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Debate over Orchestra Hall lease continues

orchestra hall
MinnPost photo by Corey Anderson
Under the terms of its lease, the Minnesota Orchestral Association is required to show how Orchestra Hall is being used to promote the arts in Minneapolis.

A grassroots advocacy group backing the locked-out Minnesota Orchestra musicians is contending that orchestra management is in default of its lease for Orchestra Hall—and the group is urging city leaders to terminate the agreement.

The Minnesota Orchestral Association (MOA), which serves as the orchestra's management organization, operates Orchestra Hall, which recently underwent a $52 million renovation. Under the terms of its lease, the organization is required to show how the facility is being used to promote the arts in Minneapolis.

In early December, the MOA filed a report with the city of Minneapolis. In its report, the MOA said it is in compliance with the terms of the lease with the city, which owns Orchestra Hall and facilitated $14 million in state bonding for the facility. After the MOA filed its report, the Star Tribune indicated that it would be difficult for the city to take the hall back from the MOA.

Still, grassroots organization Save Our Symphony Minnesota (SOS) sent a letter this week to city leaders, contending that MOA is in default and requesting that the lease be terminated.

The letter was addressed to Minneapolis Community Planning & Economic Development (CPED) Executive Director Jeremy Hanson Willis, and it was also sent to City Attorney Susan Segal and Betsy Hodges, who was sworn in Thursday as Minneapolis’ new mayor.

A city spokesperson told Twin Cities Business on Thursday afternoon that he was unaware of any letter from the SOS. (The SOS said, however, that its letter was sent Tuesday, and it was emailed as well.)

The spokesman said that the City of Minneapolis continues to review the report that MOA submitted last month, adding that the lease agreement gives the city 45 days after receiving the document to determine whether MOA is in compliance with the lease. "We expect to have a determination within that 45-days window," he said.

A spokesperson for orchestra management, meanwhile, said in a Thursday evening email to Twin Cities Business that the SOS letter "fails to consider additional information and financial detail" that orchestra management provided to the city and state leading up to the signing of the lease in 2012. "The orchestra fully disclosed the financial position of the organization for the city and state, including the need to reduce endowment draws and restructure salary and benefits expense," the MOA said.

The lease

In its letter, the SOS cites the lease, saying that the MOA would be in default if all information it previously submitted to the State of Minnesota was not “true, complete, and correct . . . in all material respects.”

The SOS then cites a December 10 letter in which 10 state legislators reportedly accused MOA leaders of mismanagement, saying they “manipulated financial results in a deliberate deception of the public, first to gain public funding for Orchestra Hall and then to justify locking out the musicians for well over a year.”

The MOA has reportedly already responded to that accusation, saying that the Legislative Auditor already discredited those allegations. But the SOS claims that the auditor actually “substantiated” such accusations.

In other words, the SOS claims that the MOA failed to provide complete financial information — in part because leaders allegedly did not tell the state about concerns regarding the organization’s financial condition — and should thus be found in default of its lease. The letter also suggests that donations made to the orchestra have formed a charitable trust, with MOA as the trustee and Orchestra Hall being an asset of that trust.

“With the termination of the lease, the City of Minneapolis will become the successor trustee with the responsibility to use Orchestra Hall for the purpose intended by the donors,” the SOS wrote in its letter.

In its statement to Twin Cities Business, the MOA refuted the SOS' claims: "Our attorneys advise that the charitable trust cases cited in the letter don’t affect the terms of the MOA lease. The lease expressly provides for reimbursement of a portion of the building costs paid for by MOA if the lease terminates under certain circumstances. MOA would comply with all donor restrictions applicable to any reimbursed funds."

Read the full SOS document — which also includes a copy of the legislators’ letter to MOA and the report from the Office of the Legislative Auditor — here.

Musicians keep playing

Since orchestra management locked out musicians in late 2012, the two sides have been at an impasse regarding labor contracts for players, as the organization attempts to reduce its budget deficit.

Twin Cities BusinessIn October, on the one-year anniversary of the musician lockout, Osmo Vänskä resigned from his role as music director of the Minnesota Orchestra.

Last month, the MOA released its annual report, which showed a $1.1 million operating loss, compared to the prior year’s $6 million deficit.

And in mid-December, the orchestra’s musicians said they would go it alone, with plans to put on at least 10 performances in a self-produced winter/spring season.

The Star Tribune pointed out that, in addition to performing music, the musicians are handling creating concert programs, securing guest soloists, renting halls, scheduling rehearsals, and selling tickets.

This article is reprinted in partnership with Twin Cities Business.

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Comments (58)

Orchestra

One way to address these concerns is to allow the musicians to play in Orchestra Hall. I think that would be a solid gesture of good faith by the MOA.

This is the first of 25 comments you make on this thread,

and honestly, "Hiram" - I think it's your best. Simple, deadpan irony.

The letter

"With the termination of the Lease, the City of Minneapolis will become the successor trustee with the responsibility to use Orchestra Hall for the purpose intended by the donors."

This seems to me to be quite a leap. I don't know why the City of Minneapolis would become the successor trustee of the MOA, if the MOA's lease of Orchestra Hall were terminated. Nor do I understand how it would be the in the interest of the City of Minneapolis to terminate the lease of it's principal tenant, even assuming the orchestra has arguably various disclosure provisions. I would also ask how such disclosures are material to the relationship between MOA and the city.

Density

We have musicians of an orchestra without a support organization (save themselves) and a lessee soon to lose their lease on Orchestra Hall because their ain't no orchestra playing in it. The lessee has some assets, but to use them in Orchestra Hall under the terms of the lease, they need an orchestra there in the 45 days the City of Minneapolis has to decide (you were kind of right the first time, Hiram).

Maybe they could get a world class orchestra to play the hall in the 45 days, but I doubt it. The Minnesota Orchestra is through unless the lessee comes to agreement with the musicians or the City before or after MOA loses the hall.

If MOA leadership had half the financial chops the musicians have musical chops, none of this would ever have happened.

Without a backroom deal with the City (good luck with that as we are watching), ther are only two ways for this to end. An orchestra in Orchestra Hall or an empty Orchestra Hall.

