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Detroit Symphony Orchestra - financial problems

Steve

Clarinet CE/Moderator
Staff member
CE/Moderator
#21
whilst the DSO is still out on strike I noticed while watching the local Public Broadcasting Service that a small ensemble was playing at the local Somerset Collection mall - about 2 miles from me. Leonard Slatkin was allowing mall guests to conduct the ensemble. Wish I knew about that .. it might have been fun as obviously most (if not all) did not actually know how to conduct.
 
#22
I hope the Union understands that this will not end well for them, unless Management is lying. You simply cannot collectively bargain for money that just isn't there.
 

Steve

Clarinet CE/Moderator
Staff member
CE/Moderator
#23
I read somewhere that in the early days of the DSO (late 1950s) they was having financial problems. Thus they basically fired all the higher salaried players (ie, all the first chair players) to meet budget.

I think this was the time when Paray was conductor, and Mr. Herb Couf was the 1st clarinet.

Now with all the legal contracts and stuff they can't do that sort of thing anymore.
 

Steve

Clarinet CE/Moderator
Staff member
CE/Moderator
#24
excerpt from http://www.guardian.co.uk/world/2010/nov/19/detroit-symphony-orchestra-strike

of current US symphonies in article about the Detroit Symphony Orchestra and their situation.

Baltimore The Baltimore Symphony Orchestra has accepted successive pay cuts that will reduce the base pay of players to 2001 levels. As its English horn player put it: "We're devastated."

Charleston An agreement to cut the staff of players by 25% this year was not sufficient to save the Charleston Symphony Orchestra from disaster. The donations on which it depends were down so much that in March it cancelled all its concerts for the rest of this year.

Cincinnati In 2009 the Cincinnati Symphony Orchestra was mired in multi-million dollar debts, and had lost its lucrative recording contract. But this turned into a good news story when local philanthropist Louise Nippert donated $85 million as a gift that should make up the CSO's shortfall for years to come.

Cleveland One of the 'big five' ensembles in the US, the Cleveland Symphony Orchestra is facing $2 million deficits this year. Its players have agreed a two-year pay freeze having gone on a one-day walkout last year. Its musicians clearly fear the Detroit effect – 17 members of the orchestra have played with the DSO strikers in their fundraising performances. Across the country, professional orchestral musicians have donated $80,000 to DSO's strike fund.

Colorado The Colorado Symphony Orchestra last year agreed a 13% pay cut and a month of unpaid leave for its musicians in the face of extreme deficits.

Honolulu The Honolulu Symphony is currently bankrupt, and has been silent since November 2009. Founded in 1900, and having survived two world wars and the Great Depression, its musicians are out of work.

Philadelphia Another of the 'big five', the Philadelphia Orchestra is facing possible bankruptcy and is requiring emergency funding to tie it over. It has suffered from a slump in ticket sales and faces difficult negotiations between management and players over a restructuring plan.
 

tictactux

Distinguished Member
Distinguished Member
#25
From what I've seen on TV, Italian Operas are in just as bad a situation. Apparently the Du^H^HCavaliere doesn't like classical or otherwise demanding music (or culture in general), apparently he prefers to have the private parts of some 1800yo statues embellished...
 

SOTSDO

Old King Log
Staff member
CE/Moderator
#26
People get what they are willing to pay for. While I enjoy playing art music more than any other kind, I am enough of a realist to conclude that it is a losing proposition as far as getting others to pay for my passion.

Hell, it's hard enough to sell any kind of music these days, much less one that needs a specific hall for the group, plus maintenance of one hundred or so bodies for the amount of time (rehearsal) that it takes to turn out a quality product.

Absent state subsidy (as in having a monarch maintain a house band of one sort or another, classical music is (in effect) dead. I could spend about a hundred dollars to go to a concert where (if I am lucky) there would be one work on the program that I would enjoy, all while sitting in considerable discomfort. Or, I could spend fifteen dollars to get the same thing whenever I wanted it on my own sound system. Duh!

And, I know that there is something worthwhile in a live performance. My group is predicated on that, and I admit that there has been a certain "presence" there in every live performance I have ever attended.

(Similarly, I have read countless accounts of cavalry charges (I was, after all, an armored cavalryman, continuing a family tradition that runs back to the Thirty Year's War), and have absorbed those opinions of what a thrilling sound one makes. But, not until attending a horse race run on turf did I actually hear it (or something quite near it) for myself - very awe-inspiring.)

