A Horrifying Interview with Douglas Hertz

Well, it has been an active day on the Atlanta Symphony Orchestra (ASO) front. On the one hand, there was an explosive press statement made by the musicians. And now to bookend the day, there is an exclusive interview with Douglas Hertz, chairman of the Governing Board of the Woodruff Arts Center (WAC).

I thought I was going to have a quiet evening, but Mr. Hertz’s comments really need to be addressed.

* * *

“ ‘I disagree that the public has sided with the musicians. I think the artists’ friends have sided with the artists. But I think the corporate community and the philanthropic community understands, like any businessperson would, we’re not going to make an investment in a business that keeps losing money.’ ”

Mr. Hertz, with respect, this can be reversed to say exactly the same thing about you and the board: “I think the corporate community has sided with the board.”

Of course your like-minded friends feel the same way you do… that’s just how the world works.

The real question is to what degree the public at large thinks about this topic, how passionately they feel, and what they as a whole decide to do as a result. You sidestep those issues entirely… but those are the issues that will ultimately determine what happens here.

And I do find it striking that you seem to think the public might be on your side—although public pressure has already forced Stanley Romanstein to resign. And, apparently, you to agree to this interview.

“ ‘It’s frustrating, because the whole allegation, whether it’s by musicians or supporters of musicians, or journalists who want to take the musicians’ side — I’m using “journalists” pretty loosely … for them to allege that the WAC doesn’t want a fantastic symphony orchestra, or the governing board doesn’t want to take care of the musicians, is so far off base if they looked at the facts.’

As evidence, Hertz mentioned the work of other Woodruff governing board members including retired BellSouth executive Jere Drummond, “whose raised millions of dollars for the ASO’s endowment” and Paul Garcia, the recently retired Global Payments chairman and CEO, who along with Delta Air Lines CEO Richard Anderson raised nearly $1.5 million over the last two years to reduce the orchestra’s deficit.

‘It makes you wonder, you know,’ Hertz said, ‘are we supporting a bunch of crazy people.’ ”

I understand that you are frustrated, but this is astonishingly petty.

So… first you insult any writer who might possibly think the musicians have a point by tossing out the line, “I’m using ‘journalists’ pretty loosely.” With respect, I don’t know that open contempt will help attract people to your point of view.

But you also completely avoid the question at hand… does the board want to turn the ASO into a minor-league ensemble to save money? You respond, in effect, that some people are still contributing large sums of money to it. Great. But that doesn’t answer the question. And makes me all the more curious to know if you plan to shrink the ensemble specifically to match the total that handful of gifts that has come in, rather than to seek out additional funds.

And finally… the fact that the musicians raise legitimate questions about your aspirations for the ensemble means you get to categorically insult them as “crazy people?”

Wow. Just… wow.

“ ‘The sad part of it is … there are not enough people that care. If the public cared maybe we wouldn’t be in this situation. When you’ve got less than 5,000 donors in a metropolitan area of 5 million, that’s my concern. We (board, administration and musicians) need to be getting together and figuring out together how do we grow support for the symphony.’ ”

Mr. Hertz, I find this deeply disturbing on several levels. First, I would obviously question the notion that people don’t care. They do.  An earlier post of mine attracted 12,100 readers from all around the world. That’s an intriguing bit of data… you seem so sure no one cares in Atlanta, but given the ASO’s international reputation, there is a vast international constituency you could be drawing from. But you aren’t.

And let’s unpack your comment further. What businessman goes out into the world with the attitude that no one “cares” about his product, and just gives up? A successful businessman fulfills demands the customers don’t even know they have. A successful businessman creates a market for his goods. He creates an appetite for his product. He creates demand.

And he doesn’t do that by denigrating his product in statements to the press. He doesn’t try to turn the public against his product as part of a labor negotiation strategy.

And let me ask you something. Just seconds ago you insulted your musicians by suggesting they are all crazy. But you need their help in growing support for the symphony… you just admitted as such. How do you propose to get them to help you when you actively insult them?