MOA leadership should resign and MOA should enter mediation with the musicians or they will have to start over with all their cash and marbles. Somehow, I think the muscians formerly of the Minnesota Orchestra would beat them to Orchestra Hall, but if MOA and their finance wizes practice really hard, maybe they can make it to some other hall with an orchestra in time, but it is more likely they'd throw in with the world class orchestra they locked out for over a year, effectively breaking their lease on their home.

Kind of dense, aren't they?

the hall

Allowing the musicians to use the hall would not, I'm afraid, be a gesture of good will by the MOA. As a part of its lease agreement with the city, the MOA needs to use the hall for arts performances, and permitting the musicians to use the facility would be at best a self-serving decision by the MOA. The MOA cannot realistically provide arts performances at this time; no North American classical music musicians will perform at the venue while the lockout continues, and any performances by other musicians or foreign ensembles would be vigorously picketed by patrons.

Regrettably, what has become clear is that the board and management of the MOA are determined to reduce the cost structure of the orchestra irrespective of the true fundraising potential of the ensemble or the implications of such cost cutting on the quality of the ensemble. They have modeled their actions after Detroit and likely feel validated by the relatively good press the Detroit Symphony has received as it has picked up the pieces from similar cuts a few years ago.

Regrettably, I don't think things will turn out as well here. The board and management of the MOA made a voluntary decision that they did not want to support a world-class orchestra anymore, and that is very different from making an all-out effort (involving all stakeholders - patrons, musicians, board and management) to try to continue supporting a world-class orchestra only to realize that it isn't possible. In the process of implementing this decision, the MOA has exhibited a serious lack of transparency, made disparaging comments about the greediness of its musicians, and displayed a callous disregard to the opinions of its patrons. It will be extremely difficult for the MOA to regain the donor and patron support that it enjoyed prior to the lockout - exponentially more difficult than it was for Detroit or Atlanta after their acrimonious lockouts. Unfortunately, if the board and management of the MOA are successful in implementing their vision for the ensemble, the future is not promising for orchestral music here.

Stripping the MOA of its control of the hall is one of the few ways that the current board and management might be forced to resign, and it is one of the few glimmers of hope that we can have for a change in the current dynamic.

Interests

In considering whether the city should act to terminate the lease, the city needs to determine whether termination of the lease is beneficial to the city's interests. Two among many questions the city would have to ask itself are:

1. Does the city have a satisfactory replacement for it's spurned primary tenant?

2. Can the city be confident that if and when the dispute is settled, it can negotiate as favorable lease with the MOA as the one they have now?

Third question

If the intent of at least talking about terminating the lease is to put pressure on the MOA to reach an unfavorable settlement with the musicians, is having a financially weakened MOA as a tenant in the interests of the city and of Orchestra Hall?

Answers

To answer your questions:

1. It would not be hard at all to form a new management team that can outperform the current management. In fact, I think the locked out musicians are currently doing a better job, and their new non-profit could form the basis of a new orchestral association (with a more open governance structure). I bet a lot of MOA employees (current, and those laid off while Henson got huge bonuses) would be happy to work under new leadership.

2. The MOA lease is in no way favorable to the City, since the MOA pays zero rent and has put on zero public concerts in well over a year. So, yes, it would not be hard for the City to get more favorable terms.

3. Again, having a tenant that actually puts on concerts would be in the interests of the City.

Orchestra

I guess I don't understand the politics of the MOA..to me it looks like they want the orchestra to fold.
What is their purpose? I am guessing that before this year is up, if there isn't a settlement. The Orchestra will fold and then what are the plans of the MOA.
A mediocre orchestra in a 57 million dollar Hall?
If the MOA got funding from the state to remodel, why can't the state move on this before our world renown Orchestra is disbanded,:

Politics

I don't think the situation is difficult to understand at all. Management thinks the path the orchestra is on is unsustainable, and they feel an obligation to do something about it. Whether they are right or wrong about it, or whether there is some other course of action raises a different set of issues. But the motivation of management right now is clear.

I don't know what breaks the stalemate. Neither party seems compelled to move off their positions.

Management's reason for existence is this orchestra

If it ceases to exist in its present form, then its management has no reason for existence.
It is incumbent on management to demonstrate that it has done its job, which includes raising money, competently. So far it has failed to do so.

Existence

Management shows no signs of ceasing to exist. Lots of things exist without reasons to exist.

Management is hired by, and serves the board of directors. If the board of directors is dissatisfied with management, it's the board who has the right to direct management to act differently, and ultimately to oust management according to the relevant laws and agreements.

The Hall

I have talked a bit how the sports teams and the orchestra face similar issues, and also how they play out differently. To the sports teams, stadium issues are central and critical. The stadiums Minnesotans have built for the Twins, and now the Vikings are money making machines. That's what they were designed to be and any other function they serve is purely secondary. Orchestra Hall, on the other hand, is just a place where the Minnesota Orchestra plays, and as they have shown, they can play elsewhere. It might very well make economic sense for the orchestra to dump the hall altogether, another issue it's not in the city's interest to raise.

Only path: Terminate lease and get new MOA

In refusing to reveal all financials and hiring legal firm that used mgmt. 'take it or leave it' in refusing to negotiate with Crystal Sugar workers, MOA revealed it's tough corporate, anti-union tactic. This will not always win when up against a tough union that IS the orchestra, because can't get cheap off-the-street strike breakers like Crystal Sugar did. Crystal Sugar owned their corporation, MOA doesn't own the orchestra; they were hired to manage it and like any poor-performing employee, they can be fired. Alternately, let MOA play the instruments and see how many come. MOA simply IS in violation of the lease. Unless NLRB involved, the only path forward is Mpls retrieving the lease, revealing real financials and actually negotiating with musicians. Now We'll see if ownership, Mpls Council, has any chops.

Disclosure

Something that often happens in acrimonious disputes is that one party makes extensive disclosure demands of the other party. The point of such demands really isn't so much to illuminate the nature of the dispute as it is to increase pressure on the party who is the target of the demands. In this case, a lot of demands are being made of the MOA which, it seems to me, go to a lot of issues from the past, which have little or nothing to do with the current dispute, but are embarrassing, or can be made to appear embarrassing to management. I am sure there were lots of internal discussions within the board, and diverse opinions were expressed. It would be surprising if that were not the case.Nevertheless, management reached the decisions it did, and it's those decisions that labor has to react to and deal with.

