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Political trio seeking decisive civic action to save Minnesota Orchestra

carlson cohen and cherryhomes
MinnPost photo by Karen Boros
Former Gov. Arne Carlson and Minneapolis mayoral candidates Dan Cohen and Jackie Cherryhomes spoke in front of Orchestra Hall, calling for government intervention in the Orchestra dispute.

Just hours before Osmo Vänskä begins his farewell concerts with the musicians of the Minnesota Orchestra, an unlikely political trio has come forward to say it is time for drastic action to save the orchestra.

“When there was a problem relative to both our baseball team and our football team, leadership stepped up immediately to the plate,” said former Gov. Arne Carlson, who appeared at a Friday news conference with Minneapolis mayoral candidates Jackie Cherryhomes and Dan Cohen.

Their short-term goal is finding enough money to end the yearlong lockout of the musicians by the Minnesota Orchestra Association and then concentrate on a long-term solution to the funding problems.

“Where are our priorities?” asked Carlson, who said the cost of getting the musicians back to work would be a lot less than the cost of starting over to rebuild an orchestra and attract a conductor. “Once you lose a facility, I know from experience how difficult it is to get it back.”

Cohen and Cherryhomes contacted Carlson and asked for his help after he blogged about the lockout and the need to resolve the dispute.

“When you compare the amount of money we’re committed to delivering to other activities, like a stadium and streetcars, the amount of money it would take to get operating funds to put this orchestra back on its feet … my answer is whatever needs to be done the city should step forward and do it,” said Cohen in response to a question about a direct bailout with city funds.

“This is not about politics. This transcends all of us. It’s about leadership for our city,” said Cherryhomes, a former City Council president. She suggested that one possible solution to the long-term funding problem could be an increase in the amount of Legacy funds the Orchestra receives from the state. “We need to figure out how to get this done,” she said.

The three suggested the possible formation of a committee to work on a solution, perhaps involving the City Council and the mayor, and seeking donations from outside the arts community.

“I would like to see the Vikings step forward and say, ‘Yes, we have got an overly generous deal from the taxpayers, and we are going to be part of the solution for Orchestra Hall,” said Carlson. “It’s entirely appropriate.”

“We need to look at every creative source we can to ensure that we have sustainable funds for the arts in our city,” said Cherryhomes. “It’s a tragedy that we don’t have the orchestra right now.”

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“In order to attract the scientific, the academic, the intellectual, the artistic talent this city needs, we need to present them with a world-class symphony as a major attraction drawing major talent to our city,” said Cohen. “This is an investment, not a bailout.”

“What are you going to say as members of the media, as members of the public and as leaders a year from now, when there isn’t anything but silence coming out of this building?” asked Carlson.

The three said the first step would be to attract others interested in finding the funds to end the lockout and then moving ahead to find sources of funding.

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Comments (29)

Finally

Someone has grasped the problem.

“I would like to see the Vikings step forward and say, ‘Yes, we have got an overly generous deal from the taxpayers, and we are going to be part of the solution for Orchestra Hall,” said Carlson. “It’s entirely appropriate.”

We are amused however. Maybe a better approach would be, "Zygi, this is a great way to assume a larger rote in the community, while helping to secure investment in Minneapolis as one of our great American cities."

That $6 million "deficit"

Isn't exactly carved in stone - it's an interesting accounting move. Hopefully Gov. Carlson, also a former State Auditor, can get access to more financial documents.

$6 million "deficit"

Yes, Sarah,

I would really love to hear Michael Henson, Richard Davis, and Jon Campbell try to explain to Arne Carlson the decision to spend $50 million dollars on the new bank lobby in Orchestra Hall, citing its ability to produce "additional" revenue. We finally heard from management that the big increase amounts to about $300,000 a year. Only 150 years to break even! It sounds like the work of the same bank geniuses who sold a bunch of securities at the worst possible time causing the orchestra endowment to take a $14 million hit. I welcome Gov. Carlson's help but I hope he will contact SOSMN or the musicians directly to get a clearer picture of the whole mess.

