Five Minutes To Midnight On The Minnesota Orchestra Doomsday Clock

The Minnesota Orchestra Association (MOA) moved another minute closer to doomsday this week in the wake of three key events: Music Director Osmo Vänskä’s publicly stated threshold for resignation, the loss of principal clarinet Burt Hara, and a commentary article authored by two members of the MOA negotiating committee which appeared in the 4/26/2013 edition of minnpost.com. In this case, doomsday is marked by organizational collapse and subsequent liquidation bankruptcy.

The Nanny Nanny Boo-Boo* Approach

Minnesota Doomsday Clock 5minThe minnpost.com commentary piece, authored by Nicky Carpenter and Greg Pulles, is officially a response to an open letter written by the musician negotiating committee and addressed to MOA CEO Michael Henson that appeared at the same publication on 4/16/2013.

The Carpenter-Pulles letter demonstrates just how far the dispute has sunk. Relying heavily on what some might define as a self indulgent and juvenile approach, the duo chastise their musician counterparts for using the press to rattle sabers and actively avoiding negotiating; all while adopting the very same tone and approach they are criticizing.

Neither letter offers any new information and only demonstrates how firmly entrenched stakeholders remain.

A Picture Is Worth A Thousand Words

Just in case there were any remaining naysayers left out there who don’t believe orchestra musicians have viable employment options other than their current position, the latest Minnesota Orchestra musician to leave is principal clarinet, Burt Hara, who recently won a position with the LA Philharmonic.

In Detroit, they left; in Louisville, they left; and in Minnesota, the artistic brain drain continues. To help illustrate this point, the MOA musicians have been cutting out members that have left for other opportunities from an orchestra photo. Hara is the latest ghost to be included, which brings the musicians’ tally to 22 members.

The Minnesota Orchestra photographed on stage Thursday, May 3, 2012  at Orchestra Hall in Minneapolis, MN.

Time Is Running Out

Lastly, the 5/2/2013 edition of the Star Tribune published an article by Graydon Royce that reports MOA music director Osmo Vänskä has stated that he will resign his position if the orchestra is not playing again by September, 2013. According Vänskä’s letter, he now believes that the MOA has let the orchestra’s commitment to musical excellence come under threat.

The last time Vänskä issued a public statement was toward the end of 2012 and insider scuttlebutt reports that orchestra’s leadership told Vänskä in no uncertain terms that if he spoke out again about the work stoppage, it may rise to the level of just cause dismissal and cancelation of his work agreement.

From that moment forward, he has more or less stayed under the radar but it seems that Vänskä’s tolerance has reached an end. At the time this article was written, there was no response from any of the MOA’s leadership or designated spokespersons; however, I have sent a message to the MOA’s public relations department seeking a statement. Once a response is provided, this article will be updated with that information.

[ilink url=”http://adaptistration.com/wp-content/uploads/139055350-Osmo-Vanksa-Letter-to-Jon-Campbell-and-Michael-Henson-4-30-131.pdf”]Download a copy of Vänskä’s letter (h/t Star Tribune).[/ilink]

Read Vänskä's letter.

30 April 2013

Dear Jon [Campbell, Chair, Board of Directors], dear Michael [Henson, President & CEO],

WITHOUT PREJUDICE

I have been proud and privileged to serve as Music Director of the Minnesota Orchestra since 2003. During that time I have done everything in my power to develop and sustain a world class body of performing musicians who have increasingly won international acclaim for their concerts, touring and recordings.

At this time, I wish to give formal notice of my sincere belief that the musical policy of excellence in symphonic music programming, which is the Minnesota Orchestral Association’s stated goal, and which the players, Board of Directors and international audience expect and deserve, is now under critical threat. As well as the impossibility of rehearsing and performing, which is crucial to maintaining standards, it is public knowledge that several orchestral musicians are leaving their posts; and it is my responsibility to inform you that our concertmaster has personally advised me that she has been offered two alternative positions elsewhere in the country. Although she does not wish to leave the Minnesota Orchestra, she will be compelled to do so if the labor dispute remains unresolved.

As an employee of the Minnesota Orchestral Association it is my duty to advise you that under these circumstances, my own position as Music Director may become unsustainable. I have already stated previously that in my professional opinion it is vital that the orchestra rehearse and perform during the week of 27 May 2013 in order to recommence the building up of quality necessary for the opening months of the coming season, including our planned recording sessions for BIS and our Carnegie Hall engagement. I have additionally requested that Yevgeny Sudbin play during my summer week commencing 22 July 2013 – again to prepare for the September recording.

At the very least, as an emergency option if playing does not recommence during May, it will be necessary to re-start work with the orchestra around 6 September 2013 – or at the latest 9 September 2013; and Yevgeny Sudbin will need to be present during that period in order to prepare for the recording sessions starting on 16 September 2013. I consider it extremely important to make the recordings in September as planned – both in terms of maintaining our record/release schedule with BIS; and as a part of the preparation process for Carnegie Hall.

The Carnegie Hall project represents for me one of the most significant goals of my entire Minnesota Orchestra tenure. I wish to do everything possible to ensure those concerts go ahead.

But at this time I must make it clear, that in the case Carnegie Hall chooses to cancel the Minnesota Orchestra’s concerts this November, i.e. if they lose confidence in our ability to perform those concerts as a result of the extended lockout, then I will be forced to resign my position as Music Director.

For the time being I will of course continue fulfilling my duties and obligations under the terms of my current employment agreement.

I trust you will share the contents and message of this letter with the entire Board.

