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Silence from the Minnesota Orchestra sides, but community efforts grow

Silence from the Minnesota Orchestra sides, but community efforts grow
Photo by Greg Helgeson
In the last contract offered by the MOA and unanimously rejected, musicians were being asked to take a 17 percent hit over three years, meaning a $110,000 violinist would be paid about $102,000 at the end of the contract.

In the last two weeks, silence has surrounded the Minnesota Orchestral Association and its locked-out musicians, but there is increased community activity on the fringes of the dispute.

Is something going on behind the wall of silence? Nobody, of course, is saying.

But certainly silence seems more hopeful to music lovers than the angry rhetoric that  has marked the lockout, which recently entered its second year.

John Remington, professor of labor studies at the Carlson School of Management at the University of Minnesota, agrees that it’s possible silence is golden.

“It’s certainly possible they are engaging in informal sidebar discussions designed to see if there is a basis for settlement,’’ Remington said in an email response to questions.

But Remington sees the problem as so fundamental that without some pretty basic changes in the demands — and leadership — of this dispute, it doesn’t seem reasonable to get too optimistic that an end is near.

“The problem appears to be that the union’s bottom line and the employer’s maximum possible offer don’t overlap," he wrote. “Accordingly there is no basis for settlement unless one of the parties abandons its basic position on dollars. I don’t see that happening without a change of leadership on one or both sides.’’

Even so, that doesn't mean others in the community aren't searching for a way out.

More public funds?

The latest development is a report Monday by the Star Tribune that some legislative and community leaders are considering ways to channel more public money to the Minnesota Orchestra. The newspaper said that the orchestra annually receives about $1 million from the state.

And last week, Save Our Symphony, which is seen by most as a pro-musician organization,  sent out a notice that Michael Henson, the association’s president and CEO, received total compensation of $619,313 in fiscal year 2011. That included a base salary of $386,916 and two bonuses totaling $202,500. (The rest of the compensation included deferred compensation of $9,800 and benefits, presumably for such things as health care, totaling $20,097.)

The MOA was quick to explain that the bonuses actually were paid in separate MOA fiscal years, but they ended up on tax records as paid in one year, because the IRS bases its data on a calendar year.

Put on the defensive by ths information, the MOA also pointed out that:

• The bonuses were paid prior to the lockout.

•  The 990 tax form that included the information on Henson lists the highest-paid individuals in the MOA. Six of the nine people listed are musicians. “That reflects the values of this organization,’’ a spokesperson said.

•  Henson has “volunteered” to take the same salary whack as musicians are being asked to take.

Given that Henson is one of the three main MOA lightning rods in this lockout, the efforts to defuse issues surrounding his pay come across as a bit hollow. After all, it was Henson, in 2011, who came up with the “strategic plan’’ calling for reducing the orchestra’s expenses.

Orchestra's top nine in pay

As for the list of the top nine, music director Osmo Vänskä, a casualty of the lockout,  was No. 1. The man credited with creating a “world class” orchestra was paid $1,175,910 in 2011. Vänskä was followed by Henson at $619,000 and then five musicians (with wages ranging from $237,364 to $187,780) and, finally, two other MOA executives.

It’s questionable, by the way, whether a rank-and-file musician would be impressed at Henson’s offer to “sacrifice.’’ In the last contract offered by the MOA and unanimously rejected, musicians were being asked to take a 17 percent hit over three  years, meaning a $110,000 violinist would be paid about $102,000 at the end of the contract. Taking the same cut from base pay, Henson would be receiving $359,832, not counting any bonuses that might come his way.

In regards to the issue of pay, Orchestrate Excellence, which is seen as the most neutral organization of music lovers that has sprung up around the lockout, conducted a comparative study of the financial performance of the Minnesota Orchestral Association and the Cleveland Orchestra.

That study seems to support the musicians’ belief that the MOA has not been as creative as it could be in marketing the orchestra, increasing the audience and in building the endowment. In all the fundamental revenue streams, Cleveland has out-performed the MOA, which has built its long-term sustainability plan on cutting costs.

Release of that study is obviously meant to put more pressure on the board to put pressure on its leadership. But if that’s happening, it’s happening quietly.

Public ownership broached

On a different front, Rep. Phyllis Kahn stepped forward with the idea that “the community,’’ meaning the city and the state, would take over the Orchestra. In the past, she’s made similar attempts for the public to take over ownership of the Vikings and the Twins, much as the public owns the Green Bay Packers.

Those efforts have failed. (The Packers are unique and grandfathered in to the NFL structure. With all other franchises, the only input pro sports owners want from the public is dollars for new stadiums.)

Kahn is the first to agree that her plan for some sort of public ownership of the orchestra is sketchy.

She also agrees that the orchestra, a nonprofit entity, is different from the privately held Vikings.

But, Kahn says, the current economic model isn’t working for the Minnesota Orchestra or for many other orchestras in the country either.

“Maybe we can come up with something that would become a national model," she  said.

