A Disastrous Decision in Baltimore

What on earth is the Baltimore Symphony Orchestra’s management thinking?

As you all know, I’ve weighed in on my share of classical music labor disputes over the years. I was, obviously, deeply involved in the Minnesota Orchestra’s lockout… and over that year-and-a-half disaster, I pretty much saw it all. I had hoped that the lessons learned in Minneapolis would keep organizations from going down a similar path, but alas that was not to be the case. The Atlanta Symphony Orchestra, MET Opera, San Diego Opera, and too many other ensembles decided to take a similar path of trying to impose brutal new business models on their organizations in the name of “fiscal responsibility” or “sustainability.” And similar to what happened in Minnesota, they got burned as a result.

And now the Baltimore Symphony Orchestra (BSO) management has taken up this misbegotten fight.  And they did so with gusto; they chose to preemptively cancel the entire summer season, which had only been announced just five weeks ago.  More surprisingly, they did so days after the announcement that Maryland’s General Assembly had promised $3.2 million to stabilize the BSO’s finances while all sides worked to build a comprehensive, shared plan to rebuild the organization’s fiscal health.

Based on decades of work as an arts administrator, board member, board president of an arts organization, and a classical performer myself, let me say unequivocally that the BSO’s decision is a disaster. Well, “disaster” hardly covers it—one could argue that it’s a hot mess of a train wreck careening toward a wheel-less bus parked next to a red-flag factory.

In one fell swoop, the BSO administration is threatening to blow up relations with all its key stakeholders… simultaneously. I fear the potential fallout could be immense.

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Burning Government Supporters.  I cannot believe that the BSO’s management cut the summer season only days after the General Assembly came riding to the rescue with funds to the tune of $3.2 million. Did anyone at the BSO tell the General Assembly they were about to pull this particular trigger? Do they suspect that anyone in the General Assembly might feel betrayed by this? And respond in kind?

For context, let me bring up the parallel situation that happened between the former Minnesota Orchestra management (specifically, former President and CEO Michael Henson) and the state legislature.

In 2010, Michael Henson went before state lawmakers seeking millions of dollars as part of a bonding bill, with a plan to renovate Orchestra Hall.  Alas, Henson famously gave inaccurate information about the Orchestra’s finances.  Well, “inaccurate” may be too polite.  He presented a view of the organization, its goals, and its financial resources that were fundamentally untrue.  And he knew them to be untrue.  Board documents came to light showing that his pre-established goal was to convince lawmakers that the Orchestra was in good financial shape in order to secure bonds for the reconstruction of Orchestra Hall, but then immediately shade the finances quite differently in public reports to show massive shortfalls.

Unfortunately for Henson, lawmakers found out this testimony was a sham.

As a result, Michael Henson has lost the trust and respect of the state’s government.  Many legislators, in fact, felt that Henson personally lied to them under oath.  As State Representative Jim Davnie (DFL-Minneapolis) said, “I can assure Mr. Henson that it is not just the musicians who have lost trust in the Minnesota Orchestra management.” At least 10 lawmakers called him out by name and demanded his immediate resignation, and began looking into clawing the money back.  Lawmakers’ ire at being deceived polluted all other dealings with the organization, and many officials made it clear that Henson’s removal was a necessary step toward repairing relations with the government.

But the shenanigans didn’t stop there. Henson and the then-leadership of the Orchestra burned the City of Minneapolis, too.

The city was hit hard by the dispute, losing an estimated $2.9 million in income due to the lockout.  As the leaseholder of Orchestra Hall, it demanded a report about the Orchestra’s past and projected activities.  Michael Henson responded with a letter under his own name that was so full of half-truths, lazy claims, and thinly-veiled deceptions that the city was outraged, and immediately demanded a follow up report.  That new report was little better, and the city began taking steps to revoke the Orchestra’s lease and take direct control of Orchestra Hall.  It became clear that it was the City’s imminent action to take control of Orchestra Hall was a critical factor that forced an end to the dispute.

What does this mean for Baltimore?  It’s still too soon to tell. I don’t pretend to know the ins and outs of Baltimore or Maryland’s politics, but the experience of the former leadership of the Minnesota Orchestra shows what a dangerous game they are playing at—one that can have short and long term consequences.

 

Potential Exodus of Musicians. Again and again, I’ve pointed out that musicians aren’t just a labor force, or a labor problem—they are the organization’s product.  The organization exists to make music, and to do so it needs musicians.  Based on the examples of Detroit, Minneapolis and the Saint Paul Chamber Orchestra, there is a real chance musicians will take the hard-core labor strategy of the BSO management as a sign of things yet to come, and will begin exercising an exit strategy that will continue long after the dispute is over.  They will continue to audition for other gigs, plan retirements, or take on new careers such as teaching.  As a point of comparison, in the wake of the SPCO’s settlement, a third of the ensemble left, leaving it with more bassoons than cellos and string basses combined.

