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Minnesota Orchestra Association offers ‘artistic’ report on Orchestra Hall lease

MinnPost photo by Corey Anderson
Under terms of the Orchestra Hall lease, the Minnesota Orchestral Association is required to show how the facility is being used — and will be used — to promote the arts in Minneapolis.

The Minnesota Orchestral Association has filed a report with the city of Minneapolis that can best be described as artistic.

The report is required in the MOA’s lease arrangement with the city to operate Orchestra Hall. Under terms of that lease, the MOA is required to show how the facility is being used — and will be used — to promote the arts in Minneapolis.

Given that the entertainment centerpiece of the Hall, the Minnesota Orchestra, has been locked out for 14 months, there has been curiosity about how the MOA would file the report.

But the MOA seemed to have no problem.  The report to the city consists of a letter from Michael Henson [PDF], the MOA’s chief executive officer, and a letter from a lawyer, explaining that the MOA didn’t really have to file a report at all [PDF].

The report, and accompanying letter, were filled with legalese, finger-pointing and vague promises of bringing any number of concerts to Orchestra Hall even if the lockout continues.

The city, under the terms of the lease, now has 45 days to ponder the MOA report.

If it finds that the MOA is fulfilling both its financial and artistic obligations, the state will be notified of city approval. (The state is involved because $14 million in public bonds were for renovation of the Hall. The money was channeled from the state to the city, which owns the Hall.)

If the city decides the MOA is not fulfilling lease agreements, a legal mess would follow.

First would come “cure” time, in which the MOA would have time to resolve any problems. If that failed, the city would need to get state permission to sell its lease with the MOA or find a new operator for the building.

All of this suggests that it would be difficult for the musicians to re-organize under a different management structure and end up with a lease to Orchestra Hall. 

Minneapolis Mayor R.T. Rybak, who once upon a time tried to bring the MOA and the musicians together, issued a statement that was more like a dance in regard to all that is happening around the Hall, if not in the Hall.

“Orchestra Hall is a gem of a building and it’s in everyone’s interest to see it live up to its potential as one of the premier concert halls in the country,’’ the mayor said in the statement. “The city will take the next few weeks to do our due diligence, however, our end goal is the same as it’s been all along: We want the Minnesota Orchestra back home making music. No one likes the other long-term options, and none of them are simple. It’s time for Minnesotans to start enjoying the music at Orchestra Hall again.’’

But agreement never has seemed so far away.

In his letter, Henson talks about a schedule of events assuming that agreement with the musicians can’t be reached.

“MOA’s primary goal for the past many months has been to reach a contract settlement with the musicians that allows us to present the already-programmed 2013-14 season. … But as negotiations have continued and a mutual settlement has not been forthcoming, MOA has begun to create a new series of concerts designed to keep music  alive in Orchestra Hall.’’

What isn’t clear is just who would walk onto the Orchestra Hall stage as long as the musicians are locked out.

Musicians say they have the support of virtually every entertainment union in the land and that no union entertainer or orchestra will perform at the Hall until there is a settlement.

Henson is vague in his “report” about the groups that might perform in Orchestra Hall.

In the letter to the city, he writes: “MOA is in discussions for a prominent music group to perform a five-concert series during F2014. It is also making arrangements for the Hall to be available for performances by other music groups, including professional, community and school orchestras and youth groups.’’ 

But in the side letter, attorney John Herman writes that even bringing in school choirs might prove difficult.

“Actions by musicians and other third parties have also interfered with MOA’s efforts to present arts programming in the Hall,’’ Herman wrote.

(It should be noted that orchestra musicians would be unlikely to picket a high school orchestra if it opted to play at Orchestra Hall.)

It appears to be Herman’s contention that the MOA isn’t obligated to fulfill lease obligations because of clauses in the lease regarding “unavoidable delays.”

The lease says that “strikes and other similar labor troubles’’ are unavoidable delays. Herman argues that there is really no difference between a strike and a lockout.

“Although the term ‘lockout’ is not specifically used in the Lease, strikes and lockouts are parallel rights of parties to a labor negotiation and are undoubtedly ‘similar labor troubles,’ ’’ Herman wrote.

While Henson seems to be talking about bringing high school orchestras to the renovated Hall, orchestra musicians next week are going to unveil their plans for the future “with or without the MOA.’’

More and more, there are indications that the orchestra musicians are at least taking steps toward creating a new management structure.

Musicians have not only played a sold-out series of concerts at various venues but they also say they have formed a 501-3C, which has raised more than $300,000 since August.

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Comments (58)

  1. Submitted by Dimitri Drekonja on 12/04/2013 - 02:45 pm.

    Having played in orchestra hall as a high-school musician, I can appreciate that the kids will likely enjoy the thrill of playing in a world-class hall (and I can’t imagine that anyone would picket high school kids). But, it’s a pretty steep price to pay, and even the best high school orchestra in the country is not going to generate enough interest to sell tickets at prices or amounts that would even cover the costs of the lights and staff for the evening.

    I can justify paying for a sitter, tickets for 2, and dinner out when it involves a world-class orchestra. For the local HS orchestra? Thanks, but no thanks.

    • Submitted by Karen Sandness on 12/05/2013 - 02:14 pm.

      Not to mention that

      both VocalEssence and the St. Olaf Choir pulled out of previously scheduled concerts in Orchestra Hall and changed the venues, presumably in solidarity with the musicians.

      They will not get any AFM musicians (i.e. most of them in all genres, including rock and jazz) to perform there until the lockout ends.

      High school orchestras will be about the best they can hope for.

