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Detroit Symphony Orchestra - financial problems

Steve

Clarinet CE/Moderator
Staff member
CE/Moderator
#1
Well it looks like the DSO is getting shocked in this economy around here. With Detroit city having a feasible 50% unemployment rate and the suburbs probably close to 30% and the BIG 3 auto companies at one time supplementing alot of artistic venues, the DSO is now getting involved in the domino effect.

http://freep.com/apps/pbcs.dll/arti...cit-soars-to-3.8-million&template=fullarticle

excerpt
Simply put, earned revenue and fund-raising are not keeping up with expenses, and the pressures are increasing. Contractual salary increases to the musicians will add $1.4 million to the payroll this year. At the same time, the banks that hold the DSO’s $54 million in long-term real estate debt are concerned about the orchestra’s viability and are pushing leaders to reduce costs. Annual interest payments on the Max M. Fisher Music Center are $2.4 million.

....
The DSO responded with severe cost-cutting maneuvers, including layoffs in March, September and October that amounted to 30 percent of the staff — 26 full-time and 15 part-time positions — and across-the-board pay cuts of 5 or 10 percent for staff. The orchestra also trimmed its number of concerts and killed its annual festival, Eight Days in June, once seen as the lynchpin in its quest to reach new audiences.

....
All metro Detroit arts institutions have been hard hit by the economic downturn, as declining individual, corporate and government funding and soft ticket sales are putting enormous pressure on every bottom line. General Motors’ and Chrysler’s decisions to pull all of their local arts funding was an especially lethal blow.
 

Ed

Founder
Staff member
Administrator
#2
The Detroit Symphony has a long and storied history. One would hope that they are able to come out the other side of this. Have they begun to diversify their offerings at their venue? Symphony Center in Chicago has had a jazz series for a number of years now as well as appearances by artists like James Taylor.
 

SOTSDO

Old King Log
Staff member
CE/Moderator
#3
There's nothing new there, or outside of what many other symphonic organizations have experienced over the past thirty years or so. Anyone who "takes" the Musician, the American Federation of Musicians' newsletter, can chart a similar course for any number of other orchestras, and the overall outlook is not "bright".

(For that matter, the salaries offered by even the most august of American orchestras are laughable, especially considering the level of attainment that the candidates at the auditions have to have reached. Most are well below the limits of a GS-11 Federal employee, not exactly the highest level of attainment in employment history. I've heard all of the arguments about how people are willing to suffer for their craft and so forth, but suffering doesn't play for a middle class lifestyle.)

"Art music" has been heavily subsidized for many many years (hence the major presense of the Pittsburgh Symphony in the past - huge subsidies from the heavy industry folks there in the period 1890 - 1940 made what should have been a small town organization into a art music powerhouse), and with times again getting tight, such support is drying up.

With the possible exceptions of Los Angeles (where Disney money has supported the LASO), Cleveland (again heavy industry folks, but more of them and a more diverse mix than Pittsburgh) and New York (a major center of everything, including investments), I think that it is safe to say that all such organizations, if not on life support, are in poor health. If San Diego, a wealthy city by most standards, cannot (or is not willing to) support a symphonic orchestra (the SDSO has gone under at least two times to date), then times are going to be tough for the balance of them in places like Orlando (out of business), Saint Louis (several funding crisies) and others.

The root cause of it all is that you cannot maintain a body of professional musicians at the top of their form at a minimum salary cost of 60,000 per annum per head without funding from somewhere. Ticket prices don't begin to cover the cost, and programming boners like performing the collected works of Bruckner only compound the problem.

Push comes to shove, there is a limited audience for the type of music that an "art music" operation is capable of generating. No butts in the seats translates to budget shortfalls, and astronomic salaries for "stars" and conductors.

(What is it with all of the Euro conductors? Don't we produce enough here? At least you can understand the American ones, even my arch nemesis Lenny Slatkin.)

Which concerts sell the best? Pops and gimmick one-shots, not a Brahms symphony. When they do draw folks to non-pops music, the popular ones are filled with warhorse material, not with leading-edge "contemporary" works.

