A FAQ that Raises More Questions than it Answers

As the labor dispute between the Minnesota Orchestra’s management and musicians has unfolded over the last few months, I’ve been baffled by many of the management’s stated positions. And I say this not in a Minnesota-passive-aggressive kind of way—I’m genuinely baffled. Yes, I fully believe that Orchestra’s finances were hit hard after the market crash in 2008, and the last few years have been a struggle.  This has been true for almost every person, business and non-profit in the nation. I am also fully prepared to believe that things have sunk so low for the Orchestra that a new business model is needed to stave off financial disaster.  So from my perspective, an argument for a cuts and/or a business reset should be easy to make and easy to substantiate.  I may not agree with all the particulars, but I should be able to understand them.

But this is not the case. Again and again, I’ve found the management’s arguments to be weak, counter-intuitive, sloppily made, easily disproved and inconsistent. It’s as if management considers its position so self-evident that feels no obligation to explain or defend it to the broader public.

The FAQ section on the Orchestra’s website is a prime example of this  (http://www.minnesotaorchestra.org/ ). Yes, in a bitter labor dispute there is always good chance that either side’s talking points play hard and fast with the truth.  But these talking points go beyond spin, and I’d like to respond.  Questions in bold refer back to the headings on the FAQ page, while phrases in italics are the specific points I’m addressing.

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 WHY ARE THESE NEGOTIATIONS IMPORTANT?

 “our musician expenses have never been higher.”

This is the kind of lazy, unsubstantiated claim one expects in media talking points. That said, it is still dreary to read. Yes, the expenses have never been higher… because the cost of living in general has never been higher. Every meaningful analysis that compares costs from two different eras adjusts for inflation as a standard operating procedure. This argument would be the equivalent of saying that the 1962 movie Cleopatra was small-budget sleeper because it only cost $31 million to make… and pivoting immediately to say it also goes to show how expensive it is to make a movie nowadays. But really. The sum of $31 million in 1962 roughly equals $230 million today, making it clear why Cleopatra is regarded as a bloated, big-budget behemoth that almost bankrupted the movie studio.   It is for identical reasons that “musician expenses have never been higher.”

Then of course there are the follow up questions:  higher relative to what?  Higher relative to whom?  Is your income higher than ever? What happens over the length of the contract?  And other relevant details.

 

“Musicians account for 48 percent of the Orchestra’s total costs.”

This number gets tossed out frequently, but needs to be unpacked. This is, after all, an orchestra—a group of musicians coming together to perform music. Why shouldn’t the musician costs be the lion’s share of the budget? I’d be curious to learn what you’d suggest should consume a larger percentage of the budget… administrative overhead? An important question to ask is, what is the industry standard?  What is the ideal percentage of an orchestra’s budget that should go toward musician salaries? More importantly, what is your ideal percentage?

“Our musicians must play their part in the organization’s financial recovery.”

Absolutely… I wholeheartedly agree. Moreover, I’m fairly sure that many of them feel this way and want to be part of the solution. I’d argue that you never asked them to be part of the solution. I’m hardly unbiased, but to me it feels like you’ve structured this whole lockout as a punitive action with an eye toward unilaterally recasting the relationship between you and the musicians. You’ve locked them out, only grudgingly allowed them a chance to speak to the board, and engaged in a whole host of heavy-handed actions that have been documented elsewhere. For me it appears that everything you’ve done to this point has been to simply win a labor dispute.  This is very different from wanting them to be partners in the organization’s financial recovery.

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WHAT ARE THE TERMS OF THE MINNESOTA ORCHESTRA’S PROPOSED CONTRACT WITH MUSICIANS?

 “Musicians can leverage the reputation of the Minnesota Orchestra brand and supplement their incomes by teaching and playing in music festivals during the regular season and during their weeks of vacation. The Orchestra is supportive of this additional employment.”

This is… astonishing. With respect, consider what you are publicly advocating. You are suggesting that musicians can always fill in here and there with outside gigs—and because you assume this to be true you are going to preemptively lower their base salary. For perspective, you’re essentially saying that Derek Jeter could take a big pay cut, because he could make up the difference by trading on the Yankee’s name for outside income.  He could choose, for example, to coach little league or be a ringer on Bank of America’s corporate softball team. Also, it’s great that you “support” someone else paying your musicians’ salary, but do you find them these gigs or coordinate with outside groups to make them happen? Or do you expect the musicians to job hunt on their own time as well?

Let’s flip this. Using this same argument, you could have the board cut Pres. Henson’s salary by 40% with the understanding that he will supplement his income with paid speaking engagements around town, or by serving as a consultant for other non-profits.

“The proposal also requests that musicians play chamber music in community locations and participate in outreach events in our state’s schools as part of their contract, which is good for our communities and good for the future of the Orchestra.”

