Orchestras battling the recession need a bold new business plan

Think salary cuts

by John Von Rhein

Chicago Tribune (MCT)

22 May 2009

In this February 17, 2000 file photograph, Finnish Conductor Osmo Vanska conducts members of the Chicago Symphony Orchestra in Chicago's Symphony Center. (John Bartley/Chicago Tribune/MCT) 

It’s everybody’s job in these recession-rocked times to get by with less, so we are constantly told. For U.S. symphony orchestras, that should mean a good deal more than making a few nips and tucks, which generally has been their response to the economic crisis thus far.

It will require a very different, much smarter business plan, beginning with a re-examination of the single largest line item in any orchestra’s budget: the expense side. That means looking hard at what everybody is paid, from top to bottom of the organization.

Executive directors and staff of U.S. orchestras, and the musicians who define the artistic identity of those orchestras, have accepted pay cuts, givebacks and other measures to help bolster their institutions in these tough times. But we have yet to hear of many music directors doing the same. Yet that’s where the greatest inflation has occurred over the last three or four decades.

Thus far only one music director of a Big Five American orchestra, the Cleveland Orchestra’s Franz Welser-Most, has volunteered to take a reduction in salary, which amounts to 20 percent. Music directors Osmo Vanska of the Minnesota Orchestra and JoAnn Falletta of the Buffalo Philharmonic and Virginia Symphony have taken smaller cuts.

The dirty little secret in the classical music world is that even the best conductors are wildly overpaid for what they are expected to do. Music director fees in the Big Five orchestras of Boston, Chicago, Cleveland, New York and Philadelphia skyrocketed during the boom years of the late 1990s and have remained high.

Of the 10 top-tier American orchestras with 52-week contracts, six paid their music directors more than $1 million in 2006-07, the most recent year for which tax documents are available. Leading the pack were Lorin Maazel of the New York Philharmonic ($2.2 million), James Levine of the Boston Symphony Orchestra ($1.5 million) and Michael Tilson Thomas of the San Francisco Symphony (also $1.5 million).

At the time of his departure from the Chicago Symphony Orchestra, in 2006, Daniel Barenboim was pulling in $1.9 million, including his fees as music director, conductor and piano soloist. (No salary figures are available for principal conductor Bernard Haitink or music director-designate Riccardo Muti.)

Inflated conductor salaries are quaint souvenirs of an era when larger-than-life maestros such as Leonard Bernstein and Herbert von Karajan walked the Earth and orchestras were willing to pay just about anything for their services. Those days are long gone, but the insane fee structure is still with us.

The situation is a bit like that of banking and auto industry CEOs still living the high life even as thousands of their employees are laid off and their companies sink ever deeper into fiscal chaos.

“A music director is worth what he or she is able to bring into the organization,” says Drew McManus, an Oak Park, Ill.-based orchestral consultant who provided the Chicago Tribune with the salary data included in this article. (The 2009 edition of his report, including salary figures from 76 professional U.S. orchestras, is due to be published early next month. The various other orchestra statistics came from the orchestras themselves, the reputable digest Musical America Online or published reports.)

“If they can quantify their value to the institution by asking, for example, how much additional funding they helped the group secure, it’s not an unreasonable expense,” McManus says. “But, to a large degree, I think that conductors, at the very least, are going to have to accept the same kind of reductions in compensation as the majority of artistic stakeholders in the organization. Whatever the musicians are going to take, (music directors) should take the same thing.”

So should orchestra managers. Eight of the 10 orchestras McManus surveyed paid their executive directors more than $400,000 as of 2007. The Los Angeles Philharmonic’s Deborah Borda topped the list at $1.2 million, followed by the Boston Symphony’s Mark Volpe at $957,000 and the New York Philharmonic’s Zarin Mehta at $863,935. Deborah Rutter, president of the Chicago Symphony Orchestra Association, made a relatively modest $442,994. She has since accepted two salary freezes.

Guest soloists make $30,000 to $70,000 per orchestral appearance, another whopping line item that cannot be supported indefinitely by organizations fretting about their future.

Some orchestras are beginning to fight back. The Chicago Symphony has just announced that beginning next season, it will reduce performance fees for guest artists and conductors as part of an operating budget for fiscal 2010 that is nearly $2 million smaller than originally planned.

“Those fees are based on what the market can or will bear,” Rutter explains. “When you hire a conductor or soloist, you have to look at what the return on that investment will be. There definitely are times when it will be a fee that the financial circumstances we are experiencing cannot bear.”

Of the numerous conductors, arts administrators, musicians and consultants interviewed for the purposes of this article, not one said salaries are fine as they stand today. When asked if they believe the compensation levels received by conductors represented by their firms are fair in light of the economic crisis, executives at four of the world’s largest and most powerful artists managements — Columbia Artists Management, IMG Artists, Opus 3 Artists and Harrison/Parrott Ltd. — either did not reply, replied with “no comment” or, in the case of CAMI’s Judie Janowski, said the question should best be “addressed to the presenters, as they are the ones paying the fees.”

What, then, of orchestra player salaries? Symphony musicians have long contended they are undercompensated compared with conductors and symphony executives. Recent salary data support their claim. If you look at the seven-year average of compensation at the CSO through 2007, you will notice that while music director salaries climbed 6.76 percent, the base salary for musicians rose only 3.4 percent.

I’ve always been for orchestra musicians being paid what they’re worth. They fought long and hard over the last four or five decades to earn their present professional status and respect. Even so, nobody can claim the players at major symphony orchestras aren’t generously paid, and some would argue that those salaries now are out of line for organizations mired in a deep recession.

As of 2007, the base annual salary was $111,670 at the CSO, $117,520 at the Los Angeles Philharmonic and $118,040 at the Boston Symphony Orchestra, although those numbers have shifted since then and many musicians in all three orchestras make far more than those amounts: The CSO’s concertmaster, for example, was paid $384,592 that year. The base pay for a CSO musician will reach $132,580 in March 2011.

I would hope, however, that the economic slump will make the Chicago players more generally aware of the vital stake they have in making the orchestra more fiscally secure and sustainable in the long haul. In fact, that already seems to be the case. As part of the orchestra’s just-announced fiscal stability plan for the next several seasons, members will take a 2.5 percent reduction in salary from July 1, 2009, to mid-September 2011. Players also have agreed to donate two additional services (a rehearsal and a performance) in 2009-10 and 2010-11.

If left unchecked, inflated salaries surely will erode audience and contributor confidence in these institutions, pushing some orchestras into bankruptcy, or worse. Ticket prices can’t rise much higher without incurring a subscriber mutiny. Major contributors are almost tapped out. Endowment draws will be down for some time to come. Yet operating expenses have not shrunk in proportion; if anything, they will continue their inexorable rise. On the expense side, there is no area left to cut besides salaries.

I would suggest the CSO put a cap on player salaries in September 2011 when the next labor contract will be up for renewal. This could be done with the proviso that the normal yearly raises would be resumed once it’s certain that a general economic recovery is under way.

In short, it’s time for everyone to work together to ensure the orchestra’s long-term well-being without impairing the artistic quality. We haven’t seen a crisis yet at the Chicago Symphony, but we could find ourselves in the middle of one if we don’t create a leaner, meaner business model soon. I’m pleased the CSO is taking significant steps in that direction.

//Mixed media

Call for Music Writers... Hip-Hop, Soul, Electronic, Rock, Indie, Americana, Jazz, World and More

// Announcements

"PopMatters is looking for smart music writers. We're looking for talented writers with deep genre knowledge of music and its present and…

READ the article