What does this mean?  This exodus is a huge artistic blow to the ensemble, obviously.  The balance, precision and flexibility of the group—built over many years of hard work—is essentially gone and has to be rebuilt from scratch.  It doesn’t matter that the players themselves are all wonderfully talented; the orchestra survives on collective precision with all the parts working together.  Similarly, a baseball team can’t rely on players’ individual skills to turn a double play or execute a suicide squeeze—they have to work together.  But more than artistic quality, the loss of so many players will be a huge drain on the institution’s resources, as round after round of expensive auditions take place, while the orchestra is simultaneously looking for a new donors and re-engaging audience members.  And who is going to audition for the group in such an environment?  The job market might be tight, but people aren’t stupid.   Finally, as I’ve argued before, the musicians are the best ambassadors for the organization.  They teach across the area, they do outreach, they are advocates… the public loves them.  It is this love that causes many people to buy a ticket or make a donation. The loss of this public face of the ensemble has long-standing effects on the community’s sense of loyalty and sense of connection.

 

Loss of Donor Support. This is obviously a diverse group with a wide range of priorities, politics and backgrounds, so it is hard to lump them into one group.  Clearly, some supported the lock out and will support you in the aftermath.  But I think it’s clear there is a great deal of donor unrest.  Some donors have expressed their displeasure publicly. When the dispute is over, there might be a rush of money from people glad to have the musicians back, but many, many donors feel they’re victims of a bait and switch.  Like the government entities, many will feel the BSO’s handling and reporting of its finances is shady, making it an unwise investment.  Many will be furious about its treatment of the musicians.

What does this mean?  Year in year out, well, for most ensembles anywhere from a third to half of its annual income comes from fundraising.  My sense is that although the BSO will still get donations, this area is going to take a big hit.  It is a long-standing truism that donors don’t make contributions simply because you need money (there are thousands of worthy charities out there), but because you inspire them.  They feel a connection, and are passionate advocates about you and your work.  The cancellation and related action will deeply strain these feelings.  What is the BSO’s plan to heal these bruised feelings?  How will it prove its transparency?  Will donors ever again believe it when it claims to have solved the budget crisis? Or for that matter, announce a new season of concerts?

The problem compounds over time; the basic law of fundraising is that you don’t get major donors ex nihilo, but cultivate them from smaller donors.  Most non-profits utilize some type of “moves management” approach, which specifically outlines the steps you need to take in order to move donors from one giving level to another.  Breaking this chain of events early on leaves you with dramatically fewer donors to develop.

 

Infuriating the Audience Members. Like donors, there will likely be a wide-spread feeling of betrayal in this group. Baltimore writer Tim Smith has eloquently written about how Baltimore audiences responded to the announced cancellation, and the folks were emphatically on the musicians’ side.  This is a trend that will most certainly continue—audience members will be furious that their beloved orchestra has been taken from them, no matter what the reason.  Sure, some may blame the musicians for their intransigence.  But the fact remains that the BSO leadership cancelled an entire summer season just when folks were riding to the rescue… and did so willingly.  Plus, there is a keen sense that this disaster happened simply to apply leverage on the musicians to make sacrificial concessions.  How does one spin that?  And worse than anger is apathy.  After a prolonged period of finding other things to do, other ways to spend money, other outlets to enjoy classical music, people will have started to move on.

What does this mean?  A key part of any ensemble’s business model is steady—if not increasing—ticket sales.  Like donations, earned income amounts to roughly a third of the total revenue of the organization.   These goals will be difficult to meet with potential ticket buyers who are still seething about the arbitrary cancellations, or have drifted away from the organization.  This means more discounted tickets to attract patrons.  Also, a new, much more aggressive marketing program is required… and that will be expensive.  I’d imagine the BSO will need a whole slew of events to build good publicity, which will again take time and money—and depend on buy-in of disgruntled musicians for success.  That could be… awkward (and brings to mind the opening scene of Boris Godunov where the Kremlin guards force the peasants to sing a hymn of praise for the newly crowned Czar). Again, I don’t doubt that the first few concerts could be well attended, because people missed the Orchestra.  But do you remember how difficult it was for Major League Baseball to bring back the fans after the 1990s strike?  It didn’t matter who the fans blamed; they didn’t buy tickets.

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Let me again be clear that I have no inside knowledge of anything regarding this dispute.  I also have no crystal ball—these “predictions” are not certain, but rather based on my reading of events, observations and a study of similar labor disputes elsewhere.  I could be over-dramatic in my interpretation of these flash points, and certainly welcome discussion of any of them.

But my point is, the BSO management has gone into this dispute with guns a-blazin’, and the situation could blow up in their faces.  It particularly astonishes me that they announce this draconian step at the same time that they’re saying the BSO has to have a new plan, a new business model for the organization to survive.  In infuriating nearly all its constituents simultaneously—its government supporters, musicians, donors and audience members—how does it hope to actually build this plan, and create the buy-in necessary to make it work?

What on earth do they propose for “Step B”?

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