Debunking Some Spin In Albuquerque

It’s time once again for one of my favorite segments here at Adaptistration where we look at public statements from those inside the business and figure out what they’re really trying to say.

This installment is inspired by a recent email I received from Anna in New Mexico, a NMSO patron, who received a note from NMSO executive director Kevin Hagan in response to an email message she sent to him expressing her concerns over the organization’s ongoing negotiation dispute…

The NMSO musicians have been distributing leaflets to patrons detailing their position in the deadlocked labor dispute at their concerts throughout the 04-05 season. They’ve also made a form letter available to patrons they can send to the NMSO administration expressing their support for musicians. Anna in New Mexico sent in one of those letters and received the following correspondence from NMSO executive director, Kevin Hagan, in response,

“The principal orchestras with which the [musician’s] leaflets compare the NMSO are Richmond and Dayton. Over the past five years those orchestras have been drawing between $300,000-$500,000 per year from endowments established many years ago. Because donors are still paying their pledges to our endowment (which was only begun in 1997) it is only this year that our endowment income has topped $100,000. The disparity of $200,000-$400,000 per year in endowment revenue would make all the difference in the world in our ability to pay our musicians.

Second, the largest part of the difference in compensation between the Richmond musicians and the NMSO (represented as $28,837 vs. $15,758) is in the amount of work. The Richmond musicians work 50% more than the comparable NMSO musicians. An “apples to apples” comparison reduces the Richmond number to $19,042 – more, but in the same ballpark. Add to that two other bits of information – the 33 Richmond musicians who don’t earn $28,837 only earn $7,200 vs. the $10,200 average for our 40 other players. In addition, Richmond covers just more than half the number of players we do with health insurance. So, you see that comparability is a lot more complex than the leaflets imply.”

Unfortunately, Mr. Hagan declined multiple requests to clarify points in his above letter. Nevertheless, let’s begin to break down this information and compare it to available facts.

Spin #1 (misrepresentation)
I obtained copies of the flyers distributed by the NMSO musicians throughout the 04-05 season. After reviewing their content I discovered an outright misrepresentation in Mr. Hagan’s response as opposed to mere spin. Although the musician flyers do compare their situation to the Richmond Symphony, I did not find any mention of the Dayton Philharmonic (although they did refer to the Toledo Symphony). However, Mr. Hagan’s note clearly states that he believes the NMSO musicians are using Dayton as a reference. This doesn’t qualify as spin so much as a blatant inaccuracy.

Spin #2
Mr. Hagan’s second paragraph claims that via an “apples to apples” comparison between the musicians of Richmond and New Mexico you’ll discover that the discrepancy isn’t the $28,837 vs. $15,758 figure claimed by the NMSO musicians so much as $19,042 vs. $15,758. Unfortunately, this point is nothing but spin. In the recent 2005 Compensation Report: ROPA Executive Directors, I pointed out that only nine ROPA ensembles paid their musicians a base salary (of which the Richmond Symphony is included), the remaining musicians are all paid on a sliding “per service” scale.

The musicians in ensembles who are paid a fixed salary receive a standard paycheck for a fixed number of weeks based on the length of their season regardless of how many services (rehearsals or concerts) they play per week. Here’s an example of the primary difference between salary and per service musicians:

In a salary structure if a percussionist is a member of the salaried musicians they receive the same pay check as any other member regardless if they play more or less services. However, the maximum number of services is typically defined in the collective bargaining agreement).

In a per service ensemble, the same percussionist would only be paid for services actually performed regardless if they performed more or less than other musicians.

Interestingly enough, the contract language between the Richmond and New Mexico orchestras dictating the maximum number of days and services any one musician can work is nearly identical. Furthermore, the number of days per season NMSO musicians are required to be available to work compared to Richmond is only one less.

So, it seems that if you actually compare the apples to apples of weekly work requirements as Mr. Hagen suggests, then the difference between the Richmond and NMSO musicians really is $28,837 vs. $15,758.

Spin #3
Mr. Hagen states “33 Richmond musicians who don’t earn $28,837 only earn $7,200…” However, based on the information provided by each organization’s collective bargaining agreement Mr. Hagen appears to be misrepresenting the facts.

In fact, the guaranteed minimum annual compensation range for Richmond’s non salary musicians (which encompasses section through principal players) ranges from $3,320.10 through $19,141.50 and has an average of $8,322.40. As such, Mr. Hagan’s claim that 33 of Richmond’s non salary musicians earn only $7,200 is entirely misleading. Actually, only 18 of Richmond’s musicians actually earn close to that amount (the precise figure is $7,209.36) and they are all slightly below the non salary average compensation for non salary Richmond musicians.

If you compare the two averages between Richmond and NMSO that Mr. Hagan incorrectly attempted to do, they are exactly the same percentage difference as Mr. Hagen’s flawed “apples to apples” comparison of $19,042 vs. $15,758 (see Spin #2 above). As such, Mr. Hagen actually marginalizes his own penultimate point by spinning it so hard it actually hits itself in the nose on the way around (some of these same points were made in the NMSO musician’s flyer from the Spring of 2005).

I’m not certain where Mr. Hagen obtained his flawed information for Richmond Symphony and since he declined the opportunity to clarify I contacted David Fisk, executive director for the Richmond Symphony.

