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Detroit Symphony Orchestra - financial problems

Discussion in 'General Discussion' started by Steve, Dec 11, 2009.

  1. Steve

    Steve Clarinet CE/Moderator Staff Member CE/Moderator

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    I never thought about it but the latest article mentions how the board of directors is commonly hefty donors, and thus have a goal to keep the symphony going.


    http://detnews.com/article/20110208/OPINION03/102080359/DSO-soon-a-Detroit-export

     
  2. Steve

    Steve Clarinet CE/Moderator Staff Member CE/Moderator

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    It's ironic that in the same town the automaker unions have given up 50% or more of base pay to maintain new contracts to compete after losing (if i recall) as many auto jobs as other states combined, and those same automakers were some of the largest donors to the DSO who thus have stopped donating.

    And now the players themselves are telling donors to stop donating ?

    I, personally, do not see the logic of this holdout as the mgt are some of the larger donors (supposedly from the last article).

    We would hate to see the DSO go but I'm sure another new organization will take their place probably at a much lower pay scale.
     
  3. Steve

    Steve Clarinet CE/Moderator Staff Member CE/Moderator

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    FYI
    from
    http://www.dso.org/page.aspx?page_id=107

    wow ... look at that list. what i first saw was Karen Davidson, the current owner of the Pistons, ie, another organization going down the tubes.
     
  4. Steve

    Steve Clarinet CE/Moderator Staff Member CE/Moderator

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    and then this fabulous letter from Peter Cummings of the board which seems to put it all into perspectice, and reality.

    http://www.dso.org/upload_files/content_pdfs/2010-2011/DSO_BoardLetters_020411.pdf


     
  5. Steve

    Steve Clarinet CE/Moderator Staff Member CE/Moderator

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    and of course the latest headlines from the Detroit Free Press

    http://www.freep.com/article/201102...ason-next-?odyssey=tab|topnews|text|FRONTPAGE

     
  6. JfW

    JfW

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    I find Mr. Cummings' words to be very congenial and alltogether apt to the situation.

    There just isn't the money and no where from which to get it. From the perspective of management and donors, it's better to let the Symphony fail than to agree to any situation where the only ones comfortable with it are the seemingly aloof musicians. Let it die and don't an agonize as a new one can be built.
     
  7. SOTSDO

    SOTSDO Old King Log Staff Member CE/Moderator

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    But that that was a solution...

    "Let it fail" has been tried at least three time in the case of the San Diego Symphony (or whatever it's called), and it's not a solution, at least for the continued success of a musical organization.

    The one party that always gets the shaft in such situations is the bargaining unit employees - they (or their replacements) are hired at greatly reduced salaries. Management seems to seek its own level ("In order to hire a decent business manager, we are going to have to offer competitive compensation"). Funny how that works.

    Truth be told, I can't see any state supporting more than four such organizations - just enough to keep a live performance within driving range of most of the population.

    Here in Texas, we've got yer Dallas, Fort Worth, Houston, San Antonio, Austin and (I think) El Paso symphonic organizations, as well as lesser operations in Midland/Odessa (and perhaps one in each), Amarillo (which, for what it is worth, is pronounced "Am-a-ree-you" - the "ll" is "y" in Spanish), the Valley and Corpus Christi. Of these, only Dallas and Houston are near the top rankings in the United States - the rest may be "professional", but they aren't what you would call "top drawer".

    So, maybe one in Dallas and Houston, and one out west somewhere are about the real limits of Texas. Two or three in California, two in Missouri and New York and Florida, one in Indiana, Louisiana and most other states.

    Even this model doesn't work. Florida has had trouble holding onto a working symphonic group, as has Louisiana. If one group can't be successful in a state the size of Louisiana, then another approach has to be considered.

    How about this:

    Four regional orchestras for the United States. Each travels its area, working a full year, bringing music to the masses. Taxpayer funded operations employ full time musicians, not a group that works nine months out of the year. They would rehearsal as they traveled - symphonic organizations travel with almost all of their equipment (the bass clarinet in A gets left behind, though), and parts from the library or guest stars can be flown in for much less than it would take to return to a "home" hall.

    It's not perfect, and it would thrust a goodly number of musicians out of the trade (and most likely into something more remunerative in the bargain), but it would allow second, third and fourth tier classical music markets to abandon the façade of maintaining a symphonic music organization on a less than living wage for its employees.

