disaster in detroit

[alocispepraluger102]

http://online.wsj.com/article/SB10001424052748703440604575496232907430938.html

by terry teachout

from wsj

The Detroit Symphony Orchestra is staring into the abyss. In order to survive a fix-it-or-else financial crisis—the DSO is expected to run up a $9 million operating deficit by the end of 2010—the management wants to slash the pay of its musicians by nearly 30%. The musicians have responded by voting to authorize a strike, and it is widely feared that this may lead to the orchestra's demise.

Does anybody care? Yes—but probably not enough to do anything about it.

The numbers tell the tale: Nearly two million people lived in Detroit in 1950. The current population is 800,000. Forty of the city's 140 square miles are vacant. Downsizing is the name of the save-Detroit game, and Mayor Dave Bing, who is looking at an $85 million budget deficit, wants to slash civic services drastically and encourage Detroit's remaining residents to cluster in the healthiest of its surviving neighborhoods.

Can a once-great city that is now the size of Austin, Texas, afford a top-rank symphony orchestra with a 52-week season? Does it even want one? The DSO, after all, is not the only one of Detroit's old-line high-culture institutions that is sweating bullets. The Detroit Institute of Arts and the Michigan Opera Theater are also in trouble, and the editorial page of the Detroit News recently declared that Detroit is "no longer a top 10 city by any measure. The reality may be that this region can no longer support a world class orchestra, or art museum, or opera company. . . . They are remnants of an era when the city was awash in automotive cash."......................................

[clifford_thornton]

The Austin metro area has well over 1 million residents. Not too shabby.

[JSngry]

Has anybody -the board, the city, the union, anybody - looked at the feasibility/sustainability of dechartering as a "city" orchestra and rechartering as a regional/state one?

[Hot Ptah]

Has anybody -the board, the city, the union, anybody - looked at the feasibility/sustainability of dechartering as a "city" orchestra and rechartering as a regional/state one?

Good idea, as the Detroit metro area has about 5 million people, and many square miles of upper middle class to upper class suburbs.

[Rooster_Ties]

If I remember the St. Louis Symphony only has a 24-week classical series (plus pops and other stuff, but they aren't year-round, I'm pretty sure of that). And Kansas City only has a 14 week classical series (plus a separate pops, etc), iirc.

So I'm not sure Detroit really has a "52 week" season, but surely they need to look at downsizing the scope of what they do.

The musicians union would have some complaint about reducing the effective hourly-rate that these salaried musicians get -- but the orchestra itself has control of the scope and scale of what they do, and it sounds like they need to downsize THAT - in order to control costs.

[alocispepraluger102]

state or national funding is going to become a necessity for all of our great orchestras, and bands, if they are to survive.

[ejp626]

state or national funding is going to become a necessity for all of our great orchestras, and bands, if they are to survive.

Well, then they won't -- and arguably they shouldn't.

There is a lot of denial of reality going on in Detroit. It seems very evident that the current symphony is not sustainable in its current form.

[Mark Stryker]

I don't quite understand why a Wall Street Journal column written seven months ago was posted today as if it was fresh news. Be that as it may, as a culture reporter here (as well as classical and jazz critic), I wrote a zillion stories about the six-month DSO strike, which ended in April. Here's the story about the final settlement some might find interesting:

http://www.freep.com/article/20110408/ENT04/110408034/DSO-strike-officially-over-musicians-ratify-pay-cut-contract

Also, for what it's worth, yours truly was interviewed on PBS NewsHour about the strike. You can watch it here (click the screen once it loads): http://www.pbs.org/newshour/bb/entertainment/jan-june11/symphony_04-11.html

[JSngry]

Well, call me crazy, but I think it would be a good idea to change to a more regional orchestra. Seems like there would be more potential for work, more funding (such as it is) and less of a need for the dramatic pay cuts.

[Mark Stryker]

Well, call me crazy, but I think it would be a good idea to change to a more regional orchestra. Seems like there would be more potential for work, more funding (such as it is) and less of a need for the dramatic pay cuts.

