Subject: CSO Musicians Seek Competitive Agreement in Line with Industry Peers and CSOA's Strong Financial Position
A copy of the press release of the Musicians of the Chicago Symphony
Orchestra is attached.
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Musicians of the Chicago Symphony Orchestra Seek Competitive Agreement in
Line with Industry Peers and CSOA's Strong Financial Position
* Management Proposes Total Compensation up to 5% Lower Compared to Current
Top-Paid U.S. Orchestra, Compromising Artistic Integrity of Top-Ranked CSO
Musicians and Chicago's Competitive Edge in Symphonic Music
* Management Reported Record-Breaking Fundraising and Endowment Returns,
Strong Ticket Sales in Fiscal 2011
* Musicians Agreed to 2.5% Salary Reduction During Two Years of Recently
Expired Agreement
* Musicians Have Agreed to Significant Concessions During Current
Negotiation
* Musicians Regret Disruption for Patrons, Seek to Return to the Stage and
to Continue to Serve Classical Music Audiences in Chicago and around the
World
CHICAGO-On Saturday evening, September 22, 2012, the management of the
Chicago Symphony Orchestra Association (CSOA) made its last offer in
connection with its ongoing contract negotiation with the Musicians of the
Chicago Symphony Orchestra. For Musicians with families, the CSOA offer
would have represented 5% lower total annual compensation compared to the
current top-paid symphony orchestra in the United States, which recently
negotiated its own contract. Accepting the CSOA offer would have
represented an unprecedented concession by the Musicians of the Chicago
Symphony Orchestra, as well as an unprecedented risk to the Chicago
Symphony's artistic integrity and its competitiveness compared to its U.S.
peers.
Management's demands were made in the context of record-breaking fiscal 2011
results by the CSOA, the not-for-profit organization under which the
Musicians of the Chicago Symphony Orchestra perform. As disclosed in its
fiscal 2011 annual report, the CSOA's net assets grew nearly 20% in 2011, to
$262 million, and endowment investments reached a record $242 million as a
result of a 20% return together with bequests. CSOA operating revenues and
support grew 3.5% in 2011, to
$63.8 million. Overall ticket sales of $20.6 million in 2011 represented
more than 84% in paid capacity sold, an increase of 2%.
These ticket sales covered substantially all of the costs of Musician
salaries and benefits, which themselves represented only 36% of the CSOA's
total expenses in 2011. The CSOA experienced a modest operating deficit of
less than $950,000, or approximately 1.5% of its operating budget in 2011,
compared with an operating surplus of
$41,000 in 2010.
Recently, the Musicians of the Chicago Symphony Orchestra were ranked in
first place among U.S. orchestras by a jury of critics based in London, New
York, Los Angeles, Vienna, Paris, Berlin, Amsterdam, Beijing and Seoul
writing in Gramophone Magazine, a U.K. classical music journal founded in
1923. In connection with the Gramophone ranking, world-renowned pianist
Emanuel Ax called the Musicians "capable of pretty much anything." In
February 2011, the Musicians earned their 61st and 62nd Grammy Awards, more
than any other group in Grammy history, for their recording of Verdi's
Requiem Mass with their music director, Maestro Riccardo Muti. In February
2011, the Musicians of the Chicago Symphony Orchestra also performed at
Davies Hall in San Francisco as part of a year-long survey of the top
orchestras in the United States hosted by the San Francisco Symphony in
celebration of its centennial. The San Francisco Chronicle hailed the
Musicians of the Chicago Symphony Orchestra as "the most powerful and
unforgettable showing in this series" and the project's "crowning glory."
The Musicians, wrote the Chronicle, displayed an "ensemble virtuosity, tonal
luster and interpretive depth that none of the other orchestras could
match."
In April 2012, the Musicians of the Chicago Symphony Orchestra performed in
Moscow and St. Petersburg, Russia, at the invitation of the Obama-Medvedev
Bilateral Presidential Commission. The concerts were the centerpiece of a
year-long cultural festival hosted by the U.S. Department of State and the
Ministry of Culture of the Russian Federation, and were the first
performances in Russia by a Big Five U.S. orchestra since the fall of
communism. With this tour, the Musicians of the Chicago Symphony Orchestra
continued their long tradition of serving as ambassadors to the world on
behalf of the City of Chicago, having carried the city's banner and
performed concerts on five continents worldwide. The Musicians are
scheduled to inaugurate Carnegie Hall's 2012-2013 season at a gala
performance in New York City on October 3, 2012 and to make their first
appearances in Mexico in October 2012 and in South Korea in February 2013 as
part of the Musicians' 38th and 39th foreign tours.
"We are only asking management to agree to a pay package that is in line
with our industry peers and the CSOA's financial strength so that we can
maintain Chicago's competitive edge in symphonic music," said bassist
Stephen Lester, Chairman of the Musicians' committee that is negotiating
with management. "The Chicago Symphony Orchestra is a not-for-profit,
world-class cultural organization. Our product is our artistic quality.
Reducing costs by lowering Musician salaries beyond a certain level could
result in a flight of quality to other orchestras, which undercuts exactly
what the Chicago Symphony Orchestra seeks to sell in Chicago and around the
world," said Lester.
"It would be tantamount to the Art Institute's selling its Picassos and
Monets to buy lower quality works that are less expensive to maintain.