    As it stands now, there is just too much classical music ("art music", if you will) capability out there chasing far too little demand. Adam Smith said something about that, but I forget what it was...

    Oh, right. Analogies work well with this stuff:

    It is as if there are hundreds of universities and colleges across the nation, each turning out a dozen or more perfectly trained buggy whip makers every year, dumping them into a pool already over saturated with buggy whip makers who can't get a paying job.
     
  8. JfW

    JfW

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    hmm. It occurs to me that if the San Diego Symphony or whatever it's called still exists as a whole or as a predecessor of it's former self, then "Let it fail" hasn't really been tried.
     
  9. JfW

    JfW

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    hmm. It occurs to me that if the San Diego Symphony or whatever it's called still exists as a whole or as a predecessor of it's former self, then "Let it fail" hasn't really been tried.
     
  10. Steve

    Steve Clarinet CE/Moderator Staff Member CE/Moderator

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    here's an interesting statement

    http://www.freep.com/article/201102...n-jeopardy-offer-turned-down?odyssey=nav|head

    I don't get it. The musician want to ask the donors to give more free money?

    Add to it, the contract still would continue to run a deficit. The DSO is legally obliged to maintain a certain level in their endowment.


    At the end of 2008 the endowment was at 56.8 million
    at the end of 2010 it was down to about 22 million

    The banks that have a controlling interest are:
    Bank of America (North Carolina) leads the syndicate of banks
    Comerica Bank., J.P. Morgan Chase & Co. (New York), PNC Bank (Pittsburgh ) and Charter One Bank (Providence, R.I.).

    the endowment, normally uses the interest gained to pay debt and operations while it grows on interest. The economy changed that and they had to raid it to fund operations.

    The DSO and banks have been talking since the fall of 2008 because the DSO fell out of compliance with two loan covenants
    [1] DSO's unrestricted endowment has to exceed the principal of the $54 million loan
    [2] the DSO operating budgets have to break even or nearly break even

    thus the banks called on the loan now

    more here if you have a subscription
    http://www.crainsdetroit.com/articl...antors-want-to-see-string-of-issues-resolved#
     
  11. SOTSDO

    SOTSDO Old King Log Staff Member CE/Moderator

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    "No way out!"

    My point, if you parse it another way. They keep trying to reform an orchestra. (They still had one the last time I read about it in International Musician, although at that point it was in trouble (again)).

    What I was trying to convey was that the musicians continue to be the losers in the equation when it is solved. The community gets an orchestra (for a while), the administrators get market rate pay (for a while), but the musicians are always negotiated downward in their compensation (which they too get, only for a while).

    Continued attempts to resuscitate a dying life form, especially one that is virtually brain dead at the time that the attempts take place, are noble. They may even succeed in rare cases. However, they are always costly, and someone has to bear that cost.

    Thus far, art music has had rich folks in their corner. Aging patrons of the arts (in other fields they are called "disease dragons", from the image of the older, fading women who support charitable causes) have subtly shifted over the last forty years, away from those who (in their youth) were routinely exposed to the same music as a required part of their education, to those who were routinely exposed to everything but such music, in a curriculum freed from the fetters of Nineteenth Century norms. This has been a gradual change, but a change none the less.

    And, if you lose your donor base (folks with the kind of money to make a symphony "happen"), then you are either going to have to jack your ticket prices into the stratosphere (where some would already argue that they are, but they aren't there yet), eat away at your endowment (most groups have already done this) or give up the ghost.

    When you start putting numbers on paper, the problem becomes very clear:

    • Musicians have gradually moved to an aspiration of a middle class lifestyle. Most have moved from music as a trade (often not requiring a four year degree) to music as a profession, with non-degreed folks being the great exception. First rate, top drawer musical folks who work for "major" orchestras seldom earn under $120,000 per annum, this by the audition ads in International Musician. Add benefits (sick leave, vacation, unemployment contributions, medical insurance) to that sum, and you are talking about an annual personnel cost (musicians alone, no equipment or admin or travel) of about $11,180,000.

    • Once you consider administrative costs (involving more than one or two expensive administrators, a high priced musical director and his assistants, plus the low cost help), facilities (it costs big money to operate a large concert facility, even just to keep it mothballed), travel (bands may have traveled on busses in the past, but orchestral travel almost always involves the human equivalent of air freight), and soon you are talking (as Vanna White used to chant) "Big Money!"