 

Respectfully yours,

Osmo Vänskä
Music Director

* http://en.wikipedia.org/wiki/Taunting#Verbal_taunts

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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37 thoughts on “Five Minutes To Midnight On The Minnesota Orchestra Doomsday Clock

  1. Drew, what do you think bankruptcy and organizational collapse would look like here? The MOA says they have an endowment of $150+ million… Couldn’t they draw down from the endowment, fire non-essential staff, and supplement with income from hall rental for years, if necessary…?

  2. They certainly could but it is not as straightforward as looking at the full endowment as unrestricted discretionary funds where all one needs to do is calculate reasonable expenses and divide that into available endowment funds to arrive at a length of time they can operate.

  3. Actually, 23 “ghosts” because Hara’s is not included in this photo. Incidentally, concertmaster Erin Keefe has been offered TWO other jobs.

  4. Interesting, I didn’t find any sort of reference key with the photo although that would certainly be helpful.

    If anyone knows of a real time definitive resource, I’d love to know about it.

  5. Emily’s question is a good one.

    How would organizational collapse and liquidation work? And Drew, it sounds as if you’re sure that’s where things are headed – I gather you think that’s where the MOA board and management want to go.

    I’m not so sure they wouldn’t try to keep going in some way – especially since they eliminated the maintaining of an actual orchestra from the MOA mission statement.

  6. It’s important to remember that there are two basic types of bankruptcy: reorganization and liquidation. I would be surprised if the MOA’s goal is reorganization and it almost certainly isn’t liquidation. The doomsday scenario presented in these articles references liquidation and barring any decisions to radically restructure the organization into some sort of a presenter, that’s where the group is headed if they are unable to resolve the dispute.

  7. Things certainly do seem to be moving in that direction. Assuming the orchestra work stoppage extends into the 2013/14 season, the MOA is left with very few options with regard to what they can actually do with the hall (only one of which among the following list is far-fetched):

    1) Hire a replacement orchestra.
    2) Become a presenter and hire shows suited for the space.
    3) Rent the space out.
    4) Flood the orchestra level seating area and reenact famous naval battles.

    Ultimately, the ability to generate a reasonable revenue stream via any one or combination of the above activities is, at best, tenuous.

  8. I myself am really looking forward to an extended run with the Stars Of The Lawrence Welk Show.

    It would be interesting to hear the debate within the MO’s board after Osmo’s letter. If he were to leave under these circumstances then the PR consequences would be catastrophic rather than merely disastrous. I wonder if anyone there understands what this would mean.

  9. I’d like to believe that too but practicality dictates that there are going to be members who were expecting it and/or it simply doesn’t rise to the level of concern for them.

  10. I’m curious. What happens in a liquidation bankruptcy with an orchestra? There are no shareholders so who would the money go to?

  11. Drew, if liquidation is the alternative, do you think the board (at least those who are interested in music) would entertain a proposal to simply replace the management team? In the for-profit world, mismanagement on this scale would invite a hostile takeover. I daresay other stakeholders in the community would welcome the change.

  12. The board recently voted unanimously to support the efforts of management’s negotiating committee. They are part of the problem.

  13. Neither an AFM replacement orchestra nor a traveling show with AFM musicians will play in that hall. Orchestras, such as Chicago Symphony, etc., will not visit there while this debacle continues.

  14. Liquidation distributes assets under a process overseen by a court appointed trustee. In a nutshell, those assets are used to pay creditors, in turn, those creditors (and the amounts paid) are determined via the process overseen by the court.

  15. That’s what seems weird about the idea of liquidation bankruptcy in this case, Drew – the doomsday scenario you suggest in your opening paragraph.

    I don’t know this for sure, obviously, but it seems a safe bet that the MOA’s collective assets (which would include the endowment) are worth way more than whatever is owed to creditors.

    Which would lead to the question: Why would the MOA liquidate in a bankruptcy? (Or at all, if there’s plenty of leftover money?)

    And if the MOA did liquidate, who would get the leftover money? (I presume non-cash assets would be auctioned off.)

  16. Okay, I see that you answered these questions above – I’m sorry that I didn’t see your answer before and that I repeated the question.

    Sure, the MOA would be headed toward liquidation bankruptcy if this fiasco of a dispute weren’t settled, but that would take a long time, wouldn’t it?

    Without paying musicians or the other expenses of presenting concerts, I’d guess that a skeleton MOA (having shed most of the now-unnecessary administrative staff) could keep running for a while on an annual draw from the endowment.

    I see a possible perverse incentive for the MOA bosses to drag this out for years …

  17. I don’t think it would take all that long; it’s important to remember that the endowment isn’t a large discretionary fund and it would be surprising to learn that a good bit of those funds would disappear if things aren’t settled.

  18. Oh, I know that endowments aren’t discretionary funds. But how would they disappear if things aren’t settled?

    I imagine that fairly specific conditions would have to occur for donors to claw back their donations to an endowment, for instance.

    I don’t know who exactly owns Orchestra Hall or the land under it, so I don’t know how much the MOA would have to spend on the place if it were simply locked up.

    But it almost looks like Henson and co. could, if it suited them, simply sit tight and let the musicians drift away (and board members resign), eliminate the jobs of almost all the administrative and management staff, and simply run a skeleton MOA on an annual $4 million endowment draw.

  19. The terms for restricted endowments are as varied as the individuals and institutions that provide them. In short, cutting back to nothing more than the costs for a handful of administrative salaries is not a tenable strategy.

  20. Requesting a blog post about endowment funds and their usage sometime down the line. It’s not a savings account. This came into public view a bit during the Phllly bankruptcy proceedings where there was buzz about a $50 million donation (from Annenberg? don’t remember) being recalled. Also the issue of stocks being part of the endowment and by proxy fund management, draw, etc.

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