Looking At Smaller Budget Groups Amidst The Economic Downturn

I received an intriguing email yesterday from Lee GrothOlson, Bartlesville Symphony General Manager, wondering about my take on how smaller budget groups are weathering the economic downturn. When compared to their larger budget peers, most smaller budget orchestras I am aware of (those up through $1.5mil annual budget) tend to have fewer challenges managing debt and budget shortfalls than not. This is due to a few primary reasons:

  1. Orchestras in this sector tend to rely on investment income less and are, comparatively, tooled up for more robust annual development goals.
  2. Likewise, an increased ratio of earned income as part of the overall budget means temporary revenue enhancement practices (over scaling the house, etc.) help offset shortfalls.
  3. Increased ability to modify artistic expenses on short notice contributes as well.

To be clear with the final point, we’re talking about what it costs to hire musicians and guest artists, program larger works that require more rehearsals and musicians on stage, etc. More often than not, orchestras in this budget group do not have a fixed expense structure that is spelled out for one or more seasons in advance via guaranteed service counts and/or scheduled improvements to service payments.

But before anyone thinks this is going to be an article about the evils of musicians’ unions, over zealous work rules, some rallying cry for gutting collective bargaining agreements, or some other politically charged nonsense, let’s dig a little deeper into this issue.

It Still Comes Down To Labor Relations

Regardless of whether or not a smaller budget orchestra maintains a collective bargaining agreement, if the number of services offered or service rates had be to cut, those measures are only effective for a limited period of time. In short, musicians are musicians and even though the immediate amount of potential blowback in the form of labor tension is likely less than their larger budget peers, smaller budget orchestras can’t expect cuts or prolonged periods of null artistic wage growth to be more than a temporary solution.

Granted, there are plenty of variables to this equation; for example, satellite orchestras in major metropolitan areas may not experience focused, overt musician efforts to push back against budget cuts or insistence for restoration, but they will find it increasingly difficult to attract the quality of free lance musicians they’ve become accustomed. As a result, artistic standards could begin to suffer therefore introducing a host of related troubles (decreased board/donor support, difficulty attracting dedicated music directors, etc.).

Similarly, if a smaller budget group is comprised of a large number of long term musicians, organized discontent can begin to spread. This can lead to emotion fueled standoffs over increasingly trivial matters, board splits, and hostile attitudes between stakeholders.

So, even though smaller budget groups have a comparatively easier time adjusting artistic expenses than their larger budget peers, it doesn’t mean that flexibility is synonymous with a long term solution. In short, you might not feel the rain on your head right now, but the storm of a century could be just beyond your radar.

Keep in mind, these are far from universal truths and one of the most endearing elements of smaller budget orchestras is their unique operating environments and diversity. As such, no one should be interpreting this discussion as ipso facto anything. Instead, it should help clarify issues such as increased control over fixed artistic expenses and labor relations are not mutually exclusive, but they may simply have varying maturation cycles.

In the end, it’s something every smaller budget manager and executive committee should consider when weighing the pros and cons behind how budget cuts fit into a longer term strategy.

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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