Just In Case You Thought They Were Bluffing

(UPDATE 3:18pm CT – agreement has been ratified) Details from the proposed, and confidential, master agreement between the Philadelphia Orchestra Association (POA) and their musicians are starting to leak to the surface. One of the items with the greatest impact for fallout is whether or not the POA remains in the American Federation of Musicians (AFM) and Employers Pension Fund. According to statements coming from the latter, it doesn’t look like that’s the case.

Several news outlets have reported that pension fund spokespersons have indicated that they intend to move forward with litigation if the POA leaves the fund. According to inside sources, the current proposal not only removes the POA musicians from the fund but it shifts the pension plan from a defined benefit to a defined contribution system.

Consequently, if those reports are accurate and the musicians ratify the agreement, it shouldn’t be long before the pension fund initiates legal action. According to the 10/12/2011 edition of Bloomberg.com, the musicians begin voting on the proposed agreement today, 10/13/2011 although it is unclear if the vote is being conducted in person or musicians will be allowed to vote by mail-in or proxy. If the latter, then the outcome may not be known until the weekend.

Of course, if the musicians choose not to ratify the contract then the issue will go back to a holding pattern. Check back throughout the day as any breaking news regarding the outcome of the vote will be posted as it is made available.

In the end, don’t expect this to be over if the agreement is ratified. In a blog post from 10/12/2011, the Philadelphia Inquirer’s Peter Dobrin provides a broader picture by reminding readers that even if the musicians ratify the contract it must be approved by the POA board (which would be all but guaranteed), reviewed and approved by the Pension Benefit Guarantee Corp. (a trickier step), and ruled on by the judge in the Association’s bankruptcy case (more certain).

Dobrin wraps up by stating the final step in the process and what might end up becoming this conflict’s Fort Sumter moment.

“The [POA] must also formally initiate its withdrawal from the fund, which it has not done.”

  • UPDATE: The POA released a media statement announcing that the proposed agreement has been ratified by the POA board and musicians. Details of the agreement are bound to be made public soon. In the meantime, start the official countdown clock for how long the pension fund will take before pursuing litigation.

[sws_toggle1 title=”POA Media Statement”]

Media Statement
October 13, 2011

Ratification/Approval of New Collective Bargaining between POA and AFM Local 77

Richard B. Worley, Chairman of The Philadelphia Orchestra Association Board of Directors
Allison Vulgamore, President and CEO, The Philadelphia Orchestra Association

The tentative collective bargaining agreement reached on Thursday, October 7, has been approved by the Board of Directors for The Philadelphia Orchestra and ratified by our Musicians. This agreement will be filed for approval in the Bankruptcy Court in the coming day.

This is a critical step toward reaching an important goal within the reorganization process – achieving long-term financial stability for The Philadelphia Orchestra while also maintaining its artistic excellence. Although there is still much to be accomplished in this process, the approval and ratification of this collective bargaining agreement reflects the shared commitment of the Orchestra’s Board of Directors, Musicians and Administration to keep the music playing for our audiences in Philadelphia and around the world.

Our financial challenges have demanded the sacrifice of many at a time when our organization needed cooperative, forward-looking actions that allowed for savings as well as revenue generating opportunities. We recognize and respect what our Musicians have done for our Orchestra and the community in our time of need. Today, we move forward with commitment and even greater determination to raise the necessary funds to ensure that The Philadelphia Orchestra remains the world class ensemble it is today for generations to come.

As we open the season this evening, we look forward to greeting our audiences with the important news that that music will indeed play on. We thank our audiences for their incredible and ongoing support of The Philadelphia Orchestra.


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 “Just In Case You Thought They Were Bluffing

  1. The net effect of these ridiculous characters across the country who are neither musicians nor solid business people masquerading as “symphony managers” is going to be the death of orchestras, or at least their quality and relevance to the art. As musicians we are now hearing “it’s not enough to practice for years, apprentice yourself for years to gain the necessary knowledge and expertise to win out over hundreds of other candidates; you must help management to sell a flawed and irrelevant product as a bitter pill to be swallowed. True leaders must stand up and bear the standard of unflagging commitment to the highest standards, and that means raising the necessary money for musicians to earn a decent living that dignifies and acknowledges their total life sacrifice to achieve the skill necessary to perform at the level required of them. No one bats an eye at the kind of money pro sports figures make, and let me tell you, they aren’t required to rush out and take out a second mortgage to purchase their own equipment. Musicians believed that they could achieve their goals facing impossible odds by never lowering their standards, striving for excellence daily. Where are our counterparts in managements and boards? Where is this commitment and faith that yes, it CAN be done, it WILL be done, we will MAKE it happen!! Not a constant barrage of it can’t be done, let’s dumb it down, let’s cut the product. I’m begging, BEGGING managements and boards, stop spending most of your efforts in confrontations with musicians trying to cut and cut and cut, and if you love the art, confront and educate the public, and have the faith that you CAN raise the money; but if you don’t believe in it, make room for the people that do, and let orchestras thrive and thrill their audiences, uplift the people’s spirit, and contribute to the kind of society that we all want to live in!

    • the thing that bugs me is that it seems to be the back office types saying that it’s all failing because the musicians failed to do good enough selling … which is supposed to be the back office types’ job, really. I mean, not that the musicians don’t have a stake in it, but still. If you’re supposed to be doing outreach, fundraising, and blowing into a trombone, then what the hell is the management getting paid to do? What are THEIR responsibilities again?

      It all reminds me of one more time when something big falls over or rots from the top, and the first people that get blamed are the ones who are the closest to the ground.

  2. Maybe I have missed something early on in this, but does anyone know exactly how the POA got $35M behind in their pension payments? Normally the AFMPF puts an orchestra on a payment plan when they start missing the deadlines so it seems odd that Philly got THAT far behind.

    Is it related to back when they switched plans in the past?

    As Bruce expresses above, you really have to wonder who is minding the ship when something like this happens unless it was done purposefully.

    • Those are all the right questions Lee but answers have yet to transpire. On a much larger scale, removing pension obligations via court/government decisions certainly has a precedent in recent history but this field isn’t like other businesses and using those tactics will open the door for some potentially unwelcome dynamic consequences. Time will tell.

    • The $35 million is the WITHDRAWAL liability, not how far behind they are. The insane part of these shenanigans is that the ANNUAL cost to stay in and current is approx. $1.2 million. This is all part of a national agenda by all sorts of companies to quit paying defined benefit pension plans and to force defined contribution plans on the worker who is unprepared to invest on his/her own behalf.

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