Covent Garden had now become a success, good operas, with the best artists, and Michael Costa as conductor, serving to draw paying audiences; but on 5 March 1856 the house was destroyed by fire.
The renters and proprietors of Covent Garden finding themselves unable to collect the money to rebuild that theatre, Gye with great energy raised or became accountable for £120,000, the sum which the new structure cost.
[3] In 1857 Gye obtained a new ground lease from the Duke of Bedford for ninety years at a rent of £850 per annum, and opened the house on 15 April 1858, when the novelty was Flotow's Martha.
An attempt was made in 1865 to amalgamate Her Majesty's and Covent Garden into the Royal Italian Opera Company, Limited, when Gye was to have had £270,000 for his interest in the latter house, but the project came to nothing.
Gye had much litigation between 1861 and 1872 with Brownlow William Knox, his partner in the Italian opera, who filed a bill in chancery against him (on 20 March 1861) for a dissolution of partnership and a production of accounts.
Mlle Emma Albani, afterwards wife of Frederick Gye's son Ernest, made her début in 1872, and in the following year fully established her position on the stage.
In 1875 Gye, finding that there was a growing taste for Wagner's music, produced Lohengrin, and in 1876 Tannhäuser and Il Vascello Fantasma (The Flying Dutchman with the lyrics translated into Italian).
By his will he left the whole of his property, comprising Covent Garden Theatre and the Floral Hall, to his children, the management devolving on Mr. Ernest Gye and one of his brothers.