An NFL-inspired solution to the orchestra dispute

Courtesy of the Minnesota Orchestra
Orchestra management and sports management are in the same business, the difference being whether the players are holding a bat or a bassoon.

Professional orchestras and sports teams are remarkably similar in their business operations and in labor relations. Orchestra management and sports management are in the same business, the difference being whether the players are holding a bat or a bassoon. In both industries, management scouts and hires talented players to perform difficult feats in such a compelling way that people pay for tickets to their events and fill concert halls and stadiums. In both industries, labor problems have caused enormous disruptions such as the one that has closed Orchestra Hall in Minneapolis for the last year.

Just as the first baseball union formed the Players’ League and tried to play its own schedule, the musicians of the Minnesota Orchestra have formed the Minnesota Orchestra Musicians to produce their own concerts. The “Players’ League” failed as the baseball players lacked capital and had the tendency to overpay themselves. The Minnesota Orchestra Musicians are following a similar path now and will learn about orchestra management’s importance.

Professional athletes and musicians start their careers early in life, either playing in Little League or in a school band. They both practice their skills the prescribed 10,000 hours to perfect the art. As they improve, they begin to stand out from their peers and are given privileges, receive adulation, and develop commensurate egos. Both players compete in countless try outs, are recruited, and attend special schools; The Eastman School and Julliard are the same as LSU and Alabama in this respect. Star at either and play later as a professional.

Players in both “sports” survive a rigorous elimination process where they are promoted over peers and then find themselves in the “Big Leagues.” They note the full audiences and revel in the applause. They understand that all of this is due to their unique talent, especially when they are the featured soloist playing Bach’s “Toccata & Fugue,” or quarterback starring in the Super Bowl. The audience is not cheering the Board of Directors are they? This sense of self leads to monumental labor conflicts which is the history of professional sports. The National Football League has adopted a salary cap/revenue sharing plan that lends itself to the orchestra setting, and should be applied to the Minnesota Orchestra.

The NFL system is based on a revenue metric and a percentage of revenue to be paid to the players. For the orchestra, the union and management would agree on the revenue attributable to the musicians — from tickets sold for orchestra events, sales of DVDs and other media, to t-shirts, and then agree on the percentage payable to the players — different percentages can be paid from tickets and DVDs. The allocation between the players can also be part of the agreement. Most of the elements of this plan are already in place. It is a matter of agreeing to the concept and then sitting down and working out the details.

I have been involved in labor relations for decades and recognize that this is the time for bold action by the orchestra board. Such bold action by the NFL created the balanced plan that benefits owners, players, and fans of that sport. By adopting such a plan, the Orchestra can look forward to long term labor peace and we concert goers can enjoy the wonderful music they create.

This post was written by Clark Griffith and originally published on the Clark Griffith Blog. Follow Clark on Twitter: @ccgpa.

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Comments (18)

  1. Submitted by Hiram Foster on 11/06/2013 - 11:14 am.

    Hm

    Essentially, what Mr. Griffith is saying is that players and management should agree on the money. I agree that would resolved the labor dispute, but the problem is that they don’t.

  2. Submitted by Paul Udstrand on 11/06/2013 - 11:49 am.

    Uggg.

    Sometimes I think sports is a virus.

    Orchestras are NOT privately owned franchises. They are NOT members of multi-billion dollar “leagues” that share millions of dollars in revenue every year. They do NOT have multi-million dollar telvision or advertising deals. They do NOT have the same “fan” base or operate on similar economies of scale. And musicians are nothing at all like athletes nor do they “perform” anything remotely like a “game”. Sheesh.

    Look, the model doesn’t even really work for sports franchises, they can’t even build their own stadiums without huge public subsidies. The only thing comparable here is the management practice of “lock outs”.

    We don’t need a different model, we just need competent management.

  3. Submitted by Hiram Foster on 11/06/2013 - 04:07 pm.

    Orchestras

    But orchestras do hold public events to which they sell tickets. And while technically non profit, lot of people make lots of money from the orchestra. There is a difference in scale between the Vikings and the orchestra in some respects, but many of the considerations are similar. Neither can generate a sufficient amount of revenue to keep their stakeholders happy without public support. the problem Mr. Griffith has is that he wants to skip over the money part, in a dispute about money.

