Chicago Lyric Opera Orchestra Goes On Strike

At 10:30am CT, the musicians of the Chicago Lyric Opera Orchestra (CLOO), represented by the Chicago Federation of Musicians (CFM), released a press statement announcing they are on strike against their employer, Lyric Opera of Chicago (LOC).

Why They Went On Strike

Adaptistration People 179According to the musicians’ statement, the decision to strike was due to the following LOC demands:

1) “Cutting the number of Orchestra musicians by eliminating five positions.”

According to the previous master agreement, which expired 6/30/2018, the minimum number of regular musicians was 76 (which included one music librarian). However, the agreement also agreed to reduce that number to 74 by removing two section violinists via attrition over the course of the agreement. Assuming the musicians are using the 74 figure, LOC’s demand would reduce the compliment to 69. It is unclear which five positions LOC wishes to see removed.

According to a LOC spokesperson, they want to see the positions cut by way of attrition. When asked about how that attrition plan is structure and which positions they want to eliminate via attrition, the LOC has yet to reply.

2) “Cutting the pay of the remaining Orchestra musicians by 8%.”

It isn’t clear how the eight percent figure was calculated. I reached out to the musicians for clarity but at the time this article was published, there was no reply. According to the previous master agreement, the base musician salary was $2,628.96 per week for 24 weeks, or an annual salary of $63,095.04.

3) “Cutting the number of Opera performances, hand-in-hand with cutting the number of working weeks for the Orchestra from 24 to 22.”

This may be one of the most difficult demands to push back against in light of the fact that LOC has reached agreements with the other unions that were bargaining for new agreements alongside the musicians.

According to a statement from a representative at Stagehands Local 2 in the 10/9/2018 edition of Operawire.com, it seems the shorter season is a done deal from their perspective.

“Opera, in general, is experiencing difficult economic times,” were the words of Craig Carlson, Business Manager of Local 2. “Lyric has been a responsible employer for more than sixty years and as a good business partner, we’re obligated to help them. It’s important they maintain their standing as a world-class opera company.”

I asked the musicians if they felt their leverage in calling a strike was compromised considering the agreements reached with other unions. At the time this article was published, there was no reply.

4) Eliminating all of Lyric’s popular radio broadcasts.

According to the previous master agreement, the musicians were paid $1,815.78 for radio payments. This is in addition to their annual wage.

Additional Musician Positions

The musicians assert that the while LOC’s expenditures have increased nearly 40 percent over the past five years, their share of that pie has become much smaller.

Lyric exploded its budget in recent years, from $60.4 million in 2012 to $84.5 million in 2017 (the most recent year for which audited financials are available).  But the Orchestra saw none of that $24 million increase.  To the contrary, the Orchestra’s share of the budget has decreased steadily, from 14.6% in 2012 to 11.9% in 2017… Which also begs the question:  where is that $24 million going?  Management has never given us a straight answer.  Certainly, that money did not go to the Orchestra.  Since 2011, our weekly salary has increased an average of less than 1% per year; and adjusted for inflation, our wages have actually decreased by 5.1% since 2011.

While the musicians assert they have not been given any clear answers as to where the increased expenses have been allocated, they have not demanded an independent examination of finances, like their colleagues in the Metropolitan Opera Orchestra did in 2014 (details). While the employer initially balked at the request, they ultimately acquiesced, and that examination is widely credited toward helping The Met avoid a disastrous work stoppage.

The musicians took a jab at LOC general director Anthony Freud by pointing out his double-digit compensation increases over recent years. When juxtaposed with the proposed cuts, it risks projecting a disingenuous approach to bargaining.

In contrast, you know whose wages have most certainly not declined?  Anthony Freud’s.  He saw a compensation increase of 18% from 2014 to 2017 – a raise of 16% in 2016 alone, right after the Orchestra musicians agreed to a cost-neutral contract with cuts to health care.  And now he is leading the charge to gut the Orchestra.  His demanded salary cuts alone would cost each musician in the Orchestra $6,000; Freud, with his $800,000 annual salary, gets paid that much every three days.

Here’s a breakdown of Freud’s earnings, as reported by the LOC’s IRS 990 filings:

  • 2013-2014 season: Freud earned a total compensation package of $666,293.
    • $580,411 in base compensation.
    • $35,646 in other compensation.
    • $33,949 in deferred compensation.
    • $15,287 in nontaxable benefits.
  • 2014-2015 season: Freud earned a total compensation package of $673,666 (1.11 percent increase).
    • $575,217 in base compensation.
    • $44,469 in other compensation.
    • $34,889 in deferred compensation.
    • $19,091 in nontaxable benefits.
  • 2015-2017 season: Freud earned a total compensation package of $781,154 (15.96 percent increase).
    • $667,667 in base compensation.
    • $60,913 in other compensation.
    • $30,043 in deferred compensation.
    • $16,531 in nontaxable benefits.

