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Detroit Symphony Orchestra - financial problems

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

  1. JfW


    I'm not sure what you intended by introducing an op-ed by some doctrinaire communist hack who's entire solution is to demonize voluntary wealthy contributors into paying more. what do you think of it?
  2. Steve

    Steve Clarinet CE/Moderator Staff Member CE/Moderator

    just a different, though widely different perspective.

    It did confirm all the problems that the area has faced including the DSO (declining ticket sales and private contributions), 50% (or more) unemployment in detroit and yet states the musicians should not be affected by any of it in any way seems lost.

    I'm curious what the actual ticket sale revenue is compared to the donated amount too.

    In one musician website I read a statement where the musician(s) thought that the management perspective must have been that their organization was largely supported by charity to impose all these changes to the group.
  3. pete

    pete Brassica Oleracea Staff Member Administrator

    You could also say that, if the op-ed writer does reflect the opinion of the majority of the musicians (which I doubt), then you can see that there's an extremely large gap between them and the DSO board.
  4. JfW


    Cool! good commentary.

    I'll try to dig it up, but it seems that tickets account for about only a third of the DSO's income. I can't imagine things like Royalties, weddings, and whatever the heck else they do brings their earned portion of their revenue to more than half of total. So yes, then, about half the organization is supported by charity. when so many rich donors hang around the orchestra, how can this be a surprise? If you're correct in the musician's perspective, then the musicians are indeed vain, dogmatic, and stupid like I've said.
  5. JfW


    SteveSklar said :
    Terry pointed out the audience factor but the hack neglected to. Of course it may be that demand realities would be immaterial to the Communist point of view anyways....
  6. pete

    pete Brassica Oleracea Staff Member Administrator

    Lefties of the world untie?
  7. Steve

    Steve Clarinet CE/Moderator Staff Member CE/Moderator

    the DSO lost the entire percussion section. Two took positions at the Cleveland Symphony Orchestra and Dallas Symphony Orchestra. The other, I'm unsure as it does not say, but moved to Minnesota. And they had an open position for the asst. tympani for a couple years.

  8. Steve

    Steve Clarinet CE/Moderator Staff Member CE/Moderator

    from the newspaper
    "the board has no committment to the orchestra"
    I'm sure that likely to get them steamed as they all think of the milllions of dollars that they donated to their favorite musical charity in the past.
  9. JfW


    I'm happy that a number of them have found new positions.
  10. Steve

    Steve Clarinet CE/Moderator Staff Member CE/Moderator

    I agree. They are lucky that there were openings. I'd be surprised if there are enough openings out there to absorb most of the players.

    But now it brings up an interesting question. With the percussionists gone how are they going to do their support concerts if they strive to have the entire orchestra play at concerts.
  11. Steve

    Steve Clarinet CE/Moderator Staff Member CE/Moderator

    some opposing letters to the editor

  12. JfW


    #1) Given that DSO Management is hardly at odds with the board of directors about this whole affair, replacing management would be like shuffling deck chairs on the Titanic.

    #2) is basically the thoughts of about 90% of Detriot.

    #3) But the finances are Critical. This is fairly well indicated by an endowment that fell from 55 million to what, less than 20 million? in only about three years. And huh? you think that Management shouldn't be he deciders? are you some sort of bum? How is this not all about simple balance sheet math? It's facinating how these mental winos try to make this about something other than revanue vs expenses.

    #4) Would it be too derivative to bring up a "smallest violin" platitude?
  13. SOTSDO

    SOTSDO Old King Log Staff Member CE/Moderator

    We have here a fossilized "industry" that is struggling to survive in a much changed world. The music is obsolescent (as far as the paying audiences out there are concerned), the expense to produce it live astronomic, and the amount of money needed to retain all of the skilled folks in one place prohibitive.

    I love art music (as it was before about 1930 or so), and enjoy listening to it. But it has been eons since I went to see it live. I can get the same thing, in flawless form, and without having to listen to two piano concertos in order to get it, for less than half price. Do the math.

    There are precious few interested in the kind of music that the DSO is/was producing in the first place, much less interested enough to shell out for live concerts. Without a huge endowment to keep them afloat, that's all she wrote.

    And, I too would question how they burned through so much money in such a short time. Perhaps my buddy Lenny had something to do with it. If I were them, I'd check his bank account statements - he and his mama may have dipped their graspy hands into the till when nobody was looking.
  14. Steve

    Steve Clarinet CE/Moderator Staff Member CE/Moderator

    I do believe the endowment used to be around the 100 million mark until recent years, from some past articles that I have read.

    But the area has imploded due to manufacturing and other business pullouts.

    Since about 2004 a mantra from many tier 1 companies (auto makers and such) have been that if you don't have a plant in China then you are not a serious contender. Initial cost cutting (offshore outsourcing) basically destroyed the Tool & Die segment (hundreds if not thousands of small shops), and other business segments around Detroit as companies set up shop elsewhere. This also affected the main manufacturing plants too. And keep in mind each of these modest to large plants feed an economy around the plant such as restuarants, small shopping strip malls, etc. Many of those shuttered too.

