Louisville Orchestra Troubles

[CC]

Musicians Press Release 11/15/2010
by Louisville Orchestra Musicians Association on Monday, November 15, 2010 at 11:09am

Last Paycheck for LO Musicians;
Alternatives: Wrong-Sizing or Bankruptcy


The Louisville Orchestra musicians have been told that today’s paycheck is their last – unless they accept agree to slash the ensemble’s size and take 20 percent leaving the remaining 55 players’ annual salary slightly below $29,000. The musicians’ other choice: accept the bankruptcy of the Louisville Orchestra right before it begins its 75th anniversary year.

“You may be told this is rightsizing the Louisville Orchestra,” said the players’ negotiating committee chair, Kim Tichenor. “No, this is an example of wrong-sizing. It’s wrong when we rightly celebrate a new arena, but our managers say they cannot scrape together even an infinitesimal fraction of that money to fund the orchestra. It’s wrong when we can save the Louisville Orchestra for what three TARC buses cost. It’s wrong for a city with the Louisville Orchestra’s history to cast it away just after we screened a movie celebrating its past and just before we experience the reviving glow of our anniversary. On every count, it’s just wrong.”

Tichenor counted down the musicians’ efforts to avoid radically downsizing the orchestra’s personnel or declaring bankruptcy. “We have offered adjustments to contract terms. The musicians have funded a consultant to develop a fundraising effort. We have initiated the immediate involvement of one of the nation’s top orchestra turnaround artists to come to Louisville. Every one of our offers has been met with delay or rejection.”

Instead, the orchestra’s management said they would accept the musicians’ offer of a cooperative campaign only if the musicians agreed to cuts that would shave the number of players from 71 to 55, and the number of weeks in the season from 37 to 31. The remaining musicians would find their annual salaries cut to $28,675. And even that may not eliminate the orchestra’s declaring bankruptcy. “It is putting the patient to death before diagnosing and treating the problem,” Tichenor said.

Tichenor said the orchestra’s management either has done much to aggravate the funding shortfall or doesn’t understand its own budget. In August Louisville Orchestra executive director Rob Birman told the musicians the orchestra needed to find $272,000 in short-term funding cuts to prevent a cash-flow crisis threatening the orchestra’s survival. In subsequent weeks, Birman inflated this figure to $900,000, then $1.4 million. In October, Birman announced it as $2 million.

In August, to close the $272,000 gap, Tichenor proposed a series of contract variances that would ease union work rules and save the orchestra $90,000.

When Birman suddenly pushed up his estimate of the budget deficit, Tichenor countered by suggesting a musician-led grassroots fundraising campaign to close that gap, and the orchestra’s musicians funded an outside consultant to conduct a feasibility study. After seeing the results, the musicians committed themselves to a $375,000 fundraising campaign.

The consultant, in turn, developed a series of incentives that would enhance the development campaign’s success and provide a strong foundation for the orchestra’s marketing campaign during its 75th anniversary season next year. Altogether, the consultant discovered approximately $1.5 million in anticipated revenue enhancements during the next three years, without any extraordinary outside funding by major donors. The consultant indicated that such additional funding could rationally be anticipated during an important event as a diamond anniversary year. This would further improve the budget picture.

Even when the musicians offered that significant, unilateral closing of the funding gap, Birman said it would not prevent the need to downsize the orchestra. So Tichenor proposed the intervention of Michael Kaiser, the president of Washington’s Kennedy Center for the Performing Arts, widely known as a “turnaround king” for arts organization. Kaiser agreed to visit Louisville Nov. 15, but his offer was turned down by Birman, who said the orchestra’s board needed time to read Kaiser’s book before inviting him to Louisville.

The musicians, who have had their last four contracts broken by the orchestra’s management, believe this is a turning point, according to Tichenor. “An orchestra of 55 musicians is not an entity anyone can recognize as the Louisville Orchestra,” Tichenor said. “A management that has the capacity to call upon Louisville’s wealth to preserve one of Louisville’s cultural treasures, but which cannot find the will to work with the musicians to discover funding that is less than one/one-hundredth of the cost of the arena; well, it’s beyond comprehension. We know the city’s citizens have higher aspirations for the Louisville Orchestra as it enters its 75thyear than do its management, whose plans equate with putting it to death.”