How are the taxpayers going

How are the taxpayers going to react to the suggestion of any sort of help from the city or state when it becomes known far and wide that the Minnesota Orchestral Association has one of the largest endowments of any orchestra in the country--something over 150 million? That they raised over 100 million dollars during the worst recession in history; that they then spent 52 million dollars of it on a new and expanded lobby? All the while crying poor.

What this political trio doesn't seem to realize is that the problem never was a shortage of funds. That's the line the MOA has been spinning from the top of the script. This line is often repeated as fact. But the fact is, this is an old fashioned union bust brought about by a small group of people at the head of the MOA--a group of people who apparently hate organized labor more than they love music.

There is a solution--even at this very late date--and it is ready at hand, if only those with the power will use it. There must be an immediate insurgency within the MOA board of directors. The chair, the past chair, and a hand full of others--I'm sure that board insiders know who they are--must be thrown out without delay, and replaced with much more moderate members who are determined to end the lockout immediately, and then work in good faith to finally resolve this horrible debacle, and begin to rebuild the Minnesota Orchestra.

The Minnesota Orchestra Will Only Survive

If the current leadership of the board is put out to pasture (or sent to the glue factory).

Either that, or the entire orchestra must resign, then immediately re-sign as members of a new and renamed orchestra, while all current supporters of the orchestra, both individual and institutional withdraw support (and funding) from the current board,...

and, together with heirs of those who left money to the original MN Orchestra as bequests, use their legal advisers to find clauses in their bequests which allow them to recoup that money from the cheapskates and charlatans who currently lead the board but have NO interest in maintaining the truly excellent orchestra those bequests had in mind,...

so that those moneys can then be used to endow the newly constituted orchestra,...

while the current orchestra board's executive leadership is left without resources to meet on a regular basis to do what they seem most qualified to do: try to beat each other playing tiddly winks or tic-tac-toe,...

while proclaiming to each other (after Tevya) that they're so rich they, "really know" about how to run everything and anything in the world.

The state and the city need to work together

Take over the Edifice (aka Orchestra Hall). Eminent domain. Heck, take over the endowment.

I'm with you, Sarah.

The executive leadership of the MOA can't be trusted with this endowment.

They already blew a bunch of money on poor investment strategy, although they hide the details, so we can't pin down exactly where their unique brand of failure was brought to bear. I'm ASSUMING there was no criminality in what they did, but again, we can't know because they are getting away with hiding their actions.

Are the donors so simple-minded that they figure, "Oh gee, I guess they flushed my gift down the drain, but here's another $10 million. I hope you don't blow this, too !" I don't think so. It's my understanding that malfeasance in money management or even hints of impropriety have a characteristically negative effect on development efforts.

These people cannot be trusted with this endowment. It is presently at risk. Donors should exercise a reasonable restraint. Some are already re-writing their bequests in their wills out of caution or in response to the disgrace of the MOA leadership. This is extreme damage to the future prospects of the MOA, and it is directly at the door of Henson, Davis, et. al.

How are the taxpayers going

How are the taxpayers going to react to the suggestion of any sort of help from the city or state when it becomes known far and wide that the Minnesota Orchestral Association has one of the largest endowments of any orchestra in the country--something over 150 million?

Not well, and that's one of the problems. But we are writing a vastly larger check to the Vikings, and despite a lot of grumbling, the taxpayers seem to be ok with it.

The problem really is a shortage of funds. The orchestra players already took a pay cut, and when the Vikings were having their issues, no one suggested those players reduce their wages. In immediate terms, the problem isn't with the board, it's the revenue boards. This management was unable to expand the audience and find other revenue sources to the extent needed to sustain the orchestra. But that's not something that can change overnight either. But putting a plan in place, or at least some new ideas in place, even at this late date, could help rebuild to some small degree, the credibility this management has lost with the musicians.

Management had the ability

AND the responsibility to "expand the audience and fine other revenue sources". They chose not to.

I hope Gov. Carlson realizes

that NOTHING will change unless there are fundamental changes in MOA Board and leadership. They don't want $6 mil found, because then they have less leverage. Raising money to keep the suits "happy" isn't going to cut it.

