Giving It All Up For Just A Little Bit More

The 5/17/2009 edition of the Chicago Tribune published an article by John von Rhein that takes a much broader look at orchestra employee expenses than most traditional media articles on the topic. Instead of focusing primarily on expense reduction initiatives focused squarely on orchestra musician salary cuts and those from administrators and staffers, he takes a closer look music directors and guest artists (conductors and soloists)…

Are we willing to give it all up for just a little bit more?
Are we willing to give it all up for just a little bit more?

Von Rhein points out that among the largest budget orchestras, only Franz Welser-Most (Cleveland) and Osmo Vänskä (Minnesota) have publicly announced salary reductions. What is particularly interesting here is that von Rhein doesn’t pull any punches when it comes to the enormous gains in salary improvements conductors have enjoyed as compared to other institutional stakeholders.

“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.”

This is an issue that has been examined here at Adaptistration from time to time and the impetus behind such large increases rests squarely on the shoulders of the professionals tasked with representing music directors: artist managers. Fortunately, von Rhein’s article includes this often overlooked component and he contacted several major artist management firms (including Columbia Artists Management, IMG Artists, Opus 3 Artists and Harrison/Parrott Ltd.) and asked them “if they believe the compensation levels received by conductors represented by their firms are fair in light of the economic crisis.”

According to the article, the only response beyond no response or “no comment” was from Columbia Artists Management’s Judie Janowski, who is quoted saying the question should best be “addressed to the presenters, as they are the ones paying the fees.”

That was a particularly intriguing response which may strike some as coming across somewhat like an abusive husband telling the police to go ask his wife why her nose is broken knowing full well she’ll say “I fell down.” Although no one in this business would refute that any artist should be denied the services of competent personal representation, it is well known that presenters have far less influence over the general increase in the rate of artist fees. However, larger budget performing arts organizations and nonprofit presenters have a better time at slowing down those increases than their lower budget peers. But even then, there’s no guarantee that guest artists and/or their managers will accept lower fees.

For example, von Rhein’s article reports that the Chicago Symphony Orchestra “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.” At the same time, this doesn’t say that they are insisting that guest artists accept less or if they’ve even approached artist managers to negotiate lower fees, it simply states that overall expenditures will be reduced.

To expand on von Rhein’s parameters, it is fair to go beyond examining actual artist fees and ask whether or not artist managers are charging their clients less for their services commensurate with any reductions to the fees charged to orchestras and presenters. Furthermore, this line of questioning should be expanded to all individuals whose work is primarily based within this business, which includes consultants.

I certainly don’t speak for all consultants, but I can say that in the course of my consulting work, fees have been adjusted accordingly to a client’s recent reductions in expenditures and I have expanded the number of annual pro bono and reduced fee projects.

Early in his article, von Rhein makes a poignant comparison between the orchestra business and the “let them eat cake” attitude of high profile for profit executives.

“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.”

Orchestra stakeholders that have benefited from extraordinary compensation increases over recent decades would be wise to take note. Not only are adjustments in surface compensation necessary for many organizations but they need to acknowledge that hidden payments in the form of golden parachutes, elaborate retention bonuses, deferred compensation, and other measures negotiated at the onset of work contracts designed to ostensibly hide cumulative compensation levels are no longer acceptable business practices.

Anything less may indicate that a privileged few are risking the future of the entire business for nothing more than their own personal gains. Von Rhein’s article graciously includes one of my quotes often used in the annual compensation reports saying “If [music directors] 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,” and I firmly believe that. Demand-based pricing is one fair method for determining compensation but there is a fine line between quantifiable demand-based pricing criteria and abusing the nature of a nonprofit business.

In the end, are too many willing to give it all up for just a little bit more?

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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7 thoughts on “Giving It All Up For Just A Little Bit More

  1. A related issue, and just as serious a problem, is the “one price fits all” approach most artist managers apply to orchestras, regardless of budget size. That Lexington should have to pay the same fee as Chicago is ridiculous.

  2. I wouldn’t go so far as that, any artist has the right to charge what they wish. I set my own policy as a consult based on models commonly used in the legal and accounting professions but if a soloist/conductor chooses to charge a single, flat rate for all ensembles then that is their prerogative. the issue above has more to do with sharing responsibilities during periods of undue economic stress. If all stakeholders in an organization have accepted cuts, it is reasonable and fair for guest artists to do the same (for at least the 2009/10 season).

    Furthermore, this can quickly turn into a slippery slope becasue if artists must charge smaller budget groups less it implies they must perform with smaller budget orchestras. I certainly wouldn’t go that far but it would be refreshing to see an artist come out with a set number of concert dates per season that follow the same sort of pro bono and/or reduced fee rate.

  3. An interesting counterpoint from the Minnesota Orchestra blog is here. The author (authors?) argue that von Rhein missed the point completely. I am wondering if the author read more between the lines that what was there…

  4. Thanks for pointing that out, I had not seen that. I gave it a thorough read and I’ve seen a few responses not dissimilar to Sam’s post but in the same way Sam presents that the Tribune article misses the point I think he missed some points about the Tribune article.

    I didn’t interpret it as saying that all salaries are too high and there need to be large cuts. What I did read is a call for freezes (I don’t think those that are needed should go so far as 2011) until the economy stabilizes and groups get a better handle on where they are with regard to revenue.

    I absolutely agree with Sam’s point that salaries are not a business model but at the same time (wait for it 🙂 ) it doesn’t mean they are mutually exclusive.

    Personally, I really didn’t walk away from the Tribune article thinking it was another doom and gloom piece so much as an examination of equal sacrifice during times of undue economic stress. So you may be right Bruce, there was more reading between the lines than perhaps should have been but given how easy it is to slip into that argument (becasue there are plenty of those who dredge it up at every turn), it’s good to be on guard against it.

  5. An Artist should not play any less well in Lexington as she does in Chicago, therefore the price is and should be the same. I am with Drew however that as the market adjusts to what is affordable, so too should the guest artists and their managers. Those that do will be remembered later as the ones that helped out in hard times an rewarded as things recover. Those who don’t reduce their fees will also be remembered, and none too fondly.

  6. Apropos of nothing, really, but if we’re including Minnesota in the largest-budget category, I’m sure you’ve overlooked some other music directors from orchestras also in that category who are taking pay cuts. Paavo Jarvi, for example, has volunteered to at least a 15% reduction.

  7. I don’t disagree at all Tonerl but my understanding is that the Trib article wanted to focus on a cross section of larger budget orchestras instead of the Top 10 as defined by budget size. Nonetheless, if you expanded the survey to include all groups from the lowest budget ensemble listed on up, orchestras like Cincinnati would certainly be included.

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