More information on the feasibility study and historic studies of the Louisville Orchestra’s funding issues are available at http://lomusicians.org/" target="_blank.

[Michael Bush]

Honestly. I'm as sympathetic as can be for funding the orchestra. But the Bucket Dome has nothing whatsoever to do with it. You may as well complain that Bill Gates has a fancy house. It's exactly as relevant.

[SousaSaver]

No union employee should make one penny more then the lowest paid worker he represents !

My mother was briefly personal assisstant to the preseident of the west cost long shormen's union, but She is by now,
"Rolling over in her grave", due to the big business unions have become.

Wait, wait... I am confused by your comments. Please clarify what you mean. The musicians unions work to make sure that the musicians don't get the short end of the stick during these tough times.

How have unions become big businesses? What does that have to do with this article? Is the musician's union representative obscenely over paid?

[SousaSaver]

No, the failure of a business isn't always part of union leadership.

I have a family member in the aviation industry who is a union machinist. The decline in the aviation industry HAS NOTHING to do with the unions.

The union, as a matter of fact, prevented this member of my family from having cuts to their medical coverage which would have amounted to a huge pay cut for him.

How have unions become big businesses?......We have let them.

This is a non-answer.

Back to the Louisville Orchestra... I would bet that the financial woes that the LO are suffering have LITTLE TO NOTHING to do with the union. I would guess (and this is only my opinion) that the financial problems aren't new, but have probably been going on for some years.

Does anyone know what the overhead of running an Orchestra is besides musician payroll, PR, marketing and maintenance?

[Alex C]

Unfortunately, this is the route many orchestras are taking. Their first response is to cut the product (musicians and music). I think all orchestra managers took the same dumb@$$ course at a convention this year.

So the product (the msuic) is diminished but the management team (who was apparently surprised that there were financial problems on the horizon) probably gets to keep their employment package.

I love what the union can do, could do, should do, but I haven't seen an effective response to this crisis. And it is a crisis.

The solution is to raise more money and sell more tickets. The Louisville musicians were prepared to do management's job for them and got turned down. I don't see much hope.

[swillafew]

Orchestra troubles run deep. The literature is not being fed by any household names any more, and no new literature = no new interest. Even recorded music went low-fi, and that won't work for selling recordings of fine art.

The anti-union sentiment is relatively small in the scheme of the problem, but you can see in this thread that it's another aspect of indifference or animosity.

A start-up orchestra near my home pays the conductor only. He does a great job, but its not such a hopeful sign.

An educated audience demanding new works would do a lot to save the musicians.

[Roger Lewis]

One thing that I have seen consistent in a number of orchestras that were having financial troubles is that for every musician there is a paid staff member. When your administration matches your work force you have a serious issue.

The musicians are "value added" - they bring in the money that pays the salaries for everyone. When your payroll grows, your musicians can no longer balance the books. Ticket prices go up and attendance drops. An orchestra near me has the musicians taking a 30% pay cut, but the salary of the Music Director isn't touched. The number of services goes down, but the Music Director's salary stays the same - for doing less. They have an audience about 1/4 the size of the hall they perform in.

Another orchestra in the area has a well balanced budget and a packed house at every concert.

What's the secret?

Just rambling.

Roger

[bisontuba]

HI-
One of the problems with symphony orchestras is their BOD (Board of Directors). If you have the 'power people' in the community who view the orchestra as an asset, you stand a much, much better chance of being a success. If you have BOD folks who, even if their heart is in the right place, are just tree stumps, you are in for a rocky road.
Also, managements tend to think that their inflated salaries are OK because it is 'Industry Standard' (and a BOD --being CEO's, CFO's, management types, etc. will concur-look at AIG, for example). Musicians must respond just like managements--their salaries need to be 'Industry Standard' too--and not just the 'easy way out' when spending cuts are needed. Nobody ever bought a ticket to a symphony orchestra concert to see an Executive Director--bottom line.
A healthy BOD will also work hard to increase an orchestra's endowment--the real key in keeping a symphony's finances in good shape.
Also, making it 'in' to attend orchestra concerts in important in ticket sales--with the MTV generation coming to power, going to see an orchestra and just sitting there and 'listening' to music is hard for many folks--they need to be drawn to coming to an event/concert--not an easy challenge in 2010.
Just a few thoughts this morning...
Regards-
mark

[windshieldbug]

Brian,

As head of the orchestra committee and player's negotiation committee of the Delaware Symphony, I was never paid a dime above my musician's salary. Now granted, we are a ROPA orchestra and not ICSOM (which Nashville is), but c.$29,000 a year is not exactly extravagant. If the board isn't willing to fund near this level, they should be taking a hike.

