Management at The Norwegian Opera & Ballet is now evaluating a wide range of cuts in everything from its orchestra to production expenses, in order to offset the skyrocketing costs of its early pensions for performers. With no agreement in hand to cut the pension costs, savings must be made in other areas, says the Opera & Ballet’s chief executive Nils Are Karstad Lysø.
“We have launched internal efforts with the thought that we won’t have a solution to the pension challenges within this coming year,” Lysø told newspaper Dagsavisen on Tuesday. “The longer it takes to find a solution, the more likely other means of saving money will become.”
The prospect of cost cuts in the production and program for the Opera & Ballet contributed to the announcement that the chief of the Opera itself, Per Boye Hansen, would not get his contract renewed. Hansen firmly opposed making cuts in the Opera’s program, claiming that would be “scandalous,” but given the pension costs and NOK 1.3 billion in debt, Lysø maintained that cuts had to be made somewhere. Hansen refused to go quietly, with his looming departure adding to the drama around the Opera. Several Opera officials, including employee representatives, blamed Hansen’s management style and unwillingness to compromise as major factors behind his contract termination, in addition to the Opera’s financial problems.
‘An open mind now’
Lysø stressed that no concrete cost-cutting measures have since been made, but added that “we’re looking at a broad spectrum of meaures with an open mind now.” Among them, reported Dagsavisen, will be an evaluation of the consequences of more external productions, the possibility of outsourcing more aspects of productions because of a need for new technical equipment, a reduction in orchestra staffing on various performances and more temporary hire of musicians in the event of illness. The long lead time for productions make it difficult to make immediate cost cuts, since many contracts are already in place for the next few seasons.
It’s the ongoing pension dilemma that’s causing major problems for the Opera’s budget. Covering the rising cost of pensions already has forced the Opera to tap into its capital, and a new presentation of the Opera & Ballet’s financial situation showed real debt of NOK 1.3 billion. Management and unions representing the performers, who can retire as early when they’re in their 40s, have been unable to come to terms on a new pension program that would reduce the pension costs and give the Opera & Ballet more predictiable pension obligations.
“It’s not easy to handle this situation without it affecting the level of activity on our stages,” Lysø told Dagsavisen. He added that the Opera & Ballet already had imposed cost cuts of around NOK 20 million a year, but it hasn’t been enough as pension costs keep soaring.
No bailout likely
Even though the Opera & Ballet is funded by the state in addition to ticket sales, the govenrment has no intention of stepping in with emergency aid. “You can’t just offer more funding to get rid of these problems,” said Thorhild Widvey, the government minister in charge of cultural affairs, in a speech to the Norwegian Theater and Orchestra Association earlier this month. “The government will continue to fund artistic production, but won’t take responsibility for escalating administrative and pension costs.”
Lysø says he’s faced with making the best use of the funds that are allocated. Outsourcing would likely result in staff cuts within the costume, staging and technical departments, for example. No decisions have been made.
While the noise has subsided around Hansen’s looming departure as head of the Opera, the Ballet division has performed better with the public. A report to the Ministry of Culture showed that the Ballet attracted a bigger audience last year, with 130,000 ticket buyers compared to 100,000 the year before, surpassing the number of people who attended opera performances. Around 130,000 people had attended the Opera in 2013, but that fell to less than 120,000 last year. The Opera had, however, fewer performances while the Ballet had more, including popular productions of Ghosts and A Swan Lake.