 The Clarinet BBoard
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Author: DougR
Date: 2011-05-30 14:55
Link:
http://articles.philly.com/2011-05-29/news/29597208_1_orchestra-chairman-allison-b-vulgamore-richard-b-worley
Savage personnel cuts, double-digit salary reductions for the players, reduction in the season. Not sure if the failed Philly board management is giving itself a similar salary haircut--any guesses there?
The passages from the plan, as quoted in the article, seem frantic to demonstrate Allison Vulgamore's competence by using every standard corporate-speak/nonprofit-speak psychobabble cliche at least once in every sentence, sort of like a pudgy old codger trying to impress his niece's twentysomething friends by employing every 'hip' signifier he can think of.
One damning quotation from the article (by Peter Dobrin): "Between 2007 and 2010, only one subscriber of medium tenure - several years rather than decades - gave a gift of more than $10,000." Which raises the question: exactly what in hell has Philly's high-priced management been doing with itself, if not raising money? At least some of this bold, shiny new 'plan' strikes me as stuff they should have been doing all along.
The article seems to suggest a lack of faith, particularly among more recent donors, that the board and management can be trusted to use the money FINALLY to resolve Philly's perpetual problems.
But I'm no expert. Is there any "there" there (other than "let's take it out of the musicians' hides, yet AGAIN")?
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Author: kdk
Date: 2011-05-30 15:47
The rental arrangements with Kimmel and divesting the orchestra of its administrative responsibility for the Pops are separate issues that loom large in the orchestra management's hopes. Of course, eliminating the defined benefit pension plan is another key, which is directly aimed, as you suggest, at the players themselves, along with the salary reductions the orchestra is seeking in any new contract.
I was confused a little by that "one subscriber of medium tenure" quote. Large contributors are probably also "subscribers" in the sense that, even if they're corporate sponsors, they give the subscribed tickets out to business associates. Perhaps some private local philanthropists actually use their tickets themselves. If this use of the term "subscriber" excludes such big corporate and private wealth that has traditionally supported the arts in general, even if they held subscriptions, then I'd be curious to know who was meant by the statement. They certainly aren't getting $10,000 from me, but I do donate more than the price of the tickets every season.
Karl
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Author: DougR
Date: 2011-05-30 17:59
Karl, I assumed the quotation referred to all sorts of donors, INCLUDING subscribers, but maybe in non-profit-speak it means something else. The "Plan's" comment on that particular statistic was: "This speaks to a profound need to cultivate and build a philanthropic ethos among our next generational waves."
I think I know what that's supposed to mean, but as one of the far, far previous generational waves, stuff goes right over my head sometimes.
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Author: elmo lewis
Date: 2011-05-30 23:06
I'm sure the musicians are looking forward to playing in an aircraft hanger and in warehouses. How about shopping malls?
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Author: JamesOrlandoGarcia
Date: 2011-06-01 23:37
When any business doesn't make enough money, the logical move is to cut cost. Why is this so shocking to musicians?
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Author: clarinetist04
Date: 2011-06-02 03:37
Bingo. Money's gotta come from somewhere. The deficits, no matter where they came from (even if it IS the fault of the directors, the fact is that the musicians aren't in the position to make management or business decisions, no matter how fair or unfair it is), aren't going to just disappear.
Here's a solution: Let's just fire all the last chair players. Heck, two for violins! That's what the teacher's union near me does. Last in, first out, right (kind of)?
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Author: Bassie
Date: 2011-06-02 16:34
> Why is this so shocking to musicians?
Because 'cutting costs' is what you do when 'promoting the business' has stopped working. If the staff are labouring under the illusion that 'promoting the business' was doing just fine, of course 'cutting costs' will come as a shock.
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Author: Jack Kissinger
Date: 2011-06-02 22:10
If an organization waits to control its costs until "promoting the business has stopped working," it's already too late. IMO, Philadelphia wouldn't have to make what some consider such drastic cuts if costs hadn't been allowed to run out of control in the first place.
Paradoxically, for nonprofits, "promoting the organization" too successfully during a short-run period can be a problem if it leads to a false sense of security and entitlement. When money is flowing into a nonprofit organization, there is little impetus to set any aside for a rainy day. (In for-profit organizations, owners provide that impetus.) On the other hand, there is plenty of impetus to increase spending. In the case of orchestras, musicians demand more compensation, benefits, and longer-term contracts, even though their productivity may not be increasing. In addition to similar demands, management, including the Music Director, may also push to bring in expensive guest artists and to take the orchestra on expensive tours to increase the organization's prestige -- though the tours, at least, usually do little to serve the constituent audience. There also may be pressure to improve the performance venue. Finally, some grants and donations are actually contingent on the organization's spending them.
Rising spending levels create expectations of even higher future spending levels. When large grants and donations suddenly prove to be transitory, the organization finds itself with a potentially inflexible cost structure it cannot support through current operations and with few resources to fall back on. (How much has the Philadelphia Orchestra set aside that was not designated as permanent endowment by donors?)
