Sunday, April 17, 2011

Philadelphia Orchestra

Today, I am distracted by the recent news from the Philadelphia Orchestra. Friday night they were deciding whether to declare bankruptcy. This morning I'm reading the board has now voted to take that step.

It is interesting to note the orchestra will list assets in excess of three times its liabilities. Meaning that it doesn't have to declare bankruptcy at this moment. It has the means to continue to meet its obligations. Quotes from the board seem to indicate that the filing would be preemptive, an attempt to prevent the orchestra from having to shut down completely at some point in the future. Concerts will continue as normal for the remainder of the season at least.

All five musicians on the 75-member board voted against filing for chapter 11 bankruptcy protection. In fact, the musicians of the orchestra may yet succeed in blocking the filing. The underlying assumption here is that at least one of the goals of bankruptcy will be to reopen negotiations with the musicians, and ultimately to reimburse them less for their participation. The uncertain future is causing some to think of leaving the ensemble.

Meanwhile, the Honolulu Symphony declared bankruptcy and ceased operations in 2009. However recent talks have produced a new organization, the Symphony Exploratory Committee, with a much smaller budget. Musicians who had been employed by the orchestra will return, at roughly the same amount of money they were making two years ago (a paltry salary). Musicians will not be paid extra for some publicity appearances on radio, and probably there are other small concessions. But most of the cost savings comes from paring down administrative costs. Not from increased revenue projections.

These are troubling times for classical music and for orchestras in particular. As old funding mechanisms fail, new ones are not being put in place and the lessons of reinvention are learned over and over, by each group in turn, the hard way.

The question on many musicians' minds is, how could the communities these orchestras serve allow this to happen? How could Philadelphia, for instance, allow one of the world's leading orchestras, one of the greatest sources of pride for one of the world's greatest cities, to come to this juncture? The Philadelphia Orchestra posted this explanation on its website:

... a decline in ticket revenues, decreased donations, eroding endowment income, pension obligations, contractual agreements, and operational costs. Our beloved musicians made multiple generous concessions during the collective bargaining negotiations. Our Board donated more than $9.5 million above and beyond annual giving. And our professional staff was both reduced and agreed to pay cuts. These proactive and important steps were simply not enough to solve all of the issues we face.

The letter goes on to say that the board has a strategy for righting its finances, but does not outline specifics.

Some musicians (not associated with the orchestra) are pointing to the Philadelphia Orchestra's investment in its new home, The Kimmel Center, as a large mistake. The Academy of Music, which the group still owns, is a somewhat rickety, historic building with steep stairs. Not big, not showy, but still relatively comfortable, with warm, wonderful acoustics. However, given the fact that so many other orchestras are currently failing, and given the reasons the orchestra's board cites above, it would appear that there are deeper issues at work.

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