Kahn notes that much about the orchestra already is public. Not only did the state come up with $14 million in bonding for the renovation of Orchestra Hall, but also the city of Minneapolis actually is the owner of the Hall. (The relationship between the city and the Hall is filled with technicalities. The Orchestra leases the hall to the city, which leases it back to the MOA. All of this helps open the door for public bonding.)

Under Kahn’s plan, the wealthy, so vital to the survival of any arts institution, would be encouraged to buy limited amounts of stock in the publicly owned orchestra.

She believes that the relationship between a board of directors of a publicly owned orchestra would have to be far better than the relationship between the current board and musicians. For starters, she said, a public board would include musicians. Orchestra members and  and their supporters fume that the current board appears tone-deaf to all, except power.

“When you introduce legislation, what you hope to do is introduce conversation,’’ Kahn said. “Let’s put our common sense together and come up with something that works.’’

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Comments (14)

Bonus!

Henson got bonuses for what? Deceiving the public long enough to get the lobby rebuilt? This is just like the bankers getting bonuses for swindling the American public. Show some class Mr. Henson and resign, you have no "strategic" vision for our Orchestra.

Public ownership

I think there is an ambiguity here. Public ownership can mean ownership by the city, state or other government entities. Public ownership can also mean ownership of shares by members of the public, which is a way it's discussed in Doug's article. I think it makes sense to subsidize the orchestra, at least if you though subsidizing the Vikings made sense. They are both in roughly the same business, and I think money spent on the orchestra has far more impact than money spent on the Vikings. But there are a lot of political issues to be overcome as discussed in the Strib this morning. Somehow, the Vikings managed to resolve those issues in their favor, but they worked a lot hard and a lot longer than the orchestra. Orchestra managers don't have the same incentive either. The public subsidy for the VikinItgs meant hundreds of millions of dollars for their owners. No one would similarly benefit from a similar orchestra deal.

I should also note, it doesn't make sense to own orchestra shares. It's a money losing business and who wants to buy losses?

Management

“The problem appears to be that the union’s bottom line and the employer’s maximum possible offer don’t overlap," he wrote. “Accordingly there is no basis for settlement unless one of the parties abandons its basic position on dollars. I don’t see that happening without a change of leadership on one or both sides.’’

I think the good professor is right for the most part. What can also move the status quo is a change in the pressures on the two sides. Going into this dispute, it now seems apparent in hindsight, each side overestimated the leverage it had on the other side. Management thought orchestra members would need paychecks. Orchestra members, to the extent they were decision makers here since it is a lockout, not a strike, may have assumed that pressure would build on management from other stakeholders, such as board members, patrons, government entities or the public at large, none of whom as it turns out, have stepped forward to try to resolve the dispute. But that can change. Rep. Haussman asked this weekend about the MOA's control of Orchestra Hall. Good question to ask. And that also prompts the larger question; is there a point where the MOA has gone out of business? It's public charity, I assume, and it must manage it's endowment according the terms on which it was set up, presumably to offer concerts to the public. If they aren't doing that anymore, what right do they have to keep the money entrusted to their care?

Public Ownership

Public ownership is a great idea.

The current board and management of the orchestra seem to be the major impediment to having a group that performs a concert schedule instead of practicing at home alone and playing together sporadically outside their supposed hall.

If the board membership were voted on by shareholders, the lockout would never have happened or management would have been replaced long before this instead of given bonuses year after year.

The Minnesota Legislature and the Minneapolis City Council should outline the structure of a publicly owned MN Orchestra and the MN Orchestra Association should adopt it or give up any future public funding.

Henson

He deserves a raise. The $6 Mil budget hole wasn't a "strategy."
It is an operating deficit that needed to be addressed by raising more money from donors/patrons, ticket sales, and cost reduction.

Do we really want to go down the road that leads to plugging deficit holes from public funds? Why not raise ticket prices to a level that supports the "world class" orchestra and see where that goes?

Raise ticket prices?

There is no symphony orchestra or opera company worldwide that is supported or breaks even with ticket revenue. European ensembles are largely supported by government subsidy and in many instances public contribution as well as ticket revenue. American orchestras are funded as the Minnesota Orchestra has been funded by ticket revenue and private contribution, with minimal government support. Its time to find out if this community really wants a world class symphony orchestra. We now have a symphony board led by several of our local captains of banking, industry and inherited wealth which maintains the orchestra as a personal charity rather than a public trust. It inexplicably hired a hatchet man at $600k+/ year to balance the books on the backs of the musicians.

A better idea than plugging the 6 million dollar gap with public funds is to change the board leadership and orchestral management. Appoint several musicians to the orchestra board executive committee. Sell Orchestra Hall to a government entity using the proceeds to supplement the endowment and lease it back cheap to a revamped Minnesota Orchestral Association with competent management. If anything, REDUCE ticket prices especially making tickets available to young people at reduced prices which would justify this government intervention. A world class symphony orchestra is a terrible thing to waste, and I'm afraid its happening.

Pay RAISE?!?!

