With ever-expanding collections and programming, it seems as though the Metropolitan Museum of Art is too big to fail. But is it true? Museum officials recently revealed that the Met is facing a deficit of $10 million this year, and that funding gap could widen to as much as $40 million if allowed to go unchecked.
This sobering news comes on the heels of several weeks of excitement for the Met. Just a month ago, the Met Breuer building opened to the public; the museum quietly unveiled its controversially re-branded logo; and NPQ reported about a change in language to a “suggested,” rather than “recommended” donation policy at the door, which officials hope will increase access to the museum for its low-income visitors. How is the museum world supposed to take the news that one of the largest and most influential museums in the world may be on rockier financial footing than we thought?
The news is troubling indeed, but officials at the museum already have a plan to get the Met back on track. Thomas P. Campbell, the museum’s director and chief executive, announced a 24-month financial restructuring plan that will include staff reductions, a slowing of the construction timeline for the planned $600 David Chipperfield-designed wing for contemporary and modern art, and a reduction in programming across all three of the museum’s buildings. The museum will implement a hiring freeze and requesting voluntary buyouts, after which it will begin reducing its headcount over the next twelve months. According to Daniel H. Weiss, the Met’s president, salaries account for 70 percent of the operating budget. One can only wonder whether Campbell himself, whose total compensation was over $1.2 million in 2014 according to the museum’s most recent IRS form 990, will be reducing his own salary in order to balance the books.
The museum has experienced lean times before. In 2009, the museum went through a series of layoffs and shrunk its overall work force by 10 percent. That cycle of austerity in the museum’s history was caused primarily by “prospective, significant, and long-term reductions” in annual operating income from its endowment, which was estimated to have lost about $800 million, or 28 percent of its value in 2008–2009. The largest factor for the decline in income from the endowment was the financial crisis of 2007–2008.
This time around, however, the reasons for the Met’s operating deficit are a little less clear. Officials say a combination of factors, including a decline in retail revenue, an increase in salaries, and an annual payment on debt service for $250 million in bonds all contributed to the gap in funding to cover expenses. Regardless of the reasons behind the failure, however, Weiss is quick to say “the driver of this deficit is not related to Breuer,” for which the Met has trained 110 staff members. The Met has taken on custodial duties for the historic building for a period of eight years, and hopes to use the space—in tandem with its proposed new wing—to beef up its contemporary art collection and programming. These new belt-tightening measures include slowing down the Chipperfield construction timeline, as the Met is anxious to balance the budget before it begins asking for additional support for a capital project of this magnitude.
What is the best strategy for early intervention when a museum’s budget begins to get out of hand? Are Campbell and Weiss leading the Met back to firmer financial footing? Let us hope that the museum’s troubles do not get worse before they get better.—Sophie Lewis