  2. Submitted by Paul Udstrand on 12/04/2013 - 02:48 pm.

    Unavoidable delay?

    Lockouts are not “unavoidable”, they are deliberate.

  3. Submitted by Jon Kingstad on 12/04/2013 - 02:55 pm.

    Other third parties. . .

    who have interfered undoubtedly “include” the citizens of the Twin City area who have expressed anything other than praise and gratitude to the MOA for destroying the orchestra. The MOA seems put out about responding to the City’s request and not just a little touchy and defensive about its poor reputation in the community.

  4. Submitted by Hiram Foster on 12/04/2013 - 03:00 pm.

    The Hall

    I don’t view considerations related to the hall as critical in this dispute. My reason for that is that it seems to be the case that the lease doesn’t impose any obligations on the parties that the parties find difficult to meet.

    When thinking about breach issues, the place to start isn’t with the lease agreement. Instead, the place to start is to determine whether there is anything to be gained by taking the position that the MOA is in breach. It’s hard to see that there is any advantage to be gained by expending time and effort, and possibly money, getting rid of a tenant if you don’t have a new tenant ready to replace the former tenant. I, for one, see no such replacement tenant on the horizon. Certainly not one as desirable as the Minnesota Orchestra. Another factor to keep in mind is that the obligations of lease go both ways. The MOA has pursued the lockout because they were dissatisfied with the contract they had with the musicians. Could it also be the case that they are dissatisfied with their lease with Orchestra Hall? If Hall management terminated their lease, could it be absolutely certain that they could get as good a deal with MOA as they have now? Or would they find that the hardball attitude MOA is displaying in it’s negotiations with the union would also taken with Hall management, if and when the labor dispute is resolved?

    • Submitted by Jackson Cage on 12/04/2013 - 03:46 pm.

      Here’s my suggestion

      I see Billy Joel just signed a deal to play concerts once a month at Madison Square Garden, to continue until demand expires. Maybe we should cut the same deal with Prince at OH?

      • Submitted by Ben Munroe on 12/04/2013 - 06:05 pm.

        Ever hear of acoustics?

        The acoustics would not work for Prince, or Billy Joel, unless that was part of the remodel.

        • Submitted by Paul Udstrand on 12/10/2013 - 12:58 pm.

          Ever hear of “sound engineers?”

          Dude,

          If Joel were to play at OH he wouldn’t show up with the same amplifiers he used in central park. Joel or anyone could play there, it just might not be a big enough audience them. Any decent sound engineer could cope with the halls acoustics, or even take advantage of it.

    • Submitted by Ben Munroe on 12/04/2013 - 04:28 pm.

      MOA is not meeting their obligations

      “the lease doesn’t impose any obligations on the parties that the parties find difficult to meet” – Apparently the MOA is finding the obligation hard to meet, in that they have not held any public performance events (except their exclusive balls, with a cover band performing) since the opening of the hall, and several acts have cancelled/postponed, being unwilling to play in the hall while the lockout continues.

      “could it be absolutely certain that they could get as good a deal with MOA as they have now?” – The City is currently leasing the hall to the MOA for $0, and getting essentially nothing in return. How could the deal be any worse?

  5. Submitted by Hiram Foster on 12/05/2013 - 05:40 am.

    “Apparently the MOA is finding the obligation hard to meet, in that they have not held any public performance events (except their exclusive balls, with a cover band performing) since the opening of the hall, and several acts have cancelled/postponed, being unwilling to play in the hall while the lockout continues.”

    Not giving concerts isn’t all that hard. In any event, if the owners of the hall decide they want to terminate their contracts with the MOA, I am sure some bright young associate in a law firm could find language in those contracts which would provide some sort of legal basis for doing so.. My question is, what does evicting the MOA from the building get us? The building would still stand empty. Meanwhile, since if it is true that the MOA pays no rent, the Hall’s owners have no particular interest in throwing out their tenant since they didn’t benefit from the tenancy anyway. This is a hallmark of this dispute. One reason there has been no settlement is that no party in this dispute seems to be under a lot of pressure to settle. For me, this as much as anything, is the terrible miscalculation MOA made, that somehow by engaging a lockout, they could force musicians to enter into an agreement they didn’t want. Even at this point, I don’t think the board fully comprehends the magnitude of that mistake, or even that it was a mistake.

    • Submitted by Ben Munroe on 12/05/2013 - 08:19 am.

      Public benefits..repeat word three times: Public, public, public

      “the Hall’s owners have no particular interest in throwing out their tenant since they didn’t benefit from the tenancy anyway”

      A fundamental problem in this dispute is that the free market ideology of, apparently, the entire board has blinded them from understanding, or at lease valuing, something economists call ‘public benefits.’ The City leases the hall to the MOA for zero dollars because of the public benefits orchestra concerts would bring to the citizens of the city, local businesses who benefit from downtown activity, and even the City’s reputation for supporting a high quality of life. Currently the City is getting no return on its investment (the rent subsidy), and I’m sure the musicians’ new organization could easily enter into a lease agreement to begin providing these public benefits.

      • Submitted by Hiram Foster on 12/05/2013 - 09:05 am.

        The Hall

        I think we learned a little bit more about the hall from the Star Tribune this morning. It seems that owners of the hall owe quite a bit of money to the MOA. That pretty much takes off the table any notion that the owners would pursue some sort of independent action with regard to the labor dispute.

        I do think the public does benefit from the orchestra. We subsidize a variety of these kinds entertainment activities. We just finished giving a half billion dollars to the Vikings. We gave a lot of money to the orchestra to renovate the hall, money that for the moment looks thoroughly wasted. But for the moment at least, I don’t think that’s a viable answer to the orchestra’s problems. There just isn’t the political will to do give the orchestra the money it needs to attain financial stability.

