A Painful Interview

Well, I guess it’s time for another rebuttal.

Yesterday, Minnesota Public Radio posted an interesting feature on their website regarding the Minnesota Orchestra lockout.   Host Euan Kerr interviewed both sides of the dispute separately, with Tim Zavadil representing the musicians, and Doug Kelley speaking for the management.

It was not an even exchange.

Once again I was surprised by the overall weakness of the management’s presentation.  Again and again, Doug Kelley resorted to arguments that have already been pulled apart by me or a whole host of other observers.  Plus, the points were just so… lazy.  I feel like I could in many ways make a better case for management’s position.

Below is a series of points that are false, misleading or just plain misinformed… I just cannot let them stand.

* * *

“We have a fiduciary responsibility to protect the organization.”  Absolutely, I agree 100% with you on that point.  What I have said numerous times is that you are not offering a plan that will, ultimately, financially sustain the organization.  Your strategic plan for the future was full of holes to begin with, and has not been updated to reflect current projections or realities on the ground.  As I’ve argued in exhaustive detail, arts funding has by and large recovered from the Great Recession, and orchestras around the country are enjoying record levels of ticket sales and donations.  The Minnesota Orchestra, however, has based all future “growth” on the financial realities of 2008.  But even if we accept the management’s numbers as gospel, everything else in that plan has changed. An entire season was cancelled.  There was no grand opening with a “glow effect.”  Osmo has left.  Therefore, whatever plan the management might have had is now lying in the dust.

And… all this was done by management’s design.

So it is somewhat off-putting to hear Doug Kelley suggest that management is somehow uniquely interested in the Orchestra’s financial health, or uniquely able to safeguard it.

“…$6 million deficit, or $500,000 per month…”  I will say—again—that this is an artificial number.  As was reported by the press back in early 2013, the board’s own records show that that specific amount was chosen in consultation with a PR firm.  And it was chosen in part to demonstrate that the Orchestra’s finances were in such bad shape that a new business model was required.  But let’s assume for a moment that the $6 million total is a real, non-manipulated number.  It does not follow that the organization has to cover the full amount of the deficit in one year.  Many professionals and outside observers have made a compelling case that that paying down the deficit gradually is a better strategy because it doesn’t deplete the organization’s resources.  On the contrary, such a gradual strategy would leave more funds in the endowment, for example, to increase as the market continues to improve.  Over the long-term, it’s actually more cost-effective to pay the deficit off in stages.

“The musicians aren’t negotiating.”  Tim Zavadil responds well to this in his counterpoint.  In short, the musicians have made many counteroffers.  As I’ve said before, the fact that management doesn’t like these counterproposals does not negate their existence.  The musicians’ website has more details.

“Demanding an end to the lockout as a precondition to negotiations is an unfair labor practice.”  Doug, with respect, this is an embarrassing comment that does not do the management’s side any credit.  The musicians’ demand that you allow them to return to their jobs is a rational, fair-game demand to make.  At this point, all the hardship is on them… Michael Henson is, for example, continuing to draw his salary.  That is also why your analogy about striking coal miners is not germane—in both cases the leadership is not personally impacted by the labor action.  Plus, it’s hardly unheard of for “cooling off periods” or “talk and play” to happen during an ongoing labor dispute.

* * *

It is at this point where we get to the meatiest portion in the interview—a lengthy section where Doug discusses the $200,000 in bonuses Michael Henson received.  His answers are particularly revealing.

“The CEO is a serious position that has specialized skill sets.”  Apparently you don’t believe the same can be said of the Music Director, the musicians, or many of the employees.

“We need to keep his salary in line with other CEOs to draw the most qualified personnel.”  Do you not find it a touch ironic that you use precisely the opposite argument when speaking about the musicians?  Management has argued again and again that it doesn’t matter what competitive salaries are for orchestra players around the country…  the musicians’ salaries have to be cut, and that management can always find someone else willing to do the work.  So why is the President in a different category all together?