Revelations CAN be embarrassing

This isn't just about embarrassing management, it's about revealing serious management errors. This is important because claims have been made and management has always argued that the only way to make the orchestra solvent for the future is to follow their plan. Well if the claims are the product of public relations strategies and manipulations rather than actual financial reality, it's just embarrassing, it's a bad plan. For instance MOA claims that it's costing them some ridiculous amount of over-head to produce concerts in the hall, they don't actually lose money on concerts as Hiram has claimed in the past, but still. Embarrassing or not we need see what's behind those claims.

It's a public-benefit nonprofit organization

And the board of directors serves the orchestra patrons. You keep forgetting that critical element of good governance, don't you, Hiram?

Governance

It's really a question of governance, not good governance. Various critics of management are focused on proving to the public at large that the orchestra is really badly managed. Perhaps it is, but how does that matter in an employer and employee relationship context?

Look at this way. An employee is told by his boss that the company he works for is struggling financially, and can't afford to give him a raise. What can the employee do? I suppose he could sit down and meet with his boss and explain how badly the company has been managed, and that the employee should really not be expected to bear the burden of that management.

What do you think the outcome of that meeting would be?

I've heard this before

Hiram, you're repeating yourself, What is going on here is that there is another stakeholder in all this, called the public, and they are now exerting leverage on the situation. This apparently is something you will not be able to understand--or admit to--as you continue to see--or purport--this simply as a management-labor dispute. And this is precisely the mistake that the board made, thinking they could act in an ownership role rather than as stewards of a public institution.

Patrons

As far as I am able to tell, patrons have had no impact on this dispute or in any potential resolution to it. In this case, they are focusing on totally extraneous matters, the hall, while not addressing the only thing that does matter, the money.

Ethics

Hiram, let me ask you: Should patrons--morally and ethically--be given a voice in the future of the orchestra? More specifically, should they have been informed about the budget problems as they arose years ago, and should they have been given a chance to work with the board to develop a more sustainable way forward? I'm not asking what was or was not done, or what the board is thinking now, but what would have been the "right" thing to do, in your opinion? If you fail to respond, or say it's irrelevant, then you will have answered my questions.

"Should patrons--morally and

"Should patrons--morally and ethically--be given a voice in the future of the orchestra?"

Neither morality nor ethics requires them to have a voice. Colgate doesn't bother to ask me what to put in their toothpaste.

"More specifically, should they have been informed about the budget problems as they arose years ago, and should they have been given a chance to work with the board to develop a more sustainable way forward? "

Again, I don't think morally and ethically they are required to be given specific level of information. I don't think the fact that the orchestra is in financial trouble comes as any surprise to anyone, and I don't think adding a lot of detail, and being informed about what took place in a lot of internal discussions adds much that is relevant to our understanding. What the board doesn't need is more people to work with, what the board needs is more money. As it is, they are being criticized by some at least for the ways in which they got more money, a different problem from the one they face now.

For whatever reason, the board or management or whoever, did not generate enough money to provide for the economic stability of the orchestra. Maybe someone messed up, or maybe that's just the way things are not. But any blame we assign in the past, doesn't change the situation now, and in my opinion, the effort we put into such finger pointing diverts us from the issues and is a waste of time. This dispute boils down to a very simple issue. The orchestra is unwilling to play for the wages management is willing to pay them. That's the problem. What's the solution?

patrons

Hiram, you have consistently represented the MOA position in your posts, and your comments regarding patrons are no exception. Let me remind you that the orchestra is a nonprofit and that it needs a deep pool of donors. Not many people are willing to donate to organizations that are not transparent, especially with respect to their finances, and that do not give their stakeholders a voice.

Positions

In any negotiation, it's important for each side to understand the position of the others side. It's the position of management that the Orchestra's current wage structure is fiscally unsustainable. Labor can choose to respond to that or not.

The fact that the orchestra is a nonprofit cuts in a number of different ways. One important result of that fact is that the board doesn't have shareholders to whom it is accountable.

I think people donate to charities all the time without rransparency. I have on occasion, contributed to the orchestra, and I have never asked to see the books. In any event, this is part of the problem. Orchestra members are speaking to the donors, not management, and that strategy just isn't working out for them. As it happens, I think donors want assurances that their money will be well spent by an organization that is fiscally responsible. By portraying this management as fiscally irresponsible,incompetent, and at the very least, deceptive in it's public dealings, labor and it's friends are hardly acting in a way that strengthens the confidence of future donors to the orchestra.

It's my hall

It is my hall (along with all the others who own it) and I will be requesting my Minneapolis City Council member to work cor the City to issue a request for proposals to manage the hall and book performances in it.

I don't care anymore who is or was using Orchestra Hall, only who can fill it with artful performances and audiences from now until doomsday. That can be the musicians formerly of the MN Orchestra or good high school and college groups or traveling world class orchestras, but that is what I want, failing a great house orchestra.

Throw the MOA out on their ears if they don't fulfill the terms of the lease and let us have new lessees who can give us some music at Orchestra Hall.

Orchestra a non profit! However the old model is dead.

Hiram, you are way off the mark when it comes to comparing our orchestra to Colgate toothpaste. When I buy a tube of said toothpaste, I don't get calls from fund raisers and bombarded with Emails, asking for donations. I don't get a pitch that I need to donate to Colgate, because the price is too low to support the product. Get it?

So the audience not only buy tickets but support the organization with hard cash above and beyond the box office receipts. The way the patrons have been ignored in this dispute is a total disgrace. This whole episode is making me do some deep pondering about this model. I personally would like to see a fundamental change in law regarding this. I think there should be a subscribed membership level that allows for the creation of a large donor super boards for all of these organizations. These should have an annual general meeting and a nominating committee, nominate candidates for election to the governing board. The governing boards should elect their officers. We don't want to be in this mess again with the Orchestra or any others. Bylaws could allow that a certain percentage of the governing board be for musicians and also put up for nomination by the nominating committee.