It's a sad development (says the bass clarinet player who loves Russian works from the late 1800's), but as inevitable as the morning sunrise. Without the kind of goverment subsidies provided by European governments, "art music" is going to be increasingly marginalized here in the Western Hemisphere. Once the United States government finally steps in to keep them afloat, it's going to be too late.

However, if it means that I never have to play a clarinet part in a Bruckner work again, it may well be worth it. I really hate Bruckner - a typical organist who got out of his comfort zone...
 

Steve

Clarinet CE/Moderator
Staff member
CE/Moderator
#4
the DSO is quite diversified. youth ensembles, 4th of July, Christmas, free family concerts, etc concerts for Classical, Pops, Jazz

for example tonight
DETROIT, (Dec., 11, 2009) - Feel the magic of 1940's swing era music and ring in the New Year with the DSO as they team up with conductor Jeff Tyzik, vocalist Steve Lippia, trombonist Jim Pugh and percussionist Dave Mancini to bring the velvety smooth hits of Frank Sinatra and the big band sound of Tommy Dorsey to the stage in Swingin' with Sinatra and Dorsey. The performances, part of the DTE Energy Foundation Pops Series, take place Thurs., Jan. 7 at 10:45 a.m. and 8 p.m.; Fri., Jan. 8 at 8:30 p.m.; Sat., Jan. 9 at 8:30 p.m.; and Sun., Jan. 10 at 3 p.m. in Orchestra Hall.

they seem to be quite diversified ... just in a really bad economic climate around here
 

Steve

Clarinet CE/Moderator
Staff member
CE/Moderator
#6
they're at it again

http://detnews.com/article/20100730/ENT01/7300388/DSO-contract-talks-stalled
DSO contract talks stalled
Sides disagree on proposed pay and benefit cuts, layoffs
Lawrence B. Johnson / Special to The Detroit News

Musicians and management of the Detroit Symphony Orchestra exchanged accusations of failure to negotiate a new contract Thursday.

Both sides said talks to renew the current three-year pact, which expires Aug. 29, have stalled.

Musicians' spokesman Haden McKay, a cellist, said management has not budged from its original demand for a 28 percent cut in the players' annual base pay of $105,000. That reduction would bring the starting salary to about $75,000, with scheduled increases to $79,950 by the third year.

McKay said management had rejected a counteroffer that would provide a 22 percent wage cut in the first year, to $82,000, with increases in the second and third year to bring the minimum up to $96,000.

But DSO president and executive director Anne Parsons said negotiators for the musicians have repeatedly canceled talks over the past month.
"We stood ready and willing to meet in July or August," Parsons said. "We haven't made them a final offer."

McKay said the two sides last met July 12 and had several further sessions planned. "But we realized that, for something like the third time in a row, management had simply come back with the same offer," he said. "What was the point? So we canceled. If they'd give us an indication we're going to get somewhere, we'd come back to the table."

In recent months Parsons said she had tried without success to reopen the current contract to get immediate concessions, insisting that a failure to do so would saddle the DSO with a $5 million deficit for the fiscal year ending Aug. 31.

Thursday she said the deficit would be "in excess of $5 million" and to cover costs, the orchestra has been forced to draw on the principal of its $20 million unrestricted endowment.

McKay said if no accord is reached by Aug. 29, and an impasse is declared, management will be legally empowered to implement its most recent offer. The musicians could accept the offer or strike.

But McKay said an immediate strike would be unlikely, if only because the DSO's season doesn't open until Oct. 8, giving both sides another month to reach an agreement.

Both sides propose layoff weeks in the framework of a new 52-week contract. Management would have the musicians effectively unemployed for 13 weeks the first and second years and 11 weeks the third year. The musicians, however, propose 11 unpaid weeks in year one, with eight weeks off the second year and six weeks off the third year.

Under the current contract, the musicians were laid off three weeks the first year, two weeks the second year and none this year.

"Management has said that, in these difficult economic times, they can spend $33 million on musicians' salaries and benefits over the next three years (in total), and that's it," said McKay. "We believe the community can do better than that."

The DSO's current budget includes $41 million over the past three years for musicians' costs. That would mean reductions totaling $8 million over the life of the next contract. Parsons said the musicians have offered cuts totaling $5.7 million, but the union says the cuts would total $9 million.

