What Do Risk Capital and Business Alliances Have to Do with Opera?

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January 22, 2015; Philadelphia Business Journal

NPQ has covered many stories about opera companies in recent years, from closures and turnarounds, to labor disputes and the need to develop new works to sustain the art form. Among the U.S. opera companies at the forefront of demonstrating how to evolve—both artistically and from a business-model perspective—is Opera Philadelphia, as reported in the Philadelphia Business Journal.

The company is celebrating its 40th-anniversary season by presenting five new productions, including the world premiere of Charlie Parker’s Yardbird and the East Coast premiere of Oscar. Those two new works are tucked in among classic operas by Rossini, Verdi, and Strauss, each of which has been given a fresh treatment. The company is in the midst of delivering ten new American works in ten seasons through its American Repertoire Program. It has significantly increased the number of co-commissions and co-productions it invests in with other companies. And it continues to blaze new trails in presenting works of opera not only on the stately stage of the Academy of Music, but also in smaller venues and in public spaces around the city.

General director and president David Devan explains that it takes many years—and hundreds of thousands of dollars—to develop a new main-stage opera. Which is why the company and its board undertook a capital campaign a few years ago to generate funds to keep investing in new projects and to make Opera Philadelphia an attractive partner for other leading opera companies. The campaign raised $2.7 million, about $1 million of which is currently designated as “risk capital,” which provides a cushion for developing new works to high artistic standards; when the company dips into this fund, it’s understood that the funds will be paid back over time through earned revenue. The company also has about $500,000 in operating reserves, which helps with cash flow in a season that offers a mix of full-scale productions, smaller chamber works and experimental pieces.

The emphasis on developing new works—without compromising its commitment to the classics—has made Opera Philadelphia an attractive partner for leading opera companies. “We have a rapport, a trust, and that’s changed. That didn’t exist before we started on this track,” Devan said. “[It’s] in keeping with what we’re seeing from the for-profit world.” Both this season’s Oscar (about the life of Oscar Wilde) and next season’s Cold Mountain (adapted from the Charles Frazier novel) are co-commissions with the world-renowned Santa Fe Opera. Its growing reputation also allows Opera Philadelphia to book top names for its productions years in advance, a sign of artistic success.

Opera Philadelphia has also been investing in audience development—through initiatives like the Knight Foundation’s “Random Acts of Culture”, “Opera on the Mall” right beside the Liberty Bell, and inviting the public to see how new works like Andy: A Popera (about Andy Warhol) are made. Which may explain why Opera Philadelphia was recently nominated for an International Opera Award for “Accessibility,” the only U.S. company to receive a nod in that category. –Eileen Cunniffe