How Are the Financial Crises Affecting Our Symphony Orchestras?
Byline: Bill Gowen
The financial health of symphony orchestras has been a major subject here over the past year, in particular following the Chicago Symphony Orchestra's announcement last October that it had posted a $6.1 million deficit for fiscal year 2002.
The CSO's actual operating deficit was $3.8 million (on total operating expenses of $59.6 million), to which was added a one-time loss of $2.3 million in non-cash accounting adjustments, which included bad debts and other writeoffs.
But the CSO remains in relatively healthy condition, with total assets of $410 million and net assets of $242 million. At the conclusion of FY 2002, the orchestra's endowment stood at an impressive $162 million, albeit down from $168 million the year before after book-balancing monies were withdrawn.
Other major-city orchestras also ended 2002 with deficits, although to somewhat lesser degrees than the CSO. They include the Philadelphia Orchestra and Boston Symphony. But like the CSO, these orchestras, because of their large endowment accounts, are better able to weather financial storms.
It is in the medium-sized American cities that the financial crisis remains acute among orchestras. The Saint Louis Symphony was in dire straits a year ago, but funding has been raised to stop the bleeding for the short term, at least.
The most recent bad news comes from Houston, where the Houston Symphony Orchestra's players went on strike at 12:01 a.m. Sunday in a contract impasse. The orchestra has been struggling ever since Christoph Eschenbach resigned as music director in 1999 after 11 years.
Eschenbach built the orchestra into a world-class ensemble and it has the advantage of playing in a modern concert hall.
The strike is the latest salvo in what have been contentious contract negotiations, the musicians rejecting the Houston Symphony Society's "final offer" of a 8.8 percent salary cut. The orchestra had been playing without a contract since October and the administration warned that without concessions from the musicians it would reach a debt ceiling on the $6 million line of credit imposed by its institutional supporters.
This is the first major strike in the 90-year history of the Houston Symphony (there was a one-day walkout Feb. 1). Player salaries comprise about 45 percent of the orchestra's $22.5 million budget.
"We have slashed all other expenses and we must reduce the cost of the orchestra. We're out of time. We cannot wait," said Houston Symphony Society president Jeffrey B. Early.
The Houston situation is just the latest example of orchestral financial crises. For example:
- The San Antonio (Texas) Symphony, on life support since nearly shutting down last September, said it is running an immediate $400,000 cash deficit, which may cause it to miss payrolls. Management says it needs $3 million to ensure operating the next two seasons as well as retire debts.
- The Colorado Springs Symphony filed for bankruptcy in February and canceled the remainder of the 2002-03 season, following the lead earlier this season of the Tulsa Philharmonic. The Colorado Springs musicians failed to reach a new contract with management, and a bankruptcy judge voided the current agreement. …