Examining The Events In Louisville Part 4

Continuing from Part 4, this final article will focus on some of the specific issues surrounding the contentious collective bargaining agreement negotiations at the Louisville Orchestra and why solutions to their problems are closer than they may realize.

In the previous articles from this series, we examined why the organization in their current position and the flawed process they used to get to this point. Fortunately, many of those flaws also hold the keys for finding an amicable solution.

How Hard Do You Want To Work?

Naturally, the biggest problem facing the organization right now is fiscal insolvency. It makes sense, therefore, to figure out why the organization is in such narrow economic straits.

During my telephone conversation on 1/22/06 with Louisville Orchestra executive director Scott Provancher, he talked about the strategic planning process the organization used over the summer of 2005 to craft their Recapitalization Campaign. Scott said that the planning committee determined that their previous strategic plan was too aggressive and that the organization couldn’t meet some of the revenue targets.

As a result, Scott said the committee attempted to determine how much money they would need to raise in bridge and capital funds in order to establish fiscal security based on the old plan. At the end of that process the committee determined the necessary amount was simply more than they were willing to attempt to generate. Furthermore, they determined that if they didn’t implement a new fundraising initiative at the onset of the 2005-2006 season, the organization would run out of money by spring, 2006.

As such, the majority of the committee determined that a much smaller figure, $3.5 million, raised over a shorter period of time in combination with a permanent reduction in expenditures in the amount of $800,000 to $1million was the better course of action. They also determined that if the musicians would agree to such cuts by December 31, 2005 then Louisville Orchestra board president, Joe Pusateri, would donate $250,000 to $500,000 in private funds to launch the $3.5million fundraising initiative. Additionally, Scott Provancher said that the organization had secured verbal pledges from several additional donors on the condition that the musicians accept their offers by the December deadline.

The committee presented their plan to the full board and it was approved. Unfortunately, when management approached the musicians with the request to begin contract negotiations early, they neglected to mention any news about the impending insolvency. During a telephone interview on 1/23/06 with the chair of the musicians’ negotiation committee, Tim Zavadil, he said that management did not inform them of any impending financial insolvency in 2006, rather that they wanted to begin negotiations early in order to help secure additional funds from potential donors as well as benefit their music director search.

This is an obvious error on the part of the orchestra managers. If the situation was as financially unstable as they believed, then instead of asking the musicians to initiate negotiations early with a deadline to settlement that preceded the contract expiration, they should have asked to reopen the current contract because the organization wouldn’t survive to the end of the current CBA.

The other problem related to this issue is the money Joe Pusateri professed he could donate in addition to the other financial gifts which were purportedly waiting in the wings. According to Scott Provancher, Joe Pusateri’s promised gift would go primarily toward operations and the remaining gifts toward an escrow account for the incoming music director salary and general endowment. Furthermore, Joe’s gift, in combination with the other verbal pledges, would be ample funds to cover the anticipated cash flow shortage in the spring.

The positive aspect here is that the money needed to prevent the Louisville Orchestra from shutting down anytime in 2006 is there, waiting to go. Unfortunately, those with their fingers on the purse strings aren’t willing to give unless the musicians accept a strategic plan which requires what they consider are draconian cuts to the artistic product.

It’s the Artistic Product, Stupid

During the summer strategic planning process the majority of the committee members, comprised mostly of executive managers and senior board members, determined that the organization needed to make significant cuts in the artistic product. They also determined that the current configuration of musicians was unproductive and required alterations. Unfortunately, they made the bulk of these decisions without the two best qualified components most orchestras rely on for critical artistic input: a music director and the musicians.

As a result, management determined that the organization needed to reduce the number of full time musicians, their benefits, and the overall artistic expenditures. They believed that the artistic product would remain in tact but had no quantifiable basis for such an assumption; furthermore, they couldn’t understand why the musicians didn’t agree. Their response was to react emotionally and blame the musicians for being unwilling to “share” in a solution by accepting the cuts they proposed.

The reasons why management’s offer and warnings of financial collapse lacked sincerity among the musicians is because they have a long history of assuming a similar posture about the organization’s finances when negotiations approach (you can only cry wolf so many times). Combine that with the lack of adequate input from the musicians during the summer strategic planning sessions regarding artistic issues and the results were disastrous.

During my conversation with Scott Provancher, he confirmed that the musician representatives who attended some of the strategic planning sessions over the summer expressed their displeasure over the plans artistic investments,

“…they were concerned that [the Recapitalization Plan] was not investing enough in the artistic product but we felt that we were investing in the artistic product by eliminating the annual deficits.

The result was that the musicians had only one option available which allowed them an avenue to influence the artistic growth of the organization: the collective bargaining process. This is the format where managers and musicians have to talk to each other or they risk the other side filing an unfair labor practice with the NLRB (or other, less overt, forms of pressure).

Instead of allowing the negotiations to work the way they are designed, management decided to circumvent the process by imposing their own deadline. They also attempted to establish negotiation parameters confined to their Recapitalization Plan and any discussion outside of those parameters was unacceptable.

Simple Solution

This is how the organization should, and could, spend their time talking to find solutions to their problems: instead of presenting take-it-or-leave-it offers, management should lay out the real financial situation as it currently exists and ask the musicians to work with them to find a mutually agreeable solution – and no deadlines or threats of bankruptcy.

Once the musicians have adequate time to evaluate the information on their own and respond, management should trust that the musicians will work with them to find solutions which both sides find acceptable. If Joe Pusateri really wanted to do things differently and work in a collaborative fashion, he would have taken the players word to bargain in good faith, checked his emotions at the door, and make good on his promised donation.