The musicians contend that a sharp cut in salaries, coupled with a proposed freeze on pension contributions and reduced health benefits, would turn top young talent away from the DSO and cause some members to seek positions elsewhere.

McKay said management also insists on a reduction in the contracted complement of musicians from 96 full-time players to 84. The DSO has only 85 full-time musicians on its roster now. The remaining 11 positions, created by departures or retirements, have gone unfilled.

DSO music director Leonard Slatkin has said he would oppose any reduction in the size of the orchestra, though he has endorsed the idea of cost-cutting through a reduction in weeks of musicians' services.

McKay said management's demands would drop the DSO out of the top 10 in the ranking of American symphony orchestras. The ranking is based on annual base musician salary.

"The fall from the top 10 would make it that much more difficult to attract internationally famous guest conductors and artists," he said.


From The Detroit News: http://detnews.com/article/20100730/ENT01/7300388/DSO-contract-talks-stalled#ixzz0v9NJpMPA
 

Steve

Clarinet CE/Moderator
Staff member
CE/Moderator
#7
Detroit Symphony Orchestra musicians set concerts

http://www.freep.com/article/201008...oit-Symphony-Orchestra-musicians-set-concerts


Detroit Symphony Orchestra musicians set concerts

By MARK STRYKER
FREE PRESS STAFF WRITER

In another sign of the deep divisions in the contract dispute between management and musicians of the Detroit Symphony Orchestra, the players have scheduled two concerts on their own in September.

The performances, planned for Sept. 11 and 19 at Kirk in the Hills church in Bloomfield Hills, will take place during the period after the musicians’ current contract expires on Aug. 29 but before the orchestra’s 2010-11 season officially opens the first full week of October.

Though orchestra musicians on strike often perform concerts to drum up support for their side, it’s rare that such events are announced weeks before a contract expires. A spokesman for the players said that planning and logistics made announcing the events now a necessity, but the timing also reinforces a growing sense of pessimism about getting a deal hammered out by the end of the month.

Cellist Haden McKay, a member of the musicians’ negotiating committee, said that players don't want to shut the door on the possibility of resolution to the conflict in the short term and that the concerts will take place either way.

“The talks are stalled and don't seem to be going in the right direction, so we thought it was prudent to move ahead,” he said. “It’s not a year when things seem to be clicking along and then will fall into place. It doesn't feel that way.”

Battered by the recession, a shrinking funding base, stock market losses and debt payments on the Max M. Fisher Music Center, the DSO is facing a projected deficit of $5 million or more from operations for the current year on top of $3.8 million in red ink from 2009. Management’s latest offer cuts the players’ base pay by 28% in the first year, from $104,650 to $75,000, with increases to nearly $80,000 in the third year.

The players have countered with a proposed 22% cut to $82,000 in the first year, rising to $96,000 in the third year.

DSO president Anne Parsons said she’s not angry about the concerts. “They want to play concerts for the public in September, and I think that’s fantastic,” she said. “I’m trying to see the best in everything that’s going on here.”

The musicians, guest artists and stagehands are donating their services for the performances. The Sept. 11 concert will be led by Uriel Segal, who has been a DSO guest conductor in the past and currently serves as principal guest conductor at the Jacobs School of Music at Indiana University. The program includes music by Bach and Mozart with DSO concertmaster Emmanuelle Boisvert performing Mozart’s Violin Concerto No. 4.

The Sept. 19 concert will be conducted by Grant Cooper, artistic director and conductor of the West Virginia Symphony Orchestra and will feature several vocalists singing arias by Mozart.

Contact MARK STRYKER: 313-222-6459 or stryker@freepress.com
Concerts
8 p.m. Sept. 11 and 3 p.m. Sept. 19
Kirk in the Hills, 340 W. Long Lake, Bloomfield Hills
$20-$50
 

pete

Brassica Oleracea
Staff member
Administrator
#8
No offense to the nice folks in the DSO, but they're getting a 28% pay cut in one of the most economically depressed cities in America -- and are complaing about a lousy 6%? Hey, they still have JOBS. I've had to take over a 30% pay cut over the last three years. To top it off, $20 to $50 tickets? I can buy an awful lot of MP3s for that price.

