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The Cost of the Met Breuer (and other nuggets from Metropolitan Museum’s FY16 financials)

Back in April, the Metropolitan Museum’s president, Daniel Weiss, declined to disclose to me the cost of renovating the Whitney Museum’s Breuer building, now repurposed (at least temporarily) as the Met Breuer.

Thanks to the Met’s annual report for fiscal 2016 (now online), the truth can now be told: Some $10.43 million was spent in FY16 and $2.52 million in FY15 for the “Breuer Building Preoccupancy Upgrade”—a total of $12.95 million. Weiss previously told me (see my top-linked post) that the renovation costs had been “funded through gifts.” In addition, the Met Breuer contributed “a little under $13 million” to the museum’s FY16 operating expenses, “all of which was fully funded through philanthropic support,” according to the annual report.

Entrance to the Met Breuer Photo by Lee Rosenbaum

Entrance to the Met Breuer
Photo by Lee Rosenbaum

As expected, the financial recap of the year that ended June 30, 2016 was a good news/bad news report. The good news: attendance in FY16 set an all-time Met record—some 6.7 million visitors in its three buildings (Fifth Avenue flagship, the Cloisters and, beginning last March, the Met Breuer). This was an increase of 400,000 from the previous year. Visitors who attended two or three Met facilities on the same day were counted two or three times towards the 6.7-million total, a museum spokesperson told me last August.

The bad news was the looming financial disaster—a growing operating deficit that would have ballooned dramatically, had the museum not taken drastic measures to curb expenses.

According to the Report from the Director and President in the annual report:

After a mid-year reforecast identified a potential operating deficit of $23 million for fiscal year 2016, the Museum implemented a soft hiring freeze and engaged departments across the institution to reduce expenses.

Wait, did they say $23 million?!? Last April, when the Met’s financial difficulties were first publicly revealed, the projected FY16 deficit was put at $10 million. Nevertheless, economy measures—including not just the soft hiring freeze, but also voluntary buyouts of veteran staffers (which ended July 5), and an “involuntary staff reduction” (ended September 2016)—are said to have improved future prospects and gotten the FY16 operating deficit down to a less scary (but still unsustainable) $8.3 million on an operating budget of $398 million, compared to the previous year’s $7.7 million on $368.9 million.

The museum’s 24-month plan, aimed at balancing the budget by the end of FY18, includes “taking a prudent approach to further reducing [a euphemism for firing?] the number of staff.” The guiding principles are:

Mission: recognizing that our primary commitment is to the collection, scholarship, and the quality of our programs
Sustainability: identifying reductions that can be maintained over the long term without compromising our mission or public service
Efficiency: realizing operating and process improvements to reduce expenses

According to the Report of the Chief Financial Officer, per capita admissions spending declined, as did attendance-driven revenue (e.g., restaurant and retail), which showed a $2.7-million loss in FY16. The long-term investment portfolio went in the wrong direction: a net loss of 0.5%, before spending and gifts.

Olena Paslawsky, the Met’s senior vice president, chief financial officer and treasurer, prudently retired in FY16 “after a decade of distinguished service.”

Here (from the annual report) are the breakdowns of the Met’s FY16 operating support and operating expenses, excluding auxiliary activities (e.g., retail, restaurants):

FY16 Operating Support (excluding auxiliary activities): $309.7 million

metinc16

FY16 Operating Expenses (excluding auxiliary activities): $315.2 million

metexp16

Of the greatest concern is how the cutbacks will affect exhibitions and programs, going forward. “As we move ahead,” Weiss and the Met’s director, Tom Campbell, warned in their annual-report essay, “we will be looking at the pace and scale of our programming.”

an ArtsJournal blog