LA Opera receives $14 million emergency loan
17 December 2009
Leased: Dorothy Chandler Pavilion
Details have emerged of an emergency bridging loan for $14 million to cover debts accumulated by LA Opera over the past three years.
Under an agreement approved by the Los Angeles County Board of Supervisors, the money will be raised through sale of a special bond, secured by leasing the opera’s county-owned venue, the Dorothy Chandler Pavilion.
Interest on the bonds is expected to be around 5%, leaving LA Opera to pay an estimated $2.1 million in interest between now and the deadline for repayment of the principal lump-sum in 2013.
The company’s Chief Operating Officer, Steve Rountree, is confident that the loan will be repaid and confirmed that $30 million has already been pledged by 23 wealthy donors. Payment of these pledges has been scheduled over the next two-and-a-half years due to losses suffered by donors themselves during the global recession.
The debts owed by LA Opera include advance payments against the company’s $32 million production of Wagner’s Ring cycle directed by Achim Freyer, planning for which began more than a decade ago. The first three parts of the tetralogy have been performed over the past year and Götterdämmerung will be staged in April 2010, followed by three full cycles between 29 May and 26 June.
However, Rountree has said that the loan will only be used to cover the company’s debts, and will not be spent on day-to-day operations or the Ring cycle production.
LA Opera’s general director, Plácido Domingo, is due to sing the role of Siegmund in Die Walküre next year. Giving his reaction to the news of the emergency loan in a statement from Italy, he said he is "absolutely thrilled that the county of Los Angeles has recognized the important and prestigious role that a world-class opera company plays in our community."
LA Opera is the second American company headed by Domingo that has recently announced details of serious financial difficulties: earlier this month, Washington National Opera was forced to eliminate eight staff positions and reduce the number of its productions next season from six to five as a result of overspending.
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