It Might Be An Eventful Week For Philadelphia

The Philadelphia Orchestra Association (POA) is entering the next stage in their will-we, won’t-we future. If you haven’t been keeping tabs over the past few weeks, here is what has been going on: the musicians’ union filed a request to verify the POA’s current financial condition, the POA submitted an objection to that request, and organization’s strategic plan was made available…

According to the Philadelphia Inquirer’s Peter Dobrin, the goal of the union’s motion is pretty simple; they want to see if the POA’s claims surrounding its endowment by way of their pension are on the up and up. To that end, they’ve requested access to “any faxes, emails, texts, or instant messages – to and from senior management on matters relating to the musicians’ contract, pension, endowment, or projections for the future viability of the orchestra.”

According to Dobrin, the POA’s response was to file an objection under the guise that granting the request would cost too much and simply be too much trouble right now.

[sws_blockquote_endquote align=”left” cite=”Arts Watch, 7/17/2011:″ quotestyle=”style05″]Allowing such voluminous and burdensome discovery would be prohibitively costly and disruptive at a critical time in these Chapter 11 Cases, and would be detrimental to the Debtors’ [Association’s] estates. Indeed, the benefit to the Fund is greatly outweighed by the harm suffered by the Debtors.” [/sws_blockquote_endquote]

Why would the musicians’ union want to examine that much information? Simple; they want to verify the status of endowment restrictions and to determine if anyone within the POA leadership is trying to play fast and loose with the organization’s finances. In a nutshell, they want to see if anyone is double-dealing.

Whether or not the union’s request rises to the level of “burdensome discovery” will likely reside with Judge Eric L. Frank, who is overseeing the POA bankruptcy and is hearing both sides on Thursday, July 21, 2011.

It will be interesting to see if the judge asks the POA how much they estimate the discovery process would actually cost and then compare that aside current expenses and cost estimates for the bankruptcy proceedings.

The important item you need to walk away from in all of this is the POA’s bankruptcy request is ultimately all about the musicians’ pension plan and the POA’s goal of using bankruptcy as means for removing their financial obligation to the pension without having any impact on their endowment or other assets.

In the meantime, if you really want to dig into the Philly situation then settle down for some light reading with the POA’s 69 page strategic plan, which was made available online in pdf format late last week (thanks again to Dobrin at the Philly Inquirer). I haven’t gone all the way through it myself yet but will dive in after Thursday’s hearing. [ilink url=”” style=”download”]Download POA Strategic Plan[/ilink]

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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0 thoughts on “It Might Be An Eventful Week For Philadelphia”

  1. Drew,

    Your analysis seems to be about a pension plan in the singular, which I presume is the AFM-EP Plan. However, aren’t numerous current and former members of the Philadelphia Orchestra vested in two pension plans, both of which could be impacted by a bankruptcy order covering future pension liability and funding obligations?

    • I haven’t read much about the pension plan prior to the POA joining the AFM-EP plan but that’s certainly a possibility. Likewise, I haven’t seen any figures regarding how much the former pension plan has impacted the current financial conditions vis-a-vis the bankruptcy filing. But that’s a good question nonetheless.

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