spaces on the fifth and sixth floors of the Time Warner Building at Columbus Circle.
Lincoln Center Theater’s major challenge seemed to be finding adequate storage space to house its many Tony Awards.
Contact
,
Coast of Utopia
,
The Light in the Piazza
,
South Pacific
,
Other Desert Cities
,
War Horse
, and
Golden Boy
were just a few of its much-heralded productions during the tenure of Andre Bishop and Bernard Gersten.
The Chamber Music Society, under the fresh artistic leadership of Wu Han and David Finckel, acquired new energy and vitality. Its activities expanded to include many more performances in Alice Tully Hall, more touring, and residencies around the United States and the world. The Lincoln Center Film Society also became more ambitious in the number and kind of its offerings and in related educational programming. And Lincoln Center’s own eclectic presentations of more than four hundred annual events were perhaps never as bold, creative, and award-winning as in the period from 2002 through 2014.
Leaders of the burgeoning, affluent hedge fund industry were persuaded to adopt Lincoln Center as their artistic cause, and the much-applauded, now consensus-blessed, ambitious physical transformation of Lincoln Center proceeded apace.
The entire city block, 65th Street from Broadway to Amsterdam Avenue, and all the artistic facilities that align it, were utterly transformed into a warm, receptive, and engaging boulevard of the arts. Never again could Lincoln Center be called forbidding, anonymous, or unwelcoming.
With the transformation of Alice Tully Hall, the expansion of The Juilliard School, the renovation of the New York State Theater (since renamed the David H. Koch Theater), the creation of a state-of-the-art third performance space for Lincoln Center Theater, two new screening rooms and an education center for the Film Society, and new dance studios for the School of American Ballet came a beautifully designed, graceful welcome to Lincoln Center’s main campus, one filled with light and life. There are new green spaces, new restaurants, and a totally Wi-Fi’d campus. Twenty-first-century technology is displayed indoors and out. And there is a remodeled, utterly overhauled, privately owned public space called the David Rubenstein Atrium (named
after its principal donor), a new Lincoln Center Commons, open free of charge to the public 365 days a year.
New board leadership took hold at Lincoln Center, the New York City Ballet, Lincoln Center Theater, the Chamber Music Society, the Film Society, and most recently, the New York Philharmonic.
This book reports on these events and their results, including both those who helped achieve progress and those who fell short. My administrative colleagues and the trustees to whom we report escape neither unscathed nor unpraised, as the case may be.
The donors are described with admiration and candor—from the generous who give willingly because they believe in their benefaction and derive pleasure from contributing to a cause beyond self, to the bargainers who treat philanthropy as another opportunity to extract advantage.
I
N REFLECTING ON
the forces and personalities at work in the world’s largest performing arts center, much more is involved than an account of heroes and villains, winners and losers, who’s up and who’s down. Above all I hope to illuminate certain truths, not just about Lincoln Center, but also about the leadership and management of key institutions in our society.
Institutionally, America is supposed to run on a strong three-sector engine, monitored by a vigorous Fourth Estate. Each sector, prodded by a free press, is said to contribute significantly to the public welfare, in a division of labor virtually unique to our country. But the gap between the promise and performance of all of these sectors is growing, alarmingly so. And the faith of Americans in the proper execution of their respective responsibilities has badly eroded, perilously so.
The first sector is government at all levels: federal, state, and local. Each is divided into executive, legislative, and judicial branches, which share power with one another. And each is supposed to act ultimately in accordance with the will of the people, the consent of the governed as expressed through free and fair elections. The polity is the ultimate consummation of the will of the people. American democracy has no other master.
So I have been taught. By Madison, Jefferson, and other Founding Fathers, the authors of arguably America’s only tract of political philosophy, the
Federalist Papers
.