However I'm now convinced more than ever that it is actually technological change driving this dispute, here and everywhere else. It is also causing the same problems in the sports world. Local TV audiences are having to go black for home games, as seats are unfilled because people would rather watch on their big screen TVs. This I believe is even more true of the musical and dramatic arts. Interest and audiences are larger then ever. The evidence builds for this assertion by the month. However, only a very small fraction of that audience will ever set foot inside a concert hall. The Guthrie makes a loss now, with declining attendance. Well UK theater groups including the National Theater are broadcasting to cinemas and have subscription YouTube channels.

The TV broadcast of the New Year concert from Vienna had 58 million viewers. I watched it also, and I'm certain I had a better experience than the people paying enormous sums to attend in the Musikverein. In addition to superb audio and video from the Musikverein, viewers were treated to Ballet performances tastefully produced from the magnificent Lichtenstein City Palace. We had a crowd here at New Year and all agreed the experience here was wonderful. All this streamed without a glitch to a remote part of North Central Minnesota from the BBC servers in Salford England. Gustavo Dudamel, recently admitted to attending concerts via the big screen. He likes it and says it is a different experience form the concert hall but valuable a valid none the less.

Times are changing fast. The Earth is shifting under our feet. The tragedy here is that I don't think anyone on either side of the dispute has woken up to the fact. I have a lot of experience in recording classical music and have recorded a couple of operas. I recently met with a highly qualified video editor and producer. We were both of like mind. We are actually looking at the feasibility of getting the Musician produced concert up on a YouTube subscription channel to get more revenue coming in. Our frustration is getting people to listen and open their eyes to this wonderful evolving technology.

If this community does not get its Orchestras, choirs, opera company and the Guthrie up on subscriber paid for Internet broadcasting with or without adverts, a massive economic opportunity will be lost. It is imperative, we tap that vast audience out there to fund the arts I have mentioned.

Now stop the bickering and lead the way in real solutions to avoid the crisis in the American arts getting any worse and turn it around.

The old model is dead and needs putting out of its misery.

Donors

There is a lot to respond to here. To begin with, I think there is some confusion here about who "patrons" are, or at least some ambiguity that would benefit from a clarification. In this context, patrons can mean ticket buyers, or it can mean donors. Obviously the two categories overlap, but they have different interests and react in different ways. For a lot of reasons, the orchestra has been relatively indifferent to the interests of ticket buyers. I think this is because of the basic dynamic of orchestra finance, that is, the orchestra loses money on concerts. In a dispute about money, folks who drain cash from the enterprise have no influence. Donors are a different matter. But the problem there is that the donors who matter are either on the board, or represented by others on the board. It's their concerns and their issues management is responding to. Those donors need assurances that the money they contribute will be spend responsibly in ways that are fiscally responsible. And by the way, it's those donors, to whom management is required to be transparent.

Lots of things drive this dispute. The business model for orchestras was always heavily dependent on donors. Those sources are drying up. You mention opera recordings. In the 1950's and 1960's, the standard operas were recorded repeatedly by several large record companies. An emerging artist like Domingo or Pavarotti would issue complete recordings of all their standard repertoire. On my ipod, I have about five or six recording of La Boheme, with folks like Tucker, Bjorling, Domingo, and Pavarotti. Those recordings just aren't made in that way anymore for a log of financial and other reasons. While there are some interesting avenues to pursue in the new media, there is no assurance that any of them will be profitable enough to make the orchestra financially stable.That is, however, an area where some flexibility on work rules can help.

Any other voices?

As we see, one person posts repeatedly and will always have the last word, and so far the only word, in support of the MOA. He posts the same old, tired talking points, like donor support is drying up (not true around the country), patrons don't matter (i.e., all that matters is money, not the actual mission of the organization), and the musicians are to blame (oops, I mean "labor"). He never criticizes all the things the MOA has done to drive away donors, like using the organization website to advertise their negotiating position (unlike any other organization I have known), taking out full-page ads in the newspaper to smear the musicians, buying up domain names in preparation for a "financial crisis" and lockout (while paying the CEO huge bonuses), failing to be transparent and work with a mediator, etc.

Is there anyone else out there in support of the MOA? If so, I'd like to hear from them.

Not only that...I have the feeling this is a fictional identity

...which exists to draw anyone into a long-drawn out debate. Sixteen of these posts are under that name, a fairly typical ratio on the Minnesota Orchestra topic, I've observed. I think his posts consistently "ride the fence"...always careful to ask more (and very distracting) questions than to provide answers.

But yeah...it would be interesting to hear from an actual MOA supporter in the comments section here, a real one.

Questions and answers

There are always more questions than answers. That's because it's easier to ask questions than answer them. This is a dynamic that often comes into play when we shift into scandal mode on whatever. How often have you heard some talking head observe, "there are just too many unanswered questions"? When we are in scandal mode, the talking heads always recommend getting ahead of the story, getting out all the information early. As a practical matter this never happens, and the reason for that is that the target of a scandal just can't answer questions as fast as they are asked.

I don't have a lot of answers to the questions I ask. That's why I ask them. If I am perceived as distracting, it's because I think discussions are often focused on the wrong issues. People want to talk about how awful management is. They may well be the awfullest management ever, but as a practical matter, explaining to the guy on the other side of the negotiating table how really mean he is, rarely moves a negotiation forward.

And now you're up to twenty, "Hiram"...

...or whoever you may be. And you're diverting the threads always...always back to yourself and your questions.
Maybe you could work this into a mildly interesting novel...your word count on Minnpost has got to be approaching those numbers.

"He posts the same old, tired

"He posts the same old, tired talking points, like donor support is drying up (not true around the country), patrons don't matter (i.e., all that matters is money, not the actual mission of the organization), and the musicians are to blame (oops, I mean "labor")."

Is some other orchestra at issue here besides the Minnesota Orchestra? Does the Minnesota Orchestra have the option to move to one of those areas where donations are plentiful?

Missions must be paid for.

There is plenty of blame to go around. But assigning blame doesn't have a cash value. You can't take blame to the store and buy groceries with it.

The problem remains the same. The musicians are unwilling to work for the wages management is willing to pay them. So what's the solution?