If anyone outside the players from the Union is brought in to help, the cost is taken from the player's Union dues, which they are already paying, and has nothing to do with the cost of the symphony. And my experience is that they are only brought in at the request of the players.

Why might you need someone like this? Because the Symphony Board is playing hardball, and you've spent your whole life trying to play the best you can, not learning corporate negotiation skills.

It is a fact of life that it is much easier to raise money for tangible things that someone can put their name on, rather than operating expenses. But the level of performance expected at these organizations does not come cheaply, easily, or without extreme effort, so they should not be surprised when it is not given away by the players who have it.

Michael
Principal Tuba emeritus
The Delaware Symphony

[windshieldbug]

Honestly. I'm as sympathetic as can be for funding the orchestra. But the Bucket Dome has nothing whatsoever to do with it. You may as well complain that Bill Gates has a fancy house. It's exactly as relevant.

Relevant? Bill Gates can afford a nice house. If people at MicroSoft weren't being paid, then it is relevant that the money is out there, somewhere. Perhaps Bill & Melinda should give away some of their fortune closer to home then, maybe to the organization that allowed Bill to amass it in the first place.

[Dylan King]

"Much of the social history of the Western world, over the past three decades, has been a history of replacing what worked with what sounded good."
Thomas Sowell

[Michael Bush]

Honestly. I'm as sympathetic as can be for funding the orchestra. But the Bucket Dome has nothing whatsoever to do with it. You may as well complain that Bill Gates has a fancy house. It's exactly as relevant.

Relevant? Bill Gates can afford a nice house. If people at MicroSoft weren't being paid, then it is relevant that the money is out there, somewhere. Perhaps Bill & Melinda should give away some of their fortune closer to home then, maybe to the organization that allowed Bill to amass it in the first place.

The point is that the money that was raised and borrowed for the KFC Yum Brands arena was not available for the Louisville Orchestra. If the LO thinks a bond issue is realistic and could get through the legislature, let them have at it. But that would obviously be a totally separate thing. If they can get Yum Brands or any of the other corporate sponsors on board, good for them, but again, the fact that they made contributions to support the arena has nothing whatsoever to do with the Orchestra's fund raising.

Just because there is a lot of money in the world doesn't mean it is or ought to be available for any given project. Complaining that someone else got the gift or the bond issue is in no way relevant and does nothing to move forward toward solving the Orchestra's funding problem.

[windshieldbug]

The point is that the money that was raised and borrowed for the KFC Yum Brands arena was not available for the Louisville Orchestra.

I think we're saying the same thing, just on different wavelengths...

[MileMarkerZero]

So let me see if I understand the logic...

Your business is suffering from a cash crunch due to lethargic sales of a quality product. So the best solution is to re-vamp and scale back production to offer an inferior product in hopes that it will spark demand?

I guess they teach that at the Business School for imbeciles?

I think there would be far fewer orchestras in trouble if they were contractually obligated to have an orchestra musician as a non-voting representative on the BoD, with open access to the financials and all other operating procedures and freedom to share such with the rest of the stakeholders in the orchestra: fellow musicians, donors, ticket-holders, etc. Call it the Canary Clause. Also, in the technological age we live in, the BoD meetings should be streamed to the web so that donors and musicians can kibbutz and really see what's going on. I would think that any entity taking government money would be subject to open-meetings acts.

[Alex C]

So let me see if I understand the logic...

Your business is suffering from a cash crunch due to lethargic sales of a quality product. So the best solution is to re-vamp and scale back production to offer an inferior product in hopes that it will spark demand?