But, is the live performance worth the 300% premium and the fact that you will never hear it again (unlike the recording)? Well, in my mind, no.

As Petrillo feared back in the 1940's, recording has been the death of live music. And, computer copying has been the virtual death of commercial recording. Sad, but true.
 

Steve

Clarinet CE/Moderator
Staff member
CE/Moderator
#27
Personally I would love to go see the DSO but it costs too much.
And I don't fully understand their argument of keeping up with the Joneses (Phila, NY, Vienna, etc) by keeping a top tier orchestra. I've, unfortunately, never really thought of them on the same level as NY or other top symphonies.

Tonight, i may go to a Clarinet Studio and Ensemble Recital with music of Brahms, Mozart, Debussy, and many others.

It's free admission.
 

pete

Brassica Oleracea
Staff member
Administrator
#31
oooohh Pete ........ Gandalfe has a recommendation .......
Wait for that in vBulletin 5.1: This Time, We Really Hope it Works.

We did have a user rating system, but that came to be a bit unworkable. You can only rate THREADS, now (you have to use the Advanced editor to see the option).
 

Steve

Clarinet CE/Moderator
Staff member
CE/Moderator
#32
i'm starting to hear flushing sounds ......


http://www.detnews.com/article/20101209/ENT01/12090492/1361/DSO-reports-$8.8M-deficit-for-2010

DSO reports $8.8M deficit for 2010
Michael H. Hodges / Detroit News Arts Writer

The financially imperiled Detroit Symphony Orchestra announced today a deficit of $8.8 million for fiscal year 2010, ending in August. That includes a $6.6 million operating shortfall and about $2 million in pension obligations and debt service on the Max M. Fisher Music Center.

The deficit, which represents about 29 percent of the orchestra's $29.3 million annual budget, is a 35 percent increase over the DSO's fiscal 2009 deficit of $6.5 million.

Further weakening the DSO's resources is the ongoing strike. Musicians of the DSO called for a strike on Sept. 24 and began picketing on Oct. 4.
mhodges@detnews.com
 

Steve

Clarinet CE/Moderator
Staff member
CE/Moderator
#33
I know we have someone here that adores Mr. Slatkin .. so i thought i would post this info about him sent to my email from the DSO email services

Leonard Slatkin To Receive Honorary Doctorate of Fine Arts from
Michigan State University

Detroit Symphony Orchestra Music Director Leonard Slatkin will receive an Honorary Doctorate of Fine Arts from Michigan State University during the university's December commencement ceremonies, held Sat., Dec. 11 at 10 a.m. at the Jack Breslin Student Events Center.

Slatkin holds a deep commitment to the advancement of arts education among audiences of all ages, which is exemplified by his numerous activities within the MSU musical community. In 2009, he conducted the Detroit Symphony Orchestra performances of Alla Borzova's Songs For Lada with the MSU Community Music School's Children's Choir at Orchestra Hall. Additionally, Slatkin initiated a collaboration with the MSU College of music as well as the University of Michigan School of Music, Theater, and Dance for students to present pre-concert performances thematically linked to DSO subscription concerts, allowing advanced performance majors an opportunity to perform in a world-class facility before new audiences. Slatkin has also hosted new music readings, in which the DSO has performed and Slatkin has critiqued pieces by MSU composition students. The MSU Community Music School Children's Choir, also under Slatkin's baton, shared their voices on the Grammy Award-winning 2005 recording of Songs of Innocence and of Experience by William Bolcom on the Naxos label.
 

SOTSDO

Old King Log
Staff member
CE/Moderator
#34
Oh, great. More accolades for Lenny Slatkin...

My experiences with him (as a bassoon player in a community orchestra which he condescendingly agreed to conduct in his junior associate days with the Saint Louis Symphony) have been largely borne out by his performance since. He's a glory hog of the first order.

I imagine that the Detroit organization paid through the nose to lure him out to the cultural wilds that are the upper Midwest. He sang the praises of Saint Louis loud and wide right up to the point that he jumped ship to go to Washington, and then was heard on DC media describing how he had never been happy until he had lived in the DC area.

