Catching Up On Loose Ends In Detroit

Since so many of us in the business are still working longer hours than usual, I’m guessing that more than a few of you are using the extra time today to catch up on news etc. so I thought it would be useful to review some of the recent news coming out of Detroit…

Today’s Detroit Free Press published an article by Mark Stryker that reports the latest round of nine hour talks between the Detroit Symphony Orchestra (DSO) and its musicians produced no results. According to the report, DSO management begrudgingly moved from their previous offers by adding an additional $1 million into their offer.

For weeks, DSO management has claimed that the terms included in the contract they imposed at the beginning of the season already included optimistic revenue targets and Stryker’s article reports that the organization maintains the additional $1 million would put the organization at risk.

“We knew that we would never get a settlement today unless we showed some movement,” said [DSO President Anne] Parsons, noting that the extra $1 million would require a fund-raising goal beyond what management has said was responsible. “Today was a window to get this done, and we took a risk,” she said.

At the end of the day, the session produced no new movement as management reportedly removed their amended offer. The DSO is expected to make an announcement on Monday, 11/29/2010 on the outcome of December’s concert activity.

In the meantime, the only other new news is that the DSO musicians have withdrawn their unfair labor practice charge filed in September (details via Detroit Free Press) and a few slivers of details presented by one side in the dispute surrounding the questionable financing practices related to the Max M. Fisher Music Center capital project (details via Crain’s Detroit Business).

It is unlikely that the dispute will be solved anytime soon without some unforeseen outside influence but the real crunch time arrives at the beginning of 2011 when the DSO board will need to decide what to do about 2011/12 season planning. This is precisely what I told Michigan Radio News’ Jennifer Guerra for their 11/18/2010 broadcast and the real concern here is regardless how either side would like to see the dispute resolved, the DSO faces the very real threat of falling into a revenue collapse syndrome (think Columbus).

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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2 thoughts on “Catching Up On Loose Ends In Detroit”

  1. Do you think there is a benefit to managment for cancelling the season?

    If they don’t produce money losing concerts it could provide a chance to use unrestricted funds on debt issues.

    Or is it to much like the baseball strikes that turned people off? Has it already reached that point?

  2. That’s a good question and one I get in private emails quite frequently. One of the initial realities of a work stoppage (strike or lockout) is that the organization actually saves money. Ticket revenue is usually minimal as most buyers opt for exchanges in hopes that the resolution is right around the corner, the lion’s share of sponsorship revenue still comes in, and individual giving can actually increase depending on how the saga unfolds in the press.

    However, these benefits are short lived as they degrade over time and at a certain point, the organization crosses a threshold where they lose more than they save. That point is determined by a large number of variables but it always there.

    Of course, most of that is impacted by static items whereas the dynamic positive/negative impact of long term consequences is harder to calculate. I’m not aware of any studies but anecdotal evidence suggests they can be aggravated or mitigated by how the conflict resolves.

    Typically, the most detrimental impact results from heavy, one-sided resolutions as factions on the losing side withdraw support and can actively hobble future revenue generating activity (especially those at the board level). On the other hand, resolutions that bring both sides closer together can mitigate a considerable amount of factionalism and can serve to bring in an initial windfall of contributed support from those holding off on donations until after a resolution.

    The long term impact on support from ticket buyers (ticket and contributed revenue, word of mouth support, etc.) is a real unknown. Certainly, subscribers can be tracked to some degree but unless the organization was already selling 90%+ of every event then the potential ticket buyer pool of infrequent to newbie buyers is probably large enough that they know very little, if anything, about the recent labor dispute. So from that aspect, it doesn’t matter who wins/loses or how the situation resolves since they didn’t pay much attention to begin with.

    Beyond attendance, whether or not this has any impact on the organization’s long term fiscal condition depends on how much earned income and annual fund revenue impacts the planned revenue stream.

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