    We wrote the Vikings a check. Why not write the considerably smaller check needed to get the musicians back to work?

  4. Submitted by Paul Udstrand on 11/06/2013 - 04:34 pm.

    I’m in but…

    I’m all for a public check for the Orchestra but, I’d be afraid to give money to an organization that’s this poorly managed so I’d want to see Hansen gone. And in order to figure out how big the check needs to be we have to see the books. Every time we come close to more complete financial disclosure Hansen pulls back… this brings me back to my first point.

    This may work itself out sometime in Dec because the Orchestra Management needs to demonstrate they’ve been doing some kind of arts related activity over the last year. Apparently the only program they’ve held was a lecture by an anti-labor visiting Governor who sang the praises of union busting “Right to Work” legislation. And THAT brings me again back to my first point…

  5. Submitted by Ben Munroe on 11/06/2013 - 05:20 pm.

    Dispute is about more than money

    The writer puts forth some interesting ideas, but there are a lot of issues besides money at the heart of the current dispute, which most reporters and commenters can’t seem to grasp. For starters, there are the two hundred and some work rule changes, the most ridiculous of which is that management and not the music director make artistic decisions such as hiring musicians. This is like the business manager of a team deciding the lineup and going out on the field every time a pitching change is needed. Then there is the $200K bonus for the CEO, in a deficit year, which speaks to fairness and respect for the musicians. This is like a coach getting a big bonus after finishing with a losing record (except in this case the musicians were getting worldwide acclaim), while players are asked to take pay cuts. Management has abused its power, and it wants even more, and the musicians simply don’t see this as a way to sustain a world class orchestra.

  6. Submitted by Hiram Foster on 11/07/2013 - 06:47 am.

    I’d be afraid to give money

    I’d be afraid to give money to an organization that’s this poorly managed so I’d want to see Hansen gone.

    Well, a badly managed orchestra is the only one we have. I would hope that after this disaster is through, this management would be quickly booted out the door, but even if that happens, the orchestra’s long term problems will still remain.

    The work rule stuff needs to work itself out. And what the board pays the managers is none of the musicians’ business.

  7. Submitted by Hiram Foster on 11/07/2013 - 07:45 am.

    The books

    As a rule, the “let’s see the books” gambit is a way of putting pressure on the other side to settle. Books almost always contain something that’s embarrassing, or in the alternative something that can be made to look embarrassing. And it’s generally the case that no matter how much information is provided, the other side will say it’s insufficient and demand more. It’s a game of charades I am not unwilling to play, but let’s not confuse it with a substantive attempt to deal with the orchestra’s problems, or to help us reach a settlement.

    • Submitted by Ben Munroe on 11/07/2013 - 08:36 am.

      Private vs. public

      This commenter seems to think that the orchestra should be run like a private business, which it is not. The board should not be acting in an ownership role, but a stewardship role, which as many have pointed out does not call for destroying the product–immediately–in order to protect some investment funds over the long run.

  8. Submitted by Ben Munroe on 11/07/2013 - 08:07 am.

    Work itself out

    Right, like this management has shown any propensity to sit down and work things out. And what the board pays management is certainly the business of the patrons and donors. (Do some commenters think that only musicians are following along here?) I certainly cannot support an organization that rewards incompetent management that is willing to throw the organization’s mission under the bus for the sake of… well, I’m not really sure what the objective is — just winning some sort of ideological war, such as “all that matters is what management thinks”?

  9. Submitted by Paul Udstrand on 11/07/2013 - 08:39 am.

    Books and such

    “Let’s see the books” wasn’t just a gambit, financial disclosure was a requirement for impartial mediation…. and Hansen backed out. Unless your claiming that mediation is a charade instead of a legitimate resolution, financial disclosure is going to have to part of the solution eventually. For one thing even if public subsidies get on the table we’ll have to produce a dollar amount at some point and I don’t think anyone will just take Hansen’s word for it at this point, he’s already deliberately misled people regarding the Orchestra’s finances. I don’t care about embarrassing him, I just need to know how serious the problem really is. (When I say “I” I’m speaking figuratively of course).