        • Submitted by Ben Munroe on 12/05/2013 - 10:02 am.

          New management, not more money

          “It seems that owners of the hall owe quite a bit of money to the MOA. That pretty much takes off the table any notion that the owners would pursue some sort of independent action with regard to the labor dispute.”

          It doesn’t take anything off the table. It’s just one more consideration moving forward if the dispute is not resolved.

          “There just isn’t the political will to do give the orchestra the money it needs to attain financial stability.”

          The orchestra doesn’t need to be given more money. It needs new management, one that respects the musicians, music patrons, and public servants of the city and state.

          • Submitted by Hiram Foster on 12/05/2013 - 11:44 am.

            New management won’t make the orchestra’s financial problems go away. Respect for musicians is nice but it doesn’t pay bills.

            • Submitted by Ben Munroe on 12/05/2013 - 02:08 pm.

              But it would be a good first step…

              Good (or bad) management can make all the difference in the world, and this management has proven to be incompetent, has created a toxic work environment, and has failed to respond to patrons’ concerns and suggestions. Other orchestras, some in smaller markets, have done very well coming out of the recession, but the MOA has become the poster child for how not to run an orchestra.

              • Submitted by Hiram Foster on 12/05/2013 - 03:41 pm.

                “Good (or bad) management can make all the difference in the world, and this management has proven to be incompetent, has created a toxic work environment, and has failed to respond to patrons’ concerns and suggestions.”

                Possibly, but I fail to see the relevance here. Let me put it this way. If someone came to me and asked for my advice on how to handle his next salary discussion with his boss, what would I say? If the offered salary was less than the employee hoped, would it make sense for me to tell the employee to explain to his boss that management was incompetent, had created a toxic work environment, and was unresponsive to customer concerns? What do you think the manager’s response to that would be? In any negotiation, does it ever make sense, or is it ever helpful, to explain to the guy on the other side of the table in detail, how rotten he is at his job?

                • Submitted by Ben Munroe on 12/05/2013 - 05:55 pm.

                  Corporate world

                  Hiram, your arguments only make sense in some kind of traditional, corporate setting where bosses are kings (or queens). There are many other management models for organizations–from employee ownership to shared governance–and a key factor in this dispute is that the current MOA management model is broken and, I would argue, completely unsustainable for a non-profit arts organization.

                  I agree that in this protracted dispute, all the criticism being heaped on the MOA is probably causing them only to dig their heels in deeper, but the manager should certainly perk up and listen when the customer says he is doing a lousy job.

                  • Submitted by Hiram Foster on 12/06/2013 - 05:43 am.

                    “There are many other management models for organizations–from employee ownership to shared governance–and a key factor in this dispute is that the current MOA management model is broken and, I would argue, completely unsustainable for a non-profit arts organization.”

                    Possibly, but it’s the board’s responsibility to fix it. For various reasons, they accept the status quo. I understand the desire on the part of labor to negotiate with someone other than Henson, et al. Sadly, in both traditional and untraditional corporate settings, one side doesn’t get to pick the other side’s negotiators.

  6. Submitted by Hiram Foster on 12/05/2013 - 06:38 am.

    Financial stability

    Even now, when I read correspondence from management I am so overwhelmed by the extent of naivete washing over that I have to sit down for a moment and wait until it passes. Somewhere, deep in the bunker that the MOA has built for them, there are managers who are telling each other that the way to stabilize the orchestra financially is to cut labor costs. What doesn’t seem to get through to them is that however desirable that outcome might be for the orchestra’s bottom line, that path to solvency just does not exist for them.

  7. Submitted by Nick Wood on 12/05/2013 - 11:38 am.

    More commentary

    Doug Grow has done an admirable job of summarizing the MOA’s report to the city of Minneapolis.

    In his blog, Scott Chamberlain has taken Henson’s letter, and offered a section-by-section commentary that is worth reading.

    http://maskoftheflowerprince.wordpress.com/2013/12/03/the-orchestras-report-to-the-city-of-minneapolis/

  8. Submitted by Timothy Johnson on 12/05/2013 - 12:00 pm.

    Endowment vs. Orchestra

    The MOA is fixated on the term “unsustainable draws from our endowment” and reveals a binary mindset. They can only see two options: Either the musicians unconditionally accept the demands of the MOA, or they will have to completely spend down the endowment.
    Assuming, for the sake of argument, that were the case, there are then two consequences: The MOA maintains a strong endowment without an orchestra (at least not The Minnesota Orchestra – as it stands now, no orchestra at all), or the orchestra eventually ends up without an endowment. I want someone to please explain to me how an endowment without an orchestra is preferable to an orchestra without an endowment.
    Then, perhaps, they can explain why these are the only two options.

  9. Submitted by Hiram Foster on 12/05/2013 - 01:39 pm.

    ” I want someone to please explain to me how an endowment without an orchestra is preferable to an orchestra without an endowment.”

    I think this at the heart of the problem, or more precisely the heart of the problem is management’s inability to grasp that their job is to put on concerts, not be fiscally viable or sustainable. They have, in effect, transformed themselves into fund managers, rather than managers of an orchestra.

  10. Submitted by Dimitri Drekonja on 12/05/2013 - 01:58 pm.

    I missed this great nugget the first read through…

    I love that the planned events in FY 2014 include “concerts by other groups and performers, such as the Preservation Hall Jazz Band, Duke Ellington,…”

    Memo to Mr Henson: Ellington has been dead for about 39 years. As Rick Perry would say– oops.