I contacted the LOC to inquire about whether their current offer included any shared sacrifice element with regard to executive compensation. The LOC spokesperson replied saying “Anthony Freud’s salary has been frozen since FY 16” but did not respond to follow-up questions seeking a response to the original shared sacrifice question.

Given the information about Mr. Freud’s salary freeze, I asked if that freeze applied only wages or what LOC reports as other compensation, deferred compensation, and nontaxable benefits. At the time this article was published, they have yet to reply.

What’s interesting to note is although the musicians decided to throw a punch at the LOC’s senior most administrative executive, they took a pass on applying the same scrutiny to the senior most artistic executive, music director Sir Andrew Davis.

According to LOC’s tax filings, Davis was paid as an independent contractor. As such, his compensation figures are reported as a lump sum:

  • 2013-2014 season: $578,823.
  • 2014-2015 season: $875,159 (51.27 percent increase).
  • 2015-2016 season: $1,040,524 (18.9 percent increase).

Granted, a music director’s duties and responsibilities are more flexible than a general director due in no small part to how many productions s/he is directly involved. While Freud’s cumulative 17.2 percent increase over those three seasons confirms the musician’s talking point, that pales in comparison to Davis’ 79.77 percent increase from that same time period.

According to the LOC statement in response to the strike, they urged the musicians and CFM to agree to a play and talk arrangement until terms are reached. Regular readers are already aware that play and talk arrangements can be effective tools for releasing bargaining pressure, but the terms are not always cut from the same cloth.

When contacted about whether the play and talk proposal was under the terms of the recently expired agreement, the currently proposed terms, or some other arrangement, the LOC spokesperson said the employer ” was very open to continuing to play and talk” and that the “current contract is in effect until a new one is ratified.”

While that may have covered some of the season’s initial services, it does not clarify if any ongoing play and talk offer is made under the same terms. the LOC has yet to reply to requests for clarification on that point.

When asked if the musicians received an offer to play and talk under the terms of the recently expired agreement, a representative from the CLOO has yet to reply.

Since this work stoppage is new, we’ll wait to examine additional points if an agreement fails to materialize within the first few days.

In the meantime, here are the official musician and LOC statements:

Musicians of the Chicago Lyric Opera Orchestra Statement

10-9-2018

Chicago Lyric Opera Orchestra
October 9, 2018 

FOR IMMEDIATE RELEASE

Chicago Lyric Opera Orchestra on Strike
Musicians Reject Unprecedented Cuts Demanded by Lyric Management

Effective immediately, the Musicians of the Chicago Lyric Opera Orchestra, represented by the Chicago Federation of Musicians, are on strike against our employer, Lyric Opera of Chicago.

Why are we on strike?  Because a world-class opera company needs a world-class orchestra.  That is now in danger.

Over the past 65 years, Chicago’s citizens, civic leaders, and philanthropists built a world-class opera company for a world-class city.  The Lyric Opera Orchestra has been a key part of that success, renowned for its artistry and exquisite sound.  But Anthony Freud and Lyric Management are demanding radical cuts that would decimate the Orchestra and forever diminish Lyric Opera:

  • Cutting the number of Orchestra musicians by eliminating five positions.
  • Cutting the pay of the remaining Orchestra musicians by 8%.
  • Cutting the number of Opera performances, hand-in-hand with cutting the number of working weeks for the Orchestra from 24 to 22.
  • Eliminating all of Lyric’s popular radio broadcasts.

If Management gets its way, the work of all those who built Lyric Opera will have been for nothing.

Management’s Demands are Unjustified

If Lyric faces financial challenges it is not because of the Orchestra.  Lyric exploded its budget in recent years, from $60.4 million in 2012 to $84.5 million in 2017 (the most recent year for which audited financials are available).  But the Orchestra saw none of that $24 million increase.  To the contrary, the Orchestra’s share of the budget has decreased steadily, from 14.6% in 2012 to 11.9% in 2017.  If Lyric wants to make cuts, it is looking in the wrong place.

Which also begs the question:  where is that $24 million going?  Management has never given us a straight answer.  Certainly, that money did not go to the Orchestra.  Since 2011, our weekly salary has increased an average of less than 1% per year; and adjusted for inflation, our wages have actually decreased by 5.1% since 2011.

Lyric Management tries to rationalize its demands by claiming poverty, but the evidence just isn’t there.

Management complains about a “structural deficit” – a term totally out of place for a nonprofit – but cannot escape the fact that there is no actual deficit on Lyric’s balance sheet.  Like all non-profits, Lyric runs an operating deficit every year because earned revenue is never enough to cover expenses.  (That’s why it is called a “non-profit.”)  So, Lyric raises money – lots of it.  Lyric is good at it.  In addition to its annual fund, Lyric has successfully mounted fundraising campaigns like “Breaking New Ground” and “Campaign for Excellence” – campaigns that have raised tens of millions of dollars.  Those funds are explicitly earmarked to be drawn on when needed for operating costs.  In keeping with that stated purpose, Lyric draws on those funds to balance the books.