Management

I am not qualified or knowledgeable enough to evaluate the MOA's management of the orchestra's business. And as little I know about the MOA, I know nothing at all about how other orchestras around the country are managed. That said, let's assume for our purposes that this management is hopelessly incompetent and inept. How does that change the discussion in a material way? However awful this management might be, this is the management this labor has to deal with. I do get the sense that labor would like to be dealing with someone else. That's not uncommon in employer employee relationships. And I think it's find to let off steam griping about the boss. That's not unknown elsewhere either. But I just modestly propose that such griping and complaining, which doubtless is occurring on both sides, just isn't constructive. And to the extent that energy and resources are devoted to it, that griping and complaining are making things worse, and not better, prolonging rather than shortening this dispute.

Hiram's comments are informative

Hiram, in his many comments extolling the MOA's viewpoint, does a nice job summarizing why the MOA has not reached a settlement with its musicians and has angered many of its patrons (donors and ticket buyers).

The board of the MOA includes approx. 80 people, but donations by the board members (using the MOA's own numbers from a recent fundraising letter) account for less than 6% of CEO Michael Henson's proposed operating budget for the MOA ($1.5 million of a total proposed budget of $26 million). These 80 people may represent some others, as Hiram has indicated, but I can guarantee you that they represent only a tiny fraction of the total donor pool to the orchestra. There is no way that an organization such an orchestra that relies on a large pool of donors can be successful when it arrogantly dismisses the vast majority of its stakeholders as irrelevant.

I would also remind Hiram and others that if Cleveland and Pittsburgh can support top-tier orchestras with top-tier salaries, Minneapolis can as well. The problem is not the market, it's the management.

Money players

I guess what's going on here is that labor and it's allies are trying to persuade the big money players, the 84% who aren't on the board to pull the plug on this management. Well, that hasn't happened so far, and it doesn't show any sign of happening in the future. If I were advising them, I would ask, why has your strategy of reaching the money been a failure so far? And what needs to be done differently in order to speak more directly and more persuasively to those folks who do pay the bills?

By the way, lots of organizations are successful which arrogantly dismiss a lot of people. The issue here is whether this management is arrogantly dismissing the people who have power to make decision.s? I suggest here, that one failing of labor's strategy of speaking past management is that they have really figured out who they want to speak to once they get past management. They don't know who has the power to reverse management's negotiating positions, and they don't know what it takes to persuade them to do that.

One last thing. Money is power, and money is what is needed to resolve this dispute. But donors are only part of that, and at this point, their power is at a low point. The money donors give fills in the gap between ticket sales and other sources of revenue, and the cost of operation. But since the orchestra isn't operating right now, that gap is greatly reduced along with the role of donors who are depended upon to fill it. One might argue that by their actions, management has permanently alienated the donors of the future, but for myself, I think that's highly doubtful. If and when the dispute is settled, the donors will come back along with the long term problems of insufficient donations.

I think the donors have walked

Hiram, I think the donors have walked. I have and I'm not coming back with the current operatives in charge.

I think it needs to be made crystal clear to this board, by signature list, no audience, and a loss of a huge part of the donor pool until this crowd to the honorable thing and resign. They should have done this months ago and their failure to do so further illustrates we are dealing with dishonorable people.

Hiram: - If you want to see what a modern world class orchestra looks like, Google Berlin Philharmonic Digital Concert Hall. They have a few free concerts if you hunt. Watch it on a big screen TV with associated good audio system. If you have a Sony or Samsung device and some others, they have an app that will take you straight there.

After enjoying the concert, take a look at the credits and count the high paying jobs.

Hiram, we are seriously missing out, as among other things these incompetents are poorly informed and lack vision. Unfortunately they have lots of company among American arts boards.

If things don't change soon, all the Orchestras will be anywhere but the US. I seem to have no trouble enjoying concerts from all over Europe, South America, some from Asia, few from America.

I watched the AllStar Orchestra on PBS this weekend. The orchestra was littered with mics, and not modern ones either. It looked like a recording session from a bygone era and the sound was way below what I can get streamed from Berlin or on Medici TV.

We have a lot of catch up to do. The Universities we have here are part of the problem also. They are high priced and under performing.

We badly need in the audio realm Tonmeister degree programs like they have at European Universities. We don't have one decent program in the US.

We also need the equivalent on the video side. I recently spoke with someone who tried to do that at the U of M. What they have is a joke. In trying to put a good faculty together with individuals who actually know what they are doing, the cry went up: - "We can't possibly give these guys tenure!."

Now if we had a musical arts center with performance spaces, containing modern AV production facilities and training programs, we would start making progress and move of this tired narrative.

It seems to me that a lot more than the board of the MOA have lost their way in these parts.

This is an interdependent world in almost all aspects of life and commerce now. I think we have a serious lack of vision in the leadership of this state in a myriad of areas. A lot more needs to be done to facilitate change, otherwise we will pay a big price.

This whole issue is just one example of petty blinkered thinking in this state and beyond.

where do they think they're going?

I've made it clear to the MOA that they'll never get another dollar in contributions from me. I think most former donors feel the same way. Public support for the MOA is zero; their ability to hire musicians is zero; their ability to raise funds is zero. They are now essentially a shell corporation with no ongoing business; if publicly owned they'd be a candidate for a reverse merger (acquired solely for their name, cash assets and customer list).

I don't think MOA currently has a plan - at least not a rational one. It seems like the original plan - to invest heavily in real estate and replace this great orchestra with some sort of low-cost "Orchestra Lite" - has failed, and now they're trapped by all their previous statements and actions and have no place to go. I can't imagine what discussions might be going on in that organization right now. From my point of view it stopped making sense a long time ago.

Donations

I think a lot of folks feel now that they will never give money to the MOA again. This is an unfortunate byproduct of portraying the MOA as being run by incompetents who are borderline corrupt. As I have often said, one way out of this mess is to get some sort of public subsidy from the legislature. Given what we have heard from some how the MOA manipulated their finances in order to secure financing for building repairs, the task of getting more money from legislators has presumably been made harder rather than easier.

This management's plan to attain fiscal stability through a reduction in labor costs has failed. The problem is that management, and it's supporters haven't grasped that fact, or if they have, they haven't been able muster the will to act on that fact. So what's the solution?

another zero

Given that 10 legislators recently made a public demand that MOA's current leadership resign, I'd say their ability to get money from the legislature is also zero.