  11. Submitted by Michael Wunsch on 12/05/2013 - 04:12 pm.

    the MOA’s proposed 2013-2014 season is shocking

    Much of focus on Mr. Henson’s letter to the city focused on his obviously weak arguments relative to the MOA’s performance in meeting the terms of the lease agreements. However, I would argue that this component was not the most concerning aspect of his letter.

    The most concerning aspect of the letter was the planned 2013-2014 season included immediately after the letter. This season outlines the vision that the management and board of the Minnesota Orchestra have for the ensemble. I agree that it is important for an orchestra to also provide pop performances, but the MOA’s schedule emphasizes pop performances to a such an extreme degree that it threatens the ability of the orchestra to maintain its ability to perform classical music at the highest level. Just like anything else, to be able to perform your core activity well, you need to be focusing most of your energies on that endeavor. This aspect alone imperils the future of the ensemble and its ability to build and maintain its core audience and donor base of people who turn to classical music for spiritual and emotional nourishment.

    By outlining their proposed 2013-2014 season, the MOA also made it extremely clear that this dispute isn’t about money as much as it is about the vision of the ensemble. I have a hard time believing that a settlement can be made on the salary issue unless the question of the vision of the ensemble is also addressed.

  12. Submitted by Hiram Foster on 12/06/2013 - 05:39 am.

    The substance of the proposed season doesn’t matter. That’s a management call. What does matter to some extent is that they do have a season planned.

  13. Submitted by Nathaniel Finch on 12/06/2013 - 09:13 am.

    Things I’d like to read about

    I’d like a full bio on Michael Henson – where he came from, how he ended up here, how he worked with other orchestras (if he ever did), etc. Who is this guy and how does it inform his actions on behalf of MOA.

    I’d also like to know about MOA board members – who they are, how they got on the board, their philosophy about music and business, etc. Also, how do they make their decisions. Do they vote? Does the board leadership just roll everyone else on the board? Is there any dissension on the board? We just hear about the board as if it were an opaque monolith whose actions are completely secret. Somebody must be willing to talk.

  14. Submitted by Hiram Foster on 12/07/2013 - 06:39 am.

    Henson

    Michael previously ran the Bournemouth Symphony Orchestra in Britain. He seems to have been known for audience building but also for restructuring Bournemouth’s debt resolving a financial crisis. Michael may be trying to repeat that success here.

    As for the board, it’s big, lot of members, and my guess is that it pretty much goes along with the decisions of an executive group within the board. I expect they rely on the managers they have hired, and in turn the managers are quite convincing in their presentations to the board. It’s been my impression that labor and it’s supporters have been trying to go around management, by appealing directly to the board. That’s why there has been so much talk about management’s various mistakes in the past, which are irrelevant to management but might quite possibly be very relevant indeed to a decision by the board to oust these managers.

  15. Submitted by Paul Udstrand on 12/07/2013 - 09:59 am.

    What? What? and What?

    Substance doesn’t matter? The substance in question here is music, and that music can only be provided by the orchestra, without which, there is no orchestra. Anyone who doesn’t understand this has no business managing an orchestra. It would be like saying hamburgers are irrelevant to Burger King.

    Hiram seems to keep coming back to the same idea that incompetent management is all that there is therefore no management could solve MOA’s fiscal crises in any other way. This is a circular that management and it’s supporters seem to be stuck in. I don’t think anyone even needs to respond to that argument.

    A season is planned? Yeah, they had a season planned last year. Unfortunately people don’t attend “plans”, they attend performances. The fact is that unless MOA ends he lock out there will be no season again this year. So unless the “plan” is to declare and end to the lock-out in the next few weeks there will no performances.

    Finally, the advantage of evicting MOA is that the hall could then be used to produce concerts again. If the city for instance turned it over the to the Park Board, the PB could schedule concerts much like they did all summer at other venues and Hall could generate some revenue AND function the way it’s supposed to. You would also be able to book other performers because they would longer be crossing a “picket” line so to speak if they performed at Orchestra Hall.

  16. Submitted by Ben Munroe on 12/07/2013 - 10:56 am.

    Henson

    The Minnesota Orchestra has just been nominated for another Grammy Award.

    Meanwhile, Henson has been nominated for an award as well:

    http://www.adaptistration.com/blog/2013/02/19/editorial-cartoon-award-time/

  17. Submitted by Hiram Foster on 12/07/2013 - 04:03 pm.

    The substance in question

    The substance in question here is music, and that music can only be provided by the orchestra, without which, there is no orchestra.

    Well, management proposed a program with music in it.

    “Hiram seems to keep coming back to the same idea that incompetent management is all that there is therefore no management could solve MOA’s fiscal crises in any other way.”

    Hey, if there were a competent management or a different management out there, labor should give some thought to negotiating with them. But the management the orchestra has is the only management there is, however competent or incompetent it might be.

    “the advantage of evicting MOA is that the hall could then be used to produce concerts again.

    The problem with concerts is that they lose money. We actually saw a back handed acknowledgement of this last week when the SPCO announced that they had a surplus, which seems to have been because of the concert stoppage. Focusing on the hall doesn’t get us very far. While I have often said the issues with respect to the orchestra, and the sports teams are similar, they play out differently. The Vikings and Twins stadiums are profit machines. That’s why they exist. Orchestra Hall is different. It doesn’t have luxury boxes, it doesn’t have signage or naming rights that are worth anything, it doesn’t appear on national tv. It’s just a building where the orchestra plays. And one concerning which the city owes the MOA a substantial amount of money.