OK, you're crazy.

Actually, more seriously, the orchestra recognizes the issues and is instituting a much more expansive menu of concerts in suburban areas to supplement concerts at its traditional home, Orchestra Hall, in downtown Detroit. But you can't abandon the historic hall, truly one of the finest in the country (seriously, its on par with Carnegie and Symphony Hall in Boston.) Very complicated equation with myriad of implications and complications, including the players' contract. But your instincts are right on in that broadening the audience and fund-raising base means going to see people in their own neighborhood and, hopefully, convincing them to come down and hear you in yours and if they don't, well, you're at least serving them in some way.

Edited May 4, 2011 by Mark Stryker

[jlhoots]

New Mexico Symphony declared Chapter 7 recently.

[Rooster_Ties]

Why can't the DSO just reduce the size and scope (sounds more like "magnitude") of their season? To me, that sounds like their only option, actually short of some 'deo ex machina' donor with infinitely deep pockets.

Surely the contract(s) with the musicians obligate the symphony to pay certain minimums PER CONCERT (and per rehearsal, per hour, etc) -- but surely the musicians' union has no control over the scope of the season.

If they only have $X much money, that only buys so many concerts, simple as that. Not a long-term solution, I know -- but it sounds like the DSO is wanting to bite off only what it could formerly chew.

See my post #5 above.

Edited May 4, 2011 by Rooster_Ties

[Chalupa]

The Philadelphia Orchestra declared bankruptcy last month

[Mark Stryker]

Why can't the DSO just reduce the size and scope (sounds more like "magnitude") of their season? To me, that sounds like their only option, actually short of some 'deo ex machina' donor with infinitely deep pockets.

Surely the contract(s) with the musicians obligate the symphony to pay certain minimums PER CONCERT (and per rehearsal, per hour, etc) -- but surely the musicians' union has no control over the scope of the season.

If they only have $X much money, that only buys so many concerts, simple as that. Not a long-term solution, I know -- but it sounds like the DSO is wanting to bite off only what it could formerly chew.

See my post #5 above.

Briefly, the new contract did reduce the size and scope of the season and the union has a great deal of say in all of that -- anything relating to wages, work rules, length of season, etc., has to be negotiated. The orchestra went from 52 guaranteed weeks of pay to 40. The musicians are paid a weekly salary. Their work week is defined by an average of 8 "services" (orchestra rehearsals or orchestra concerts). The unique wrinkle in the new contract is the introduction of additional optional pay for optional work that covers a range of community and outreach work including chamber music, teaching, coaching, school concerts. DSO management was able to fold the optional pay into the total $36M deal($34 million for guaranteed orchestra work, plus $2M for the optional work). That's a big deal in the orchestra world, where there's currently a huge fight going on between the musicians' union and managements over contractually redefining musicians' jobs to include more than just traditional orchestra rehearsals and concerts.

Historically, if you wanted your musicians to teach or play chamber music or do other kinds of outreach work, you had to pay them extra above their guaranteed salary. But the argument from managements today is that to create more flexible institutions that are better able to meet a community's needs, those 8 services per weeks should be able to be used to cover all kinds of different work, not just traditional orchestra concerts. The concept is called "service conversion" and it's controversial on a variety of levels -- but mostly because it redefines the job of playing in a major orchestra.

Worth noting that the DSO's optional work approach doesn't actually change the jobs -- nobody has to participate if they don't want to -- but it does begin to give management more flexibility and the only way to get max amount of money is to participate.

[Chuck Nessa]

Not sure why we should pay for 17th-19th/early '20th century artifacts if we can't support current music.

I love the classical material but do not need to see/hear it in regular concert seasons. Why is 3rd clarinetist paid more than my farmer father?

