Analysis: Deconstructing Orchestra Debacle In Minnesota

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Osmo Vanska acknowledges members of the Minnesota Orchestra during one of his final concerts with the ensemble in October featuring pianist Emanuel Ax (front left). (Minnesota Public Radio)

Osmo Vänskä acknowledges members of the Minnesota Orchestra during one of his final concerts with them in early October.
Pianist Emanuel Ax (front, second from left) was soloist. (Minnesota Public Radio)

By Robert Commanday

MINNEAPOLIS — The Minnesota Orchestra has broken a record, achieving the longest work stoppage of a major orchestra in American history, and lost its music director as well. And after bootless negotiations during thirteen months of no performances, the cancellation of the entire 2012-13 season and this first month of the current season, there are no signs of progress.

On Oct. 3 and 4, the locked-out Minnesota Orchestra – billed as Musicians of the Minnesota Orchestra – gave three concerts on its own at the University of Minnesota with Emanuel Ax as piano soloist. It marked the farewell appearance of music director Osmo Vänskä, who had resigned days earlier. The response was emotional.

On Nov. 14 and 15, the locked-out musicians will return to the university for concerts under their conductor laureate, Stanislaw Skrowaczewski, with pianist Lydia Artymiw as soloist. The performances again will be presented independently of the Minnesota Orchestra Association.

There is no end to the lockout in sight. Judging from the Minnesota Orchestra Association’s board declining arbitration or formal mediation, it would appear that the strategy is to “starve” the troops into submission.

Former music director Osmo Vanska. (Todd Buchanan)

With Carnegie Hall concerts lost, Vänskä resigned. (Todd Buchanan)

The lack of a settlement was the primary reason for the resignation of Vänskä, the orchestra’s celebrated music director, on Oct. 1. He had earlier given notice that that he would step down should the orchestra be unable to perform its scheduled Carnegie Hall concerts in November. That was immediately followed by the resignation of composer Aaron Jay Kernis, music adviser to the Minnesota Orchestra and director of the Minnesota Orchestra’s Composers’ Institute for 15 years.

After the contract expired last year, the musicians rejected a new contract offer by the Minnesota Orchestra Association (MOA) that would have cut the musicians’ base pay by approximately one-third. The average salary under the previous, expired contract was $135,000. On Sept. 28 of this year, the musicians rejected the fourth of the contracts that had been proposed by the MOA since then. This latest offer would have provided an average annual salary of $104,500 over five years plus a one-time signing bonus of $20,000 for each player. The offer was made possible by funds from Minnesota foundations. The players’ spokesman, Blois Olson, voiced the players’ concern that the lower pay scale would make it difficult for the orchestra to attract the best players. Pay scale aside, a work break of this duration would hardly encourage top musicians to apply.

Aaron Jay Kernis. (Kim Pluti for Parallel Productions)

At Vänskä’s news, Kernis also resigned. (K. Pluti-Parallel Productions)

Ranked by budget size, never mind the fantasy “excellence” listings, with a budget of $30 million, the Minnesota Orchestra is listed 13th among 27 in Tier I of North American orchestras belonging to the League of American Orchestras. 

Unfortunately, neither the musicians nor the Minnesota Star Tribune have publicized the salary figures of other major orchestras, so Minneapolis residents have little context with which to evaluate the issue. The average annual salary of the San Francisco Symphony, which has a budget about twice Minnesota’s size, is $165,000; for the Pittsburgh Symphony Orchestra, in a comparable budget range to Minnesota, that figure is $122,304. Average annual salary is based on the total of all players’ salaries, those at the base or minimum scale, the principal players’ premium salaries, the salaries of those doubling (playing more than one instrument, say, flute and piccolo) and of those who have earned increases in salary by virtue of duration of employment.

The base — starting or minimum — salary for the San Francisco Symphony is $141,700 ($2,725 a week). At the Pittsburgh Symphony, the base salary is $104,115. The base salary for the country’s top paid and highest budgeted orchestra, the Los Angeles Philharmonic, will be $154,336, according to its new contract, an amount reached four years from now, by graduated increases. And to the Los Angeles base (currently $148,700), additional compensation elements include a housing allowance and new contributions to a 403K.

Adding fuel to the fire during the Minnesota lockout, the 39-year-old Orchestra Hall was renovated at a cost of $50 million. The results, viewed recently, show it to be a big improvement in all respects. That expenditure angered the musicians. It was financed by the Association’s $110 million “Building for the Future” Campaign, for which $98 million has been raised. Last month, the orchestra’s president and CEO, Michael Henson, said the campaign would allocate $50 million for the renovation, $30 million for artistic projects (touring, recording, etc.), and $30 million for the endowment.