  18. Submitted by Ben Munroe on 12/07/2013 - 05:14 pm.

    Shortsightedness

    “The problem with concerts is that they lose money.”

    Thank you for demonstrating the myopia that must be afflicting the board and management of the Minnesota Orchestra. They apparently can’t understand, or frankly don’t care, what damage is caused by the lockout. Concerts are the very reason that the organization exists–the reason for the endowment, and donations that make up such a large portion of the revenue stream, in addition to ticket sales.

    “The Vikings and Twins stadiums are profit machines. That’s why they exist.”

    This implies that nothing should exist if it is not a “profit machine,” even a non-profit organization. I guess that’s why the Minnesota Orchestra is being driven out of existence.

  19. Submitted by Hiram Foster on 12/08/2013 - 06:51 am.

    Concerts

    I do understand that concerts are the reason the Minnesota Orchestra exists or are at least one of them. It’s management’s position, right or wrong, that if the status quo continues, the orchestra will go broke, and there will be no concerts.

    As for the Vikings and Twins Stadiums, my statement that the only reason they exist is their potential for profitability was not meant to imply that profitability is the only reason for existing. No one ever thought Orchestra Hall would make money, yet there it is.

  20. Submitted by Paul Udstrand on 12/08/2013 - 10:16 am.

    Henson Shmenson

    Henson’s management abilities were obviously over-rated. His previous orchestra was a very very very different animal compared to the Minnesota Orchestra and Bournemouth is a very different city compared to MN and the Twin Cities. Not only that, but apparently he wasn’t the wiz kid he was supposed to be in the first place: http://www.artsjournal.com/slippeddisc/2012/09/the-bumbling-merry-go-round-of-us-orchestra-managers.html

  21. Submitted by Paul Udstrand on 12/08/2013 - 10:54 am.

    Circular reasoning

    “The problem with concerts is that they lose money.”

    This is circular reasoning, imagine how money the Orchestra would have if they’d never had a concert! The money would just pile up forever!

    In the scenario that I imagine the Park Board would not be paying musicians full scale, they would simply be making the hall available for concerts, and the revenue would certainly cover the costs of the house… how much did the venues cost for all the concerts they put on last year? At any rate although the revenue would fall short in some ways it would be better than nothing and people could hear some music in the hall they just paid $50 million to renovate.

    We’ve already established that comparisons with professional sport franchises are a waste of time. There’s no applicable or transferable business models there, and in fact the “lock-out” that is so popular amongst pro-sports owners has essentially liquidated this orchestra rather than make it financially solvent.

    Tell me, after 14 months without concerts what kind of donations is management predicting in the next 12 months? On what basis are they even asking for donations? Are they going to use the money to prevent even more concerts from being played in the remodeled concert hall?

    This management and board are incompetent and irrelevant, they have no business “managing” an orchestra. The only solution will be take the orchestra away from these people unless they end the lock-out and allow concerts to begin. What has become clear, and I’m not saying this is easy, is that if MN is going to have an orchestra, we’re going to have find a way to work around the current MOA because they cannot be worked with. If MPLS fails to take back the hall or end the lease, that will be the end of the MOA for all practical purposes. I can’t see any reason why they would ever have a concert. The current musicians won’t play, no other musicians will cross the line, and in the end even if they somehow reconstitute the orchestra in the future it will likely fail no matter how little they pay the musicians because the MOA “brand” will be toast. If they think they’re losing money on concerts now wait till they try putting on concerts with no-name conductors and mediocre musicians.

  22. Submitted by Mark Carter on 12/08/2013 - 02:21 pm.

    Reasons why our orchestra in trouble not understood.

    The problem is now getting worse on our doorstep. The Milwaukee problems are now worse than they let on. The Milwaukee Symphony will close for good,, if it does not raise 5 million in 2 months. They are have agreed to cut the orchestra back to about 60 players. There is not any fat to cut. I guess with the problems here, a drastic salary cut in not on the cards. The CEO is the principal trumpeter. Major donors say they are tapped out, and will not contribute to this drive, as they have funded too many bail outs in recent years. So this money will have to be raised from small donors. It seems they would rather close the doors if this fund drive fails, rather than have the spectacle we have here.
    At the start of this, I said the funding model is dead. I’m certain that without new ideas, this rot will spread to every orchestra in the US within a generation if nothing changes.

    I think the choice will be between no permanent musicians, and 100% freelance or using new technology to reach the audience. The third option is a combination of both.

    The real problem here is missed. We all know that concert halls are not big enough to keep the orchestras solvent without unaffordable ticket prices. The big donors are baulking. There is over whelming evidence for the fact that the audience for classical music is larger then it has ever been, but only a very small fraction of that audience ever steps inside a concert hall. What has also changed is that those listeners get to listen to the music free, mostly, or at minimal cost.
    So there needs to be serious discussion about how to get people to pay a reasonable charge. The generation growing up, will want a TV picture, not just audio. So just like in the LP, Stereo, and digital transitions, the whole repertory needs to be recorded again in AV. I don’t think the industry will lead this, the major players are now totally pop geared. That is another problem as modern digital technology is increasingly pop geared. So classical music does need a technical parallel universe. So musical arts organizations need to figure this out, and be in charge of recoding, production and distribution. They will also have to lead in consumer education, as classical musical fans tend to be backward technologically, I have observed.

    I suspect this will require a combination of listeners getting good results in the home and broadcast to satellite venues around the the country and world.