“Well, we are very interested in exploring alternatives. We are not, cannot and will not move from ending up with a balanced budget moving forward. But there are a lot of ways to get there, and if we were to do it together, we may be able to find a way.”

As I’ve said before—this isn’t actually a negotiation if you won’t budge from the first (and only) number you propose. Think of it this way: a clerk asking if you want to pay by cash, check, or credit card does not mean the two of you are negotiating about an item’s price.

“ ‘Well, it’s my impression that our symphony orchestra got the same artistic reviews over this past year as they have had in previous years. We had 116 separate musicians that played with our orchestra (who were) not part of our (88-musician) complement — 116 additional musicians who sat in just last year. Yet no one’s told me that artistically that we were any better or worse.’ ”

It’s your “impression?” No one has “told” you?

Do I take this to mean you have no first-hand knowledge of the group you oversee?

Do you think it is good that a business leader has no such first-hand knowledge of his or her product?

Look, freelancers can absolutely be as talented as their counterparts with permanent positions. As subs, they can also bring passion, fresh ideas and flexibility to the group. Subs play a critical role in every standing ensemble. And yes, a group that uses subs can still sound great and get rave reviews.

But that’s not what you’re saying here. You are saying you just don’t care. You don’t care about the fresh perspective subs bring, or their passionate playing.  You don’t care about how much work it is to integrate them into the ensemble. Conversely, you don’t care about the added value permanent players can bring, or about how you could use their familiarity to the community as an advantage. You don’t care about personnel.  You don’t care about the orchestra sound—its brand.

You are simply saying you can’t tell the difference and you don’t care.

I can’t imagine being a leader of a group if I were so indifferent to it.

“ ‘Again, we’re criticized for not wanting a great symphony, right? But we signed Robert to a five-year contract (that’s just beginning) with a raise. And Robert’s getting paid. And we signed (principal guest conductor) Donald Runnicles to a three-year contract. He’s getting paid. So don’t criticize WAC management or the WAC governing board for not wanting to put our money where our mouth is.’ ”

“He’s getting paid”? That’s the criteria?

So proof that you want a great orchestra is…the fact that you haven’t unilaterally revoked the conductors’ contracts?

What an astonishingly low bar.

“ ‘Maybe Robert’s feeling a little bit guilty because he’s getting paid and the musicians aren’t. But he could be a big help in solving this.’ ”

Do you have any evidence to support this speculation?

Let me ask: is it correct that Spano provided $50,000 to finance a tour to Carnegie Hall that the board was ready to cancel to save money? Is it possible, then, that he has been appalled by the lack of support you and the board have given the organization, and is genuinely upset?

And is it possible that most observers would consider that he was justified in his feelings?

“ ‘Encouragement of the musicians to come back and talk. But he hasn’t been particularly constructive to this point.’ ”

Please consider. If you and he switched roles, would you suggest to the musicians that they should get back to the table, based on everything that’s been said and done? Or would you see the WAC’s actions as an existential threat to their interests?

“ ‘We’ve got a division of the arts center that threatens the ability of the other divisions (the Alliance Theatre, High Museum of Art and Arts for Learning) to produce the great work that they’re doing. We owe it to everybody to make sure that everybody is pulling their weight.’ ”

Really? So you are publicly stating that the ASO is the problem? That the ASO is a drag on the collective finances of the WAC? And as the problem it has to be brought into line? That’s worth remembering….

“ ‘Don’t forget, when you have earned ticket revenues of only $5 million and have salaries and benefits just for the musicians of $10 million to $11 million, you’re losing money from the very beginning. …Every day, we lose money.’ ”

I don’t think I can convey how disappointing I find it that the head of the WAC doesn’t seem to understand the concept of a 501 (c) (3) not-for-profit organization, as defined by the IRS.

Mr. Hertz, the WAC is a non-profit. By definition, your earned income does not, and will not cover your expenses. As a 501 (c) (3) you are given the right to engage in fundraising to make up the difference. That is what you do. Just like every other non-profit in the country.

This isn’t a failure in your business model. It is your business model.

* * *

I find this whole interview deeply depressing.

