The focus was on the good news at the Minnesota Orchestral Association annual meeting Tuesday evening.
Even news that might be considered not so good was said to be a positive: The orchestra ended fiscal year 2014 (the orchestra’s fiscal year ended Aug. 31) with a $650,000 deficit.
How’s that good? MOA leadership had expected a deficit of about $1 million. And compared to the $6 million deficit of 2012, $650,000 almost looks like money in the bank.
Another sign of good news, according to those who understand organizations as large as the Minnesota Orchestra: In the last fiscal year, management drew down about 5 percent from its huge endowments. That apparently is at the high end of economic sustainability, but the drawdown is half the amounts that were being drawn down in the years leading up to the lockout.
“I don’t want anyone to think we have solved all of our financial problems,’’ Gordon Sprenger, the chairman of the board, told a crowd of board members, musicians and music lovers. “We have not.’’
A new tone, a feeling of trust
But what’s so different, Sprenger and others repeatedly said, is the tone surrounding the entire operation. There’s a widespread sense of cooperation among management, board members, musicians, staff and the music-loving public that had evaporated in the years leading up to the 16-month lockout. That feeling of trust, Sprenger said, already has led to boosts in community financial support.
The biggest donation was for $10 million from an anonymous donor. In the wake of that gift, three other anonymous donors contributed a total of $3.2 million. The bulk of those dollars are to be used to support the Building for the Future endowment, though some money will also be used for artistic programs beginning in 2015.
Sprenger stepped into the breach to head the board after the 16-month lockout. He was to step down on this occasion, to be succeeded by Allen Lenzmeier, a longtime Best Buy executive, who was that company’s CEO from 2002 to 2005. But Sprenger has agreed to stay on as board chairman for a few more months as Lenzmeier deals with some health issues.
Again Tuesday, Sprenger was being credited by many — including musicians — for the rapid turnaround of the Minnesota Orchestra: from being an organization in deep turmoil to one of remarkable cohesiveness and hope.
Sprenger’s crucial role
Roma Duncan, a piccoloist with the orchestra, talked of the crucial role Sprenger played in calming tumultuous waters. The first day that the musicians came together for rehearsal after the lockout, Sprenger addressed the orchestra.
His mere presence on that day, Duncan said, was very different from previous management. And his words hit all the right notes. “He said he was sorry for what we all had been through,’‘ Duncan recalled. “He said that healing would take place in different ways and on different timelines.’‘
Duncan wasn’t the only musician speaking highly of the new atmosphere surrounding the orchestra. What’s surprising about these positive statements from musicians is the simple fact that they are being paid $1.7 million less than in pre-lockout days. (Those reductions were only about half as deep as the orchestra’s previous president, Michael Henson, was demanding when the orchestra was locked out.)
While Duncan and other musicians praised Sprenger and the MOA’s president and CEO Kevin Smith, Sprenger and Smith praised the musicians.
“What tremendous music we’ve been hearing,’’ said Sprenger. “Thank you, musicians.’’
But Sprenger also went back to a constant theme. “A great orchestra truly hinges on the generosity of the community. … It takes a a village to support a great orchestra.’’
Laughing, Smith suggested Sprenger wasn’t quite right about the “village’’ aspect of his statement. “It doesn’t take a village, it takes a major metropolitan area.’’
Community support is up
In the short season following the lockout, most signs have been good. Refurbished Orchestra Hall is creating rental income. Community support for the orchestra is higher than in recent years, with more than 5,000 donors. Ticket sales in the short, post-lockout season ran about 78 percent of capacity, which was about the same as the last regular full season (2011-2012) at Orchestra Hall. But that 78 percent number comes at a time when everything was being done on the fly — there was little time for marketing pushes and community ticket drives.
In the short year, the orchestra had revenues of $20.8 million and expenses of $21.5 million. The MOA’s total invested assets increased by nearly $18 million, to $164 million, the result of stronger market returns in addition to those large contributions.
Dave Boehnen, who was elected to his third term as a board member at the meeting, spoke of the difference between now and the “then’’ of the lockout.
“It was emotionally wrenching,’’ said Boehnen of those months on the board. “But you can’t give up on this orchestra. Once we got back to the music again, everything started moving forward.’’
Credibility
Part of what happened during the lockout was an attack on orchestra management’s credibility. That being the case, I think orchestra financials need to be independently audited or at least reviewed.
I attended the event last night mentioned in this article. I can confirm that the atmosphere among the many board members and high profile donors in the room, as well as some musicians and a handful of lowly community members such as myself, was very positive and even celebratory. It is remarkable how this contrasts with previous years. Above all else, it is an undeniable indictment of the now discredited and failed business plan pushed on the orchestra by Jon Campbell (previous board chair), Richard Davis, and ex-CEO Henson. They thought that by reducing musician ranks (both in terms of sheer numbers *and* quality — which is what inevitably happens when you propose a salary reduction as drastic as the one they did), minimizing the orchestra’s classical music focus and elevating pops concerts, and turning the organization into a front for classy/jazzy/trendy hall rentals in a refurbished hall, they had uncovered a new model that would take hold around the country as an answer to the structural problems facing large orchestras. How delightful it is to know how WRONG they were.