Unlike a business corporation, a cultural organization like the Chicago
Symphony Orchestra cannot save its way to success."
In its expired contract with management, the Musicians of the Chicago
Symphony Orchestra agreed to a 2.5% salary cut during two years. In the
negotiation of the current contract, the Musicians agreed to a number of
significant concessions, including a relaxation in conditions for
appearances away from Orchestra Hall but within the Chicago region,
addressing the CSOA's concern for new fundraising in the area; a new ticket
revenue opportunity in the form of admission to open rehearsals; a freeze in
Musician compensation for certain community concerts; an increase in the
number of rehearsals and concerts per week during the summer season; and an
increase in the number of rehearsals on tour.
The negotiations of the proposed contract began last summer. Following weeks
of discussions, the Musicians agreed to continue to work after their
contract expired on September 16 and until the end of the Musicians' Free
Concert for Chicago at Millennium Park on Friday evening, September 21, at
which the Musicians performed Carl Orff's Carmina Burana under Maestro Muti.
In good faith, the Musicians extended their Friday after-concert deadline
and agreed to continue to talk into Saturday, hopeful that they would reach
an agreement with management before Saturday evening's concert at Orchestra
Hall.
However, after delaying the pace of negotiation throughout the day, the
CSOA's attorney made an offer at approximately 6:00 pm on Saturday evening
that represented an increase of twenty dollars ($20.00) in total
compensation per Musician over the contract term compared to the last offer
presented. As a result, the Musicians concluded that management was not
negotiating in good faith and felt compelled to call a work stoppage.
"We were more unhappy than anyone about the cancellation of our Saturday
concert," said bassoonist William Buchman, Secretary of the Musicians'
negotiating committee, "and we couldn't understand why the CSOA and its
attorney slowed the pace of negotiation in a way that resulted in
inconvenience to our patrons. We are musicians; we are most comfortable on
the stage, not in a contract dispute or on a picket line. We live for the
opportunity to bring classical music to our audiences in Chicago and
abroad." "In all honesty," added Buchman, "the timing, tone and substance
of management's last offer to us on Saturday night shocked all of us, and in
light of the previous extensions of our deadline, we felt justified in
withholding our services."
The Musicians of the Chicago Symphony Orchestra were also disappointed to
learn of a number of misleading statements cited by the CSOA in its
communications with the public since the work stoppage began. For example,
the CSOA cited an average annual pay figure for Musicians that includes the
salaries of a group of approximately twelve Musicians who hold titled and
principal chairs and whose salary is significantly above the mean annual
Musician pay. Including the salaries of these Musicians misleadingly skews
the average annual pay figure upward given that the compensation of the vast
majority of the Musicians of the Chicago Symphony Orchestra is much lower.
The CSOA's public statements also describe various benefits out of context,
including paid time off, a pension plan, health insurance and personnel
size, without pointing out that these benefits are industry standards
provided by all of the Chicago Symphony's peer orchestras.
"What we do," said violinist Rachel Goldstein, the Musicians of the Chicago
Symphony Orchestra's representative at the American Federation of Musicians,
"is very physical and, in many ways, similar to playing a sport. If
Musicians are not given adequate time off during the year, we suffer
repetitive stress and other injuries." "Management has recognized this in
the past and previously agreed to working conditions that successfully
lowered the injury rate among Musicians,"
Goldstein added. "We do not understand why management is pointing to this
fact of life in a way that suggests that we are being unreasonable."
The CSOA also reported that the Musicians currently shoulder only 5% of the
cost of the health care provided to them, and that the proposals presented
by management would increase that share to 12%.
These numbers do not reflect the additional costs of deductibles, co-pays on
prescription drugs and office visits and procedures that are covered at less
than 100%. When these are factored in, the Musicians are currently carrying
approximately 10% of their health care costs. The Musicians are keenly
aware of the upward pressure on health care costs, and in these
negotiations, they have shown willingness to contribute significantly more
toward those costs. Under the Musicians' latest proposal, their share would
have climbed to over 20% of the total costs in the first year of a new
contract, with increases in that contribution that would have increased the
amount of dollars in anticipation of rising costs.
Furthermore, data provided to the Musicians by the CSOA shows a modest
increase of only $100,000 in total annual Musician health insurance costs
over the last ten years, an average increase of approximately 0.6% per year.
Coming changes in the health insurance market prompted by recently enacted
health care legislation are designed to keep costs from rising as
dramatically in the future, and may even bring costs down. In this light,
the 8.5% projected annual increase in health care costs that the CSOA has
used to justify its concerns seems out of line with the recent past and can
only be viewed as a desire to shift the burden of other expenses to the
Musicians.
"This is about the future of the Chicago Symphony Orchestra. Is the CSOA
committed to keeping Chicago at the top of symphonic music-making in the
United States, or are they willing to let the wrong agents at the
negotiating table lead to a loss of artistic integrity?" Lester asked. "We
wake up every morning with the goal of making music in a way that preserves
the Chicago Symphony's legacy, and we will always remain committed to that
goal-throughout this negotiation and after it's over," said Lester. "We
want to be reasonable and to address management's concerns. After all,
assuring the long-term fiscal viability of our great orchestra and helping
to preserve the position of financial strength that it currently enjoys is
our goal, too. We look forward to continuing to work with our leaders in
management to come to a mutually acceptable agreement and to get back to the
stage and in front of our loyal patrons, where we belong."
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