I think the donors have

I think the donors have walked. I have and I'm not coming back with the current operatives in charge.

Contributions are down, we have the numbers on that, but if and when the dispute is settled, I think donors will return. But the long term problems with donations will continue. I think the board should have been fired too. Oddly enough, my opinion in this matter seems to have no weight at all despite the fact I am an occasional contributor to the orchestra.

The Berlin Philharmonic is a great orchestra. Along with several other Berlin orchestras and opera companies, it's also publicly financed. Public financing is one solution to the Minnesota Orchestra's problems as well. I, personally, would support publicly financing the orchestra. After all, we gave the Vikings, a profit making enterprise, a half billion dollars in subsidies with very little transparency or accountability at all, surely we can find a few million dollars in the couch somewhere to bring the orchestra dispute to a conclusion. Dollar for dollar, I think it would be pretty easy to make the argument that the orchestra is a better investment than the Vikings. That just doesn't seem to be in the political cards however.

Negotiations

I think of this dispute as a negotiation. And for negotiations to be successful, I think it's helpful to do certain things. First, it's good to have a goal in mind. When all is said and done, what do you want to take away when you leave the table. Secondly, once you have a goal you have to think about creating a strategy for getting there. The second is always dependent on the first, since if you don't know where you are going, it's very hard to develop a strategy for getting there. Everything to do with the negotiation should be focused on these two things. With every possible public utterance, with every potential move, the negotiators should ask themselves, does that utterance or move get us closer, or does that take us further away from our goal? In any difficult negotiation, there is always a temptation to do things that make one of the parties feel good, but don't bring us any clearer to a resolution, indeed will take us away from a resolution. Those temptations should be resisted. One such temptation is attacking the negotiator on the other side. There are two alternative likely outcomes from such attacks, neither of them helpful. One outcome is that you will just make the other guy mad, and an angry negotiator is more rather than less likely to reach a deal. Once egos start coming into play, the only ones who benefit are the lawyers who gleefully charge by the hour while parties exchange bitter and time consuming recriminations. Another outcome is that the authority of the negotiator can become undermined, and any negotiation where one of the parities doesn't have the authority to conclude a deal is bout to fail, in ways that have disastrous consequences for future negotiations.

With respect to the Minnesota Orchestra negotiations, the immediate problem is that labor is attacking the negotiator. And it stands to reason if one side in a negotiation doesn't want to deal with the other side, for whatever reason, sound or unsound, the negotiation is going to be a failure. Now there are cases, and maybe this is one, where the negotiator is ineffective, doesn't offer a pathway to the goal. If that's the case, then what's the alternative? If getting around a negotiator, if that's what the party decides to do, requires a strategy. So in the case of the Minnesota Orchestra labor dispute, what is that strategy?

Hiram, enough manipulative comments

Hiram - To be fair, I think that any neutral outside observer would agree that the MOA has been attacking the musicians much more than the reverse. You have illustrated this attack in your own wording - note that you use the dehumanizing term "labor" rather than "musicians", just like the MOA consistently uses the term "union" rather than "musicians". I would also note that the term "union" is deliberately misleading in this case: There is no national union here that is calling the decisions, as anyone with any knowledge of classical music knows. All of the decisions are being made by the local musicians; they've just banded together to speak as one unified voice.

I would also remind you that the MOA put out a full-page ad in the Star Tribute, used their website, and sent out letters to their patrons that used manipulative numbers to paint the musicians as greedy. If that isn't an attack on a negotiating party, I don't know what is. Many of these statements were so far-fetched and manipulative that they insulted the intelligence of patrons, and they ignored the fact that many of the musicians actually donated back a significant portion of their salaries to the orchestra prior to the lockout. (In a bit of irony, after the MOA initiated the lockout of the musicians, the MOA actually called some of these musicians to ask them to renew their donations! It stretches incredulity that an organization could be so incompetent.)

Enough manipulative statements, Hiram. Mendacious PR only gets you so far.

At this point, the MOA is a toxic organization. You can delude yourself into thinking that the donations are coming back or that the government is going to give the MOA a subsidy, but likelihood of either is nearly zero unless (1) the governance structure of the organization is changed; (2) Micheal Henson, Richard Davis, Jon Campbell and the other individuals in charge of this disastrous strategy leave; and (3) the culture of the organization shifts completely.

I think that any neutral

I think that any neutral outside observer would agree that the MOA has been attacking the musicians much more than the reverse.

That has been a problem, all those statements from management how the orchestra's Grammy nominated Sibelius recording wasn't all that great, and not nearly up to the standard set by Von Karajan. That being the case, I think both sides should tone down their negative comments about the other, or at least realize that such comments are not helpful.

"At this point, the MOA is a toxic organization. "

If that's the case, why should I support it with the purchase of tickets, donations, or a public subsidy?

I expect donations to come back, for the same reasons fans who vowed they would never go to another hockey game after their lockouts quickly came back. But if they don't, well that's not my problem.

"Micheal Henson, Richard Davis, Jon Campbell and the other individuals in charge of this disastrous strategy leave."

I so often hear that the orchestra members are negotiating in good faith. But I also so often hear that the negotiators on the other side must go. How can both things be true?

You have illustrated this

You have illustrated this attack in your own wording - note that you use the dehumanizing term "labor" rather than "musicians",

I use both, actually. But my use of the word "labor" is in no way intended to be pejorative. I like labor. I believe in working for a living. And I am a very pro union guy, and a very active member of the DFL.

This isn't about narratives, it's about management.

Just a couple observations about Hiram's comments:

"In any negotiation, it's important for each side to understand the position of the others side. It's the position of management that the Orchestra's current wage structure is fiscally unsustainable. Labor can choose to respond to that or not."

I'm soooo glad that Hiram keeps explaining the basic nature of "negotiations", I keep forgetting. Nevertheless, labor HAS responded. This attempt to establish a narrative that labor is negotiating with the press instead of management is a failed strategy because the facts contradict it. The musicians have responded, they've offered counter-proposals, they taken a cut in pay, and they've agreed to mediation. Time and time again it's management that has pulled back to their original proposal. See what happens is one side makes a proposal, and the other responds, and then... wait, now I'M explaining what a negotiation is.