========

I really don't mind trying to get as much money as you can, but I think that the DSO is being a tad unrealistic.
 

Steve

Clarinet CE/Moderator
Staff member
CE/Moderator
#9
I agree

If they don't like the mgt structure of the DSO then maybe they should strike out on their own and then realize that salary is heavily dependent upon income. And thus if income drops alot then something has to happen to salaries.

I'm not against them wanting to get their artistic value, but if that local value drops then having a job is much better than not having one.

We'll see how it works out.
 
#10
No offense to the nice folks in the DSO, but they're getting a 28% pay cut in one of the most economically depressed cities in America -- and are complaing about a lousy 6%? Hey, they still have JOBS. I've had to take over a 30% pay cut over the last three years. To top it off, $20 to $50 tickets? I can buy an awful lot of MP3s for that price.

========

I really don't mind trying to get as much money as you can, but I think that the DSO is being a tad unrealistic.
I believe I agree with Pete.

I am somewhat alarmed that the DSO has been drawing against the principal of it's endowment. Every dollar expended from there means a permanent loss of future economic viability for the Orchestra.
 

Steve

Clarinet CE/Moderator
Staff member
CE/Moderator
#11
one their websites they also mention how the DSO mgt mad bad real estate decisions in opening and overpaying for their 'mad max" extension several years back. This during the overpriced real estate market anyways .... now it's upside down i guess .. which is the scenario here in most if not all places in metro detroit. I wonder if all their homes are not in the same scenario.

but, the endowment is also a collateral for the banks. So they are in a precarious position. I wish them the best.
 

Steve

Clarinet CE/Moderator
Staff member
CE/Moderator
#12
It doesn't look so good

http://detnews.com/article/20100827/ENT01/8270449/1361/No-agreement-reached-in-DSO-talks

No agreement reached in DSO talks

Lawrence B. Johnson / Special to The Detroit News

Musicians spokesman Haden McKay said late Friday that no agreement had been reached in negotiations with management of the Detroit Symphony Orchestra.

No talks are planned Saturday, when management has said its offer known as Proposal A, which proposes a 28 percent pay cut, will be pulled off the table and replaced on Sunday with its more stringent offer, Proposal B. The musicians' current contract expires at 11:59 p.m. Sunday.

DSO management said, "The (musicians) negotiating committee says they are taking the proposals to the full orchestra for a vote and we are waiting for that outcome of that vote."

McKay said his bargaining team plans to report to the full orchestra on Saturday afternoon, but that the two sides were not close to an agreement.
No further negotiations are scheduled.
 

pete

Brassica Oleracea
Staff member
Administrator
#13
Opinion: there will be a compromise at around 25%. It will allow both sides to save face. The orchestra members will say how they won against management and the management will say that they won because 25% was really the number they were looking for.

Do not underestimate my powers: I've guessed my company's current stock price, + or - 5%, for the past week. And I don't follow stocks. I also was $0.01 off in my prediction for the MSRP of the iPad.
 
#14
Opinion: there will be a compromise at around 25%. It will allow both sides to save face. The orchestra members will say how they won against management and the management will say that they won because 25% was really the number they were looking for.
I don't know about that as it all depends on the money issues. Management has no reason to agree to anything short of long term financial solvency, and they're the ones sitting on the numbers. It really depends if there's room for compromise or not.
 

Steve

Clarinet CE/Moderator
Staff member
CE/Moderator
#15
it's all driven by revenue .. and that has been downwards trending for years.

EXCERPT:
Management had put two proposals on the table in the current talks. Proposal A cut pay 28% in the first year to about $75,000, with small increases to nearly $80,000 in year three. If the players didn't approve some version of this proposal by Saturday, then management had said it would replace it with Proposal B -- which cuts guaranteed pay further to $70,200 in year one, rising to $73,800 in year three. Proposal B also institutes a lower starting wage of $61,200 for new players, and it redefines work rules to make chamber music and nonperforming activities such as teaching part of the job rather than work requiring additional payment

The players agree that pay cuts are necessary and offered a 22% reduction in the first year to $80,000. But the players demand far steeper raises, with base salaries reaching $96,600 in year three. The musicians say management's cuts would make it impossible to attract or retain the best talent.