I fully agree that these activities are good for the Orchestra and good for the community. But they come at a cost. Who picks up travel expenses? Will these outside activities disrupt practice time or otherwise interfere in musicians’ schedules? Can musicians refuse? Think about this from a broader business perspective—how many times can you send an employee out to represent your company at trade meetings, career fairs, conferences and such before that employee’s core job duties begin to suffer?

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WHY NOT CONTINUE TO “PAY AND PLAY” TO TRY TO COME TO AN AGREEMENT?

 

“From April through September, that is precisely what we did.”

This talking point is, in honesty, bizarre. First, you make an un-clever riff of the well-known, broadly used term “play and talk” that makes it sound like you’re a grumpy father fuming that your kid bought expensive clothes on your credit card. More to the point, it is wholly inaccurate—you were paying them because they were still under contract to play. The labor contract didn’t expire until September. They were fulfilling their job duties, and you were obviously legally required to pay them for services they were rendering. “Play and talk” would only come about after the contract expired.

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 HOW MANY MUSICIANS HAVE LEFT AS A RESULT OF THE LOCKOUT?

“Since the lockout began in October, the Orchestra has received one resignation and notification from four musicians that they wish to take a year’s leave of absence in order to pursue other opportunities.”

This is a delicate topic. Many outside observers think the phrase “they’ve taken a year’s leave of absence in order to pursue other opportunities” means, in plain English, “they’ve quit.”  It is the standard operating procedure across the industry for musicians to take a year-long leave if they receive another job offer. Does that mean they view their absence as a temporary sabbatical?  Or are they keeping to the letter of the contract but counting the days until they can officially resign? You seem to assume the former, but I believe they wouldn’t have left if they were a contented employee.

Another obvious point.  Even before the musicians received the management’s proposal in April, it was clear what direction it was going to go. Did a couple of retirements happen because individuals didn’t want to get caught up in the coming storm? Did musicians take jobs elsewhere because it was easier than sitting through an emotionally draining labor dispute? Did they leave directly because of the labor dispute, or was it an indirect factor… one of many considered?  Only they know for sure.  But, coincidentally, we do have statements from some of the musicians themselves: Burt Hara, Gina DiBello, Thomas Turner, Matthew Young, Sarah Kwak, Vali Phillips, and Peter McGuire seem to have given some indication—at least to their former colleagues—that they left due to the lockout and the proposed changes to the Orchestra. Do you dispute their claims? How do you reconcile this with your statement of “one” resignation?

“On average, approximately three musicians leave the Orchestra each season to accept other positions.”

This may be true but it is irrelevant. Well, I take that back. It is a useful perspective to offer as background information, but you’re making it seem more important than it is. And it doesn’t change the fact that the individuals mentioned above have indicated the specific reason they’re leaving is the contract you are trying to implement, plus an overall bad work environment. It seems like you’re implying that the first three musicians that leave under these circumstances don’t count somehow because something else would have caused them to resign anyway.

 ***

 IS IT TRUE YOU ARE ASKING MUSICIANS TO ACCEPT 1983-LEVEL SALARIES?

 

“In 1983, Minnesota Orchestra musicians earned $33,000 a year, and health care and pension costs were more modest, manageable expenses.”

While this statement is technically true, my feeling is that making such a claim actually undermines your overall credibility. Yes, the musicians made $33,000 in 1983, but the cost of living was far lower back then. Adjusting for inflation, which is a standard procedure when comparing costs from two very different eras, reveals that the musicians’ salary would equal about $77,000 in today’s job market (remember my Cleopatra analogy above?).  This is essentially the point the musicians have made, and is to my mind an accurate assessment.  Likewise, a comparison with health plans is also false because of the massive transformation in healthcare delivery systems and options between then and now.

Again I would reverse this and ask if you would have the CEO make the same inflation-adjusted income as his 1983 predecessor?

 ***

WHAT IS THE ORCHESTRA DOING TO TRY TO GET ITS MUSICIANS TO SUBMIT A COUNTERPROPOSAL?

“Since January, the board has done everything it can to remove the barriers musicians have said stand in the way of them issuing a counterproposal.”

I’m sorry, but this statement, along with the accompanying list of bullet points, is not exactly true. Faced with repeated demands for an independent financial analysis from the musicians, donors and the state legislature, you chose instead to hire your own firm to produce a narrowly-focused “independent” analysis that deliberately sidestepped several questions the musicians wanted answered before they felt they had the necessary information to make a counterproposal. Yes, you did invite the musicians to speak to the board, but only for a 15-minute time slot; this feels inadequate for the amount of issues to be resolved. You did offer additional meeting dates, but for weeks into the future, which made it seem like you were simply stalling for time. Your efforts to rework the mission statement were greatly appreciated, and I thank you.