    Ben is right, the work rule issues will not work themselves out, they’ll have to be negotiated… that means Hansen will have to abandon his drive to bust the union.

    And this brings up to another question: why is Hansen still there? How exactly did he earn his $400,000 last year? Why hasn’t he been fired or otherwise forced out? My guess would be that ironically, he has a contract that makes it difficult to fire him.

  10. Submitted by Hiram Foster on 11/07/2013 - 09:44 am.

    Mediation

    “Let’s see the books” wasn’t just a gambit, financial disclosure was a requirement for impartial mediation…. and Hansen backed out.

    Mediators should mediate, not set conditions for mediation. It’s hard enough for parties to negotiate with each other. Asking them to negotiate with a mediator is really asking them too much. Mediators don’t have the power to resolve disputes and in this case had little impact overall. It’s pretty clear that management has no interest in delegating their fiduciary responsibilities to a mediator, nor should they.

    The argument for producing the books is a bit stronger for a charity like the orchestra, I suppose. And every party to every negotiation has the right to put requests to the other side. But for myself, the fact that the Minnesota Orchestra is hopelessly and incompetently mismanaged has been proven already. Granting more access would just make a convincing case more convincing.

    “Why is Henson still there?”

    We saw a little bit of why from Mr. Cutler’s letter. The board has blinders. They have somehow been convinced that management is a manager of the endowment rather than the manager of an orchestra. They don’t see the utter absurdity of having a fiscally sound management of an endowment without an orchestra to endow. I think there is a certain “sunken cost” element at work. Board members have convinced themselves that they are in too deep now to turn back, failing to grasp that throwing away money and assets in the past is not a sound reason for throwing away money and assets in the future. And just the basic reason that they don’t know how to get rid of the current management. I expect dissident elements on the board are fragmented and without the knowledge or the resources to put together a campaign to get rid of Henson, and so management stays, collecting paychecks for managing a non existent orchestra.

    Something I might mention again. The status quo may very well be remarkably stable. My guess is that it is the case that the orchestra loses money when it gives concerts. Without that expense, the endowment fund just keeps on generating returns financing the zombie entity the MOA has become and relieving it of any fiscal pressure to reach a settlement.

  11. Submitted by Paul Udstrand on 11/07/2013 - 11:24 am.

    Mediation and blinders

    Hiram says: “The board has blinders. ”

    Point taken. In fact there some evidence of this as of late in the Strib, one of the Bachman’s who may or may not be on the board wrote a ridiculously ignorant commentary or letter claiming that the musician’s position and demands have been unclear or non-existent. This person clearly has not been paying any attention whatsoever. I half think the Strib published it in order to embarrass the person.

    This is a little further afield but when you look at the board and it’s behavior it’s a little ironic that so many wealthy people who are supposed to be endowed with so much financial and business acumen could be so clueless. Is this a small window into the absurdity of meritocracy?

    As for the mediation, there such a thing as Binding Mediation and financial disclosures are standard requirement. It’s impossible to mediate without requisite access to the books because the disputes usually revolve around disputed financial statements. The fact is for all we know Henderson has manufactured a $6 million crises in order to justify the lockout. At any rate, if this Orchestra is shut down because of Henderson’s pride or fear of being embarrassed, well that’s reason 506 why the guy needs to go.

  12. Submitted by Paul Udstrand on 11/07/2013 - 11:31 am.

    Just to put a finer point on it…

    Getting back to Griffith’s suggestion: The Orchestra’s management HAS tried the NFL approach, they locked out the players. Griffith seems to have overlooked that fact. I would’ve thought the multiple and obvious differences between a privately owned sports franchise worth hundreds of millions of dollars and an Orchestra would be obvious… I guess not. The NFL approach to Orchestra management has very nearly liquidated the Orchestra.

  13. Submitted by Hiram Foster on 11/07/2013 - 12:20 pm.

    “This is a little further afield but when you look at the board and it’s behavior it’s a little ironic that so many wealthy people who are supposed to be endowed with so much financial and business acumen could be so clueless.”