[Dave James]

Just another brick in the wall. Is anyone really surprised that a country with its priorities as screwed up as they are here can sit idly by and let this happen? I mean, c'mon, we've got two wars to fight, the Pakistanis to support, a Libyan insurrection...all that important stuff that turns the problems with our own hard and soft infrastructure into an afterthought.

[Rooster_Ties]

The unique wrinkle in the new contract is the introduction of additional optional pay for optional work that covers a range of community and outreach work including chamber music, teaching, coaching, school concerts. DSO management was able to fold the optional pay into the total $36M deal($34 million for guaranteed orchestra work, plus $2M for the optional work). That's a big deal in the orchestra world, where there's currently a huge fight going on between the musicians' union and managements over contractually redefining musicians' jobs to include more than just traditional orchestra rehearsals and concerts.

This isn't directed AT you, Mark, just so you know.

My first thought is, BFD. People do what their employer pays them to do, and the employer generally defines what the duties of the job are (within reason). Now I realize that the union exists to negotiate on behalf of their members, and I generally support unions more often than not. But when times are lean, I think it's necessary for organizations like symphony orchestras to do whatever they have to, in order to continue to exist. If that means that some of the orchestra-players salaries come from community outreach (which enables orchestras to pay a portion of musicians' salaries through grants that the orchestras get to do said community-outreach), then so be it.

I know quite a number of symphony musicians "somewhat well"-ish here in Kansas City (I sang in the KC Symphony Chorus for 10 years), and to the best of my knowledge, KC Symphony players have either had to, or are provided 'incentives' to do community outreach -- all the time, in fact. I don't really know the details, but for all I know, these may be job requirements. This has been the case for 5 or 10 years. For musicians elsewhere to suddenly get bent out of shape about having to do community outreach concerts and such, as a part of their jobs, seems kinda crazy to me.

I want orchestra musicians to get paid "pretty well" (their education isn't cheap) -- but they also need to suck it up, and do what's necessary to keep their organizations solvent too. I worked in the non-profit world for the last 6 years, and not-for-profits are constantly bobbing and weaving to follow the money from donors and grant sources. Performing arts organizations aren't much different. Symphony musicians need to bob and weave too, or else get paid less if they won't, simple as that.

A 40-week season for a symphony in a city the size of Detroit sounds a little crazy to me. 52-weeks was probably absolutely insane. The dollars simply couldn't have been there to support that.

Edited May 5, 2011 by Rooster_Ties

[felser]

The Philadelphia Orchestra declared bankruptcy last month

With assets three times the amount of liabilities. Want the musicians to take a 20% pay cut, and to defund the pension.

[Mark Stryker]

The Philadelphia Orchestra declared bankruptcy last month

With assets three times the amount of liabilities. Want the musicians to take a 20% pay cut, and to defund the pension.

The financial problems are really complicated. The orchestra has already eaten through the unrestricted portion of its endowment to cover bills and the $140 million that's left in the endowment is all completely restricted by law. It's untouchable, unless a bankruptcy judge would decide they ought be allowed to tap into that money to pay operating costs. (I'm unclear on the specifics of the law and what kind of leeway a judge has on this issue.)

The bottom line is that the orchestra has a Herculean cash flow problem, with annual operating expenses of something like $47M and income of $31M. They might be endowment rich but they are cash poor, and even if you started drawing down principal of the endowment to pay operating costs, $140M doesn't go very far when you're cashing out $16M annually. Here's another way to look at it: The orchestra would have to raise an additional $320M for its endowment to generate the $16M needed to cover its gap (figuring a typical 5 percent draw).

Edited May 5, 2011 by Mark Stryker

[Rooster_Ties]

Time to shorten their season (not literally shorter, but fewer concerts over the same time).

If people don't like it, they can pony up more $$$.

The classical series in St. Louis was 24 weeks last time I saw. Kansas City is 14.

I just looked, and Philadelphia was something like 4 weekends per month, 8-9 months of the year (some of that might have been pops).

Cut the season, do less, get by. If people don't like it, they can donate until such time as they can do more.