 ***

IS IT TRUE THAT THE MUSICIANS ARE REFUSING TO ISSUE A COUNTERPROPOSAL BECAUSE THEY ARE CONCERNED MANAGEMENT COULD DECLARE AN “IMPASSE” AND LEGALLY IMPOSE ITS ORIGINAL OFFER—OR MANAGEMENT COULD FORCE THE MUSICIANS INTO A STRIKE?

“To say that one party can’t make an offer in a negotiation runs contrary to the very notion of collective bargaining.”

This comment about the musicians not offering a counterproposal is made frequently by people inside and outside the organization. Other writers and outside commentators have covered this… a good analysis is presented by industry writer Drew McManus here: http://www.adaptistration.com/blog/2012/11/29/no-confidence-vs-full-confidence/ .

My own point to add to this discussion is that the demand for a counterproposal prioritizes an internal benchmark over an overall goal. Instead of trying again and again to specifically elicit a counterproposal from the musicians, why don’t you work toward resolving the dispute as a whole? You don’t need a notarized counterproposal on official letterhead signed by multiple witnesses. Hash it out over the phone. Break it into parts written up on note cards. Argue face to face. Again, a formal counterproposal is not actually necessary to resolve the dispute—but real negotiations are.

 ***

 WILL THE BOARD AGREE TO AN INDEPENDENT FINANCIAL AUDIT?

“The Board agreed to proceed with a joint financial review on January 2. It offered terms for the review by the end of January and suggested an independent financial analyst by February 11. On April 16, citing frustration over Union delays, the Board announced it would proceed on its own with the review. “

Again, this is such an odd statement to make publicly. For several months, the management flat-out refused to entertain the notion of an independent financial review. After legislative hearings and damaging revelations about the board minutes, the management backtracked and begrudging agreed to an analysis. However, it continued to push back against a review of key topics the musicians wanted to explore.  And, last month the management suddenly and unilaterally withdrew from negotiations… and declared they would conduct their own analysis and share the findings with the union. The story is detailed here: http://blogs.mprnews.org/state-of-the-arts/2013/04/mnorch-management-launches-its-own-financial-analysis-cancels-concerts/ .

So.  The timeline and version of events is you have in your FAQ is factually correct, but blithely ignores the fact that management fought tooth and nail against having any of financial analysis done in the first place, and sidesteps the repeated efforts to limit its scope. For what it’s worth, I think it is nearly impossible to positively spin the fact that you are conducting an “independent” analysis on your own terms, by firm you have chosen, with selected results being given to a chosen few—but are still referring to it as “independent.”

 ***

 WILL BOARD MEMBERS GAIN IN ANY WAY IF MUSICIANS MAKE CONCESSIONS?

“Over the last five years, Board members have donated $46.76 million to the Minnesota Orchestra.”

In the midst of my grumbling, let me take an opportunity to sincerely thank the board members for their generous support of the Orchestra. This support has made all kinds of wonderful programs possible. No “buts” or “howevers” from me… just a genuine thank you.

***

WILL MANAGEMENT AND ADMINISTRATION ALSO REDUCE ITS COMPENSATION?

“Yes, it already has.”

Again, this section is not entirely untrue, but bypasses some critical details. Yes the staff was reduced 20%, but as noted in the press coverage at the time, that number included staff members whose jobs were specifically tied to the building, such as the facilities crew or the stage door guard. Once Orchestra Hall reopens, will some of these positions reappear? There is also much talk about staff salaries and how they’ve been flat or reduced. Interestingly, the CEO’s salary is reported in the Orchestra’s 990 forms for the IRS, and it doesn’t seem that he took a pay cut. On the contrary, he received salary increases comparable to the musicians over the same amount of time.  The same documents show he makes significantly more than the musicians (more than four times the musicians’ base salary), and it would seem that this salary package would be a good area for cuts—particularly if he’s asking for a sacrificial, 40% cut from the musicians.

***

WHY RAISE $50 MILLION FOR THE RENOVATION OF ORCHESTRA HALL WHEN THE ORCHESTRA FACES LARGE DEFICITS?

“A renovated Orchestra Hall is part of the solution to the Orchestra’s financial issues.”

This is a novel explanation—that the $50 million renovation of Orchestra Hall will in and of itself help the Orchestra’s bottom line.  This is an idea that seduces art organizations all the time, but it is, unfortunately, difficult to substantiate this claim.  But there is, however, plenty of data to suggest that this plan won’t work.  It’s also important to note that many key figures following this dispute have persuasively argued the reverse of your argument, saying that spending large sums on renovations to Orchestra Hall in the midst of a financial crisis was fiscally irresponsible. It would be the equivalent of securing a home improvement loan to build an addition to your house, but losing your job just before ground breaking. Should you go through with the project? Yes, the new addition might add value to your house down the road when you’re ready to sell, and yes all the contractors are lined up and ready to go, but can your budget afford such a thing in the here and now?