It all comes back to the board

I dunno, the board claims they have a $6 million deficit but have they demonstrated it? You can't ask someone else to kick in money without demonstrating that you actually need it whether it be legacy funds or donations. How can they be sitting on $150 million but not have $6 million? A 2%-3% interest money market account would get them around $3 million a year. How can they have $50 million for renovations but not enough money to pay the musicians? These are questions that have simply not been satisfactorally answered.

Tom is right, more legacy money and public support is a tough sell when it looks like they're sitting over $100 million and they're already getting legacy money.

It does look like good old fashioned union busting for the sake of union busting, corporate execs in the US can will do this just because they can, they don't have to have a financial justification.

How many and who.....

...have left the orchestra. In the news, it is the conductor, a composer, and a concertmaster. Are there others. The success of any sueviving ensemble will depend on who will be there. To retain and obtain and maybe even claw back the talent needed for success will take lots of money. That is why the current donors should shift their contributions. Then there is the problem of where to stage performances. Is Ted Mann theater large enough and unscheduled? Is a return to Northrupt Auditorium a more than feasible option. The last option, if at all, would be renting MO Hall from the Association. Let us also remember that the players do much more than show up onstage in formal attire - there are the hours of practice and the detailed maintenance of their instruments.

Twenty-six musicians have left

but as is customary in the orchestra world, many are on year-long "leaves of absence" to try out how they fit in their new ensemble. Others are firmly ensconced in other ensembles or looking for career changes.

I dunno, the board claims

I dunno, the board claims they have a $6 million deficit but have they demonstrated it?

They have provided a lot of numbers but the players remain unsatisfied. In any event, that's the board's position, and it's not as if they had a strong motive to be deceptive on that issue. The Wilfs had lots of reasons to keep their books private which are not applicable to the orchestra management.

We gave a half a billion bucks to the Vikings with far less access to Viking financials than the orchestra management has provided to the union. I have little doubt that if orchestra management thought they had a reasonable chance of getting money from them, they would thrust as many books and ledgers on the state as they possibly could.

Football and Music here and across the pond

As a Vikings Fan and a Minnesota Orchestra devotee since moving to Minnesota in 1969, I am amazed by the apparent differences in how football (albeit soccer in the Europe) and classical music are funded. So many European orchestras, opera companies and ballet companies are essentially owned by the performers, and their operations including performance venues are funded and or subsidized by government. Many of the European football teams are privately owned enterprises and their stadia are variously owned but when the stadium is not owned by the team, the team pays to use the stadium. In Europe, governments appear to value music and the arts, and believe me if you've ever been in the London underground when football fans, all 85 thousand of them, appear to be swarming in one direction or another to or from Wembley, you can assume that this is generally not the same crowd that attends the London Symphony Orchestra concerts or the Royal Opera. They are the majority, not the "elite 1%" of classical music lovers. Yet, the UK chose to remodel the Royal Opera House at a cost of $500,000,000 using lottery proceeds. There was some grumbling from the 85,000 football fans about where their money was going, yet the government appeared to have valued the Opera as well as football. Isn't it time, faced with the self induced suicide mission of the Minnesota Orchestra board (paradoxically directed by an Englishman) and his two banker affiliates (I'm not sure who is actually pulling the strings) that government step in?

A modest beginning is for government (State/County/City) to buy Orchestra Hall for $100,000,000 from the board and have the proceeds invested in investment grade corporate securities. Even our genius banker friends couldn't screw this up. Income would be $7,000,000 tax free which could then go towards subsidizing operations and paying a leasing fee to use Orchestra Hall.

A modest sales tax increase could help pay for tax exempt Orchestra Hall revenue bonds to finance the operation. Failing that,ideally Orchestra Musicians should form a cooperative and continue to mount their own concerts in other venues (easy for me to say as I have food on my table). After awhile, they will end up in Orchestra Hall after all, and the board and management will now be there to foster symphonic music in the Twin Cities, rather than to run the orchestra as a "Junior League" project, and when they mess up, balance their financial and promotional blunders on the backs of the musicians.

A modest beginning is for

A modest beginning is for government (State/County/City) to buy Orchestra Hall for $100,000,000 from the board and have the proceeds invested in investment grade corporate securities.

