Shortly before the San Diego Opera board of directors met Friday to discuss its fate, management released a series of financial projections showing just how difficult it would be to keep the organization running.
Even if the opera shuts down at the end of June, it will still be on the hook to pay nearly $7.5 million in contractual obligations, not including $975,000 in estimated shutdown costs, according to calculations by Michael Lowry, the organization's chief financial officer. At deadline Friday, the board had not announced a decision.
And even if it managed to collect all of its pledged contributions and sell off its assets at a reasonable price, the company would still be more than $83,000 in the red, the projections showed.
The projections also detailed the sharp challenges the opera would face if it continued to operate through its 50th anniversary year in 2015. According to a chart that Lowry created in January, but which was released to the public just this week, if current trends continue, the opera would be underwater $6 million by June 2015 and an additional $7.6 million by June 2016.
Members of the so-called White Knight Committee — a coalition of opera board members, workers and donors who have been fighting to keep the company alive — say the picture isn't necessarily so dire, arguing that management has not explored all the possibilities of cutting costs or raising funds.
Executive salaries and overhead costs are much higher at the San Diego Opera than at other companies its size, they say, adding that the opera could draw more money by expanding its donor base, and sell more tickets by broadening its mix of shows.
But the numbers in Lowry's projections seemed daunting.
Based on the reports released this week, the opera has contractual commitments of $3.3 million from fiscal 2014, which ends June 30, as well as another $3.3 million in fiscal 2015 and $962,200 in fiscal 2016.
The biggest obligations include:
• $1.7 million in compensation costs for opera employees, including $431,219 for CEO Ian Campbell and $143,881 for his ex-wife, Ann Spira Campbell, the opera's director of development and marketing, as well an estimated $722,467 over possible contract disputes.
Those figures — which include nearly $145,000 in accrued vacation pay and more than $105,000 in medical and health insurance costs — are much lower than the worse-case scenarios that critics of the management team had feared. But they differ from a "manifesto" that Karen S. Cohen, the opera board's president, released Thursday, saying that the Campbells "will both leave the company’s offices with no payments whatsoever if we close."
• $3.2 million in contractual obligations for next year's lineup of operas, including $1.5 million to the San Diego Symphony, $922,000 to the main artists and $470,000 for set designs. Even if nobody sees the operas — which were slated to range from "La Boheme" to the brand new mariachi opera "El Pasado Nunca se Termina" — those contracts must still be honored.
• $1.4 million in similar obligations for the operas scheduled for 2016.
The opera has $1 million in cash and investment money, and projects that could potentially bring in more than $750,000 in additional revenues through collecting contribution pledges and selling its scenery shop in Barrio Logan, which would bring in about $3 million.