The DSO has historically ranked in or near the top 10 of American orchestras in terms of pay but, under Proposal B, would fall into the low teens, below symphonies it has always outranked, such as St. Louis, Cincinnati and Indianapolis.

"That top sliver of talent, the ones who can truly thrill the audience, will not come here," McKay said.

The DSO has lived beyond its means for years, and fund-raising, ticket sales and investment income have plummeted during the recession. Management projects a $6.5-million operating deficit this year, and the cash burn is expected to reach $9 million, including pension obligations and $2 million in debt service on the Max M. Fisher Music Center. The DSO has been raiding its endowment to cover its annual losses, and the value of its nest egg has fallen 47% since 2005. Only $23 million remains available as emergency cash.

Management says the orchestra can no longer afford to promise money it won’t be able to raise. Jim Nicholson, chairman emeritus and a member of the negotiating team, told the Free Press editorial board last week that while management had in the past often agreed to large increases in the final year of a contract to make up for concessions, the tenuous Detroit economy demanded a new approach. “We are never going to be as rich as we once were,” he said. “There’s a new reality.”
http://www.freep.com/apps/pbcs.dll/...e-but-it-wont-happen-yet&template=fullarticle
 

Steve

Clarinet CE/Moderator
Staff member
CE/Moderator
#16
now they are on strike

http://www.freep.com/article/20101004/ENT04/10040337/1318/DSO-strike-set-to-begin-today


Trust issues at root of DSO strike set to begin today
BY MARK STRYKER
FREE PRESS STAFF WRITER

Detroit Symphony Orchestra musicians met newly appointed president Anne Parsons with hugs before the first concert of the season six years ago. Today she'll see picket signs.

The players are set to strike today, threatening the start of the season later this week and capping the most volatile DSO labor conflict since the 1980s. The parties remain deeply divided over pay cuts and work rules. But the biggest threat to the DSO may be the breakdown in communication and trust that could make it difficult, perhaps impossible, to rebuild in the wake of a settlement.

Musicians feel betrayed and frozen out of decision making; management says the players aren't listening and aren't acting responsibly.

"When parties don't trust or believe each other, effective negotiations become much more difficult," said Robert Mnookin, head of the Program of Negotiation at Harvard Law School, who added that Detroit's economy would challenge even great problem solvers with good relationships.

"A serious strike could jeopardize the future of the orchestra. You see, in essence, a game of chicken where if there's a crack-up, it's plain there will be no winner."

Orchestra strikes don't come out of the blue. The breakdown of trust between parties can be a slow march to the scaffold.

After last-ditch talks failed Sept. 24, management imposed the terms of its final contract offer, prompting the strike. But beyond displeasure with contract details, the musicians are smarting from a long list of perceived injustices they say leave them with no control over their destiny -- a series concessionary contracts, claims that management reneged on its promise of artistic excellence and new provisions they say weaken traditional tenure and the musicians' ability to influence policy.

"Management would like the musicians simply to play what and where they are told and no longer volunteer their ideas and efforts to shaping the institution," said cellist Haden McKay, a musician spokesman.

Parsons disagreed. She pointed to artistic goals that recently came to fruition, including hiring Leonard Slatkin as music director, recording and touring. She said management and the board have invited input, but the players' blanket rejection of proposals and insistence on a contract the DSO can't afford make it impossible to dig out of the deep financial hole.

"This staff and board have been consistently direct, honest and transparent with our musicians," she said. "I think the players often simply don't like what we tell them."

In the wake of Michigan's distressed economy, DSO has been running life-threatening, multimillion-dollar annual deficits. The orchestra expects to lose $9 million in 2010 and would exhaust its cash reserves in less than three years if losses continue at the current rate.

The imposed contract slices base pay for veterans about 30% from $104,650 to $70,200, rising to $73,200 in three years. (Nearly all players make more than scale.) The contract cuts salaries for incoming players by 42 percent to $61,200, and introduces sweeping work-rule changes that fold teaching, chamber music and outreach into the job for all players. Players are currently paid extra for such work, though some also volunteer their time.

The imposed contract guarantees 33 weeks of work plus three weeks of paid vacation, as well as the possibility of optional work for additional pay. Currently the players enjoy a 52-week contract including nine weeks of paid vacation.