    Many of the medium sized business suppliers had severe financial strains, and large unprofitable streaks, assuming they survived which many didn't. If they did, they shuttered many jobs, slashed salaries and benefits, and shifted at least some manufacturing outside the country (China, Mexico, south america). Just look up American Axle on the web it was indicative of businesses that survived.

    I used to work in automotive. We HAD to set up manufacturing in China to continue to supply to the BIG 3 autos. This factory basically shutdown the australian factories and put heavy pressure on the US and mexico & S.A. factories. The UK factory was also shuttered. Also many internal jobs of CAD were shifted to lower cost India. And then they slashed basically all mid mgt and others. I know people that have been out of work for 3+ years now. I think we paid chinese workers around $0.25 cents per hour including benefits back in 2006. I think Mexico was about $8.00 and US above $17.00 per hour.

    In chatting with CEO's and other executive people, largely based on the Michigan economy, I have found that many executive level people have left Michigan for other locations such as Atlanta, Dallas, etc. Think of how this has eroded the donation/charity base of the DSO. I would not be surprised if their large donation givers list was more than cut in half from 2006-2008, and then probably again from 2008-2010. Thus the quick erosion of their endowment.

    Add to this they no longer play at Meadowbrook - a very nice location for the suburban elite to go to, versus Detroit. The Detroit Orchestra hall is great and such (I assume, I've never been there but next door and across the street & have seen pictures) but Meadowbrook is so much more accessible (been there), and open and in a safe area with virtually unlimted parking.

    Thus the DSO is on the trail end of the entire business implosion in the area simply because they had a very large endowment that they could feed off of. Now with that dwindling they are in the same situation as hundreds of businesses large and small were just a few years ago.

    The DSO actually has to pay a level in which they can raise the endowment above $54 million again, which I believe is stipulated in the contract with the banks. So their current offers were way above generous and above actual revenue/donations. They even said they would have to have a very aggressive donation drive to break even. Add to that they have to bring up the endowment and they were basically just kicking the can down the dead end road.
    Last edited: Mar 1, 2011
  15. Steve

    Steve Clarinet CE/Moderator Staff Member CE/Moderator

    in 2007 this is what was ratified

    Last edited: Mar 1, 2011
  16. Steve

    Steve Clarinet CE/Moderator Staff Member CE/Moderator

    another interesting article about pay


  17. Steve

    Steve Clarinet CE/Moderator Staff Member CE/Moderator

    here's some trial and tribulations of a couple smaller orchestras just south of us in Ohio

    Last edited: Mar 1, 2011
  18. SOTSDO

    SOTSDO Old King Log Staff Member CE/Moderator

    One of the guys that I occasionally use as a sideman used to play in the Tulsa organization during a prior life. He said that the mismanagement was incredible, and that he was glad that he was never dependent upon the income from the orchestra.

    (Both he and his wife are odd ducks in that they are both doctors, but neither of them practices medicine. She has a doctorate in nursing, he in clarinet.)

    San Jose is the prototypical case of what's wrong. They have just enough interest there to organize an orchestra, but nowhere near enough interest to support one. They have risen and fallen no less than three times in my living memory.
  19. Steve

    Steve Clarinet CE/Moderator Staff Member CE/Moderator

    This is interesting ...

  20. SOTSDO

    SOTSDO Old King Log Staff Member CE/Moderator

    ...and that's the way the labor-management negotiating system is supposed to work. The AFM obviously has a very limited strike fund these days, unlike their strength under Petrillo in the 1940's. I imagine the United Mine Workers (UMW) would have lasted a lot longer as their leadership.

    Unfortunately, when dealing with "artists" who have very portable skills, the DSO was running the risk that it would lose something like its percussion section (or the much more vital third clarinet/bass clarinet chair). Unlike the automobile industry, you cannot go hire some semi-skilled industrial schlub to push the bolts in. But, they'll get three guys fresh out of college and make do, only to find that their donors have fled the list. But, that too is a function of the labor-management equation.

    Incidentally, the UMW reference is more germane than it might seem. Over the past fifty years, the Congress of Industrial Organizations ("CIO unions") like the United Mine Workers have taken significant steps to organize outside of their specific industries. In doing so, they have absorbed a huge number of employees formerly represented by the relatively weak American Federation of Labor (AFL) unions (traditionally representing employees with more "craft skills"), smaller groups like the American Federation of Musicians. This started when, in the 1940's and 1950's, the United Mine Workers organized a lot of non-mining activities in areas where they already had a strong presence in mining industries, grouping them all into a nebulous District 50.

    In the 1970's, they decided to retrench and the United Steelworkers Union took those employee units into their union portfolio. Thus, I once visited a plant that made cottage cheese, only to find out that the union representation was the United Steel Workers (USA), another CIO union.

    In recent years, the United Steelworkers have picked up the Organization of Chemical Workers, another huge CIO union through a merger. If things continue along these lines, there may be a day not too distant when the Steelworkers are representing professional musicians. If they do, the whole strike picture will change, for the better as far as the employees are concerned.
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