 

Xochipilli

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24 thoughts on “A Horrifying Interview with Douglas Hertz

  1. There should be excitement in management to raise more funds for this great orchestra. Instead they come off as if they’ve had enough of creative fund raising and want to have the musicians shoulder essentially their lack of creativity and professional interest. Why should’t management be as excited about what they do as the musicians are?

    Liked by 1 person

  2. Here is a man revealing the business philosophy behind the scenes at many corporations. Imagine being an employee working at his company. If you think the treatment of the musicians is bad, it is rooted in the idea that they are merely employees to be interchanged with other less “expensive” employees, and while we’re at it, we might as well reduce their benefits, too. People such as this reject the notion that what the musicians have achieved by even being members of this orchestra, is of outstanding value through talent, experience, intelligence, education and creativity. God forbid the musicians use those traits to counteract such managerial incompetence.

    Liked by 1 person

  3. I’m speechless. This is, again, a sad example of a person (and people) who don’t understand that they don’t understand. You’d think intelligent people would be curious and want to learn, but this guy, like some in MOA management during the lockout there, just didn’t care. They believed they knew all they needed to know. What arrogance.

    Liked by 1 person

  4. Nonprofit corporations exist not to make money but to fulfill one of the purposes recognized by federal law: charitable, educational, scientific, or literary. Your assertion that such an entity may not have its income cover its expenses is completely incorrect, however. Making profits from related activities, in fact, is not taxable and does not jeopardize the tax exempt status. No business can survive with its core competency running a consistent deficit. Your assertions here demonstrate the lack of understanding that most musicians in this industry have. I suggest you do some research on the industry and its related structures.

    Liked by 1 person

    • Thank you for posting. To complete the circle of suggestions, may I suggest that you click on the “about” section of my blog. There you will find that while I am a singer, my bread and butter job for many years has been as an arts administrator with a variety of organizations, including the Minnesota Orchestra, One Voice Mixed Chorus, The Musical Offering, and The O’Shaughnessy theater. Plus, I serve on the board of the Minnesota Chorale.

      You are correct that I didn’t give a full account of the intricacies of non-profit law, because such a thing is not warranted here. You are also correct that there are complex regulations that involve earned revenue and taxation, and non-profits must balance such things carefully… particularly when it comes to sponsorships. Or when a theater runs a restaurant in its lobby.

      Of course no organization should run a deficit. This is true of for-profit and non-profit organizations. But I’m unclear as to why you raise the issue of deficits… that’s completely unrelated to the issue earned income covering an organization’s costs.

      It appears you’re falling into the same trap that Mr. Hertz did, and that you are both thinking about a “deficit” inappropriately. Mr. Hertz argues that not covering costs with earned income means the organization is an inherent failure. The fact that a non-profit does not completely cover its costs by earned revenue (in the way a Broadway theater does) does not mean there is a “deficit” or that the organization is inherently losing money. It can still have a balanced budget, or even report a surplus, by making up the difference in one of its other revenue streams. Non-profit arts organizations raise money from three major areas: earned income, donations, and investments (i.e. an endowment). Each of these contributes to the final bottom line, in various proportions. A true deficit comes about when the totality of these revenue streams is below expenditures.

      And if a deficit occurs, there are myriad ways of eliminating it besides simply slashing away at the core product of the company, as arts administrators have been saying across the country.

      But again, the fact that an arts organization engages in fundraising at all does not mean it’s running a deficit or that it’s business model has failed. Especially when the organization in question is a non-profit; that’s what non-profits do.

      One final suggestion. Please refer to one of the experts in this area, Michael Kaiser, who was until recently the head of the Kennedy Center. You can start here.

      Liked by 2 people

  5. What a silly article. “Horrifying?” Good grief. Get over yourself.

    “The real question is to what degree the public at large thinks about this topic, how passionately they feel, and what they as a whole decide to do as a result. ”
    I live in Atlanta and I think the general silence evident in the majority of the population answers this question.

    “Mr. Hertz, I find this deeply disturbing on several levels. First, I would obviously question the notion that people don’t care. They do. An earlier post of mine attracted 12,100 readers from all around the world.”
    What a naive and egoistical stance. You discovered 12,100 donors? No. 12,100 supporters? No. 12,100 people interested enough to read a post. Wow.