There was little if any effort in terms of creative marketing or targeted pricing. All fundraising efforts went to the Corporate Events Center bucket. Henson utterly failed in doing anything about general fundraising and marketing, or in increasing concerts or presenting them in new venues and innovative ways. Instead of building audience and community loyalty, he trashed it - it's the musicians who deserve the accolades and the money for keeping the connections alive. The ONLY thing that the Board would "negotiate" on in the contract proposal was whether $5 million would come out of the musicians' salaries or their health care.

The $6 million WAS a deliberate strategy, and even that number is questionable.

The future

"If the board membership were voted on by shareholders, the lockout would never have happened or management would have been replaced long before this instead of given bonuses year after year."

The board which is the functional equivalent of shareholders in this context, hasn't acted to remove management so far. There are a number of reasons for that, but there we are. Turning the MOA into a publicly held corporation isn't feasible really because no one wants to buy losses, but it's also worth noting that it almost never happens that public shareholders are able to oust a management.

I do think this management has failed in it's responsibility to the board. If, at the outset of this dispute, you had asked the inside board member whether they would have been willing to accept a work stoppage of over a year, with no prospect of a settlement, the loss of it's world famous conductor, along with crucial members of the orchestra, I think they would have said no. Assuming that's the case, what's the justification for continuing on the same course? It was management's goal to put the orchestra on a fiscally sound basis in the long term. It's become increasingly clear that that goal is no longer attainable. In an effort to save the orchestra in the long term they risk destroying it in the short term. What sense does that make? So it's time for a Plan B. What needs to happen is for management to make a fiscally unsound settlement, to give up the goal that simply isn't attainable, and hope for the best. As Mr. Micawber was prone to observe, something might turn up.

About more public aid for the Orchestra

Proposals to provide major state financial aid to the Minnesota Orchestra merit discussion, but no one should rush to upset the current structure of public arts funding without a great deal of thought - least of all legislators who could be besieged annually by hundreds of arts organizations, each seeking its own line item. We have seen this movie before:

"In December 1987, word circulated that Minnesota's governor, Rudy Perpich, would support placing a line-item in the state's general fund budget to finance the NorthWest Ballet, based in Minneapolis. Perpich spent much time during his terms in office flying around the country scouting for opportunities that would produce jobs in Minnesota. One of his initiatives resulted in the building of the Mall of America in Bloomington, a project that has produced untold millions of tourist visits from around the globe and hundreds of millions in tax receipts. However, his proposal to support the NorthWest Ballet, while well intended, was outrageous. …

"After one too many financial crises…the board of directors at the Minnesota Dance Theatre fired its artistic director and founder, Loyce Houlton, and then started merger discussions with the Pacific Northwest Ballet in Seattle. The merging of dance companies in different cities had become somewhat fashionable in an attempt to achieve operational efficiencies. Supposedly, Perpich had seen one of the stellar productions for which the Seattle company was famous under the direction of Kent Stowell and Francia Russell, and offered enthusiastic gubernatorial support to create something like it in Minnesota.

"Unfortunately…we did not do things that way in Minnesota. We still don't. Years before, the collective we had formed the Minnesota Citizens for the Arts ("MCA"), a statewide membership and lobbying organization. MCA convinced the Minnesota Legislature to create the Minnesota State Arts Board and the 11 Regional Arts Councils to re-grant appropriations made from the general fund. No one, including the Guthrie Theater and the Minnesota Orchestra, got a line-item appropriation. …

"The proposal withered away quietly, and the NorthWest Ballet hired Ted Kivitt, long-time director of the combined Milwaukee Ballet and Pennsylvania Ballet, as the new leader of its school and company – one that had no local dancers."

minnesotamist.blogspot.com/2012/11/meaning-madness-and-magic-of-zenon.html

Confusion

Nowhere in Khan's proposal does it mention additional public funding for the orchestra. Former Gov. Carlson called for it, vaguely, but he is not even in office any more. These proposals are meant to begin looking for new ways to move forward, beyond the superficial "management-labor" impasse that many like to tout. The issue here is really how should an orchestra be run, for the public benefit, not how will the numbers line up after the next contract.

Bad math, too

Musicians were asked to take an average 17.7% cut over 3 years, with a 25% cut by the end of year 3, so a $110,000 violinist would be making $82,500.

Henson's "offer"

If Henson were serious about taking the same "pay cut" as the musicians, he would give back 14 months of his salary plus a pro-rated portion of the bonuses. We're waiting.

Henson

Attempts to personalize this discussion by focusing on Henson's pay package are one of the things that each side is using to divert us from the substantive issues in this dispute, and are a waste of time. For the purposes of argument, I concede the point that management is really, really, lousy and has made a number of mistakes in the past. That said, this management is still in charge, and is still the negotiating partner labor has to deal with. Labor is faced with a stark choice here. It can either respond to management's concerns, or it can choose not to.

What's it to be?

Dissolution

Although we aren't there yet, there might come a point where the Minnesota Orchestra ceases to exist. At the moment, management is living off revenue sources which were intended to support a performance organization known as the Minnesota Orchestra. If the orchestra disappears, the people who manage it, should no longer have jobs.