Wednesday, May 11, 2011

How can we interpret the Philadelphia Orchestra bankruptcy filing?

The Kimmel Center, home of the Philadelphia Orchestra
By Barry Johnson

Just as the Detroit Symphony strike did last fall, the Philadelphia Orchestra bankruptcy filing last month presents thorny problems for its interpreters. (Unless they come fully equipped with a simplistic ideological response to such problems -- I'm thinking of the anti-labor reflex of the Wall Street Journal's Terry Teachout here.)

In an earlier post, I complained about the lack of transparency by the board of the Philadelphia Orchestra. Without much better financial information, the argument for bankruptcy was almost impossible to judge.

We don't have tables of year-to-year attendance, revenue and expense figures, a reliable narrative of major initiatives (administrative and artistic), demographic data for the orchestra and the city, survey results from subscribers and donors, a good picture of the overall classical music "ecology" in Philadelphia and how the Philadelphia Orchestra participates within it, or a solid general sense of how Philadelphia Metro feels about its world-class orchestra and its appetite for funding it. All of these are important to know, both to understand the immediate situation and how the orchestra landed there.

At this point, following Peter Dobrin's analysis this Sunday in the Philadelphia Inquirer, I'm convinced that the bankruptcy is a screen behind which the board and orchestra management hope to re-make the orchestra and its current financial structure. Orchestra consultant Drew McManus agrees in his own probing analysis of Dobrin's article.

From my many posts on the Detroit Symphony, you know that I oppose this top-down approach because it alienates so many individuals and segments in the orchestra's community. The popular word today for those individuals and segments is "stakeholders," but I like the word community, because it points us in the right direction for possible solutions -- community organizing and community building -- to the underlying problems that orchestras face nationwide.

Before we go further, one important point must be made: The Great Recession of 2008 lingers with us still. I'm starting to think it may be the new reality, but if a real broad-based recovery ever occurs, then that will improve some of the immediate conditions -- depressed revenues -- that orchestras face.  On the other hand, lots of orchestras, especially smaller ones but also Top 10 symphonies, faced chronic declines in attendance and revenue even before the Recession.

 So, what are some of the explanations for this general decline?

1. Classical music is a dying form and nothing will save it. Antidote: Save your breath.

2. The classical music establishment has fiddled while the culture veered in new directions that don't value "old timey" classical music anymore, especially among the younger elements of the culture.  Antidote: more emphasis on new music in new venues. (Greg Sandow)

3. Orchestra management hasn't been transparent or accountable enough. Antidote: Most symphonies are working on their biggest problems, with varying degrees of success, and applying best practices as they emerge will solve those problems -- as long as the stakeholders are accountable to and supportive of each other. (Drew McManus)

4. It's all the fault of greedy unions, who refuse to adapt to the times. Antidote: bust the unions. (Terry Teachout)

I'm not sympathetic to #1, though it suggests a point I myself have made: It's possible that classical music (and other art forms that require lots of trained artists) can't survive in the marketplace of the present. It's too hard to commodify and to tame for use for other commodities. That marketplace has driven it to the periphery of the culture (or rather, "ignored it to the periphery of the culture"). If it's going to survive, ultimately, classical music will need the support of the community as a whole -- from democratic governments -- in the form of much larger financial subsidies. Though unthinkable in the U.S. at this moment, other democracies have followed that course.

Sandow's ongoing discussion of how to make classical music part of the lives of younger people is an important one -- it addresses the "bad" demographics that symphonies face.  And he champions the "natural" outreach efforts of small clubs around the country that mingle new classical-based music with other forms of music, such as jazz and indie rock, and performance. My reading of Sandow is that he believes that orchestras need to figure out how to get involved in this process, too, though the financial effects may be small at the beginning.

I am always a little suspicious of "technocratic" solutions to big problems, because they so often are imposed solutions. Imposed solutions generate opposition even when they work. McManus, though, has such a wide view of orchestra management that he avoids this. I recommend taking a look at his TED presentation on labor/management problems at symphonies and his analysis of Dobrin's article, for starters, and then adding his Adaptistration blog to your list of favorites.

McManus has the advantage of looking at the specifics of individual cases. So, following and adding to Dobrin, he recounts a series of management decisions by the orchestra that failed in one way or another. Management has never "owned" these decisions -- meaning simply that they haven't discussed them, explained them to their stakeholders, drawn public conclusions from them or been chastened by them. That list of decisions includes leaving their Philadelphia Academy of Music home for the new Kimmel Center, merging with the Philadelphia Pops and taking on new pension obligations for the musicians, all mentioned in orchestra's bankruptcy filing. He also points out "the underwhelming performance from the Ondine recording label," a financial partner of the orchestra. These decisions added to the current problems that Dobrin cites (failure to staff crucial fund-raising and marketing positions, for example) created the situation of today. Dobrin argues (and McManus concurs) that the situation is perilous:
The Philadelphia Orchestra is among the best ensembles anywhere, and if it becomes a lesser version of itself - in terms of its uniquely saturated sound, the quality of individual players, or its artistic drive - it's probably not coming back. A great orchestra is a rare and perishable thing. It takes decades to make, just months to ruin.
Teachout's argument -- that out-of-touch musicians and their unions are preventing enlightened orchestra management from a successful transformation into symphonies for a brave new world -- has no grounding in fact -- at least none that he cites:
"High-culture unions that fight to hang on to an untenable status quo are shooting themselves in the head. Labor leaders invariably respond to managerial cries of disaster-around-the-corner by arguing that their members should not be made to suffer today for the managerial mistakes of the past." 
Invariably? Does Teachout have an editor at the Wall St. Journal? Apparently not. How many American orchestra unions have accepted pay freezes, pay cuts and benefit trimming in the past few years? A ton, including the Oregon Symphony, Arts Dispatch's hometown symphony. Many of them understand that traditional orchestra practices need to be adapted to this cultural moment. So, this is a straw dog that Teachout has erected, and McManus has dealt conclusively with Teachout's ignorance in the matter.  I'm also struck by Teachout's own contradiction -- management made past mistakes but management now knows best. How does that work exactly?  The musicians should follow the lead of managers and boards that exacerbated the problems? McManus would ask, where's the transparency and accountability. He'd be right.

The Philadelphia Orchestra does have a problem. Apparently, its deficit this year is going to be around $15 million on a budget of around $40 million. Much of its endowment -- around $140 million -- can't go to general operating expenses, it says. But both Dobrin and McManus argue that until management and board reform themselves, raising a lot of money to get themselves out of their current hole will be very difficult.

What strategy, beyond the bankruptcy filing and the $160 million fundraising campaign the orchestra has announced, is the board pursuing as it moves ahead? What sort of orchestra is it interested in supporting? What practices does it want to change? What values does it support? How does it plan to rally its community of supporters (musicians, audience members, donors, volunteers) and classical music fans in general to its cause? How will it reach out to Philadelphia to make its case -- especially if its own community isn't united?

I don't know the answers to any of these questions right now. Maybe they will become clear  as time passes. I do believe that if the board tried its level best to answer them, they'd be doing their orchestra a favor, and they would be helping every other orchestra in the country in the process.


Joe Patti said...

Is this the Dobrin article you were looking for?

Barry Johnson said...

That's it! I'll plug it in above... Thank you.

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