I asked Mr. Fisk whether or not he or any other member of the RSO management have ever had any conversations with any member of the New Mexico Symphony management regarding the RSO musician pay structure. I clarified my request by explaining that the NMSO executive director publicly states a number of salaries and work statistics for RSO musicians which are not accurate based on information from the RSO collective bargaining agreement.

Mr. Fisk responded via email,

“I believe…their executive director [has had contact] with our Orchestra Manager, but I haven’t had that kind of conversation, and am not aware of what figures NMSO has been quoting. There isn’t any great secret about the figures in our [collective bargaining agreement], and you obviously have access to it to draw your own conclusions. It’s regrettable that there should be any confusion.”

I agree, it is regrettable that there should be so much confusion as well as so much spin about the actual figures. However, Mr. Fisk did not elaborate on what the topic of discussion was between their orchestra manager, then Pat Murphy, and Mr. Hagen.

Spin #4
The final point from Mr. Hagan’s letter regarding health insurance is confusing since he states that “Richmond covers just more than half the number of players [the NMSO does] with health insurance”. That’s deceptive because it doesn’t mention any actual dollar figures or number of individuals covered by health insurance from either orchestra.

But the facts derived from each orchestra’s collective bargaining agreement are quite clear. In Richmond, all salaried musicians are eligible for a health insurance plan with out of pocket maximums for each player not to exceed $196.94 per month. The per service musicians in Richmond are guaranteed a “Section 125 flexible benefits plan, which shall consist of a dependent care flexible spending account and a health care flexible spending account.”

In New Mexico, their organization only contributes $150.00 per month toward individual medical and dental care for each musician. The musician is responsible for all other charges beyond that amount. The point Mr. Hagen is making in the final sentence of his letter isn’t very clear, but contrasting the health insurance plans between Richmond and New Mexico is not going to make the NMSO look good by comparison.

Spin #5
Arguably, the most important issue in Mr. Hagen’s note are his comments from the first paragraph where he claims the reason the NMSO isn’t able to pay their musicians as much as in Richmond is because Richmond has a larger endowment. Unfortunately, Mr. Hagen never compares actual endowment figures which would help clarify the issue.

For the sake of clarity, here are the actual numbers; based on the figures from the 04-05 season, New Mexico had an endowment of $2.58 million (100% unrestricted) and Richmond reported an endowment of $8.26 million (90% restricted).

Unfortunately, how much each organization earns in endowment income isn’t the issue. Unlike Mr. Hagen’s exaggerated claim that $200,000-$400,000 would make all the difference in the world in what they could pay their musicians, it’s actually about the size of each orchestra’s budget.

In 04-05, the NMSO spent approximately $4.3 million and Richmond spent approximately $4.1 million. So if we use Mr. Hagen’s logic, the NMSO would require approximately $300,000 more in revenue (over and above the $200,000 more they already spend compared to Richmond) to pay their musicians more than they currently earn, which is still less than what Richmond pays their musicians now.

Just brilliant.

So in the end, the NMSO has a larger budget, pay their musicians less, and have a smaller health insurance obligation than Richmond. So the big question at this point is where does all of the additional money in New Mexico go?

Although this certainly isn’t where all the money is going, the following chart is interesting nevertheless:
View image

On the other side of the coin, the only curious detail I could find in any of the NMSO musician flyers was from their final offering. In that flyer they post a W-2 form for one of their core players who they say earns the base salary of $15,758, plus eight years of seniority pay. However, the W-2 form states that the player earned $11,316.01 (you can see the W-2 for yourself at their website).

What I’m suspecting happened in this case is the musician in question probably turned down some of the offered services. That’s the real double edged sword musicians in per service orchestras have to deal with; they certainly can’t earn a living wage on $11,000 or even $15,000 per year. As such, they have to go out and find additional work and those additional jobs sometimes conflict with their orchestra responsibilities.

In the end, they earn less with the orchestra and the ensemble loses the opportunity to build a cohesive artistic product by always having the same players available for each service. No one wins in that scenario.

Disclosure statement: Back in January of 2005 I did some professional development consulting for the musicians of the NMSO. It consisted of an educational seminar about historical orchestra growth and the development of collective bargaining agreements since 1962, there was also an extensive Q&A session at the end open to all who attended. Overall, it was very similar to the lecture I presented at the Eastman School of Music in the fall of 2004 although there was no mock negotiation component. My services and travel expenses were paid for by a private sponsor and not the NMSO players association, the NMSO, or AFM Local 618.

About Drew McManus

"I hear that every time you show up to work with an orchestra, people get fired." Those were the first words out of an executive's mouth after her board chair introduced us. That executive is now a dear colleague and friend but the day that consulting contract began with her orchestra, she was convinced I was a hatchet-man brought in by the board to clean house.

I understand where the trepidation comes from as a great deal of my consulting and technology provider work for arts organizations involves due diligence, separating fact from fiction, interpreting spin, as well as performance review and oversight. So yes, sometimes that work results in one or two individuals "aggressively embracing career change" but far more often than not, it reinforces and clarifies exactly what works and why.

In short, it doesn't matter if you know where all the bodies are buried if you can't keep your own clients out of the ground, and I'm fortunate enough to say that for more than 15 years, I've done exactly that for groups of all budget size from Qatar to Kathmandu.

For fun, I write a daily blog about the orchestra business, provide a platform for arts insiders to speak their mind, keep track of what people in this business get paid, help write a satirical cartoon about orchestra life, hack the arts, and love a good coffee drink.

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