    The elephant in the room: the ASO is an upper-middle-class, Western, white organization trying to eke out an existence in a non-Western, multicultural, majority black city. You claim and assume that people do care. Besides upper-middle-class, Western, whites, who *should* care and why?

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      • Was there a comment referring to the SPCO and the parallels to the Atlanta Symphony. I thought I read one but can no longer locate it. Was that comment deleted? Thanks

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      • I don’t know that there was one on this post… but I’ve heard several point out similarities between the SPCO and the ASO. I haven’t deleted any comments, if that helps.

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    • Bert — the ASO’s audience base shouldn’t stop at the city limits. The Atlanta metro area is not actually majority black.

      However, an orchestra doesn’t need to appeal to the majority of the metropolitan area in order to be vibrant and valuable. Of 5 million people, the management just needs to be able to effectively reach out to more than 5,000 of them.

      Liked by 1 person

    • Well, obviously you don’t, so why bother even asking? Given that you’re clearly uninterested in the ASO to where you see fit to speak of it and its present problems in such a sweepingly dismissive manner, why should you get yourself so exercised over Mr. Chamberlain’s statements? Because he has the unmitigated temerity to actually care about this? Whether the ASO survives or not is no skin off your nose, that much is clear, but there are plenty of people out in the world at large who feel otherwise. I guess one should be grateful you stopped short of trotting out that old shopworn adjective “elitist”!

      Liked by 1 person

    • Bert, Bert, Bert – shakes my head. Why don’t you pop on over to Save Our Symphony Atlanta on Facebook and see what kind of people care about the ASO. The post reach last week was 141.5k. Now given that there are only a paltry (by your estimation) 8,775 people who have “Liked” the page, which they do, in order to comment on the page, that means that enough of those 8k+ people cared enough about the ASO that they saw to it that a whole bunch of people saw the posts there. Just for the record, many of them are donors or former donors who are carefully watching now this unfolds.
      If you bother to check it out, you’ll see posts from virtually every ethnicity, every socio-economic class and every age who are voicing their support – many in pictures, video challenges for donations to the ASO musicians and affirmations of having signed the petition listed there.
      Speaking of the petition, it has garnered over 2,500 signatures, well over half of which are from Atlanta/Georgia in only a few days.
      Your “general silence” supposition is predicated in part by the fact that the local news stations are, at best, dragging their feet about reporting on this debacle. The silence comes far more from not knowing as from not caring.
      The lack of caring, Bert, is not on the part of those of us who cherish the symphony and what it brings to the fabric of human culture, but from uninformed readers like you, who delight in making snide comments on the internet.

      Liked by 1 person

    • Hi, Bert! I have a question for you: why do you trot over here and open with an insult…yet close with an essay question about caring?
      Are you familiar with the aging lunatic identity-troll Pamela Brown? One of her main approaches to posting under random identities is to whip up opposition, usually using antiquated insults and a tone perhaps found in second-rate Victorian novels. (Not nearly as skilled a writer as she thinks she is.)
      If you’re real, be civil. If you’re Pamela, take your meds and work on your novel.

      Liked by 1 person

    • Bert, you should take a few moments and watch this piece that appeared on 60 Minutes and educate yourself a little bit. Joy in the Congo: http://www.cbsnews.com/videos/joy-in-the-congo-a-musical-miracle-2/. Then there is this second story about instruments made from trash in Paraguay in another poverty laden society that craves culture: http://www.cbsnews.com/videos/60-minutes-shows-how-garbage-is-transforming-lives-in-paraguayan-town/. Why would you interject race into an issue that has nothing whatsoever to do with race, but speaks to all of our humanity? Shame on you. A deficit of character on your part, sir.

      This is not really an issue for the public at large, since the public at large isn’t required to support it, unlike many referendums on tax allowances for building multiple sports complexes in the greater metropolitan Atlanta area. If you aren’t a supporter, go in peace, and leave the rest of us to express ourselves about that which we are passionate. It’s no skin off your nose.

