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Issue: February 1995

The Louisville Orchestra

Let Us Reason Together

Louisville Music News has been following with great interest the situation involving our local orchestra and its talented musicians. There is a larger interest involved here than the victory of one side or the other. Louisville has been acquiring an enviable musical reputation.

We can't afford to have it tarnished by the failure to reason together. We appeal to the principals in this difficulty to be tireless in their search for agreement. With so much talent and intelligence present among the orchestra management and board as well as among musicians, it is unthinkable that an agreement is impossible.

Henry C. Mayer

This newspaper offered to the players and to the administration space in this issue in which to state their position. The unedited responses follow . The Editor

The Orchestra Players

The Louisville Orchestra Classical musicians are often considered by our fellow musicians to be the gloomy spirits of the music world, a condition usually attributed to spending too many hours alone in a practice room with the ghosts of Mahler and the other "light" German composers.

You can understand if we musicians of the Louisville Orchestra are particularly gloomy right now. Our despair was profound even before we began this season, because in April we lost approximately $335,000 to salary cuts. But now the orchestra management's lawyer has demanded a cap that would amount to a minimum of $645,000 in additional concessions for next year, a 30.9% cut in full-time salaries. Management needs this, the lawyer proclaims, because the orchestra would lose $410,000 next year if the board undertook the completely irresponsible task of honoring the final year of the three-year contract it negotiated with us.

You'd understand our depression in the midst of this blizzard of negative numbers. But the Louisville Orchestra musicians appear positively cheery when seated next to the orchestra's consultant, Baylor Landrum III. He manufactured the $410,000 shortfall during the 1996 season by predicting an apocalypse descending upon our fair city and anyone who has anything to do with presenting symphonic music; in Old Testament fashion, Landrum predicts a year-long catastrophe that includes substantial drops in revenue from season tickets, single tickets, contract income, touring income, individual contributions, corporate contributions, corporate sponsorships and miscellaneous contributions.

Because the musicians believe God reserves hellfire for more serious transgressions than presenting John Cage at a coffee concert, the orchestra's managers accuse the musicians of wearing rose-colored glasses, of being obliviously optimistic in the face of overwhelming burdens. But after studying the financial situation with the help of the management consultants we've engaged, we've got to turn the question around. Are the musicians wearing rose-colored glasses or is the orchestra's management blind behind the blinkers of their own despair?

Are the musicians foolishly optimistic to believe that the orchestra would probably earn as much ticket revenue in a 45-week season in 1996 as it did during a 44-week season in 1994? Or are the orchestra's managers being unrealistically grim when they think the orchestra could add that extra week during 1996 and somehow earn $199,000 less from ticket sales? Isn't it a tad bit defeatist if you predict that 1994 and 1995, when per-week earned income rose 8.5% and then 12.4%, would be followed by a 1996 season in which per-week income plunges 19.6%? That's what the board's consultant projects.

Is it too ambitious for the musicians to think the Louisville Orchestra could manage a 0% gain in outside fund raising next year, after a four-year period when corporate contributions rose 394% and individual contributions rose 82%? Or is it unrealistically pessimistic for the board's consultant to project that those trends would dramatically reverse themselves and total outside fund raising would dive 16% next year?

So is it our rose-colored glasses that make it hard for the musicians to believe the board's transparent budget manipulations? Or is it more realistic to believe our experts, who found that even if the orchestra's management doesn't generate a single dollar more of income next year than it did in comparable periods during the last two years, the orchestra should still have a $96,000 surplus?

We know Louisville's leaders are and should be, suspicious of such rosy predictions of the orchestra's emergence into financial stability. However, this time the positive outlook is justified, since the orchestra's management has finally cut $322,000 of its administrative and production expenses, reversing a trend that between 1990 and 1993 saw growth in those expenses outpacing increases in musician salaries by 45 percent. In fact, if those administrative cuts had been made in 1989, the orchestra would have accumulated a surplus in five of the last six years.

The weight of evidence supports the musicians' contention that the Louisville Orchestra is financially strong. The burden of proving otherwise lies with the orchestra's board and management, who are trying to abandon their legal and, indeed, moral commitment to the musicians by creating a financial wasteland where none exists. But up to now, at least, while we've talked hard numbers, the management has yet to present any similarly detailed explanation justifying its doomsday scenario.

Obviously, determining whether financial figures have been manipulated to justify escaping a binding contract is important to the musicians' financial well-being and artistic fulfillment. However, there is a more important consideration for every person in this community. Each of us should be concerned about a situation in which the stewards of a public institution have misled the public so to persuade all of us to acquiesce in a decision to dismantle an institution that serves us all.

That's why the musicians are bewildered by the "solution" the orchestra's management has determined from these incredibly flawed projections. Under what logical business plan should the employees of an organization be asked to break a binding contract and take a $645,000 concession that would pay the organizati0n's accumulated deficit of $250,000 twice over? What artistic judgment tells our managers that an orchestra can survive if they strip 30% of the musicians' salaries from them, or perhaps more likely, fire 30% or more of their musicians? Under what management principle can the managers of an organization argue that they can only save the organization by destroying it?

We are arguing for a new vision for the Louisville Orchestra by the board, by the management and by the public. Yes, we are asking for a modicum of faith in the institution and the benefits it brings to our community, rather than resigning to the management's cynicism and defeatism, which threatens to become a self-fulfilling prophesy.