The musicians had countered with a 22% cut to $82,000, with increases to $96,600 in the third year. The players say accepting steeper reductions will mortgage the DSO's artistic integrity, making it impossible to retain and recruit top talent compared to peer symphonies. They reject the two-tier wage system and also say the work rule changes would dilute the professionalism of the ensemble.

The seeds of the current dispute began with the concessionary contract signed in 2004, but the ill will reached fever pitch during the contentious 2007 negotiations. The players threatened to strike before agreeing to more givebacks in exchange for a healthy third-year bump.

The next watershed was the strategic plan ratified in fall 2008 after years of collaborative work by management, the board, musicians and Slatkin. Players were enthusiastic about their involvement. The plan is a blueprint identifying broad goals for artistic excellence, audience development, education, fund-raising and finances.

One item says the DSO will "attract, nurture and retain the highest quality musicians, preserving the DSO as a destination orchestra and one of the 10 leading orchestras in America." But oboist Shelley Heron has written that she was stunned when management appeared to turn away from the plan seven months later.

"Our strategic plan ... was essentially being shelved so that the powers-that-be could ram home massive change using the financial crisis as cover," Heron wrote at Arts Dispatch, a blog run by arts journalist Barry Johnson of Portland, Ore.

Parsons said that she and the board remained committed to meeting the high international artistic standards outlined in the plan. But she said creating a sustainable business was also a key goal, and the unprecedented economic freefall and tenuous DSO finances demanded decisive action.

"We finished the plan and the world collapsed around us," she said.

Parsons also said that two consecutive board chairs told the players that the longer it took to reach a deal, the more severe reductions would have to be, given deteriorating economic conditions. And she said that work-rule changes were first put on the table during the 2007 contract negotiations but could not be discussed during strategic planning because the ground rules were that those sessions were not to be a proxy for collective bargaining.

The intensity of the strain at the DSO may be extreme, but cold war tensions are ubiquitous in orchestras. Several studies document high levels of unhappiness, discontent and stress among American symphony musicians. The players have little or no control over the music selected, a conductor tells them how to play and, except for those sitting in solo chairs, they have little expressive freedom. Violinists often aspire to solo careers and may consider working as a section player to be failure.

"All these frustrations have no regular outlet except the collective bargaining process," writes Harvard's Mnookin in "Bargaining with the Devil" (Simon & Schuster, $27).

One result is dense contracts jammed with arcane work rules regulating every detail of daily life in the orchestra, from the precise length of rehearsals to the maximum length of bus rides on tour. Another is that the ability to call a strike is the one arena in which players have historically held real power. Finding ways to nurture open and honest lines of communication between management and musicians doesn't always build trust or guarantee labor peace, but it makes them a lot more likely.

"When people are angry and fearful, it's hard for them to think clearly about their own long-term interests," said Mnookin, who acted as a consultant to the San Francisco Symphony following a bitter strike in 1996. "Of course, everyone will have a narrative about the past, but there's always a narrative on the other side, and helping parties understand there are different perspectives can be constructive. The challenge is to get beyond posturing."

Contact MARK STRYKER : 313-222-6459 or mstryker@freepress.com
 

Steve

Clarinet CE/Moderator
Staff member
CE/Moderator
#17
interesting strike information at other symphonies

Strikes at major orchestras
Salary disputes have been at the heart of most orchestra strikes, but benefits, work rules and artistic issues can also play important roles. The Detroit Symphony Orchestra's 1982 strike, for example, was mostly about how much say the players would have in selecting a new music director. Here's a list of some other notable strikes and how long they lasted.

2010: Cleveland Orchestra, 1 day
2005: St. Louis Symphony, 8 weeks
2003: Houston Symphony, 3 weeks
1996: Atlanta Symphony, 10 weeks; San Francisco Symphony, 9 1/2 weeks; Philadelphia Orchestra, 9 weeks
1988-89: Baltimore Symphony, 21 weeks
1987: Detroit Symphony Orchestra, 12 weeks
1982: Detroit Symphony Orchestra, 10 days
 

pete

Brassica Oleracea
Staff member
Administrator
#19
I know an awful lot of really good players that would love to make $61,200 a year playing ....
 
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