Edited May 5, 2011 by Rooster_Ties

[Mark Stryker]

Time to shorten their season (not literally shorter, but fewer concerts over the same time).

If people don't like it, they can pony up more $$$.

The classical series in St. Louis was 24 weeks last time I saw. Kansas City is 14.

I just looked, and Philadelphia was something like 4 weekends per month, 8-9 months of the year (some of that might have been pops).

Cut the season, do less, get by. If people don't like it, they can donate until such time as they can do more.

This issue of "oversupply" is a key point. Many argue that driven by the need to fill out 52-week contracts, large orchestras have been forced into creating far too much product for their markets, and, further, that the inflexible subscription models that have arisen to support those seasons are both a drag on innovation and unsustainable financially. Worth noting here that others will argue that orchestras need to do a better job of marketing to "create the demand."

Edited May 5, 2011 by Mark Stryker

[Hot Ptah]

Mark, As you have studied and written on the subject of orchestras and their finances, I wonder if you have come across information on the age of those who buy tickets and/or subscriptions to the orchestra concerts. I wonder if the audience is largely over 60 years old and dwindling as the age group dies off or becomes disabled with age. Whenever we have gone to classical concerts in Kansas City, we have been struck by the advanced age of most of the audience members. I wonder if that is a common situation in other cities.

[Hoppy T. Frog]

Why don't more orchestras try flexible subscription packages?

I'm a 36 year old who has just ordered his second subscription season at the Baltimore Symphony Orchestra. The reason? I can CHOOSE six concerts I want to see, at $25 a seat. My tastes are 20th century music and I can select the concerts that I really want to see. (Sure I love Beethoven, but I've got records, and I'd rather use my money to support Honneger's "Joan of Arc at the Stake") I'm shocked that not every orchestra does that. The National Symphony in Washington is doing some interesting stuff next season, but since I have to choose between two inflexible subscription packages, each with only a few of the things I want to see and the rest I couldn't give two shits about, guess what? I won't buy either damned subscription package at all!

Edited May 11, 2011 by Hoppy T. Frog

[ejp626]

Why don't more orchestras try flexible subscription packages?

I'm a 36 year old who has just ordered his second subscription season at the Baltimore Symphony Orchestra. The reason? I can CHOOSE six concerts I want to see, at $25 a seat. My tastes are 20th century music and I can select the concerts that I really want to see. (Sure I love Beethoven, but I've got records, and I'd rather use my money to support Honneger's "Joan of Arc at the Stake") I'm shocked that not every orchestra does that. The National Symphony in Washington is doing some interesting stuff next season, but since I have to choose between two inflexible subscription packages, each with only a few of the things I want to see and the rest I couldn't give two shits about, guess what? I won't buy either damned subscription package at all!

The Chicago Symphony is semi-flexible. They definitely push several fixed 5 and 10 concert packages (and these have the best discounts), but if you wait after the people ordering those are done, then there is a period you can make your own 5 and 10 concert series with a reasonable discount. I've done this a couple of times. They are also fairly reasonable about making changes with at least 24 hours notice (I think there is a $5 change fee).

[Rooster_Ties]

OMG, really? That's crazy.

The Kansas City Symphony has had a near totally flexible season ticket policy, for the entire 15 years I've been going. Buy a half-season classical package, and move the tickets around however you like to whatever other classical concerts you want. There's an up-charge if you want to switch something to a pops concert (especially their most popular Xmas concert), but basically you can move everything around however you like.

I'm the same as Hoppy T. Frog -- I cherry pick the 20th century concerts, and those with less played-to-death late Romantic stuff (especially concerti that one might not get to hear every decade -- like, say, Amy Beach's piano concerto - which I saw once in St. Louis).

That's insane that the National Symphony and others don't do something similar. I'm sure as hell not going to buy any season ticket packages if they lock me into specific concerts. Hell, half the time there was one weekend I would be out of town, or something, and have to switch tickets around for stuff like that.

Edited May 11, 2011 by Rooster_Ties