Michael Kaiser, head of the Kennedy Center in Washington, has written an interesting article on this theme, and been forced to ask, “How many more arts institutions must face financial woes, labor unrest, reduced performing schedules and even closure because they commit to capital projects that are beyond their means?” (http://www.huffingtonpost.com/michael-kaiser/the-arts-and-the-edifice_b_3305696.html)

***

WHY DOES THE PROPOSAL INCLUDE UNION WORK RULE CHANGES?

“For example, we’d like to be able to schedule concerts on New Year’s Eve or New Year’s Day—occasions when our audiences enjoy hearing music. We’d like to be able to schedule concerts up to 2 1/2 hours in length to allow for more programming flexibility and longer intermissions for audiences.”

I’m somewhat surprised to learn that there has been a groundswell of support for concerts on New Year’s Eve or Day, knowing the Hall’s spotty record with attempts to schedule them in the past.

More to the point—in your own words, you want to call in your musicians on major holidays and extend their work day with no extra benefit or compensation.  But wait… it’s not just that they won’t see any extra compensation.  You’re making this request of them as part of a contract that is simultaneously demanding a 40% pay cut.  So to recap:  work through holidays, work longer days, half the pay.  Is there any employee that would think this is a good idea?

***

HOW HAVE OTHER ORCHESTRAS ADDRESSED THEIR DEFICITS?

“Every community must find its own solution to the challenges that its orchestra faces, based on what its community can afford.”

The rest of this bullet point—which model is, in fact, the best one for us here—is debatable.  But there’s this point is important to address.  As you say, we need to let the community find the solution.  With respect, the solution you have approved and decided to implement has not, to my knowledge, been vetted by the community.  In fact, the community has in many ways reacted strongly against it.  It is clear from your own board minutes that you were reluctant to let key members of the community, including the state legislature and donors, know that there was even a problem that needed a solution.  Several donors have come forward publicly to state they would not have donated to the capital campaign if they knew the organization was truly in such dire financial straits… they would have instead earmarked their gift to keep salaries strong.  My own opinion is your proposed solution feels like something that a small, select group crafted and decided to force on the community whether they like it or not, and any resistance from the community was to be ignored.  Nothing in this feels like a community finding a solution.

***

WHY DOES THE PROPOSAL REQUIRE COMMUNITY AND SCHOOL OUTREACH?

“Our current contract limits the amount of outreach the Orchestra can do in the community because we must pay musicians approximately $100 per hour (on top of their regular salaries) to go into schools, to talk with students and engage in outreach.”

I’m at the end, and I’m sure most rational people have left their computer and found something more enjoyable to do.  So let me say this.  Outreach is great.  But are you proposing that musicians learn a totally different repertoire on their own, rehearse it with their colleagues on their own, get to an off-site location on their own, and spend a few hours of their own time performing and mentoring kids… without any compensation whatsoever?

And something else that seems “off” in your talking point.  Over the last few years, the date of the first concert of the season has been moved later and later.  Since the number of weeks covered by the contract hasn’t changed, aren’t you essentially paying your musicians to stay home when you could be having them perform in a community setting during the month of September?  Maybe have them play at the Lake Harriet Bandshell, or Como Park Pavilion or in Plymouth?   Or if the transportation is prohibitively expensive, have them perform at Orchestra Hall or simply send them out as speakers.  It is not a rigid union contract that is blocking these things from happening, it is a rigid way of thinking… there are creative solutions available.  Why waste those weeks if you’re paying the salaries anyway?

And finally, this point seems to imply that the musicians aren’t involved in community outreach, or at least not unless they are paid handsomely.  I have to say that they do take part in outreach.  All over and in all kinds of ways.  Could they do more?  Sure—the community loves these interactions and is always hungry for more.  But they absolutely are involved in outreach now.  Absolutely.

***

Again, I’m outside this whole dispute and I readily concede that I don’t have all the information.  As a result, I could be taking a simplistic approach to many of your arguments.  But these are your words in your FAQ section, and from my perspective your arguments have some serious holes in them.

 

Xochipilli

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5 thoughts on “A FAQ that Raises More Questions than it Answers

  1. This is a very helpful and thoughtful response. It’s hard to know if there is anything that can be said that would move the board. This makes me fear that there will ot be another season of the orchestra I am at a loss to understand what is going on in the minds of the board members. Surely they cannot wish for the destruction of this incredible institution. But that appears to be the direction they are taking. What will they do in their new lobby when there is no orchestra?
    Thank you for taking the time to respond to the FAQs.

    Like

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