Funding Opera Houses

Abstract

People unfamiliar with opera house economics often ask why these institutions are not profitable. There are two classic answers to this question. First, opera houses are incapable, in both Europe and the USA, of generating sufficient income from the sale of tickets and other products to cover their operating costs. Additional funding is invariably needed. Second, opera houses usually settle for the goal of a balanced budget rather than a profit, and often succeed in achieving that. Are the two answers contradictory?