Crunching the Metropolitan Museum’s numbers

Met Museum president Daniel Weiss gave an interview to Hyperallergicexplaining why he’s being forced to implement a compulsory admission fee for out-of-state visitors. Basically, he says, revenues haven’t increased with visitorship:

For various reasons, over the past 10 or 12 years, the pay-as-you-wish policy has failed. It has declined by 71% in the amount people pay…

During the last period of time, we’re talking about, let’s just say, the last 5 years we’ve seen visitation increase dramatically. At the same time, the amount of money people are paying, has decreased dramatically. So that during the last 5 years, we’ve seen no growth in revenue. Our costs have grown, because, you know, we have to pay people, and be a functioning entity in the economy. But we’ve had no growth in revenue.

It’s worth fact-checking this, because it turns out that it’s not really true. The Met is very good at putting its annual reports on its website, which makes apples-to-apples comparisons very easy. And here are the numbers:

  • In fiscal 2017, the Met had 7 million visitors, up 11.5% from 6.28 million in fiscal 2012. (This is mostly thanks to the opening of the Met Breuer, which had just over 500,000 visitors this fiscal year.)
  • In fiscal 2017, the Met’s admissions revenue was $42.8 million, up 13%from $37.8 million in fiscal 2012.
  • In fiscal 2017, the Met’s total revenues were $385 million, up 16%from $332 million in fiscal 2012.

In other words, there hasn’t been a spike in visitation over the past 5 years; in fact it has risen more slowly than revenues. What’s more, those visitors aren’t paying less: admissions revenue was $6.11 per visitor in fiscal 2017, which is higher, not lower, than the $6.02 it was in fiscal 2012. So I don’t know where Weiss is getting his 71% figure, but at best it’s cherry-picked. (It’s not by including membership revenue: although that hasn’t risen as fast as admissions revenue, it too has risen over the past 5 years.)

So while it’s true that the Met has swung from a $153,000 profit in fiscal 2012 to a $10.1 million loss in fiscal 2017, it’s very hard to blame admissions revenue for that. Much more germane is the $63.5 million rise in annual expenses, including a $7.5 million spike in “financial, legal, and other administrative functions”, as well as $10.8 million in “restructuring charges”, which is a euphemism for layoff costs.

The big picture, says Weiss, is this:

We’re seeking a modest increase in the amount the public contributes to our budget. We are imagining, we are planning, that we’ll go from 14% of our budget, to about 16, or 17%. That will increase our revenues by somewhere from 6 and 11 million dollars.

Admissions, it seems, are being asked to pull much more weight than they are currently. In order for their share of the overall budget to rise by 3 percentage points, they’re going to have to rise in absolute terms by some 20%.

Weiss says that this is simply a fiscal necessity:

The practical question is “Who’s supposed to pay?” If the public doesn’t wish to pay, who should pay?

But there’s a very clear answer to that question: Big donors! In the last year alone, the Met received $232.2 million in public and private donations. As the CFO says in his report:

The Met’s net assets grew by $399 million in fiscal year 2017, from $3.0 billion to $3.4 billion. Investment returns of 14.1% drove a substantial part of this improvement, coupled with $106.5 million of endowment gifts.

That’s right: Never mind the hundreds of millions of dollars that the museum is making just in investment returns, it also managed to rake in $106 million in new gifts to beef up the endowment even further. The Met now has some $2.9 billion in its endowment, of which $1.6 billion is entirely unrestricted.

So here’s the question: You’re already receiving over $100 million a year in gifts from big private donors, much if not most of which is going into a general endowment which can be used for anything you want. If you want to increase your revenues by $10 million a year, why not just take it out of that endowment?

After all, in the past 5 years, the value of the Met’s investments has skyrocketed: it was an already-enormous $2.58 billion in fiscal 2012, and it has risen to an eye-watering $3.43 billion now. That’s an increase of $854 million in just 5 years, or $170 million a year. I’m not buying cries of poverty. If that sum rises, going forwards, by $160 million a year rather than $170 million a year, the Met will be just fine.

If the Met didn’t have a multi-billion-dollar endowment, if it was really near insolvency, then it would be much easier to feel sympathy for its decision to raise admission prices. But in fact it’s one of the richest museums in the world. If anybody can afford a pay-what-you-wish policy, the Met can.

Update: The Met responds:

Mr. Salmon’s analysis misses the point: as costs have risen, admissions revenue has not kept sufficient pace.

Over the past 13 years, costs at all museums have risen, and while the admissions price has increased at all these venues (suggested for The Met, mandatory for others), the percentage of those paying full price at The Met has declined, plus the amount paid per visitor has declined. In 2004, 63 percent of paying visitors contributed the full suggested price of $12. Today, 17 percent pay the full suggested price of $25. In 2004, the average per visitor contribution was $7.39 ($9.58 adjusted for inflation). Today, the average contribution is $9.13 and our overall operating costs are substantially higher than they were in 2004.

Therefore, the policy has declined in two ways: people don’t pay what is expected and they are paying less than they did in the past. A healthy museum requires co-investment: from government, donors, and the public. We are seeking a modest adjustment in our revenue model to reset the admissions component of our overall revenues.

Finally, we disagree with Salmon’s suggestion of asking our generous contributors to offset an admissions policy that is not performing as intended and that is not meeting the institution’s needs.

This is obviously a significant shift from Weiss’s original comments to Hyperallergic. But one thing remains the same: a visceral aversion to the idea that big donors might want to subsidize admissions (more than they already do). In the original interview, Weiss said he had a moral objection to asking David Koch to do such a thing. But surely subsidizing admissions is pretty much the best and highest use that donor money can be put to. After all, the whole point of a museum is to show art to the public. Art without viewers is nothing.

One Reply to “Crunching the Metropolitan Museum’s numbers”

  1. How is Weiss getting that $9.13 average visitor admissions figure? Tried to verify that number quickly but based on the 2017 report’s numbers that would mean only about 4.5M of the Met’s 7M visitors were one-time ticket sales. The Met has ~<200,000 members, who would need to be visiting an average of 12-13 times/year each to make up the remaining 2.5M visits.

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