This course of action would allow enough pressure to escape that both sides could take the entire length of the current contract (August, 2006) to find a mutually agreeable solution and make sure all constituents were properly informed. Furthermore, I doubt it would even take much longer than the initial December deadline. Given my discussions with Scott Provancher and Tim Zavadil, both sides are actually very close in finding a reasonable middle ground in their positions and the differences which exist are more than surmountable.

Does this process guarantee that Joe Pusateri would get to cut away the musicians he feels are lazy freeloaders who aren’t playing enough to receive full time status? No. Does it guarantee that the musicians will end up with 10% increases in their base pay and full dependant health care coverage? No. Does it mean management will be able to change all of the work rules they believe restrict their ability to “maximize revenue”? No.

The collective bargaining process doesn’t guarantee anyone anything. What it does guarantee is that both sides have a regulated opportunity to talk to each other until they figure out a solution to their problems and chart a course for their future.

Better Communication

Another aspect which could improve the working environment in Louisville is if the musicians would create a system to remain in contact with their fellow players at all times.

One of the pressure points in these events centered around the fact that the planning and decision making process for the Recapitalization Plan was conducted over the summer, when the musicians are not in session. It was during these sessions that the organization determined that they would become fiscally insolvent in 2006 and during our telephone interview Scott Provancher commented on those frustrations,

“I felt there was a lack of communication between the musicians on the finance committee [which attended most of the planning sessions] and the negotiation committee.”

Scott isn’t alone in that frustration; many orchestra managers encounter those feelings at one time or another. This is one area where just about every group of orchestra musicians could stand some improvement. Fortunately, it isn’t very difficult to establish a system of internal communication that facilitates a suitable method for gathering, disseminating, and considering information.

At the latest ICSOM conference in August, 2005 I gave a presentation to the delegates about how every group of orchestra musicians can set up such a system. Unfortunately, it takes money and time to get a system up and running and the majority of orchestra associations don’t have enough of either to establish such a system. Unfortunately, the Louisville musicians are among that majority so they have not been able to establish such a system.

One of the activities I do in my consulting work is helping players associations set up a system of communication like the one I presented at the ICSOM conference. If management (at Louisville and elsewhere) is sincere in their desire to have the musicians establish a better system of internal communications and reduce their frustrations from what they perceive as a painstakingly slow communication process, then they would offer to help fund professional development endeavors to create such a system (or find outside funding sources).

Until then, they had better enroll in a good yoga class and give up on booze and cigarettes.

Some Observations & Opinion

It’s difficult not to notice that the demands coming from management have continuously changed throughout this process. At first, they claimed that they never wanted to reduce the numbers of full time musicians then a few weeks later, they said that cutting down the core orchestra was a prerequisite to mediation. At first, they claimed that if they didn’t meet their December 31, 2005 deadline for a new contract, they couldn’t properly initiate a fundraising campaign to keep the organization out of bankruptcy. However, the only reason offered as to why that would happen is because the board president, Joe Pusateri, said he didn’t want to contribute (your guess is as good as mine when trying to figure out why December 31 made a difference for him).

Management claimed that the musicians were unwilling to loosen work rules, but the players agreed to a dozen of management’s proposed changes in their first counterproposal and were willing to discuss more. Management claims that the musicians aren’t willing to cooperate in finding a solution to their financial problems but the musicians eventually offered a two year wage freeze in order to give the organization more time to discover solutions.

Management claims that the musicians were demonstrating a “complete disregard for the challenges facing the orchestra” by asking for dependant health care coverage. Yet the image of a Dickensonian Capitalist murmuring such lines as “If they rather die, the better they do it to decrease the surplus population.” quickly comes to mind.

What this process requires is perspective and the understanding that any endeavor worth doing involves risk. The majority of revenue which didn’t materialize for the Louisville Orchestra in 2004-2005 was from local arts funds and government resources. And when those avenues fail, it’s up to the board of directors to fill those pot holes, not merely strip away the rest of the pavement.

For a board president to publicly state that he has the funds available but isn’t willing to give them to the non profit organization which he serves because he doesn’t understand the basic nature of how musicians are used in an ensemble shows a complete lack of understanding of what philanthropic service is about. Joe Pusateri could have emerged from this quagmire resembling the hero he desperately covets; instead, he comes across resembling Don Quixote: a hero in his own mind.

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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3 thoughts on “Examining The Events In Louisville Part 4”

  1. Drew, I am going to ask that my committee bring you out before we start our negotiation. Rumors are circulating that my orchestra is the “next Louisville”. Seems to me you are hitting the nail on the head of most of these orchestral problems. Hope to see you soon so you can save my orchestra.

  2. I would like to make a clarification.
    Scott mentioned [in parts 3 and 4] the Recap. Plan took place last summer and involved musicians from the Finance Committee. As THE musician who attends all the Finance meetings, I would like to categorically deny that. The first I heard of the $3.5Mil. plan was in late fall when Tim asked me about it.
    The Plan was never presented at a Finance Committee meeting and no musician was ever involved in its formulation.
    Just to make sure I wasn’t suffering from brain lock, I looked back at the minutes from last summer’s meetings. Something that substantial would have been mentioned, right?
    Not there.
    Last summer, the June and July meetings never happened. So I didn’t know anything about this year until the Aug. 24th meeting.
    Further, it wasn’t until the Oct. meeting that Scott came to us and stated he had finally met w/ all the dept. heads and realized we were in a bigger hole than he had imagined. All of a sudden this year’s deficit had nearly doulbed. So the musicians weren’t aware, until nearly the end of the year, how dire the financial situation had become.
    Thank you for allowing me to set the record straight.

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