    So, if the Milwaukee Symphony folds, should a reconstituted Minnesota Orchestra, be also the Milwaukee Orchestra?
    The Metropolitan Opera have lead the way on this. Europe is way in front technically and have garnered a lot of help and big funds from the hardware industry. The BPO Digital Concert Hall is a real lesson, in the way forward. Sony have put a lot of money in this. The Vienna State Opera and therefore the Vienna Phil, have just signed a big contract with Samsung.

    Radical change is required, but not the sort the MOA envisage. We need a big conference on all this, here in Minneapolis, and hear from all the players. The players being AV technology companies, AV manufacturers, loudspeakers manufacturers, IT companies, IT system builders, CEDIA and home builders, retailers, the cinema industry, symphony associations, musicians and artists. There are probably many parties I have overlooked. There has to be a huge change of gear world wide about all of this.

    I have been concerned before this crisis in Minnesota blew up, that the real reasons for the problem have not been understood by anybody involved in the dispute, and that is the major reason it has not been solved. This crisis here an everywhere may primarily, in fact, be entirely one of failure to manage and understand technological change.

    In closing I would say, the question will come up: – How many large high quality symphony orchestras does the world need? The answer may well be a lot less than you think, but that is a guess. I do know that only the finest and far sighted orchestras will survive. The MOA have already gone far down the road to making sure intelligent change will not come to Minnesota. That is a pity considering the accomplishments of the Minnesota Orchestra and its history of being on the cutting edge of technological change.

    • Submitted by Paul Udstrand on 12/09/2013 - 09:13 am.

      I think w’ere all aware of these concerns

      I’m not seeing anything here that I didn’t understand previously. I’m not sure the question at hand here is how many orchestras does the world need, the question is whether or not Minnesota can have one of those orchestras?

      Instead of creative and innovative leadership we have a management team that deployed 1930s era anti labor tactics and sent the MOA into a death spiral.

      I’m no expert but I think a combination of public subsidy and creative marketing and production could’ve sustained our orchestra. It may well be that the income of orchestra musicians will decrease somewhat over time, but that can’t be imposed by lock-outs. Personally I think the idea of the orchestra could be changed a little. For instance last night in TPT they this “Celtic” something or another on. Well, they had an orchestra behind them, could the MO not produce a Minnesota version of that? We have the talent here in MN to do something like a Nordic or whatever and if it were co-produced or partnered with TPT and MPR it might create a bigger audience and generate more revenue. I have to admit that while I frequently listen to classical music I haven’t been to the Hall in many years. Do they still have that basic static lighting or have they jazzed it up a bit? You don’t want to give people seizures but you can jazz it up just a bit for younger audiences. Seriously, we just need to think about this.

  23. Submitted by Hiram Foster on 12/09/2013 - 06:13 am.

    Orchestras

    I don’t think there is a big market for the orchestra on video. Orchestras just aren’t very interesting visually. And really, if the artistic vision we hear so much about from members is rerecording the warhorses, we definitely need a new artistic vision. The orchestra, Mike came from, the Bournemouth Symphony has an extensive catalog of recordings of little recorded music on the Naxos label, the coolest and hippest classical label around. Meanwhile, the Minnesota Orchestra records the warhorses, on CD’s that cost more than a season of Glee DVD’s.

    There are ways to work around the Minnesota Orchestra, certainly. One idea I have is to expand the St. Paul Chamber Orchestra into a full orchestra. We could also start a new, starter orchestra, There are various groups around town, that could serve as a base for such an orchestra. We don’t have to accept the Minnesota Orchestra model for what an orchestra should be at all.

  24. Submitted by Hiram Foster on 12/09/2013 - 06:20 am.

    “There’s no applicable or transferable business models there, and in fact the “lock-out” that is so popular amongst pro-sports owners has essentially liquidated this orchestra rather than make it financially solvent.”

    I disagree actually. Professional sports in the past had the same problem the orchestra has now. Sports were not viable without public support. So we gave them a subsidy in the form of stadiums. We could do the same for the Minnesota Orchestra, it’s just that we choose not to, or more precisely we choose not to identify that as a choice we can make.

    I would find it hard to imagine that the MOA is having very much success raising money now, but they don’t have to. They can live off the income from the endowment.

    I do think this management’s goals are unrealistic. It’s perfectly clear at this point that cutting labor costs isn’t one of the option they have for putting the orchestra back on a fiscally sound path. They just haven’t realized that or if they have, they can’t bring themselves to act appropriately.

    • Submitted by Paul Udstrand on 12/09/2013 - 08:42 am.

      Well “yes” and “no”

      “I disagree actually. Professional sports in the past had the same problem the orchestra has now. Sports were not viable without public support. So we gave them a subsidy in the form of stadiums. ”

      Yes, and athletes and musicians are also both human beings. A similarity is not a business model.

      This societal obsession with sports is one of the most bizarre features of our culture. The professional sports industry did not invent the idea of a public subsidies, nor are pro-sports franchises the only recipients of public subsidies. However, pro-sports subsidies ARE the most vehemently OPPOSED subsidies you can find as a general rule wherever they are dispensed. The Vikings stadium is NOT a popular program. Ziggy Wilf is NOT a popular figure and the Vikings are NOT even a popular team at the moment. Why in the world would you want to associate your enterprise with an unpopular program?

      Again, there is no transferable business model or solution to be found in professional sports. Every company and industry from mines in northern MN to shopping malls in Bloomington that gets a subsidy gets it for the same reason, it’s not “sports” specific. On the other hand the dissimilarities are striking in that orchestras are not private franchises purchased from a multibillion industry nor are musicians comparable to athletes beyond the fact they both have audiences.