    Put very bluntly, a city that aspires to a "first class symphonic organization" (a term frequently applied to the Houston Symphony when fund raising is an issue) is going to have to find that big money somewhere.

    • Ticket holders? Prices are already sky high. Keep raising them, and you will lose the non-subscriber, and (in some cases) the subscriber.

    • The municipality in which they are located? There might be some help with the facilities side of the equation, but compensation for arts group is a third rail issue in politics. If it comes down to a cop on the beat/fireman in the house or a violist, the cop (or fireman) is going to come out ahead every time, and rightfully so, as the public safety officer can be seen as serving all, while the poor violist is playing to a limited cohort of the population.

    • Fund raisers? This well has been used a lot in the past, but as populations change and those attuned to art music "age" and drop out of the donor pool, it develops less and less. Corporations are going through lean times now as well, and are not as prone to be as generous as in the past.

    • The endowment? This option has been used quite heavily for some time now (all of those corporate donations during the good times had built up over the years), but endowments (as a general rule) have been shrinking, and in some cases have been used up altogether.

    As Leo Blum said in The Producers, "No way out! No way out!" Art music is in a downward spiral, and unless government can be persuaded to step in and spend space program levels of dollars to help, the spiral will continue. " 'Saving' Detroit will only amount to bailing a bucket or two of water out of the already waterlogged art music boat, and only the government wields the kind of financial power necessary to make the difference.
     
  12. Steve

    Steve Clarinet CE/Moderator Staff Member CE/Moderator

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    on the DSO facebook page
    the DSO added

    excerpt
    http://www.facebook.com/detroitsymphony/posts/174584789252913
     
  13. Steve

    Steve Clarinet CE/Moderator Staff Member CE/Moderator

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  14. SOTSDO

    SOTSDO Old King Log Staff Member CE/Moderator

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    You bring music schools into it and I am reminded of Ron and Rhonda, a piece I wrote many, many years ago for The Clarinet, but was told that, while it might be apposite and true, it could never be published in a magazine devoted to "art" music.

    I'll have to see if I can dredge up a copy to post hereon. (It's probably on a 400K 'floppy' disk - that's how old it is. I did it on an original Macintosh (128K RAM) computer.)
     
  15. Steve

    Steve Clarinet CE/Moderator Staff Member CE/Moderator

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  16. JfW

    JfW

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    I still have several operable computers that will read this. In fact I have an old SE that's plugged in and ready to turn on, though it's been over a year.
     
  17. pete

    pete Brassica Oleracea Staff Member Administrator

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    I finally put my Mac 512K in the computer recycling at work, about a month ago.
     
  18. JfW

    JfW

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    I'm not quite sure why or if you think it ought to be any other way. It is, after all, the musician's art that is continually finding itself less in demand. Administrative skills translate too well to other environments to pay less than market.

    I don't see things so dismal. It's a declining art form, yes, as it has been for a century now, but it's not yet near disappearing given it's prominent use in soundtracks, scholarly value, and has a still somewhat significant popular appeal.

    I guess then that the solution is for less to pursue musical professions, and for musicians to accept less lucrative compensation more commensurate with the demand for their skill, or explore other industries.

    We are merely in for further regression. The orchestras that survive then will be those who's musician's best accept these truths
     
  19. JfW

    JfW

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    yikes! you know that means it'll be worth a ton of money in due time. The fact that these little gems weren't all that reliable, coupled with free community recycling programs will mean these things will be expensive collector items.

    Right now, a good condition 512K is worth just a couple hundred bucks, or so, IIRC. Not really worth marketing and messing with shipping for most people.
     
  20. SOTSDO

    SOTSDO Old King Log Staff Member CE/Moderator

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    Not only do I still have my original Mac in the carrying case in the back closet, I even have an original Macintosh case (the one with all of the signatures inside) that I salvaged when a computer upgrade was being done and they set the keyboard atop the case vents, resulting in a partial meltdown.

    Someday, I'm going to get the back of the case cut free and mount it as a wall hanging.

    I also have the external and internal drives, so reading it isn't a problem. And I have a USB drive to copy the article from, once I move it from 400 K to 1.2 meg floppy disk.

    Apple believes that media delivered on CD or DVD is about to become obsolescent, if not obsolete. My inside sources with the firm tell me that the MacBook Air pattern of no on-board Super Drive (CD/DVD) is the wave of the future.
     
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