But the difference we offer is that the city will still have the proud institution of the Louisville Orchestra if they follow our path. We are not so assured the grand tower will be standing if we acquiesce to the doubts of our detractors.

The Orchestra Administration

Nobody wants to believe that The Louisville Orchestra is in such deep financial trouble that, without severe sacrifices and major changes, there will not be a 1995-96 season.

Unfortunately, we have no choice.

We've depleted our reserves and exhausted our credit. We are at the end of the line for a 70-musician orchestra playing a 45-week season. In our present situation there are no allowances for contingencies such as lower than expected ticket sales or fund raising, or floods, fires, snow closings, or anything else that might cause cancellation of a performance.

Last December our auditors, Deloitte & Touche, delivered their numbers with an official opinion letter that included the words, "The orchestra's recurring current fund excess of expenses over revenues and deficit in current fund balance raise substantial doubt about its ability to continue as a going concern."

For the past nine years the orchestra and by this I mean management, musicians, the board and the community at large have been overly optimistic about projected income. We've then budgeted expenses proportionally. As a result we've gene deeper in debt year after year.

If we allow ourselves, once again, to believe in a future we would like to have, we will be faced with the prospect of reaching a point during the 1995-96 season where we cannot meet our payroll. We will not open a 1995-96 season without reasonable assurance we can perform all of the concerts in our schedule.

It is human nature, a tender trap, to focus on the irrelevant during times of crises, to pretend the problem isn't there, in the hope that it will go away. As one example, some have said that artistic quality will suffer if the orchestra has fewer full-time musicians. Indeed quality will be an issue (as it always has been) if the orchestra continues into the 1995-96 season and beyond. But until an agreement is reached so that the orchestra can be sure of staying in business, the question of how many musicians play in how many concerts has no relevance whatsoever. What is the point of high artistic standards if there is no orchestra to meet such standards?

Similarly, outlandishly optimistic projections for ticket sales and contributions during the 1995-96 season have no place in serious discussions of the orchestra's future. Certainly you can ask a butcher, a baker, or anyone else, except a certified accountant able and willing to spend several weeks studying the situation, to come up with projections that make you feel optimistic about the future.

You can point out that this figure or that number in a consultant's report seems suspicious on the surface and then avoid looking beneath the surface to the rationale supporting the amount. But such thinking doesn't change anything. It doesn't make the problem go away. Worse, it muddies an issue in desperate need of being seen with uncluttered clarity.

Some unforeseen event packed houses for the remainder of this season, fund raising beyond all expectations, a special, huge and totally unexpected gift, or some grass roots effort to save our symphony on a par with the recent drive to save Presentation Academy might enable us to eke through one more season. But the problem would still be there. And the orchestra, its musicians and the community would find itself with the same challenges it faces now and the prospect of not having a 1996-97 season.

Plain and simple, we would be refusing to change in a changing world, with inevitable consequences. .

Louisville is not alone, of course, symphony orchestras all over the country are being forced to take a realistic view of their finances. Most have opted to reduce their expenses with a combination of fewer full-time musicians and fewer weeks of performance. While cutting their costs of "manufacturing," all other operating expenses have been pared to the danger level, a step Louisville's orchestra already has taken.

On the income side of the ledger, orchestras (including Louisville's) have been achieving moderate success with innovative marketing efforts such as our Compose Your Own ticket purchase plan; new kinds of musical programming such as our Classical Roots and New Dimensions and new special performances such as our Christmas concert at Calvary Episcopal Church. These efforts alone have not been and will not be enough to maintain the kind of orchestra we have had in the past with the size of audiences we have had.

The market for orchestral music has taken a direction over which we have precious little control. We can and have forestalled the future. With a balanced budget, a reduced deficit and reasonable reserves for contingencies, we can begin to influence the future of an orchestra in Louisville.

With a reasonably secure future, we can make calculated investments in occasional high-risk, high-yield marketing and programming ventures. We can continue long-range community outreach programs that introduce children, teens and college students to the beauty of flawlessly performed orchestral music. We can increase our appeal to younger couples, to minorities, to all who are not currently considered part of our orchestra's "affinity group."

We can do all of this without compromising any of the standards which have given The Louisville Orchestra its reputation for being among the finest in the nation. The next decade can be the most exciting ever in the history of our 58-year-old orchestra.

But first we must move back from the precipice where we stand today. We must discard the outdated notion that we and they, management and union, are on opposing teams. We must recognize that survival is the only priority that deserves a place on the page of today's "to-do list." And we must work together musicians, management, the community at large and, most particularly, our economic development organizations to ensure the future of one of this community's most precious and prized cultural assets.

What can you do to help propel The Louisville Orchestra into the future? First, buy tickets. Show your support for us. The 1994-95 season is not in any jeopardy. If you've not been to a Louisville Orchestra concert recently, now is the time to go. And as you sit enjoying the music and the excitement of a live performance, remind yourself that it could all be gone next year if we let it happen.

Bring some friends. Make a special effort to bring people who don't normally attend orchestra concerts. Bring your children or a neighbor's. Teenagers get in free at most concerts and we are going to need their support in future years. Help them become music appreciators now.

Secondly, treat rosy projections of a future, without changes in anything but our income, with the skepticism they deserve. Help us persuade ourselves that, at least temporarily, we have entered a phase where our market will not support business as usual. Help us stay focused on the reality that is there and respond to it accordingly.

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