http://www.nytimes.com/2014/10/03/arts/music/metropolitan-operas-credit-rating-is-under-review-for-possible-downgrade.html 2014-10-02 07:59:10 Metropolitan Opera’s Credit Rating Is Under Review for Possible Downgrade Moody’s Investors Service said it was considering a downgrade in light of what it called a “softening” of both Met ticket sales and contributions from donors. === The gravity of the Metropolitan Opera’s financial challenges was underscored on Wednesday when Moody’s Investors Service said it was putting the opera company The Met completed a round of contentious labor negotiations this summer in which the company, warning that it faced dire financial difficulties, persuaded its unionized workers to agree to their first pay cuts in decades. Moody’s said that while those agreements “should benefit long-term operating performance,” it was still weighing a possible downgrade of the Met’s credit rating in light of what it called a “softening” of both ticket sales and contributions from donors. “The capacity and willingness of key donors including board members to increase gift flow will remain a key factor for the credit,” Moody’s said in its report, which was first reported by The Met said in a statement that “as Moody’s points out in their statement, recent changes at the Met — including the implementation of our historic new union agreements, and a program of institution-wide cost cuts and controls — will significantly strengthen the long-term financial prospects of the institution.” The Met reported in a financial filing In its new labor deals, the Met agreed to cut expenses by roughly $90 million over the next four years, with half of the reduction coming from pay cuts and half coming from other budget cuts. The Met’s board also agreed to begin a campaign to double the Met’s endowment over the next five years. The endowment was whittled down in recent years to cover operating costs. It was valued at $253 million in the Met’s last annual report – not enough to cover a year’s worth of costs. “If successful, the combination of reduced payroll expenses and increased philanthropy would support a move to balanced operations,” Moody’s said in its report. Moody’s said that the Met’s most recent projections call for balancing the budget in the current year, while spending 6 percent of its endowment – which is higher than the more common spending rate of 5 percent. But it is less than the Met spent in some recent years, when it