If these buildings were worth owning, somebody in the private sector would build and own them. They aren't, and that's why the public is asked to build them. We often get stuck with burden of owning them, but it's really bad policy to go around volunteering to own them. In this case, what is proposed here is an awkward, indirect and expensive way of doing something we find politically difficult to do, write the orchestra a subsidy check.

I wold favor a public subsidy for the orchestra. We gave a half billion dollars to some New Jersey real estate guys in a deal that was far worse. But the public just hasn't been prepared for that, and it just doesn't seem to be in the cards.

Premature questions

It's premature to ask this, but what the heck, I will ask it.

Where do we go from here? If were to reach a settlement, what is the state of the season? Of the orchestra? If we can't reach a settlement, what do we do with Orchestra Hall? Who, if anyone, is on the hook, paying the costs associated with keeping a building sitting on prime downtown Minneapolis real estate empty?

Here's my suggestion

The board has to resign and be replaced, they've lost too much trust and goodwill,and frankly they've blown this. The lockout needs to end and the music needs to start. The easiest and quickest way to do this would be to accept the musicians latest compromise, but failing that, go to mediation.

Once the lockout is ended, and the music is playing (maybe if this were done quickly enough we could get that director back) a new more credible board should be able to explain with requisite credibility how serious the funding issues really are. The crises has gotten a lot of attention so with the remodeled hall and the concerts underway I would think it's possible to make an affective appeal to donors and maybe even make a stab at public subsidies.

DO NOT appeal for public subsidies with sport analogies or comparisons to the Vikings stadium. Those sports subsidies are unpopular and the Vikings stadium is a fiasco on more levels than one can count, you DO NOT want to be associated with those subsidies. Make the case for a symphony, the value of classical music stands on it's own regardless of stadiums and arenas. The only comparison value is to point out that the symphony subsidy is much smaller, and much more appropriate than the billions we've thrown at small private franchises. Contrast this with sports subsidies, but do not compare.

There's no way a major donor is going to

step up for this without a completely new board.

Perhaps a better approach is to found a new symphony and start from scratch, with some taxpayer help as well as donors who want to build something new, with a more carefully vetted management.

"Vals Triste" indeed.

The Board and orchestra management have failed in whatever their mission is or was, in whatever their goals may have been in locking out the orchestra's musicians until they surrendered to management's forced salary cut and outrageous downgrading of programming and working conditions.

If this were a private for-profit corporation, both Board and management would be removed and replaced by shareholders. Pity, that the non-profit cultural amenity that so graced Minneapolis for more than a century had to be destroyed by inept people at the top, and has no stockholders to boot them out.

"The Board and orchestra

"The Board and orchestra management have failed in whatever their mission is or was, in whatever their goals may have been in locking out the orchestra's musicians until they surrendered to management's forced salary cut and outrageous downgrading of programming and working conditions."

I think in some ways, they have not been successful, and that's having an impact on the dispute. Mr. Henson was brought in, in part, to build a new audience, and his lack of sufficient success in doing that is part of the problem we are facing now. If and when this dispute is resolved, I expect him to be gone in pretty short order. But that doesn't help our problem now. Management does have the option to take a shot in the dark, enter into a settlement that's based on risky financial projections, one that puts the future of the orchestra at risk. They have been unwilling to do that, but the fact is, the future of the orchestra is at risk now, not just in the future. It is losing important members, and the loss of Mr. Vanska is a critical blow. The orchestra has been seriously and perhaps irreparably damaged.

The future

John Maynard Keynes famously observed that in the long run we are all dead. The reality we are facing now is that in their concern for the long term financial survival of the orchestra, they may have killed it in the short term, rendering those long term concerns irrelevant.

I don't disparage those bankers who are so influential in management decisions. Caution, and clear eyed risk management by some of those very same bankers, resulted in the survival and even prospering of their companies in a business where many of their counterparts in other companies to disaster. It's not surprising that those bankers have applied the lessons they learned in their business lives to the management of the Minnesota Orchestra. But maybe it is time to reconsider those lessons, at least as they apply to the orchestra. Maybe it is time to take a carefully calculated leap of faith, to make the deal that violates the rules, that assumes the unjustifiable risk and hope that things just work out.