In contrast to a board of owners, it's hard for a board of unpaid volunteers to resist such spending pressures, especially when their primary qualification for membership may be large donations they have made in the past and when their primary desire is to find ways to say "yes" to the organization. When things start to go south, such a board may exacerbate the problem by resorting to borrowing in the hopes that new revenues will eventually materialize.
MOO,
jnk
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Author: Dileep Gangolli
Date: 2011-06-02 22:21
I think that many of these problems were self created by all parties involved during the 90s when everyone thought that annual rates of return were always going to be 12% annum. Hence managers thought that they could give a good deal to the pension through investment returns rather than contributions.
The wealth effect during the 90s also allowed for musicians to ask for more money than the organizations could sustain long term. Boards would cave in to easily because they thought that they could make it up down the road.
This same thinking has gotten municipalities and state governments into big trouble and they too are asking for similar concessions from their workers.
The best jobs in the US in the years ahead will be the military bands where, even if budgets are cut, will be secure and part of the Dept of Defense budget.
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Author: kdk
Date: 2011-06-02 23:44
Dileep Gangolli wrote:
>
> The best jobs in the US in the years ahead will be the military
> bands where, even if budgets are cut, will be secure and part
> of the Dept of Defense budget.
I'm not so sure how secure the bands' funding will be as budget cutting becomes more and more severe at the Federal level. If the military budget needs to be cut SOMEwhere, military music, like school music, will be one of the most vulnerable areas to start waving the ax.
Karl
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Author: Bassie
Date: 2011-06-03 11:56
Jack -
Yes, I thought someone might say that. Of course, if a business can cut costs (e.g. salaries) without compromising the product, it is obliged to do so.
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Author: Dileep Gangolli
Date: 2011-06-03 15:37
Some more comments.
These have nothing to do with how I think of things just what is regarding the orchestra industry within the current US economy.
>Orchestras are businesses. They have to stay financially viable to stay in existence. Musicians are labor. The product is music. If demand does not exist (whether through ticket revenues or contributed income), then supply has to be lowered (either through reduced concerts and offerings or cost structure). Past revenue streams such as recording contracts are now nonexistent.
> Boards and communities do not have to give money to anything. They do this for a variety of reasons (not just for the love of art or altruism).
> With the US economy teetering on a double dip recession (which I am predicting when QE 2 ends), things are going to get very painful in the US esp in the nonprofits and social services. Orchestras will be viewed as luxury items which depending on the community will continue to be funded by the elite in some manner.
> Unions will not be viewed in favorable terms by many people who have little or no benefits or health care. Governors have made workers the scape goat of poor management. So will orchestra managers. It should be viewed the other way around but it is what it is.
> Even the great cities like NYC will weed out the weak organizations (witness MET vs NYC Opera issues). There will be little place to hide for the smaller groups who have no specific niche in these large cities.
> Smaller communities such as Louisville and Syracuse will use bankruptcy as an exist strategy to get out of pension obligations then create new entities that have a much lower fixed expense (musicians) and more flexibility in programming (depending on cash flows and revenues). It will be the only way to survive. Having some orchestra is better than no orchestra in my opinion. I think it is a sad thing that Louisville can build a new basketball arena for their college team and flush the orchestra down the tube. But that is where America is these days.
> Yes, military bands may suffer cuts in the future but the DC bands will be as secure a job for a musician as the NYPO or the CSO. If I was advising a student making a choice making a life decision, I would urge them to join a DC band over a smaller orchestra job that may not be around in 10 years.
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Author: Dileep Gangolli
Date: 2011-06-03 16:25
Greg,
1) Amendment has not been passed.
2) Cut still leaves a big number and is still part of overall DOD budget.
3) Doesn't change my position of thinking regarding safety of a DC band vs a smaller orchestra.
DRG
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Author: Buster
Date: 2011-06-03 16:50
Dileep,
One more thing. I have seen reports from various financial experts speaking of another recession of sorts (the double dip- but I don't quite understand the connotation of the term in a financial context.) However I must claim complete ignorance what QE2 refers to.
-JH
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Author: Dileep Gangolli
Date: 2011-06-03 17:47
Buster,
QE2 is the short form of Quantitative Easing (second round) that started in AUG 2010 and is set to end in JUN 2011 (this coming month).
Basically the Federal Reserve is buying most of the T-bills from the US Treasury (via the US banking system). That is what is keeping the US stock market afloat while the housing continues to tank and the unemployment rate hovers at 9% officially.
This easy money (in US dollars) is causing the high spike in commodities prices such as crude oil and gold. But it is also causing inflation at the gas pump while the high unemployment is keeping wages low or static.
The government has basically loaned money to itself in order to stimulate the economy which is fine. But now it has to wrestle with paying back that debt and hence the national debate on what to do with the record deficit.
Double dip just refers to a graph of two recessions. Dip #1 was 2008-09, there was a recovery in 2010 and 2011, now if we go back down again we have Dip #2. Double Dip (with no fudge or cherries on top).
Post Edited (2011-06-03 17:50)
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