2
The second sector is free enterprise. It is composed of for-profit institutions presumed to act in the best interests of their shareholders by delighting customers, partnering with suppliers, and conducting themselves not only lawfully but in a socially responsible way. Such being the case, little regulation from government is said to be required. What is in the interest of General Motors and Goldman Sachs is in the interest of the United States. Ordinarily, capitalism triumphs where government treads lightly.
So I have learned. From Friedrich Hayek, Adam Smith, Milton Friedman, and Alan Greenspan.
3
The third sector is the realm of nonprofit institutions. Accountable neither to voters nor to shareholders, eleemosynary organizations form when markets and governments fail to provide needed services at high enough levels of quality and at low enough cost. Exempt from taxes and eligible to receive tax-deductible gifts, these publicly subsidized nonprofits are intended to promote the general welfare.
The pluralism of this third sector allows for the coexistence of hundreds of thousands of organizations serving the commonweal, a critical component of the genius of America. Educating our kids, healing our sick, offering the visual and performing arts to a demanding and discerning public, ministering to our religious needs, providing social services of all kinds, generating ideas in think tanks and patents at research universities, and safeguarding our civil rights and liberties, these and other indispensable services are performed better in America than elsewhere because of our extensive voluntarism and philanthropy.
So I have gathered. Courtesy of Alexis de Tocqueville, Waldemar Nielsen, Lester Salamon, and Robert Putnam, among others.
4
Politicians are accountable to citizens. The $4.5 trillion budgets they collectively wield each year, and the millions of workers the federal, state, and local governments employ, are intended to serve public needs. No more. No less. Answerable to the American people who choose to vote, politicians must face the public in regularly held elections, in which their performance will be judged.
Members of the boards of directors of for-profit institutions are supposed to govern them intelligently and prudently. Our $17.5 trillion economy depends on it. That means careful selection of a qualified chief executive officer and the constant monitoring of the chief executive
officer’s (CEO’s) performance, as well as that of the senior management team. It entails rigorous review of company strategy and close examination of an organization’s strategic risk profile. It suggests that the director of a for-profit firm is responsible not to the CEO but to the shareholders and the customers, first and foremost.
All around this nation, nonprofit organizations, private institutions devoted to the public good, also struggle with the challenges of governance, the fast-changing marketplace, government relations, and leadership. The lessons I learned at Lincoln Center might be valuable not only to those who labor in the country’s fast-growing, nonprofit third sector, but also to those employed by the government or in the private sector.
On January 19, 2012, a Gallup study revealed that Americans’ satisfaction with the size and power of the federal government was at a record low of 29 percent. Their satisfaction with the size and influence of major corporations remained near an all-time low of 30 percent. Gallup concluded its report: “The results suggest that it’s a case of ‘pick your poison’ in the political arena when it comes to big business and big government—Americans are quite dissatisfied with the size, power and influence of both.”
5
This lack of confidence is widespread, and it characterizes the prevailing attitude of Americans. Citizens are losing trust in the US Senate, the House of Representatives, the presidency, labor unions, the media, religious organizations, and government as a whole. A Pew Research Center poll taken in 2012 confirmed the Gallup study.
6
When people lose faith in key institutions, they are less able to solve common problems. As a candidate to run on the Republican ticket for president in 2012, Jon Hunstman characterized our key national challenge as a “trust deficit.” It is serious and it is corrosive, he claimed.
The Edelman Trust Barometer, administered for fourteen consecutive years, also found that faith in government and business is in a very severe downward trend. According to this study, published on January 19, 2012, government suffered the deepest trust decline in the history of the poll, and business was not far behind in the public’s loss of confidence.
7
By comparison, faith in nongovernment organizations has held up reasonably well. But that level of credibility and confidence can
be squandered easily. Maintaining public approval is a constant challenge and requires high-quality governance and management. The public’s trust must be earned every day. If proof were needed, for decades the US Supreme Court and houses of worship were exceptions to the sweeping tide of negativism depicted in well-regarded opinion surveys. This is no longer the case.
When government is not trusted, voter participation rates fall. Democracy languishes. Resistance to corrective action rises.