The 10/4/14 edition of the Atlanta Journal-Constitution (AJC) published an article by Howard Pousner that includes an exclusive interview with Woodruff Arts Center (WAC) Governing Board Chairman Douglas Hertz. The WAC serves as the 501(c)3 under which the Atlanta Symphony Orchestra (ASO) conducts business; consequently, even though the ASO maintains its own board of directors and executive committee, it does not ratify labor agreements, does not manage its own budget, and all of the ASO’s executive ranks are WAC employees.
As it relates to the labor dispute, the WAC executive committee is the decision making authority responsible for all bargaining, initiating the lockout, and ultimately agreeing to terms for a new collective bargaining agreement (CBA). That makes Hertz the WAC’s key decision maker and leading architect with regard to the institution’s strategic policies.
Hertz’s AJC interview is the first time he provided unfiltered public comments about the institution’s bargaining strategy and goals for new CBA terms. The interview is a must-read for anyone even remotely interested in the labor dispute as many of Hertz’s remarks are perhaps best defined as astonishing.
Although the entire interview is worth detailed analysis, here is a Top 10 overview of Hertz’s positions.
- He believes the musicians and conductors are “a bunch of crazy people” for failing to appreciate contributors and understanding the WAC’s bargaining position.
- He doesn’t think very many people in Atlanta care about the ASO and the orchestra’s artistic employees are not doing enough to reverse this perception.
- The WAC is only interested in zero-sum bargaining and their financial terms are intractable.
- The WAC would be willing to amend proposed terms that afford the employer with final say on numbers of musicians employed and how positions are potentially filled, but only if the musicians agree to their financial terms.
- He thinks ASO music director Robert Spano and Principal Guest Conductor Donald Runnicles are a pair of populist carpetbaggers who only support the musicians because they feel guilty about getting paid while the musicians are locked out.
- Spano and Runnicles are hyperbolic when speaking about degrading artistic accomplishment. Instead, Hertz believes they should not be talking about artist matters at all but they should be proposing solutions for “developing a more sustainable model.”
- The ASO should operate via a commercial model and never run a deficit.
- The ASO is a financial anchor that drags down the entire WAC.
- He holds culture bloggers in low regard.
- He doesn’t believe the deluge of social media vitriol against the WAC indicates the public sides with the musicians; instead, he feels that the general public, corporate community, and large donors support the WAC’s strategy.
A Lawyer’s Worst Nightmare
It isn’t surprising that Hertz has stayed out of the public limelight. His comments project an image of profound ignorance on core issues related to successful nonprofit performing arts governance alongside a simmering contempt for artistic employees (conductors and instrumentalists alike).
At the same time, it isn’t surprising to learn that a board chair maintains these positions, having said that, it is highly unusual for one to offer them up as rationale for strategic decision making.
A similar situation transpired in the Metropolitan Opera labor dispute where the institution’s General Manager, Peter Gelb, issued a string of quotes to the press that depicted a hardline approach toward employer-employee relations. Gelb’s defining moment that contributed to the Met emerging from its zero-sum bargaining strategy occurred when he told the Associated Press that “we need to impose a lockout because otherwise we have no ability to make [the artist unions] take [negotiations] seriously.”
Comments such as this make it extraordinarily difficult for an attorney representing either side in a labor dispute to implement a successful strategy, which includes carefully crafted sound bites and talking points. There’s a saying in that field, “don’t let them see how you make the sausage” and a key element in that approach is to stay on script.
In Hertz’s case, his unfiltered remarks were akin to wearing a bloody apron to the interview. It was the sort of thing that makes labor lawyers develop substance abuse problems and in the words of labor lawyer Michael G. Dzialo of Pitta & Giblin LLP, “If he were my client, I’d take him backstage and slap him around a bit, because he’s gone off-script. You do not say that.”
The Musicians Respond
Shortly after Hertz’s interview was published, the Atlanta Symphony Orchestra Players’ Association (ASOPA) issued a press statement accusing the WAC Governing Board leadership of financial mismanagement related to expansion of the WAC’s other divisions; specifically, the High Museum of Art and Arts for Learning. Moreover, they called for increased scrutiny and financial oversight as means for allowing the institution to achieve its goals of sustainability.
Atlanta, GA, October 4, 2014
Woodruff Arts Center Governing Board Chair Douglas Hertz, in an exclusive interview with the Atlanta Journal Constitution yesterday about the Symphony crisis, stated that “we’ve got a division of the arts center that threatens the ability of the other divisions (the Alliance Theater, High Museum of Art and Arts for Learning) to produce the great work that they’re doing. We owe it to everybody to make sure that everybody is pulling their weight.”
Decisions of the WAC Governing Board leadership made during the expansion of the High Museum and the Arts Center, completed around 2005, warrant close scrutiny that they have not yet received. The fiduciary and other financial decisions associated with this expansion actually seem to be a significant cause of the financial strain impacting all of the WAC’s divisions, including the Atlanta Symphony Orchestra.
Fundraising efforts by the High Museum and the Woodruff Arts Center to supply the necessary capital for the expansion project were extremely successful, securing an amount well in excess of $164 million. (http://www.dexigner.com/ news/5871)
Yet, despite having raised such a large sum, something troubling seems to have occurred. In 2000, the WAC had an outstanding tax-exempt bond liability of $29.3 million. This number increased from 2001 through 2003 to a staggering $173.02 million, or an increase in liability of $143.72 million in only three short years. (http://www.faqs.org/tax-exempt/GA/Robert-W-Woodruff-Arts-Center-Inc.html#detailedReports_a) This increased debt coincided directly with the WAC’s expansion of the High Museum, which by all accounts had appeared to be fully funded.
The Atlanta Symphony Orchestra did not benefit from this expansion in any way. If the High Museum’s expansion project was fully funded, why did the debt of the WAC increase by $143.72 million? Where did all the funds raised for the expansion project go, if they were not utilized to pay for the project? This is only one of many questions that will need to be answered and understood fully if the WAC’s silencing of the Orchestra by locking out its musicians is to be resolved.
As of now, the U.S. Federal Mediation and Conciliation Service (FMCS) announced they will provide mediation services to help settle the dispute and Atlanta Mayor Kasim Reed announced that he was going to intervene by way of bringing representatives from both sides in the dispute together because he believes “both of them are communicating with me in a more open fashion than I think they are communicating with each other.”