After all, in Keynesian terms, isn't it better to be dead in the long term than the short term?

The situation

The Brits have a term for an unreasoning stubbornness, ":bloody mindedness". Whatever the goals of management at the outset of the lockout, they prospect of attaining them has been overcome by events. This orchestra has been damaged severely in a number of ways, some of them irreparable. Top members have to be left, and will have to be replaced in circumstances where the bargaining power is on their side. If and when the members go back to work, management will find it difficult to impossible to put together an appealing season to subscribers, a problem that might afflict them for years to come. Subscribers have found other things to do on orchestra night, and donors have found other things to do with their money. Most significantly, they lost their world class conductor with no possibility of replacing him with all that entails. What I suspect is the case is that because of the lockout, under current projections, the orchestra is no longer viable even if the members accepted management's offer, which they show no sign of doing.

Management's Plan A was to put the orchestra on the path of financial sustainability through cuts in labor costs. That's no longer possible. So what's Plan B?

I still smell hypocrisy

After months of ranting against the football stadium, it's amusing to see all those opponents somehow feeling public funding for the Orchestra is somehow different. We should give the Orchestra public funding because (a) we did it for the Vikings; or (b) well, it's not a lot of money; or (c) it's for classical music, dammit. You can't have your cake and eat it too. You're either against public subsidies or your not. Just don't pretend to have principles.

Hello.... "non-profit", not hypocrisy

The Minnesota Orchestra doesn't have a private owner and players who are already incredibly wealthy and who reap much of the profit from a given season. When millionaires hold their hands out for public money, I think a lot of people are right to oppose it.

If the world were black and white...

You might have point Jackson. As it is, some public subsidies can be appropriate (think transportation and health care) and some may not be (as in subsidies for private companies who are not experiencing any financial difficulties). Hence, amongst adults, it's not a matter of being for or against subsidies, it's a matter of subsidizing appropriately and responsibly.

Be that as it may, what I'm seeing here, as person who vigorously opposed the Vikings subsidy, is the same people who support such subsidies supporting an orchestra subsidy. I myself haven't made up my mind, I haven't seen a decent argument for an orchestra subsidy. There doesn't seem to be any agreement or consensus that a subsidy is necessary. And I agree with you, arguments along the lines the orchestra should get one just because the Vikings got one are not going to convince me.

The Minnesota Orchestra

The Minnesota Orchestra doesn't have a private owner and players who are already incredibly wealthy and who reap much of the profit from a given season.

But it does have management and players who make incomes far in excess of the income of the average Minnesotans. As with the Vikings we are asked to subsidize people who are likely to be far richer than we typically are.

Is that a problem? And another question, is that a reason why the Minnesota Orchestra has been stumbling in it's fund raising in recent years?

Corpoations

There was a time in this country when corporate executives were treated as princes of the realm. They lived lives of unimaginable splendor, jetting from golf tournament to golf tournament effectively living off each other's expense accounts, The great book "Barbarians at the Gate" looks back at that era of history. One of the features of that life was that corporate executives could use corporate funds to favor their personal charities at will and without regard to shareholder concerns and interests. The Minnesota Orchestra and lots of other charities benefited from this freely distributed corporate largesse. But those days are gone now. While corporate executives still make tons of money, a lot of the perks are a whole lot less available. They are now called to account a bit more, and changes in the attitudes of corporate governance make it far more difficult for executives to use corporation money to support their personal whims. All arts organizations which were formerly dependent on corporate money are affected by that, and it seems to be a systemic change, which means the money isn't coming back any time soon. And like it or not, that's the new reality that organizations like the Minnesota Orchestra must deal with, and the sooner all it's stakeholders become aware of that and it's implications, the closer we will get to a settlement.

Corporations are still philanthropic

Although corporate executives may not have the free reign they used to when it comes to making corporate donations, the fact is that corporations are still philanthropic. Additionally, the ratio of CEO to average worker pay is, on average, about 350 to 1 (LA Times), so I think corporate executives can still support their whims if they choose to. Giving to culture and arts has risen steadily since 2009, and I think we would see a lot more giving from middle income workers if we could move towards greater income equality in this country, instead of in the opposite direction.