It Was Nice While It Lasted

We’ve enjoyed an unusually long stretch of time where there wasn’t a labor dispute brewing but that seems to becoming rapidly to an end and the culprit this time around is the Pittsburgh Symphony Orchestra (PSO). With a collective bargaining agreement (CBA) that expires Sunday, 9/4/2016 the group has yet to reach a new deal.

Adaptistration People 123The PSO’s soon to expire agreement was a three-year term covering the 2013/14, 2014/15, and 2015/16 seasons and included a three percent increase in the final year. The prior agreement, which covered the 2011/12, 2012/13, and 2013/14 seasons garnered quite a bit of attention at the time as it was heralded within certain circles inside the field as an example of austerity driven cooperation that would produce sustainability.

In particular, the employer and musicians agreed to phase out the musicians’ defined benefit pension plan and implement a far less costly defined contribution plan for any new musician coming into the orchestra at that time along with any musicians having less than five years of service after 9/5/11.

Setting aside for a moment this produced two tiers of musicians with equal artistic responsibilities yet vastly different overall compensation packages (a dangerous environment of inequity even in the best of times), it appears that the organization failed to capitalize on turning that massive expense reduction into anticipated sustainability.

At least, that’s the picture being presented by the PSO in an article by Mark Kanny in the 8/29/16 edition of the Pittsburgh Tribune.

Kanny’s article reports the PSO is projecting a nearly five percent operating deficit for the 2016/17 season, although that number isn’t firm due to the lack of a CBA to define musician oriented expenses. On top of that, the PSO will be missing nearly that same amount in revenue thanks to losing a portion of a long standing fee based earned income stream and a long time angel donor.

If that weren’t enough, the PSO claims to have $10.4 million in unfunded pension obligations.

What’s particularly discouraging in the article is how all of the financials are being used in a very 1960’s era labor relations approach.

For example, the PSO’s President, Melia Tourangeau, was fine providing dire figures then took the passive-aggressive approach of declining to offer comments about the ongoing negotiations.

For now, the PSO musicians appear to be holding their cards close to their chests. Short of a group photo showing members wearing “Musicians of the Pittsburgh Symphony” t-shirts, their Facebook page is conspicuously empty of any traditional negotiation rhetoric (overt or passive).

This paints a stark contrast to the gloomy financial picture presented by Tourangeau in the Tribune article.

Hopefully, the Gloom-and-Doom 101 tacit is just that and isn’t a harbinger of something particularly ugly on the horizon.

But one item from the article worth pointing out is Tourangeau’s assertion that the PSO allocates far more of their annual expenses toward artistic expenses compared to “other major orchestras.”

Instead, [Tourangeau] asserted that 70 percent of Pittsburgh Symphony’s expenses are artistic and 30 percent administrative and for operating Heinz Hall. For most other major orchestras, the relationship is reversed.

If the situation continues to degrade, I’m looking forward to finding out more about that statement because on the surface it seems, at best, skeptical. There’s no indication in the article what expenses Tourangeau is classifying as “artistic” and “administrative” but according to figures the PSO musicians report to their national union, the American Federation of Musicians, the percent of expenses from the 2013-2014 season paid for all musicians is 48 percent. This figure excludes payments made to conductors and guest artist and includes salary, benefits, and related items such as electronic music guarantees, seniority, etc.

For a broader frame of reference, here are the percentages paid at other large budget orchestras from that same season:

  • National Symphony 56.3 percent
  • Philadelphia paid 48 percent
  • Cleveland Orchestra 43 percent
  • Detroit Symphony 42 percent
  • New York Philharmonic 41 percent
  • Dallas Symphony 37.04 percent
  • Boston Symphony paid 35 percent
  • Chicago Symphony 35 percent
  • Minnesota Orchestra 34 percent
  • Cincinnati Symphony 30.39 percent

So unless there are some profound differences in how both sides are reporting those figures, it will be interesting to see how everything unfolds.

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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7 thoughts on “It Was Nice While It Lasted

  1. Time to negotiate? Put the frowny face on the accounting numbers and turn your pockets inside out. What a novel approach.

  2. Do you mean the Fort Worth Symphony Orchestra, the group that avoided a labor dispute entirely with a one year extension back in January, 2016? If so, we examined that topic over the course of several article, all of which are available via that orchestra’s archive page.

  3. Yes, I am in fact aware of the existence of the Fort Worth Symphony Orchestra, and I would be familiar with its labor struggles even if I didn’t read all of your articles extremely closely.

    But Fort Worth remains in federal mediation. At the beginning of August, the Star Telegram quoted management as saying: “We are pleased that at this time no interruption of performances will occur,” insinuating that the potential for a labor dispute still exists.
    http://www.star-telegram.com/entertainment/performing-arts/article93174987.html

    Not to mention, Hartford, San Antonio, and Kalamazoo all have experienced labor unrest in 2016. You know that because you’ve covered them.

    Which is why I’m so surprised to hear you say that it has been an unusually long time between labor disputes, and to even use that assertion as the basis for this piece’s title. To say so glosses over the recent battles at smaller-budget ensembles and places Pittsburgh in a false context.

  4. Sure, let’s take a look at each of those instances. San Antonio Symphony implemented a cut in musician salary but there was nothing that rose to the level of potential work stoppage and the Kalamazoo Symphony musicians have filed an unfair labor charge, a process with a very clear path to resolution and is mutually exclusive from a potential work stoppage.

    Fort Worth Symphony settled their most recent contentious labor dispute with a one-year agreement in January, 2016 and have been engaged in negotiations since then (the presence of a Federal mediator is commonplace these days and no longer in and of itself, a remarkable occurrence). Lastly, the Hartford Symphony’s contentious negotiations were settled in the same month. The latter two were the most recent situations holding real potential for devolving into a work stoppage.

    That was nine months ago so yes, it has been an unusually long stretch of time to enjoy the absence of a brewing labor dispute.

    I get the sense that you’re asserting this article somehow denigrates what transpires at orchestra with budgets smaller than the Pittsburgh Symphony Orchestra. If so, you may not be aware of a very long standing practice of reinforcing the equal value of all professional orchestra stakeholders throughout the field as a whole. One of the earliest, and most popular articles on that topic, which equates the value between orchestras of varying budget size is from 2004. In fact, you may find it useful in expressing the points I believe you’re trying to make: Why Albuquerque Is Just As Important As Chicago.

    Granted, this is from a dozen years ago; it predates the economic downturn not to mention the entry point for the newest generation of the orchestra field’s professionals so I’m glad to see an opportunity to introduce it once again into contemporary discussions.

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