There was a setback in trust between management and musicians when it was reported in the Star Tribune that Henson, while testifying before the Legislature in 2010 regarding funding for Orchestra Hall, apparently denied that it was operating at a deficit. He stated: “On the financial front, we have announced three balanced budgets in a row.”

On Nov. 26, 2012, in an article headlined, “Orchestra walked thin line on finances,” the Star Tribune reported that management chose to delay the incurring of deficits so as not to affect fundraising and state bonding requests, according to minutes from the orchestra board meetings. That led state legislators to call for a hearing on the matter and demands from the musicians and others that there be a joint independent review of the finances and transparency.

In 2011, after choosing to balance its budget the previous two years, the board retained the public relations firm Padilla Speer Beardsley to determine “what size of deficit to report publicly, between $2.9 million and $4.3 million.” In a Star Tribune article of Dec. 6, 2012, Jon Campbell, the orchestra’s board chairman, denied that there had been a cover-up. Money was withdrawn from the endowment to cover the deficit, so technically there were no deficits. “The need to manage public perception and simultaneously make a case for musician pay cuts animated discussions at finance and executive committee meetings over the next two years,” the article stated.

President and CEO Michael Henson. (Minnesota Public Radio)

CEO Henson: 2007 pay raises, recession stresses led to deficit crisis.

Henson, expressing to San Francisco Classical Voice his primary concern for the maintenance of the orchestra’s endowments, acknowledged recently that there had been annual deficits. Of the endowments, totaling $148 million as of July, the one controlled by the Orchestra Association amounts to $58.4 million, he said. To meet annual deficits, it had been drawn down at a rate that Henson said would deplete it by 2019 if continued. “The situation had been building up for three or four years (before October 2012),” he said. “In 2007 the agreement for a 25 percent pay raise over five years created a structural [deficit] problem. In 2008, the recession had a huge effect and that crisis exacerbated the financial situation. The musicians agreed to a slight modification (of the contract), a raise of 19.5 percent instead of 25 percent.” Still, the Association faced a $6 million deficit, which motivated the lockout.

A fund drive raised $3.8 million that came in from a 20 percent increase in board giving toward annual operations. “In terms of the giving, the corporate giving is tight in proportion to the individual,” Henson said. “A tough part of this is that we laid off 20 percent of the administration.” On the orchestra’s website, the association’s position and situation are described. It tells, for example, that after the start of the 2007 musicians’ contract, the Minnesota Orchestra administrative team took a salary reduction and wage freeze, and had their pension contributions from the Association reduced by more than 40 percent. Henson has offered to reduce his salary package by the same reduction musicians took. According to the Orchestra Association’s tax return for 2011, Henson received a total of $619,313, including $202,500 in bonus pay.

Former Senator George Mitchell, brought in as a consultant, offered an idea that the board rejected – to allow for four months of negotiations, the musicians playing at their former salaries and then taking a 6 percent pay cut in the final two months if there were no deal. If no agreement were reached, a 24-month contract would go into effect that would pay the musicians an annual average salary of $102,200, representing a 24 percent cut from the previous, expired contract. No go.

Principal trombone Douglas Wright.  (frequencybone.blogspot.com)

Principal trombone Douglas Wright negotiated. (FrequencyBone)

The two players leading the musicians’ negotiating team, Timothy Zavadil, bass clarinet, and Douglas Wright, principal trombone, deplore the complete lack of trust that has developed. “That has to be addressed,” Wright said. “It needs organizational marriage counseling. We were shocked when Davis (Richard Davis, chair of the board’s negotiating committee) said, ‘Yes, we will have to lose Osmo (Vänskä).’ If they don’t care about retaining the artistic level, what is their motivation?”

The musicians offered “a couple of concessions,” delivering them on the last day for negotiating, according to Henson. “We received notice at 10:15 in the morning when our deadline was 1 p.m.,”  he said. “We finally heard about the proposal at 2 p.m.” With the sides still far apart, the board’s negotiators ended that session, which in turn angered the musicians because some hours still remained before Vänskä’s deadline.

