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The world's largest opera company may be headed for a shutdown. Most of the union contracts for New York's Metropolitan Opera expire in a week. Yesterday, the Met's general manager sent a letter to the unions, warning them to prepare for a lockout if they don't come to terms. Jeff Lunden reports.

JEFF LUNDEN, BYLINE: The clock is ticking. For months now, the Metropolitan Opera and its unions had been at an impasse. Management has proposed cutting 16 percent of union members' compensation. Otherwise, the Met's general manager Peter Gelb contends the company could go bankrupt in two to three years.

PETER GELB: The fact of the matter is that two-thirds of our costs are driven by our union payments.

LUNDEN: Gelb is not proposing cuts to base salary, but over-time, health and pension benefits. The musicians' union says its members could actually see cuts of twice that after they crunch the numbers. Jessica Phillips Rieske plays clarinet in the orchestra and is on the bargaining committee.

JESSICA PHILLIPS RIESKE: Actually, the cuts that we're talking about would be more like 25 to a worst-case scenario of 37 percent.

LUNDEN: Since Peter Gelb took over the Met in 2006, the company's budget has ballooned to over $325 million. He's doubled the amount of new productions, and he's created high-definition broadcasts which bring Met performances to movie theaters around the world.

GELB: When I took over the Met, the budget was about $200 million a year, and we invested in new efforts to help make the opera more accessible and more successful.

LUNDEN: But revenues from those efforts have not come close to matching expenses. So Gelb is more dependent than ever on private and corporate donors.

GELB: We had to raise about $150 million in the last fiscal year in annual donations to make ends meet. And that's a level that our donors are not willing to continue to bear.

LUNDEN: The unions counter that Gelb has been reckless in his spending, and now they're being asked to pay the tab. They say all this new activity has triggered costly overtime payments. And the expensive new productions haven't filled the theater. Joe Hartnett is at the bargaining table for the six unions which represent the stagehands, wardrobe workers and box office personnel, among others.

JOE HARTNETT: We consider the Met Opera our family. And with that, we feel that, just as any family that has budgetary crisis, everything needs to be on the table. And that includes Mr. Gelb's spending. And if we're being asked to tighten our belts, Mr. Gelb is going to have to cut up some credit cards.

LUNDEN: One credit card is Gelb's salary which is roughly $1.4 million. Unions say Met management has withheld crucial financial information. It would help them negotiate. And they contend that Gelb has wanted to lock them out all along. But he says a lockout isn't the point.

GELB: More important than even the opening night is that we fix this economic problem that the Met has so that we will have many opening nights in the years to come.

LUNDEN: All of the unions have bargaining sessions scheduled in the coming week. But if they don't reach an agreement, a lockout would almost certainly delay the Mets' opening night in September. For NPR News, I'm Jeff Lunden in New York.

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