One thing that an ailing "program" (using the college basketball metaphor here) like Detroit did not need is someone like Slatkin...
 

Steve

Clarinet CE/Moderator
Staff member
CE/Moderator
#35
Slowly .......

http://detnews.com/article/20110203/OPINION03/102030374/Banks-want-DSO-s-$54M-loan-repaid

ast Updated: February 03. 2011 1:00AM
Daniel Howes
Banks want DSO's $54M loan repaid

The Detroit Symphony Orchestra has a bigger problem than the 18-week-old strike that has marred the classical music season, alienated donors and disappointed subscribers.

The orchestra's lenders, in an ominous turn, repaid the orchestra's bondholders on Dec. 1 and called a $54 million loan the symphony cannot pay. The move essentially sets up a high-stakes game of chicken between the orchestra's directors, the musicians and the lenders, who aren't likely to renegotiate the loans without a realistic labor agreement and an aggressive turnaround plan.

"This thing is at a tipping point and if we don't get it back quick, it's gone," a ranking banker close to the situation said Wednesday. "It's a sad situation. But somebody miscalculated badly. The labor situation is part of an overall restructuring that the banks want to see put in place."

The transaction, completed by a five-bank consortium that includes JPMorgan Chase, Comerica and Bank of America, exchanges bonds set to mature in 2030 for debt controlled directly by the banks. The change moves the DSO one large step closer to a bankruptcy filing with existential implications for the organization, the musicians, the management and the future of world-class music in Metro Detroit.

"We're close to the edge here — we're not over the edge — as a result of these actions," DSO President Anne Parsons said in an interview. "We're not going to give the banks a deal we can't afford, and we're not going to give the players a deal we can't afford."

Said Hayden McKay, a DSO cellist and spokesman for the Detroit Federation of Musicians: "Ever since the DSO went into violation of the two (bond) covenants, we've been at the mercy of the banks. That's been the situation for at least a year. I'm not minimizing the problems; the problems are there."

And not just for the DSO and its musicians. How would it play, he suggested, for banks that benefited from taxpayer bailouts and reaped record bonuses to move to shut down a venerable Detroit institution? Fair point, PR-wise, even if the banks may be sitting on solid business ground.

Still, both sides — management and union — are running out of time in a sickening replay of the good ol' Detroit denial-and-delay game that pushed two of its three automakers into bankruptcy, forced their unions to make historic concessions to put the companies back on a sustainable path and administered a big dose of humility.

The symphony saga isn't much different, in form at least. Wednesday, the DSO's directors said in a statement that management was preparing another contract offer to the striking musicians — perhaps a final one before a self-imposed deadline of next Friday to decide whether to cancel the remaining season.

That could change, of course. But what's becoming increasingly clear is that neither side is willing to reckon with the fundamental changes occurring beneath their collective feet. They're operating in a market that is demonstrably poorer, as official government numbers and studies confirm, repeatedly.

Sound familiar, kinda like Detroit's automakers circa 2004 or so? Too much debt and too few paying customers mixed with an out-of-touch union that didn't believe the numbers and management-board cliques still operating as if their companies ruled the world — except they didn't get the joke being told at their expense.

We know what happened to them because we lived it and so did the DSO's management, board and musicians, all of whom saw corporate donors slowly swallowed by the unraveling now spinning inexorably toward Orchestra Hall. The only question is how much damage it will do when it finally arrives.

Major corporate donors are either out of the philanthropy game or getting back in with a bias toward education, children and the hungry. The strike is alienating well-heeled donors who spent time and money to fund a renovation of Orchestra Hall and subscribers are canceling. Will they come back?

Depends, and anyone who says with certainty that they will — DSO management or its musicians — hasn't experienced the devastating effect a long, ugly and public labor dispute can have on the attitudes and habits of paying customers. Give them long enough to go elsewhere and they may never return.

That's why the latest promise of yet another offer to the musicians walks by a far more important point: None of these offers from either side puts the DSO as it exists today in the retrenched Michigan economy on a solid path to sustainability.

In the interview, Parsons acknowledged that the orchestra's last offer to the musicians would leave the DSO a few million dollars in the hole. And that's assuming the bank debt could be renegotiated and the DSO staff could raise an average of $12 million to $13 million a year from donors over the next several years.

