The holiday season didn’t seem to have much impact on softening attitudes in the Hartford Symphony Orchestra (HSO) labor dispute; if anything, the employer has come out swinging harder than before with a threat to shut down the organization after the end of January, 2016 if musicians do not accept proposed cuts. Although the term “shutting down” may appear to be straightforward, it is an excellent example of just how much lies under the surface of a seemingly straightforward position.
According to a 12/19/2015 Associated Press report by Stephen Singer, the HSO is suggesting they may cease operations by the end of January, 2016.
“If we don’t solve our financial crisis with a long-term solution by the end of January, we’ll have to make difficult decisions, all of which are unpalatable, including shutting down immediately,” said Stephen Collins, director of artistic operations and administration at the symphony… It’s publicizing the standstill to make known “that we’re in serious trouble, that we’re in crisis,” he said. “Our back is against the wall,” Collins said.
The article contains no details related to how the HSO is defining the crisis outside of a long standing statement that the organization’s $2 million line of credit is completely drawn and a string of sizeable annual deficits.
What has yet to transpire are any statements about the HSO’s existing cash reserves or related info about expected revenue streams, such as scheduled foundation/grant disbursements and earned income expectations (ticket sales and fee engagement income for scheduled events).
Nonetheless, the key question here is what “shutting down” entails and whether such activity would impact musicians only or all HSO staff and executive leadership, including music director Carolyn Kuan. An added wrinkle here is the HSO’s outsourced administrative services agreement with The Bushnell Center for the Performing Arts which includes the problematic decision to share a single CEO, David Fay (details).
If it applies to musicians exclusively, “shutting down” could include everything from locking the musicians out, failing to make scheduled payroll disbursements, or filing for either Chapter 7 (liquidation) or Chapter 11 (reorganization) bankruptcy.
Locking Out The Musicians
This is the most likely option in that it provides the employer with the greatest amount of flexibility in that cash flow and assets can remain confidential. Given how long the employer has maintained an entrenched bargaining position, this is the most likely outcome if the organization’s statement isn’t brinkmanship driven rhetoric.
Chapter 11 Bankruptcy
As a comparison, the Philadelphia Orchestra Association (POA) filed for Chapter 11 bankruptcy in 2011 in order to secure large concessions from musicians and other creditors and those efforts where very productive in securing the employer’s desired cuts. Having said that, it is important to note that the POA maintained sizable cash reserves at the time they filed, which provided a great deal of leverage in not only sustaining annual operations but funding the enormous legal fees associated with the bankruptcy process and related legal challenges.
Based on the HSO’s statements, it does not appear that they have financial resources capable of carrying out a Chapter 11 bankruptcy with the same sort of methodical implementation as the POA, but that doesn’t rule it out as an option.
Failing To Meet Payroll But Not Instituting A Formal Lockout
Failing to meet payroll obligations for services rendered without officially locking out the musicians would result in a host of unfair labor charges that if found in violation, would likely drive the HSO into Chapter 7 bankruptcy if the reason behind the move was a legitimate lack of fiscal resources. This is not only a messy and conflict driven option, but one that all but guarantees arriving at a dissolution endgame; an outcome the HSO’s contracted administration, The Bushnell Center for the Performing Arts, would likely be very unhappy with as the HSO generates too much revenue to simply discount.
Chapter 7 Bankruptcy
Although not unheard of, orchestras only reach a point of liquidating after a prolonged process overseen by a bankruptcy court. It is also common to see the process receive intense scrutiny by stakeholders and public interests. All things considered, it would be more than a bit surprising to see the HSO pursue this option; in short, this is the least likely scenario to unfold should the orchestra and its musicians fail to reach an agreement by the employer imposed deadline.
One item missing from recent reports is whether or not anyone has asked the HSO what exactly entails “shutting down” the organization. Thanks to the timing of that announcement and the holidays, it becomes more difficult to obtain clarification; but that doesn’t rule it out either.
To that end, I’ve contacted Steve Collins, HSO Director of Artistic Operations & Administration, for clarity surrounding what the organization considers as qualifying actions for “shutting down.” Moreover, I asked Mr. Collins about what meets the requirements for their “long-term solution” prerequisite; specifically, this could entail the obvious action of ratifying a new collective bargaining agreement but it could also include imposing a contract (an option we explored in an article from 10/10/15).
Keep an eye out for a follow-up article later this week once the HSO has had an opportunity to respond.