But now Management says it has suddenly lost the ability to raise money, citing “donor fatigue.”  Such fatigue would be an affliction unique to Lyric.  Other major cultural institutions in Chicago, including the Art Institute, Joffrey Ballet, and Museum of Contemporary Art, have seen big increases in fundraising.  According to Giving USA – the gold standard for tracking charitable giving – giving to the arts has steadily increased since the Great Recession, outpacing nearly every other philanthropic sector.

At the bargaining table, we also heard a defeatist and self-fulfilling narrative about ticket sales.  In the words of Deputy General Director and Chief Operating Officer Drew Landmesser, “Ticket sales are down, they will keep going down, and then they will keep going down.”  But the actual numbers tell a different story.  In 2012, Lyric’s ticket sales were $25.03 million.  In 2018, they are forecast to be $25.95 million; and, Lyric’s fill rate of 84% of the house is the envy of other opera companies.

Moreover, ticket revenue has remained stable despite Management dramatically reducing the number of performances, alienating subscribers by changing their longstanding subscription packages, and failing to grasp new technological requirements like maintaining a well-functioning website or building a mobile app.  The fact that Lyric has managed to sell opera tickets despite Management’s own missteps speaks well for the demand for opera in Chicago.

Radical demands for concessions from musicians also seems to be a Lyric-specific phenomenon.  This year alone, the Metropolitan Opera reached a contract agreement with its musicians that featured salary increases and pension improvements; the musicians of the San Francisco Opera reached a five-year agreement with significant wage increases; and the Washington National Opera orchestra obtained a progressive contract with wage increases every year and no loss of guaranteed work.  Clearly, the managements of those companies recognize the folly of trying to improve finances on the backs of their musicians.

The Musicians Are Seeking to Preserve the Orchestra and the  Quality of Lyric Opera Performances

An opera company that aspires to be world-class needs an orchestra that can draw the finest musicians, and produce the sound that makes opera the thrilling experience that Chicagoans have come to expect from Lyric Opera. We are looking to maintain the same number of musicians in the orchestra, for cost of living increases, and to preserve our benefits and working conditions.

We mean “cost of living increases” quite literally – our last bargaining proposal to management proposed tying wage increases directly to the rate of inflation.  We’re not even trying to make up for lost ground, even though our wages in real dollars have declined more than 5% since 2011.

In contrast, you know whose wages have most certainly not declined?  Anthony Freud’s.  He saw a compensation increase of 18% from 2014 to 2017 – a raise of 16% in 2016 alone, right after the Orchestra musicians agreed to a cost-neutral contract with cuts to health care.  And now he is leading the charge to gut the Orchestra.  His demanded salary cuts alone would cost each musician in the Orchestra $6,000; Freud, with his $800,000 annual salary, gets paid that much every three days.

Where We Go from Here

Lyric Opera of Chicago is at a crossroads.  What kind of opera company does Lyric want to be?  Will Lyric fulfill its core mission of presenting great opera to Chicago and the world at the highest level – the vision that Ardis Krainik and other leaders tirelessly pursued, and which inspired generations of Chicagoans?  Or will Lyric disregard the work of those leaders, abandon all ambition, and adopt a myopic vision that looks no further than its own balance sheet?

We’re on strike because we will not, and cannot, accept a Lyric Opera of Chicago that is nothing but a pale shadow of its former self.  If Anthony Freud and his crew abdicate their responsibility as the stewards of this organization, then the musicians of the Orchestra will gladly take up that cause.

LOC Statement

CHICAGO (10/9/2018) – The Chicago Federation of Musicians (CFM) Local #10-208 is on strike at Lyric Opera. This unnecessary and harmful action may require Lyric to cancel performances. Ryan Opera Center, Lyric Unlimited and other related activities also will be affected. Additional updates will be provided as these determinations are made.

We apologize for the inconvenience and losses this disruption creates for our patrons, donors, partners and other dedicated employees, and are doing everything possible to protect as much of our season. That said, Lyric simply cannot agree to the terms CFM demands, given our current financial circumstances. Our proposed changes are necessary to ensure Lyric’s survival as a world-class opera company providing a diverse range of cultural entertainment to communities throughout Chicago.

We offered CFM wage increases in exchange for a reduction in guaranteed work weeks that better aligns with audience demand and increased scheduling flexibility that will allow us to access additional rental income. The leadership of our other two unions – the American Guild of Musical Artists (AGMA) and the International Alliance of Theatrical Stage Employees (IATSE) – recognized the need for these essential changes and have agreed to multi-year agreements.  Only CFM refused. Lyric urges CFM to continue to talk and perform.

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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