"I think a lot of folks feel now that they will never give money to the MOA again. This is an unfortunate byproduct of portraying the MOA as being run by incompetents who are borderline corrupt."

It not a by-product, it's a direct result of mismanagement. It's a direct result of the decision to lock-out the musicians and keep them locked out. It's not about "portraying" management, it's about the very public and observable lock-out management had orchestrated. What? Are people not supposed to have noticed that there has been no concerts for 15 months?

Look, in almost any other organization we would have seen resignations or dismissals by now amongst the MOA leadership. The only reason haven't seen this is apparently the board and leadership are simply too disfunctional to cope this crises. Apparently we're not supposed make common sense requests for transparency and accountability because it's too embarrassing for MOA.

Donations are falling off because this management team has decided that actual concerts are not a core function of an orchestra. Again, not a by-product of labor portrayals, a direct result of locking the musicians out.

The problem with securing public money to replace the falling donations is that you have to convince the public that giving money to THIS management team makes sense. Whether it's embarrassing or not MOA has is going to have to come clean and demonstrate they can be trusted. As it is, the information we already have raises serious questions about their financial management, and our ability to trust their disclosures. They used the endowment to create an illusion of solvency while planning a lockout that is clearly more about union busting than financial problem solving. So what? We're supposed to pretend we haven't noticed because it's embarrassing for the MOA? We're supposed to save them with a public investment without requiring better management?

Good luck selling that Hiram.

Lockout's were never a viable solution

Listen, even if the financial situation for the orchestra was unsustainable, the lockout was not a rational solution. The solution was to continue having concerts and draw down the endowment until a more sustainable path is mapped out. Lockouts are about breaking unions, not solving financial problems. And it's not just about money as many musicians keep pointing out, there were a host of work-rule demands being made as well.

So you'll say: "well we'd spend down the endowment and end up without an orchestra". That's better than having a big damn endowment without an orchestra, which is what we have now. Look, people are saying that this isn't sustainable, well if that's true a busted union isn't going to save it anyways.

As I've said before, the lockout put the orchestra into a death spiral, that's all it could've done. If this management isn't going to end the lockout, then we need to lockout the management, kill the lease and start over. My only question is whether or not the new entity could capture what's left of the endowment?

he audience

Nevertheless, labor HAS responded.

Not effectively, otherwise we would have a deal. And it may be the case that no deal is possible, that management simply isn't offering enough in wages to secure a work force in this market. When a deal can't be reached, it can't be reached and what happens is that both parties go their separate ways.

"This attempt to establish a narrative that labor is negotiating with the press instead of management is a failed strategy because the facts contradict it."

Quite honestly, I don't know who labor is speaking to. Some seem to be saying that they are speaking to patrons and/or donors, on the theory that those folks can reverse management's positions. If so, labor needs to craft a message that specific to them, and persuasive on their concerns whatever they might be. And they might also give some thought to exactly how those groups, once persuaded, go about imposing their will on the situation.

"It not a by-product, it's a direct result of mismanagement."

The problem here is lack of money, and by making the case that management is mismanaging funds, you are persuading donors who need to give more, that they should contribute less or not at all. This is one of the things I was referring to when I talked about how the focus should be on making things better, not worse.

"Look, in almost any other organization we would have seen resignations or dismissals by now amongst the MOA leadership. "

Very possible. The relevant question to ask here is why haven't we seen those resignations and dismissals. Once we understand why the situation is different, we might have a better understanding of how to respond to it. Everyone wants to talk about something other than the situation at hand.

"Donations are falling off because this management team has decided that actual concerts are not a core function of an orchestra."

I think donations are falling off because the orchestra isn't giving concerts, at least not under the supervision of the MOA. The surprising thing isn't how little that's being donated to the orchestra, rather how much. I have no idea why people would contribute to a locked out orchestra, but they do.

"The problem with securing public money to replace the falling donations is that you have to convince the public that giving money to THIS management team makes sense. "

So it's that's being spoken to? Well, I will tell you this for free. The public doesn't care. The public is barely aware that there is such a thing as the Minnesota Orchestra, let alone that it's locked out. If you don't like what this management is doing, you have to identify who it is who has the power to change this management's decision, and find a way to appeal directly and persuasively to the concerns that move them.

*sigh* Twenty-one comments, now.

Bait this side of the room, bait that side of the room...stay as vague and windy as possible, use others' words to inflate your comment, which is essentially air and inaccuracies.
Maybe these techniques work in the netherworld of JFK assassination hobbyists, but it's tiresome and useless here.

The problem...

"The problem here is lack of money,"

This is NOT a bankrupt organization. They're sitting a what? $150 million? It's hard to plead poverty when you're sitting on that kind of money. What we have here is "claim" by management, that claim may be true, or untrue, or somewhat true. So far, every effort to verify that claim has been thwarted by the MOA.

Who is management speaking to? I hear the musicians have an open door and enough chairs for everyone.

"So it's that's being spoken to? Well, I will tell you this for free. The public doesn't care. "

The public thus far has not been asked to make a significant annual contribution. If and when they are, someone will have to justify it, and when they try to do that, someone else will ask questions, and if you want the money, you're not going to be able to refuse answers because it's "embarrassing".

I'm sure some donors kept donating thinking that the lockout would end. As the reality sinks in they will probably find other places to put their money as the weeks and months go by.

It's hard to plead poverty

It's hard to plead poverty when you're sitting on that kind of money.

Nevertheless, they have.

" What we have here is "claim" by management, that claim may be true, or untrue, or somewhat true. So far, every effort to verify that claim has been thwarted by the MOA."

Everyone has the choice whether to believe management or not. If one side makes the decision that the other party is, for whatever reason, unwilling to deal in good faith, and is not to be viewed as a credible negotiating partner, then negotiations won't take place, and the dispute will continue. That's pretty much what seems to have happened with the Minnesota Orchestra labor dispute.

"Who is management speaking to?"