“Michael Henson has told the board he will take a similar pay cut as the musicians.”  I’ve written about this extensively.  If the Orchestra’s finances were as bad as is now claimed, why wasn’t Mr. Henson’s pay cut automatically?  Or at least frozen, like the rest of the staff?  And, Michael Henson telling the board that this is his intention to take a pay cut is not the same as him formally making this offer to the musicians as part of a settlement—which he hasn’t done. Right now, it’s nothing but a PR stunt.

“These happened in 2011, before the lockout even occurred.”  Doug seems to suggest that since these bonuses were given out before the current fiscal year, they’re not relevant to the discussion today.  I cry foul.  As Tim points out in his response, these bonuses were made during this same year that Michael Henson was crying organizational poverty and laying off staff.  Emily Hogstad has a great blog exploring this in more detail.  I’m sorry, Doug, but the bonuses are most certainly relevant.

Doug also tries to suggest that the 990 form in question is reporting on two separate years, and that’s why the bonuses got “doubled up.”  Well, not really.  It’s reporting on two separate fiscal half-years, but still covering one 12-month period.  Assuming Mr. Henson was awarded a bonus every 12 months, there is no reason why two bonuses would show up on one 990, unless the Orchestra chose to distribute them that way—and to report them that way.  Why did management do so?

“This is the money Michael Henson is eligible for under his contract.”  This is a bizarre phrase to throw out.  Doug, are you arguing that in a time of great financial difficulty you simply had to give Michael Henson the maximum allowable bonus? Were there no other options?  Was there no way of using that money to plug other holes in the budget?  Going further, do you suggest that because the President’s bonuses were the most important line item in the entire budget, other things actually had to be cut so that he could get the maximum amount allowed under his contract?  Do you argue that simply because Michael Henson was eligible to receive that money that he actually earned it?  Has his tenure been that successful?

“Michael Henson should get combat pay.”  I understand in such a difficult situation as we have here, that a certain amount of “gallows humor” is par for the course.  But it is highly inappropriate to make this particular comment at this time.  I’m truly sorry Michael Henson feels put upon… that must be a miserable feeling to live with.  But he’s still drawing a salary.  He has gotten bonuses larger than most musicians’ entire salaries, and he has done so while laying off seasoned employees.  He is not the victim here.  And to make such a joke while trying (ineffectively) to explain why he’s getting such outrageous bonuses shows incredibly bad taste.

* * *

Two final points.  First, I was struck by the contrast between how Tim and Doug summed up what happens next, from their respective sides’ point of view.  Tim essentially argued that the mission of the musicians—and the organization as a whole—was to make music.  He detailed the various ways the musicians would continue to engage the community and make world class music, thus keeping the mission of the Orchestra alive.  Doug, on the other hand, countered that the musicians had to accept reality and negotiate with management.

With apologies, the management’s “reality” has nothing to do with the real world’s “reality.”

Management’s assumptions have been proven false.  It has spent money frivolously.  Its demands have been widely derided and its strategic plan leads nowhere.  Management’s only real plan at this point seems to be “save money,” which cannot sustain an organization over the long-term.  More than that, the management has few friends left outside of its own closed circle.  Everyone who has tried to negotiate with the management—Mayor Rybak, Judy Dayton, Governor Dayton, Alan Fletcher, Orchestrate Excellence, Senator Mitchell, and the musicians themselves—has come away burned.  Plus, the state’s legislature is openly hostile, the incoming mayor of Minneapolis publicly sides with the musicians and the public is outraged.

Doug, with respect, I don’t think it is the musicians who need to face reality.

Also, at this late stage of the game, it seems odd that the Orchestra sent Doug Kelley out to be its spokesman.  Doug isn’t, after all, a current board member, and isn’t a senior leader on the administrative staff.  The musicians sent an actual musician to speak to MPR, so why didn’t the management send a board member?  The disadvantage of sending Doug is that his whole presentation had an impersonal feel to it.  It’s like he’s speaking in the passive voice throughout.

A final note.  As part of his introduction, Euan Kerr noted that when MPR elicited feedback from its listeners regarding the lockout, the overwhelming majority of comments supported the musicians.

Based on this exchange, I don’t think Doug did anything to change that dynamic.