      Liked by 1 person

    • What an idiotic response. I’d suppose you’d have the orchestra play (c)rap music and let the musicians go on stage with their pants hanging down. And serve 40s and blunts at intermission, right? Get over YOURself.

      Liked by 1 person

  6. The job of management and of the board of the WAC and ASO is to support and fund raise for its divisions. In the AJC interview Hertz talks about a city who doesn’t support the arts. But at the same time, he talks about his philanthropic circles of which he is a proud member. So… seems to me he is showing off not only his personal failure to promote his product but the failure of his board as chairman and failure of the management he was elected to oversee. To Mr. Oleander, have you ever heard the ASO? I’m thinking perhaps not. It may not even be something you have thought of as the marketing department of the ASO is in a sad state, see Song of the Lark- blog for more information. Another reason you may not have seen the Amazing ASO is because Atlanta media isn’t interested in giving this story the coverage it deserves. This is why blogs like this are how vital information gets out, so glad you were able to read this. Mr. Oleander, please try You Tube and you can hear what an amazing World Class Orchestra sounds like – however it is 100% better in person. Too bad the doors are locked and the lights are out and some of the most talented members of our community are out on the street – no work, no pay, no health insurance – they too have families to support!

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  7. Spot on, as always. The handful of naysayers always miss the same point: you must have unearned income to cover your expenses. When people hear us say that a non-profit is “not supposed to make money”, they assume we just don’t know what we’re talking about. In fact, the opposite is true. Unfortunately, the same people who believe that non-profits are supposed to be racking in the dough are running the show at the WAC. Their critics say they don’t want a world-class orchestra, but I don’t believe that’s true. They would love a world-class orchestra if it was super easy to fund. The problem is that they don’t know how to raise money and it scares them. Even if Virginia was excellent at fundraising, she could manage with this board. The problem is that neither her nor the board of trustees know anything about raising money for the arts. They’ve come in to “fix” the business because that’s what they know how to do. (And if people actually working in non-profits were given a nickel for every time we’ve seen this model fail, they wouldn’t need fundraisers.)

    Liked by 1 person

  8. Mr. Oleander, While I am not intimately familiar with Atlanta, I am so with Detroit. Your statement below has been proven wrong over and over again here in a city which I dare say is just as non-Western, multicultural and majority black as Atlanta. The Detroit Symphony Orchestra is thriving like never before. Check out this recent post from their website:
    http://www.dso.org/DSOnewsdetail.aspx?pid=4112&Title=DSO+ANNUAL+GIVING+SURPASSES+GOAL+AT+%2417.4M
    “The elephant in the room: the ASO is an upper-middle-class, Western, white organization trying to eke out an existence in a non-Western, multicultural, majority black city. You claim and assume that people do care. Besides upper-middle-class, Western, whites, who *should* care and why?”

    Liked by 1 person

  9. Dear WAC,
    You mean to tell me you have a division in your Arts Center called:
    Arts For Learning
    AND
    you are NOT using the
    Atlanta Symphony Orchestra to
    Teach the Arts!
    What does your Arts For Learning
    program entail? How do you propose to use the Arts to Learn without a symphony orchestra???
    Please explain,
    Jacqui Danilow
    Bassist at the Met
    Education Programmer “using classical music, opera, & symphony orchestras as MAJOR tools for all of our Children’s Education!”

    Liked by 1 person

  10. What I find telling is that Mr. Hertz states that ticket sales make up only about half of the orchestra’s revenue, and doesn’t explain at all that this is par for the course. This is how every performing organization that I’m personally familiar with operates. At performances, there will be an announcement (either spoken or written) saying, “Thank you for coming, we hope you enjoy the show. Ticket sales only account for half of our budget; the rest comes from people like you, who see the work we are doing, and would like to see it continue. Please donate to help keep our organization going. Thank you!”

    Really, since when can any symphony orchestra survive on ticket sales alone? Mr. Hertz is either ignorant, or telling half truths in order to make his point seem more valid. I’d put my money on the latter.

    Like

  11. Pingback: 2014: A Year to Remember | Mask of the Flower Prince

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