They were nearly successive entries in Artsjournal.com one week in mid-April: “New Mexico Symphony Declares Chapter 7 Bankruptcy, Will Go Out Of Business” and “Philadelphia Orchestra’s Bankruptcy Resounds: Now What?” Scrolling back a week brought “Detroit Symphony Musicians Approve Contract with 23 Percent Pay Cut.” And back further, to the start of the month: “Behind The Wreckage Of The Syracuse Symphony.”
And on and on. The previous weeks and months brought up a Chapter 11 at the Louisville Symphony, a liquidation in Honolulu and orchestral woes in Baltimore and Charleston. In June the normally on-message League of American Orchestras conference in Minneapolis opened with a frank speech by president and CEO Jesse Rosen that acknowledged a “downward spiral” in the orchestral field, bolstered by some sobering statistics. The average orchestra deficit in 2005 was $193,000. Just four years later, in 2009, it had skyrocketed to $697,000. In 2008, half of orchestras reported deficits; the very next year it was more than two-thirds.
“The data over the past twenty-five years is clear,” Rosen said. “While orchestras were adding concerts and increasing costs, per concert attendance and sales revenue were declining every year.”
Many of the orchestras represented in the league’s statistics have been pressing along, trimming concerts here and making staff cuts there, both in and out of the news headlines. But unlike past industry downturns, the current one isn’t simply cyclical, and it has reached the top-level groups.
A six-month musicians’ strike in Detroit last season was the culmination of an economic maelstrom that was delivered with a one-two punch: as Detroit’s auto industry fell into decline, the recession pushed the city over the edge. Corporate support withered away, subscriptions began to fall off, and management and musicians found themselves in what the Detroit Free Press labeled “the most contentious, knock-down-drag-out labor dispute at a major American symphony in a generation.”
Meanwhile, on April 21, the Philadelphia Orchestra was driven to seek Chapter 11 for the same reasons many private companies do: its expenses ($46 million) were quite a bit higher than its revenue ($33 million). The orchestra was “operating at a significant loss based upon declining ticket revenues, decreased donations, eroding endowment income, pension obligations, contractual agreements, and increased operational cost,” read a statement announcing the bankruptcy. Undaunted, Philadelphia is planning a $160 million fundraising campaign over the next five years.
Now Detroit and Philadelphia face drastically different roads ahead as each examines the wreckage and considers options for moving forward.
Staging a Motor City Comeback
Detroit’s debilitating strike, which began on October 4, 2010, led to the cancellation of seventy-five percent of the orchestra’s season and the departure of six musicians, most notably longtime concertmaster Emmanuelle Boisvert. It also left the institution financially crippled, with a $9 million deficit, a $54 million real estate debt on its concert hall, the Max M. Fisher Music Center, and an endowment that has fallen to just $23 million.
The approved contract, which runs through 2013-14, includes two significant items from an audience-building standpoint: one, each player can earn up to $6,900 more a year if he or she chooses to take part in community outreach activities. In addition, $2 million is earmarked for such activities, which management intends to use to build the DSO’s presence in the suburbs, where the majority of its audience lives. Not unlike the New Jersey Symphony, which became a statewide touring orchestra after financial collapse earlier last decade, the DSO has initiated a series of run-out concerts from its Orchestra Hall base in downtown Detroit to churches, synagogues and regional performing arts centers.
“We have been thinking of ways to grow our audiences,” says Anne Parsons, the orchestra’s president and CEO. “The population in Detroit has dwindled and the economic capacity of fifty percent of these people is close to poverty level. So in order to find our audiences we have to go to them. It’s a little bit like if there’s a great restaurant or store, it has to deliver. If we can reach new audiences this way, we hope we’ll tempt them to come down to Orchestra Hall, which is the only place they’ll find certain repertoire.”
Parsons believes that community-based work will not only redevelop a base of support but also stimulate fundraising, albeit at a modest level. No longer can the DSO count on the same number of six-figure donations to keep the organization running, just as it no longer receives arts funding from the state of Michigan. But Parsons believes the orchestra can triple or quadruple the number of donors who give smaller gifts—those giving “five figures and less.” Additionally, Parsons reports that the orchestra is renewing conversations with ex-donors—including General Motors and Chrysler, after two years of silence—though she cautions their contributions "won’t be anywhere near the level of the past.
“We should not count on huge growth,” she adds, noting that the new contract plans for modest growth: an $11 million annual fund in year one, growing to a $13 million annual fund in year three. “That will still produce deficit results,” says Parsons. “We have a very tall mountain to climb here.” But in the abbreviated season that ran through April and May, the DSO took in more than $3 million, putting it $500,000 ahead of its 2010 fundraising pace. In addition, donor rolls jumped by twenty-seven percent, to four thousand eight hundred contributors.