      Furthermore while the preferred method of labor management i.e. the “lock-out” does not demolish professional sports franchises, it liquidates orchestras precisely because they are very different entities. In a very real way we can argue that the orchestra has been demolished precisely because MOA management mistook the orchestra for a sports franchise and tried to apply the same tactics. So let’s stop pretending that we’re going to find a solution in “sports” business models.

      Now, if you want to talk about public subsidies for the orchestra, great, let’s put our case together. But arguing that the orchestra or anything should get a subsidy because someone else got a subsidy is irrational and dangerous, especially if you compare the orchestra to one of the most unpopular subsidies in MN right now. If you make that argument you’re inviting the same opposition.

      Look, Wilf didn’t get his billion dollar subsidy because it was popular, necessary, or made sense, he got it because we have a corrupted political system that services billionaires. You can’t expect that system to function the same way for an orchestra. Wilf got his money despite public opposition, I wouldn’t expect the same outcome for the orchestra. Your going to need more public support (or less opposition) if you want an orchestra subsidy so I’d put as much distance between the orchestra and the Vikings as possible. Listen: the vast majority of Minnesotan’s always said they’d rather loose the Vikings than build them a stadium… do you really want THAT to be your starting point for a orchestra subsidy?

      Talk about what a great and unique community asset the orchestra is and how small the subsidy to save it would be. Find comparisons with other community assets, NOT professional sports. Look at the comments on the Strib whenever we have a orchestra story, the comments that we should subsidize the orchestra because we subsidize the Vikings are SARCASTIC, not supportive. Don’t go there.

  25. Submitted by Hiram Foster on 12/09/2013 - 09:32 am.

    Again, there is no transferable business model or solution to be found in professional sports.

    I find this somewhat baffling. The sports teams weren’t generating enough revenue to satisfy their owners. The solution they found was a public subsidy. Similarly the orchestra is not generating enough revenue to satisfy their managers. Surely one solution to the problem is the same one that worked for the sports teams, a public subsidy. I am not arguing here that the orchestra should get a public subsidy just that a public subsidy is one solution to the orchestra’s problems as it has been for the Twins, Vikings, Gophers, et al. Wilf got his subsidy because he spent millions of dollars over a period of years lobbying the legislature. A big reason the orchestra isn’t getting a public subsidy, is that they haven’t put that money and that effort into getting one.

    There are other problems too. As a professor pointed out, there may not be a solution to the orchestra’s problems .It may turn out to be the case that the musicians will not work for what management is willing to offer them. If that turns out to be the case, the orchestra will cease to exist.

    • Submitted by Paul Udstrand on 12/09/2013 - 11:52 am.

      Baffling?

      “I find this somewhat baffling. The sports teams weren’t generating enough revenue to satisfy their owners.”

      Yes Hiram, I know you’re baffled by this, I do not know why. I’ll try again: Since the MOA does not exist in order to satisfy any owner’s revenue expectations, the MOA does not have the same problem as an owner of a pro-sports franchise. Sports teams had a profit problem, non-profits do not have profit problems. Non profits may have revenue problems, or expense problems, but they don’t seek public money in order to satisfy any owners “revenue” expectations.

      As for the “professor”, there are solutions to this problem, the problem is that this management team has failed to pursue them and in fact, may not even be aware of them. It’s silly and disingenuous to pretend that the lock-out was or is the only possible solution or that this incompetent management teams “solution” is or was the only possible solution. If the orchestra ceases to exist, it will be because it’s management sent it into a death spiral, not because the musicians weren’t willing to perform.

  26. Submitted by Rick Ryan on 12/09/2013 - 12:40 pm.

    ACS not NHL

    The law firm that is leading negotiations for the MOA (Felhaber, Fenlon, and Vogt) was the same firm that led the American Crystal Sugar lock-out. The model wasn’t the NHL or NFL, it was Crystal Sugar. They thought they could break the Union and force them to accept a concessionary contract like they did in Grand Forks. Professional Orchestra musicians are not sugar workers, they come from a different economic strata and are better able to hold out.

    The strategy by the MOA was never to negotiate (despite all their protestations to the contrary), it was to break the Musicians Union Local and impose their will upon them, period. When you decide to lock-out the workers you are taking a “my way or the highway” stance.

    • Submitted by Paul Udstrand on 12/09/2013 - 03:51 pm.

      Exactly

      And by the way, you don’t have to be the Amazing Carnac to see what the MOA plan is at this point. They obviously intend to keep the musicians locked out for another year until the existing contract runs out. At that point presumably they have more options as far as replacing the musicians is concerned. The problem is that they have already trashed the MOA brand, and it will be completely useless after another 12 months of zero performances. This is a liquidation strategy, not a path to solvency. Even if they get an orchestra up and running a year from now, regardless how little they pay the musicians, it will fail financially because it will be a mere ghost of the orchestra management they inherited when Hanson came on.

      I don’t know how MOA can claim to running and artistic organization or have plans to do so when they’re plan is to prevent any concert performances for another 12 months on top of the 14 already prevented.

      And, I’ll point out for the umpteenth time, the money isn’t the only problem with the contract MOA is demanding, there are a whole host of other work rules etc. that if implemented, will cripple future orchestras and musicians. The same people who have made all of the disastrous decisions of the last 14 months will making even more decisions. The management plan is and can be nothing but a death spiral for the orchestra.

  27. Submitted by Hiram Foster on 12/09/2013 - 02:43 pm.

    Since the MOA does not exist

    Since the MOA does not exist in order to satisfy any owner’s revenue expectations, the MOA does not have the same problem as an owner of a pro-sports franchise.