    The board has a very large membership, and what I expect that means is that most of them are outside directors, there because they are contributors or bring some other asset to the MOA. They aren’t influential in management’s decision making progress and are probably just as much at a loss as the rest of us as what to do next.

    “As for the mediation, there such a thing as Binding Mediation and financial disclosures are standard requirement.”

    Sure, but the board would never agree to that nor should it. That would be an unacceptable delegation of their management and fiduciary responsibilities to a third party. Bear in mind that the board has to live with the outcome of this dispute in ways the musicians do not. They are stuck with the contract, while the musicians can always leave.

    Mediation can be helpful, in that it can focus on the real issues in dispute. For the musicians, a mediator could insist that the musicians start talking to management, instead of everyone else besides management. A mediator could also bring home to management that they are managers of an orchestra, not a mutual fund. But a mediator can’t make the deal for the parties, they must make the deal for themselves.

  14. Submitted by Ben Munroe on 11/07/2013 - 01:04 pm.

    Board does not have accountability

    The fundamental problem, as I see it, is the the board really has no accountability. They’re a self-appointed board, and they really don’t have a personal stake (except their reputations) in the outcome. In fact, Richard Davis is on something like 18 boards, and so what if he screws up just one organization? The musicians, on the other hand, absolutely have to live with the outcome of the dispute, as it has affected their personal income and, indeed, their entire careers. Why else would management declare they will not lift the lockout, lest they lose “leverage”?

    A commenter says the board should not delegate their management responsibility to a third party. However, if they had any concern for the orchestra’s mission, or accountability to patrons, they would do exactly that once they realized they had made a miscalculation and set the sides so far apart that an agreement could not be reached in any other way.

    Also, it is completely misinformed to state that the musicians have not tried to talk with management. Anyone who has followed this story knows about the multiple musicians proposals and how management has stonewalled.

  15. Submitted by Hiram Foster on 11/07/2013 - 02:19 pm.

    “The fundamental problem, as I see it, is the the board really has no accountability.”

    But that’s kind of inherent in the nature of a non profit organization. But is that really a problem in this context? Since the board isn’t accountable to anyone, why not enter into a fiscally irresponsible deal? It won’t hurt the stock price.

    What management has learned is that locking out the musicians hasn’t given them leverage, at least not sufficient leverage to force an agreement. I do hope that’s sunk in, but that’s pretty much of a negative factor. It doesn’t bring management any closer to making an acceptable offer.

    “if they had any concern for the orchestra’s mission, or accountability to patrons, they would do exactly that once they realized they had made a miscalculation and set the sides so far apart that an agreement could not be reached in any other way.”

    If they have made a miscalculation, the proper course of action would be to make a new offer based on the revised calculations. As I have said before, to turn over management to a third party would be a violation of their fiduciary responsibilities. It is quite possible that no deal is possible. The musicians may simply not be willing to play for what management is willing to offer. That would mean the end of the Minnesota Orchestra as we know it, but nothing lasts forever.

    “It is completely misinformed to state that the musicians have not tried to talk with management. Anyone who has followed this story knows about the multiple musicians proposals and how management has stonewalled.”

    I am pleased to be corrected in this matter. I hope this yields results soon.

  16. Submitted by Ben Munroe on 11/07/2013 - 04:45 pm.

    Talking in circles

    Discussion here is becoming circular. One commenter cannot see this as anything more than a dispute between management and labor, and puts such a spin on all responses. Meanwhile, patrons of the orchestra would very much like management to turn over their fiduciary responsibilities because they have been doing such a lousy, careless job and now seem hellbent on ruining the orchestra’s finances, all so they can pat themselves on the back for remodeling a meeting hall and “winning” a labor dispute.

  17. Submitted by Hiram Foster on 11/09/2013 - 08:46 am.

    The endowment fund

    I see the idea of wrestling control of the endowment fund from the MOA is being floated in the Strib this morning. At the moment, I feel that management is deep in a bunker somewhere, no longer able to grasp the fact that there is no point in having an endowment, unless there is an orchestra to endow. I would hope the possibility that their precious endowment fund might be taken away from them, is perhaps the wake up call they need.

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