Government in Minnesota hasn’t helped much. The state normally gives the orchestra $1 million a year, but since concerts were suspended, the Association declined the payments. Governor Mark Dayton, whose aunt, Judy Dayton, has been a major supporter of the orchestra, enlisted former Senator Mitchell as consultant in the dispute. Working with board and musicians, Mitchell tried to reach ground rules for a mediated negotiation.

The city has done less than the state. Mayor R.T. Rybak has made only one significant move, setting up a concert last February by the orchestra in the Convention Center, independent of the Association, to celebrate the orchestra’s Grammy nomination. (He invited orchestra board chairman Anderson, executive vice president of Wells Fargo, and orchestra board president Richard Davis, CEO of U.S. Bancorp and past chair of the orchestra board, to attend. They declined.)

Compare this to the proactive performance in 1967 of Mayor Joseph Alioto, who got the San Francisco Symphony strike settled by closeting both sides in City Hall all night until a settlement was reached. Recently, Rybak said that there was nothing more he can do. He did not run for re-election.

Compare this to the settlement of the St. Paul Orchestra in Minneapolis’ Twin City last April, ending a lockout from the previous October. It was engineered by its mayor, Chris Coleman, shuttling between both sides for eight hours, playing hardball mediator.

Minneapolis gives not a cent to the orchestra — unlike San Francisco, which, since it instituted the Grants for the Arts/Hotel Fund 52 years ago, has given generously to the San Francisco Symphony annually. This year’s contribution was $661,000). Minneapolis, on the other hand, plans to contribute $15 million from its sales and hospitality taxes to the $975 million cost of building a new stadium for the Minnesota Vikings football team and $7.5 million annually to the stadium’s operating costs.

Former Minnesota Gov. Arne Carlson. (YouTube.com)

Former governor Arne Carlson argued for state intervention. (YouTube)

Two political figures have offered ideas worth considering. Former governor Arne Carlson, along with two mayoral candidates, has called for government intervention, as reported in the Star Tribune. Carlson recently proposed that as long as the Vikings stadium was getting “$450 million in tax payer money, (the city) could come up with a large part of the orchestra’s $6 million deficit. The orchestra is a vital state asset that should receive the same attention as the stadium…. The Vikings bring [a total of] 502,000 people downtown eight times in one season, (but) the orchestra brings 305,000 people downtown over a whole year.” That was reported in the MinnPost, a non-profit, website news journal. Rep. Phyllis Kahn, DFL-Minneapolis, has even discussed introducing a bill that would establish community ownership of the orchestra. She sees that “as a means for preventing the kinds of ongoing disputes between management and musicians that we’re seeing right now.”

With a population of 392,880, Minneapolis is the 48th largest city in the U.S., but the area’s $199.6 billion gross metropolitan product and its per capita personal income rank 13th in the U.S. It is the second largest economic center in the Midwest, behind Chicago. Minneapolis proper contains America’s fifth-highest concentration of Fortune 500 companies.

That the orchestra as highly trained musical instrument has been wounded is undeniable. The musicians’ negotiators point to the loss of personnel who have gone elsewhere. Among the personnel departures reported were four violinists (including the principal second violin and first associate concertmaster), two violists, and a cellist. “They either saw the writing on the wall or went to another orchestra, leaving because of the lockout,” Wright said. “There are vacancies not filled.” Some players have taken single engagements with other orchestras as substitutes. Wright has subbed at 12 other orchestras in the past year. As Henson reported, “We carry 87 players under a contract that specifies 95. In a normal year, three or four ask for a year’s leave. It’s maybe eight (on leave) now.”

The longer the lockout continues, the harder and more expensive it will be to bring the orchestra back to its pre-lockout artistic condition. There is one other unusual, perhaps unprecedented aspect in this situation. The Association’s 56-person board, which normally meets four times a year, hast met six times this year because of the crisis. By contrast, the San Francisco Symphony’s board of 85 meets just once a year: Its select executive committee of 21 effectively runs the operation, a much more efficient procedure than having the entire board try to run the ship, especially when a critical situation arises involving knowledge and experience of music and the field.

The long-term costs of the lockout will be various: What will it take to attract a conductor of Vänskä’s stature, and how will the Association regain the musicians’ trust? Mediation or, less likely, arbitration seems clearly the only way out, but it is thus far a course the Minnesota Orchestra Association has not welcomed, a road not traveled.

Robert P. Commanday, founding editor of San Francisco Classical Voice, was The San Francisco Chronicle’s Music Critic from 1965-93 and previously conductor and lecturer at the University of California – Berkeley.

Date posted: November 7, 2013