The DSO's annual fund has raised $12 million or more in just three of the past 10 years, according to orchestra records — '06, '07 and '09. Average the decade out, and the annualized haul comes to $11.4 million, probably not the best predictor of success for a tarnished DSO's fund-raising efforts around here.

And then there's the bank debt, a big bankruptcy trigger. Because the DSO's assets are comparatively limited aside from the value of musicians who actually are playing, the banks' interests are focused on the ability of management, the musicians and the DSO's board to craft a workout plan that has a credible shot at paying the musicians so the organization can repay the renegotiated debt.

Without a credible plan, they could move aggressively to demand repayment outside bankruptcy, which likely would push the DSO into federal court, where a judge would oversee renegotiation of debts, labor agreements and possible rejection of pension liabilities.

In other words, a bad situation becomes even worse because the losses could grow even larger than they already are. That, too, should sound familiar to anyone who paid attention to the Detroit auto implosion.

"What you have now is everyone has kind of failed and the longer it stays shut down … you increase the probability of it never reopening," said Van Conway, CEO of Conway Mackenzie, a Birmingham-based corporate restructuring firm retained by the banks to study the DSO predicament. "The union, management, the banks and the donors have to come to a global resolution."

Otherwise, they're all in big trouble.
dchowes@detnews.com
(313) 222-2106


From The Detroit News: http://detnews.com/article/20110203/OPINION03/102030374/Banks-want-DSO-s-$54M-loan-repaid#ixzz1CtLB9DSa
 

SOTSDO

Old King Log
Staff member
CE/Moderator
#37
The big difference...

...between your little con, and the scam being pulled by the DSO, is that you don't have a reputation to trade upon. It's why you remain a sniveling little pawn in the world of music, being forced to pay your employees in cash, while the directors of the DSO wear silk suits and have catered luncheons at their board meetings where they decide who to lay off the next time around.

Their venerable record and perceived value to the community (which I think is vastly overstated in the first place) of an organization like the DSO has allowed them to go out on limbs ever farther from the tree, since the management knows that they can always play the "You can't let something this valuable die!" card when some inconvenient thing like legal obligations to pay the employees/pensions/medical insurance/debt owed to others gets in the way.

San Diego is on their fourth or fifth "rescue" of their symphonic group, which everyone wants but no one wants to pay for. They still haven't learned, and Detroit (with a far more venerated organization), is only postponing the inevitable. Let the thing die, and be done with it.
 
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#39
I've been following this for awhile and find it interesting how most the media and many commentators like to blame the situation on awhat they deem incompetent management rather than with a union so far out of touch with reality. Of course, said commentator's arguments usually go somewhat like, "Detriot deserves\needs a World Class Symphony" and alludes to the Symphony as being part of some important element of urban renewal or the local economy (it isn't), so naturally, Management should pay up regardless of what the numbers are.

The truth of the situation is that fundraising has been tepid even before the economy turned south. Attendence, likewise, has also been down. For Management to magically gain the competence to vastly increase donor contributions when philanthropy in general is way down while bringing more butts to put in the seats during a depressed economy; in a city where most could not care less about what is being played is indeed a fantastic expectation. For all the stupidity for which management is alone being blamed, they alone are the ones who are talking about the realities of numbers.

Supposedly the sides are close to an agreement, but if an agreement isn't reached by the end of the week, the season may be cancelled. If that happens, it's quite possible the Detriot Symphony is brought to chapter 7 by it's creditors mentioned in SteveSklar's post.
 

pete

Brassica Oleracea
Staff member
Administrator
#40
The interesting thing is that when I go to orchestral events somewhere, they're usually well attended. The exceptions are when the orchestra plays somewhere other than their standard venue (i.e. somewhere other than the symphony hall) -- or if it's a "community" group. And, in the latter case, it's generally because they're charging an "outrageous" price (like $10 - $15). Hey, if a community group is charging as much as the price of a CD from a good orchestra and you know that it'll be an average performance, I'd rather have the CD.

(Where I work I occasionally get free tickets to a variety of events.)

Personally, when I'm in a group playing or singing, the performance is almost secondary. I play or sing for the sheer enjoyment of it. That there's going to be a performance is just the cherry on top. I think that's what community bands/choral groups should be. Hey, if you need to charge for renting out where you're playing, keep it at $5 a ticket or less.
 
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