A Confounding Development in Philadelphia

I’ve seen a lot in my time as a classical music writer/blogger. I’ve covered a number of labor disputes involving orchestras and opera companies, and have seen a number of bone-headed, tone-deaf actions as a result. As this point, I assume I’ve pretty much seen it all.

And yet, I continue to be surprised.  It seems that there are still plenty of labor disputes plaguing the world of classical music, and they continue to generate breathtakingly bad ideas.

Let me share the most recent—one that unfortunately has transpired in Philadelphia, the home of one of the United States’ most celebrated, venerated orchestras. This one is a whopper.

* * *

First a few words of context.

The Philadelphia Orchestra stunned the world in 2011 by announcing bankruptcy, during a time of tremendous upheaval at the orchestra. The decision drew harsh criticism, in part because the Orchestra’s financial endowment was one of the largest in the country.  Many suggested the Orchestra filed bankruptcy simply as a maneuver to get out of its pension obligations to its musicians, as well as to force a 20% pay cut on them. A later report detailing all the luxurious perks in CEO Allison Vulgamore’s compensation package only reinforced the idea that the bankruptcy proceedings were a sham. Nevertheless, it went through.

Well, the labor contract that was imposed during the bankruptcy is nearing its end, and new contract negotiations between the management and musicians have been going on since last April. It is probably no surprise that these labor negotiations are particularly weighty—this is the first new contract since the bankruptcy. The musicians are attempting to make up lost ground, and arguing that without pay raises the orchestra can’t compete for top talent. Management is trying to hold the line with no raises, or minimal raises paired with large cuts in health insurance.  Tensions have been rising, although both sides agreed to a series of short-term “pay and play” agreements after the old contract expired in September.

One of the biggest obstacles to a settlement is that management’s credibility on financial matters is, to be polite, strained.

In part this comes from the fact that so many other classical managements have poisoned the well already. For example, during the Minnesota Orchestra dispute, minutes from board meetings came to light showing that management followed a strategy of fudging the finances to show a surplus when the organization was seeking state bonding money, but deficits when it was negotiating with the musicians. Also, a pair of financial reports to the City of Minneapolis were so flawed that the city was 48 hours from taking over Orchestra Hall. There is also the case of the Metropolitan Opera, where suspicious financial reports completely undermined the position of General Manager Peter Gelb; the dire financial warnings Mr. Gelb made during the dispute were further undermined when the Met announced $1 million surplus this fiscal year. And in the case of the San Diego Opera, General Director and Artistic Director Ian Campbell (with support from Board President Karen Cohn) announced that the Opera did not have sufficient funds to survive, and moved to close it permanently… before being ousted by other board members and a new leadership team who proved the company could survive quite well, thank you very much.

After these and many similar cases, it’s quite clear that managements’ statements of financial doom need to be taken with more than a few grains of salt, and closely examined to ensure they are literally true, and not just ideological position pieces.

But the Philadelphia Orchestra’s management has some specific credibility problems, too. The musicians have been suspicious about management’s capital campaign, arguing that it is inadequate for the situation. They’ve also had questions about inflated executive compensation amid cries of poverty.

That brings us to this week’s shocking developments.

Things started off well. Days ago there was a new development that seemed to offer a bit of hope that the logjam might be broken—the Orchestra’s management had hired the famed arts administrator Michael Kaiser to a six-month contract.  He was charged with analyzing the organization’s finances, making recommendations about how to raise additional funds, and addressing broader organizational problems. “He will be advising the association on the next phase of strategic planning, specifically resulting in proposed directives for increasing earned and contributed revenue and for creating a larger endowment fund,” reported a management spokesperson.

This was a hopeful sign in that Michael Kaiser is famous for his views that arts non-profits can’t cut their way to success, and that the money has to serve the art rather than the other way around. It’s doubtful he would simply be a management stooge, and his involvement suggested that the Orchestra’s management might be moving away from a hard-core press of the musicians. More important, this development suggested management realized it had a significant credibility problem, and was engaging in an outside, neutral analysis to bolster its case. Many assumed that Mr. Kaiser wouldn’t take the job (and potentially threaten his reputation) unless he would be granted complete clearance to look at the books.

And just like that, the mood changed.

It appears that Mr. Kaiser’s report isn’t going to be shared. From Peter Dobrin’s report last night:

“But several impediments to a deal remain, including one involving Kaiser’s report. Management has resisted the idea of sharing the findings with musicians, according to two sources familiar with negotiations. ‘The biggest sticking point is, they don’t want to show us his report,’ said one, asking not to be named. ‘We were really close twice last night, and then it sort of fell apart.’ ”

This is the most astonishing statement I’ve seen in some time. To recap: with great fanfare, management hires a well-known arts consultant to look at its finances and strategic planning documents, with the goal of gaining credibility with the musicians. But then… it refuses to share the findings with the musicians?

This is unbelievable. I can’t think of a move that could more emphatically suggest that management is hiding something in its ledger sheets, or is simply trying to be duplicitous. If management had no intention of sharing the data and was doing this simply as some sort of internal capacity report, why choose to hire such a public figure? Why announce they were hiring such a public figure?

Plus, there’s a larger picture to consider. The Orchestra’s leadership is running a major, multi-million dollar non-profit. The whole concept of a non-profit is based on public support and public trust. How does such defiant secrecy help in that regard?

What possible purpose can this serve?

* * *

So, here we go. Another labor dispute, another transparently self-serving move on the part of management to push its preferred narrative, no matter what the evidence suggests.

I suspect this will not end well.  Particularly for management.



6 thoughts on “A Confounding Development in Philadelphia

  1. Philadelphia could certainly learn from the MO’s experience, and especially the Board’s realization that they needed to work with the musicians not against them. Secrecy is destructive whether in families or business organizations. Right now, given what you’ve written, Scott, I would not trust Philly management to help me across the street. Thanks for writing about this! Cinda


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