Yes!

Now you are now qualified for a position as an Orchestra Manager and/or Board Member... and you didn't even have to go to the convention.

[Mark]

So let me see if I understand the logic...

Your business is suffering from a cash crunch due to lethargic sales of a quality product. So the best solution is to re-vamp and scale back production to offer an inferior product in hopes that it will spark demand?

Well, if you find that the POPS concerts consistently draw a larger audience and the orchestra members make it clear that POPS concerts are beneath them and are unwilling to play anymore in a season...

[N.B. This is a remark about orchestras in general and not directed at Louisville.]

[windshieldbug]

So let me see if I understand the logic...

Your business is suffering from a cash crunch due to lethargic sales of a quality product. So the best solution is to re-vamp and scale back production to offer an inferior product in hopes that it will spark demand?

Well, if you find that the POPS concerts consistently draw a larger audience and the orchestra members make it clear that POPS concerts are beneath them and are unwilling to play anymore in a season...

[N.B. This is a remark about orchestras in general and not directed at Louisville.]

So lowest common denominator always wins...

"A 1997 Harvard study found the job satisfaction of symphony players to be just below “federal prison guards” and just above “industrial production teams.” And that was the glory years of American orchestras. Since then, musicians in numerous orchestras have had their pay slashed, weeks of employment cut, and, in places like Detroit, their livelihoods threatened."

[Mark]

So lowest common denominator always wins...

No, but you can't sell a product no one wants.

[Tom]

Well, if you find that the POPS concerts consistently draw a larger audience and the orchestra members make it clear that POPS concerts are beneath them and are unwilling to play anymore in a season...

[N.B. This is a remark about orchestras in general and not directed at Louisville.]

Most orchestra musicans make it clear that Pops concerts are beneath them, it's just that most stop short of being unwilling to play them completely because they know deep down inside that the pops concert with someone like Kenny G or Michael McDonald on the program today is funding the Mahler, Bruckner, and Shostakovich symphony concerts tomorrow that don't draw flies.

[Steve Marcus]

Most orchestra musicians make it clear that Pops concerts are beneath them, it's just that most stop short of being unwilling to play them completely because they know deep down inside that the pops concert with someone like Kenny G or Michael McDonald on the program today is funding the Mahler, Bruckner, and Shostakovich symphony concerts tomorrow that don't draw flies.

Here's a proposal which might actually be attempted if some of those orchestra players who witness the empty house chairs for Mahler, Bruckner, and Shostakovich push actively for their orchestra's marketing staff to try. The primary target for this marketing campaign would be those people who have attended only the orchestra's concerts with Kenny G, Michael McDonald, etc. and are not already subscribers of the orchestra:

" You'll love our orchestra! MONEY BACK GUARANTEE!"

Reserve one, two, three, or four seats to an upcoming concert that features, for example, Shostakovich #____ coupled with other truly creative programming (that's the responsibility of the Artistic Director to offer variety within what we label as "classical music").

To participate in the Money Back Guarantee offer, audience members would agree to listen before the concert (on the honor system) to a downloadable MP3 (or CD, if they're not computer-friendly) of an engaging introduction to the repertoire to be performed on the program, styled after Bill McGlaughlin's "Exploring Music" or BBC Radio 3's "Discovering Music" or CSO's "Beyond the Score."

The audience members would "check in" upon arrival at the concert, confirming that they listened to the introductory program.

After attending the concert, if they truly felt that they "hated the music" or "didn't get their money's worth," they could request a partial or full refund of their ticket costs.

If promoted aggressively*, new audience members might be willing to "put their toe in the water" and give it a try. The net result would be some new fans of the so-called "standard" repertoire. It could go as far as having a "Billy May" type character announce the "Money Back Guarantee" program. Dignified? Perhaps not. But do those same people who attend concerts by Michael McDonald, Kenny G, etc. care how "dignified" the ads or the concert itself is? No! Perhaps they might smile and say to themselves, "OK, I'll give this Shostakovich a try."

*It is worth noting that the CSO has regular ad campaigns on the AM NewsRadio station in Chicago. It must be working to gain new audience members. This would be one avenue for promoting the "Money Back Guarantee."