Wednesday, November 24, 2010

Discord at the symphony (we're NOT talking about the music)

By Barry Johnson

We know that symphony orchestras are the canary in the mineshaft of the classical arts, mostly because their expenses are hard to adjust because of the fixed expense of musician salaries (among other things) and their revenues are hard to raise. We've explored the problems at the Detroit Symphony in depth, but other orchestras are in trouble, too, some of them in far worse shape than Detroit simply because they don't have Detroit's history or cash reserves.

In the past week, we noticed these reports about struggling symphony orchestras around the country. We'll start with an update on Detroit and move to Milwaukee, Louisville and Honolulu. Gradually, certain patterns are emerging in these accounts (which would be far better if the reporters involved would put current financial troubles in context by using the readily available IRS Form 990 reports of the various symphonies).

A tax to support the majors? Detroit has more than its share of struggling cultural groups, and the Michigan legislature is considering a plan to raise property taxes in the three counties around Detroit to help the zoo and Detroit Institute of Arts.  And with the musicians' strike in its eighth week, there's a move to add the Detroit Symphony to that list, though its late in the legislative game. When the Detroit Free Press asked symphony officials to comment about the bill, they had no comment, saying they still hoped to extract massive pay cuts from the musicians. Great. Informal talks between management and the union resumed Nov. 5 after six weeks of silence.

The Milwaukee Symphony, which is roughly the size of the Oregon Symphony, reported a $2.3 deficit in its fiscal year 2010, mostly attributable to a 20 percent decrease in donations, according to the Milwaukee Journal Sentinel. That's the third year in a row that the symphony's deficit has been more than $2 million according to its IRS Form 990.  The symphony's endowment has cushioned this blow -- at the end of the 2009 fiscal year it stood at $23.3 million, having dropped from $27.8 million at the end of the previous year. (The Oregon Symphony's endowment dipped to $9.1 million this year.) It's cutting costs to close the deficit some this year and two committees, one tactical and one strategic, have been convened to find some solutions to the ongoing deficit problem.

The Honolulu Symphony situation remains dire and may be getting worse. The 110-year-old symphony is in Chapter 11 bankruptcy and may be headed for Chapter 7, which involves liquidation. A strike between the musicians union and orchestra management was the precipitating cause, though a huge drop in contributed income led to the strike The story of the Honolulu symphony and its lead-up to bankruptcy proved too complex for the previous sentence, as our commenter below pointed out. We'll just say that contributed income fell  $6.8 million to $3.8 million from FY 2008 to FY 2009 out of a total budget of a little less than $9 million, per the IRS Form 990. The lives of music fans in Hawaii have gone without orchestral accompaniment for more than a year.

I like the summary line in the Pacific Business News account:  "Animosity between the [symphony management]society and union has grown into a crescendo during the past year, with labor and management almost daring the public to choose a side. That has not set well with lovers of classical music, who prefer harmony to discord."

The Louisville Orchestra is also experiencing union-management discord as it faces a drop in revenue, so bad that management has threatened to take the orchestra into bankruptcy if the union will not make major wage concessions and agree to reduce the size of the orchestra from 71 musicians to 55, according to the Louisville Courier-Journal. The IRS Form 990 doesn't reveal the same serious imbalances in Kentucky that Milwaukee, Honolulu and Detroit recorded -- though contributed income was down significantly. But the rhetoric is already harsh and the orchestra is small, with a budget roughly half of the Oregon Symphony's, and its endowment is smaller than Oregon's, too.


Anonymous said...

Correction: the Honolulu Symphony hasn't had a strike since 1986. In fact, the HSO musicians worked continually for the two entire seasons preceding the bankruptcy despite delayed pay checks (at one point, they were behind in pay by some 14 weeks). For a chronology of events, go to

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