Met Museum Prepares for $100 Million Loss Due to Coronavirus

The Met’s executives say the coronavirus outbreak makes painful layoffs likely for every cultural institution. In a powerful sign that casualties of the coronavirus outbreak include even the country’s strongest cultural institutions, the Metropolitan Museum of Art is projecting a total shortfall of close to $100 million for the near future and expects to be closed until July, according to a letter the museum sent to its department heads on Wednesday. “This is an extraordinarily challenging time for us all,” said the letter, signed by the Met’s top executives, Daniel H. Weiss, the president and chief executive, and Max Hollein, the director.

“As staff members of The Met we all have a profound responsibility to protect and preserve the treasured institution we inherited. ” The Met is an important canary in the coal mine for arts institutions all over the country; when the museum announced on March 12 that it was closing, others followed close behind. If even a behemoth like the Met — with an operating budget of $320 million and an endowment of $3. 6 billion — is anticipating such a steep financial hit, smaller institutions may not be able to survive at all.

“Many museums are using any reserves they have to get through the next month,” said Laura Lott, the president and chief executive of the American Alliance of Museums, a professional association that has urged Congress to include $4 billion in relief for museums. About a third of museums surveyed in the United States were operating in the red or close to it before coronavirus, Ms. Lott added; three-quarters have now closed and one-third will not reopen if the crisis continues. “This situation is by far more dire than anything I have experienced in my 25 years of being an arts finance professional,” she said.

The Tenement Museum on Manhattan’s Lower East Side — which has a $2. 7 million cash endowment and depends on earned revenue for over 75 percent of its operating costs — has laid off 13 employees, which amounts to a 20 percent reduction in staff. “Our budget projections now take us through the end of June showing no revenue,” said Morris Vogel, the museum’s president, adding that the institution owes about $9. 5 million in bonds with covenants that restrict its ability to borrow money.

“We still have to make those monthly payments. ” The Met, preparing for its own financial hardship, has developed a three-phase response: having all staff members work from home and continue to be paid through April 4 as the museum evaluates possible furloughs, layoffs and voluntary retirements; from April to July, evaluating how to control spending and reduce operating costs, including freezing discretionary expenditures and hiring; and from July to October, “reopening with a reduced program and lower cost structure that anticipates lower attendance for at least the next year due to reduced global and domestic tourism and spending,” according to the letter. The Met, which estimates the overall damage from the virus will be spread over this fiscal year and next, is also creating an emergency fund of more than $50 million by reallocating discretionary resources usually used for acquisitions and programming toward operating expenses, fund-raising from foundations and donors and pursuing government assistance. “We’re trying to be as proactive as we can in an environment of profound uncertainty,” Mr.