Chevron Texaco Axes Metropolitan Opera Sponsorship, Figuring that 63 Years of Atonement is Enough(A)
For many opera lovers, listening to the radio on Saturday afternoon is a ritual. That’s when a live broadcast of the New York Metropolitan Opera is heard on a nationwide network. And for more than 60 years those broadcasts have been sponsored by Texaco, now part of Chevron. The broadcasts will no doubt continue, but not under Chevron Texaco sponsorship. The world’s fifth largest oil and gas company has announced that it will end its sponsorship after the 2003-2004 season. The reason, in the company’s own words: “As our business has evolved, we believe it is important to focus more of our resources directly with the countries and markets where we do business.”
So, is the Met a casualty of globalization? I don’t think so. Let’s consider how this sponsorship came about in the first place and what has happened to Texaco in the interim.
Companies mount what is called institutional advertising to burnish their images. And Texaco badly needed such enhancement in 1940 when it was headed by Torkild Rieber, a Norwegian and rabid fan of Adolf Hitler. In the late 1930s, Rieber ignored the Neutrality Act under which the United States was operating and had Texaco tankers bring oil to the Nazi-backed Franco forces in Spain. In June 1940, when France fell, Rieber celebrated the event with a party at the Waldorf-Astoria Hotel. At the same time, Texaco harbored a German spy, Gerhardt Westrick, in its offices in New York City. Writing in the New York Herald Tribune, William Stephenson, the British intelligence chief in New York, disclosed that Texaco was paying Westrick’s salary, providing him with an office and a large house in Scarsdale. From his Texaco office, Westrick sent a detailed profile of the American aircraft industry to Berlin.
When these activities surfaced, Texaco shareholders became so enraged that Rieber was forced to resign. And it was then, in 1940, that Texaco’s mea culpa resulted in the Metropolitan Opera sponsorship as a way of establishing itself as an upright corporate citizen.
There is no evidence that association with this program changed the way Texaco operated. “We all hate Texaco,” an Exxon man said in Anthony Sampson’s book, The Seven Sisters. “If I were dying in a Texaco filling station,” a Shell man added, “I’d asked to be dragged across the road.” Sampson’s conclusion: “Texaco has always taken pride in being the meanest of the big companies.”
The signal event in Texaco’s recent history was not finding oil but messing up a merger. In 1984, Pennzoil reached an agreement to acquire a substantial holding in Getty Oil. Getty’s board approved the deal, but two days later Texaco entered a higher bid to buy all of Getty’s shares – and its bid was accepted. Pennzoil’s tough chairman, the late J. Hugh Liedtke, was not about to walk away quietly. In a Texas court, he successfully sued Texaco for interfering with his contract, and the jury sided with him, ruling that Texaco owed Pennzoil $10.5 billion. It was at the time the largest civil damage amount ever awarded – and it drove Texaco into bankruptcy.
In 1987, Texaco settled with Liedktke for $3 billion, enabling it to emerge from bankruptcy. But it was never again the same force it had been in the oil industry. In the year 2000, it was acquired by Chevron – and through all this turmoil the sponsorship of the Met broadcasts continued. It’s the longest continuing sponsorship in the history of broadcasting. The annual cost is now $7 million, hardly a significant figure for a company that rakes in $100 billion a year.
Texaco has brought other legacies to Chevron. For example, in Ecuador the company is now confronted by a massive class action suit related to the environmental and health damages caused by the alleged dumping of 20 billion gallons of oil into open pits, rivers and estuaries between 1964 and 1992. Last August a New York court ruled that any finding by an Ecuadorian court would be enforceable in the United States. So, yes, it’s a different time, with different problems. And sponsoring “Don Giovanni” and “Aida” to please opera lovers is probably not going to help Chevron Texaco in Ecuador.