As it happens, management doesn't seem to be saying much. And labor is complaining about this. In labor's view, management has refused to verify what statements they have made, and they have refused labor's offers to negotiate. At this point, I think management is quite dysfunctional, and in a state of denial. Their lockout strategy has failed, and they don't seem to have any alternative strategy. They have a goal, but no way to reach it.

"The public thus far has not been asked to make a significant annual contribution."

I have gotten solicited by the orchestra since the lockout, which seemed absurd to me. Any attempt to mount a significant campaign to raise money while the orchestra is locked out would be bound to fail. People are always free to refuse to answer "embarrassing" questions or otherwise. They just have to be willing to accept the consequences of such refusals.

Who knows why the donors contributed? In any event, the MOA isn't dependent on donations now.

What?

Labor has:

"Not effectively, otherwise we would have a deal. "

Oh please. And management HAS responded effectively?

Effectively

No, management hasn't responded effectively to labor's position.

Rationality

"Listen, even if the financial situation for the orchestra was unsustainable, the lockout was not a rational solution. The solution was to continue having concerts and draw down the endowment until a more sustainable path is mapped out."

Possibly, and it looks more that way in retrospect. Management saw a financial situation they thought was unsustainable and they thought they could solve the problem by cutting labor costs. As it turns out they were wrong, but they couldn't have known that at the the outset. Being wrong isn't the same thing as being irrational. Given what we know, the better solution might simply have been to continue giving concerts, explore some ways to increase revenue, and basically hope that something would turn up. But that course of action, or inaction, just might not have appealed to these managers, or the folks to whom these managers are responsible. For one thing, doing little in response to would they were advised was deteriorating financial situation might legally have been considered a violation of their fiduciary responsibilities.

Management would say the orchestra was already in a death spiral when they entered into a lockout. Again, I see a suggestion to lockout management. How exactly would one go about doing that?

Re: Rationality

In that case, if they were truly fulfilling their fiduciary responsibilities, the rational decision would be to change course. Certainly these business icons understand that you don’t make decisions based on sunk costs, egos, or emotional attachments.

By not changing course, the MOA has shown its strategy is to draw out this dispute as long as possible and starve the musicians until most of them leave or they cave to management's demands. Meanwhile, the MOA figures they can smokescreen the public and blame “the union.” Unfortunately, I think the union-busting law firm hired by the MOA really has no other strategy to offer, and so the MOA just keeps following the same script no matter how ludicrous and outrageous their public statements, rationalizations, and diversions become.

As an aside, the MOA has further demonstrated a lack of rational business sense by continuing to pay huge sums (from the endowment) to said legal firm, the only apparent rationale being that the firm is represented on the board (COI). Particularly ironic is that the firm’s website extols Minneapolis as a great place to live, even saying, “The Lake Harriet Bandshell is a popular summertime event locale, often featuring the renowned Minnesota Orchestra.” You can’t make this stuff up.

Failed strategy

By not changing course, the MOA has shown its strategy is to draw out this dispute as long as possible and starve the musicians until most of them leave or they cave to management's demands.

Well, that strategy has pretty much failed, hasn't it? So what do you think the MOA's back up strategy might be? Or should be?

In fact, I don't think the board or management is acting rationally now. This presents a different problem. On what basis do you deal with an irrational negotiating partner? Can rationality work when you are dealing with someone who is acting irrationally? It's sort of like Cold war mutually assured destruction policy, only without the atomic bombs.

End the lockout and negotiate in good faith.

C'mon, Hiram, fish or cut bait. :)

Rationality part two

"Possibly, and it looks more that way in retrospect. Management saw a financial situation they thought was unsustainable and they thought they could solve the problem by cutting labor costs. As it turns out they were wrong, but they couldn't have known that at the the outset."

When a mistake is big enough, it's irrational. This comes back to my frequent assertions regarding mediocre American executives. This course of action seems to have been driven more by an ALEC anti-labor agenda than an intelligent financial plan. It was irrational to assume that creating a labor crises with a lock out was a better course of action than some kind of good faith collaboration with the musicians. I think this outcome was predictable given the nature of orchestras and the musicians union. This isn't just 20-20 hindsight, people predicted it at the time. Several commenters have pointed out how strange it is that this management team didn't/doesn't seem to know the difference between an Orchestra and a coal mine. Even if this gambit had worked for the MOA it's unlikely that it would have actually stabilized the financials because it would have resulted in a lower quality orchestra. At a time when orchestra interest is diminishing it IS irrational to assume that the lower the quality of your orchestra, the more financially stable it will be. It's not rational to assume that dressing up the lobby and gutting the quality of the musicians will pull you out of a financial dive. On the contrary, it put them into a death spiral.

There are also problems with the financials, I'm not sure the financial assessment itself is rational or reliable. The figures the MOA has released raise some serious questions. For instance back in December MOA reported ( http://www.minnpost.com/arts-culture/2013/12/minnesota-orchestral-associ... ) that they're still spending almost $6 million in salaries for management and administration, that's only down roughly $1.5 million from the year before when they had 30 or so concerts. Who and what exactly is that paying for? They also report that it costs them nearly $4 million a year just put the concerts on, and that doesn't included musicians salaries or other expenses. That works out around $130k per concert? And they don't even pay rent. Unless they have the highest paid ushers on the planet how in the world does it cost that much to have a concert in a hall you get for free? I mean it's not like they have elaborate sets they're build and striking for every concert so what's the deal? Yet MOA tells us the ONLY way they can possibly wring $6 million out of the expenses is cutting labor costs?

Out of many courses of action they could have pursued, they chose the riskiest, the most controversial and confrontational. And of course, when it put the orchestra into a death spiral instead of changing course they kept on going. I suppose you could it a big mistake but I say it's a big enough mistake to border on irrational.

More on those per-concert costs

OK, just to follow up. MOA says it's costing them $100,000 or more per concert to produce a concert in the hall. Well, if you look at their rental PDF : http://www.minnesotaorchestra.org/images/rentals/orchestra_hall_rental_p...

You can see that with all the bells and whistles you or I could rent the hall and put on a concert for around $10k. Why does it cost MOA $90k more to put on their own concerts than it would cost someone renting the hall? Judging by these rates it should cost less than $500k a year, not $4 million. So what's the deal?