    But the people who are running the orchestra now have financial expectations that must be satisfied, they are in the same position as Wilf and associates. The MOA, like the Vikings are a business.

    “Sports teams had a profit problem, non-profits do not have profit problems.”

    A distinction without a relevant difference. Lots of people make a lot of money from the orchestra, and considered. And both the Vikings and the MOA have financial goals which they insist must be met.

    “Non profits may have revenue problems, or expense problems, but they don’t seek public money in order to satisfy any owners “revenue” expectations.”

    In fact lots of public money goes into these organizations. The problem the MOA is having is that the money that the public put into it was not intended to generate increased revenue. In other words the money we blew on the orchestra was wasted because it didn’t address the central problem the orchestra has, it’s deteriorating finances. We made that mistake because we thought the MOA was a non-profit and above such mundane mercenary considerations.

    Management doesn’t have to be the only one to address the problems. Mickey Rooney organized shows in barns movie after a movie. It’s just that no one has had the initiative to address the problem of Minnesota’s lack of an orchestra from outside the Minnesota Orchestra framework.

    • Submitted by Paul Udstrand on 12/09/2013 - 08:49 pm.

      “we”?

      ” We made that mistake because we thought the MOA was a non-profit and above such mundane mercenary considerations.”

      That is NOT the mistake “we” made. On the contrary, the mistake was in assuming there is no difference between a sugar refinery and an orchestra. I don’t think anyone was ever under any illusion that orchestras can function without sufficient revenue. Someone seems have forgotten that orchestras that don’t play music cannot generate revenue.

  28. Submitted by Ben Munroe on 12/09/2013 - 05:09 pm.

    What exactly does the MOA do?

    “No one has had the initiative to address the problem of Minnesota’s lack of an orchestra from outside the Minnesota Orchestra framework.”

    I agree it’s not clear what the MOA is doing, except orchestrating a lockout, but check out what the Minnesota Orchestra Musicians are doing — raising funds, carrying out educational programs, and putting on another season of concerts, through May at least. Then you should go read various blogs (and other comment boards) with numerous revenue enhancing ideas from patrons, who want to contribute to a solution. Next, read what some politicians have been suggesting, as straw-men models really, at the risk of political backlash for evening mentioning the words “public” and “support” in the same paragraph (none that I am aware of have actually called for a direct public subsidy). So, there are many, many people trying to take some initiative, yet the board and management (the only ones who matter, right Hiram?) do nothing but sit in their bunker, following some lousy script written for them by their union-busting law firm.

  29. Submitted by Hiram Foster on 12/10/2013 - 05:20 am.

    Qustions

    Someone seems have forgotten that orchestras that don’t play music cannot generate revenue.

    My guess is that the MOA is generating revenue just fine. It has an endowment without an orchestra the endowment is supposed to pay for. If the board is uncomfortable with this arrangement, they can change it.

    The orchestra needs to raise revenues. I think there are ways to do that, but there aren’t any sure things out there. One area that might have to be looked in that regard is the work rules.

    The board isn’t the only entity that matters, but it is the entity that ultimately is responsible for the choices management makes. If others want a role, they are welcome to put some skin in the game. If they want a place at the table, they need to bring some money. As the board members have done. In terms of gaining public support, the orchestra has to deal with a variation of the question the Vikings spent tens of million dollars in lobbying fees to deflect: Why should taxpayers pay for an entity that is run for the benefit of millionaires?

  30. Submitted by Paul Udstrand on 12/10/2013 - 11:20 am.

    Thank you Hiram

    “My guess is that the MOA is generating revenue just fine.”

    That must be why they don’t need an orchestra. Just imagine how much money they’ll have in the endowment if they never produce another concert! Of course they really ought to change the name at some point from the Minnesota Orchestra to the Minnesota Orchestra Endowment since the plan is to have an endowment without an orchestra. I’m also not sure if you need a concert hall to put endowment into? You could probably put something like that in bank account of some kind. Imagine how much money they’d have without an orchestra OR a concert hall!

    A few weeks ago Hiram, you were explaining why and how it is that the board has no control over management because they lack the influence and resources to make a move of any kind given Hanson’s contract. Either way, the board is irrelevant because the MOA has been effectively liquidated at this point. After another 12 months of concertless orchestra the MOA only be less viable than it was when the lock out was implemented.

    I don’t know if it’s deliberate or not but I’d like to thank Hiram for consistently performing the thankless task of representing the MOA position here.

  31. Submitted by Hiram Foster on 12/10/2013 - 12:26 pm.

    That must be why they don’t need an orchestra.

    What I would say is that helps to explain why they are under little financial pressure to reach a settlement.

    ” you were explaining why and how it is that the board has no control over management because they lack the influence and resources to make a move of any kind given Hanson’s contract.”

    I don’t think I mentioned Mike’s contract. I have no idea what it provides. What I recall talking about is are more general considerations why the board might find it difficult to exercise control over management. I don’t know what specifically would be required because I haven’t seen the relevant documents. But I am pretty confident in saying that ousting a management that doesn’t want to go would involve a lot of expense and a lot of effort. I have seen no indication that there is a faction of the board willing to fight that fight. In that sense the board is, at the moment at least, irrelevant. At some point, they might become relevant. I see no indication that the MOA has been liquidated, effectively or otherwise. That is, I suppose, something the board could do but it’s certainly the case that they haven’t done it.

    I don’t know that I have represented the MOA’s position. I have simply discussed it. I think management’s position is misguided. It has become clear that there effort to balance the orchestra’s through cuts in labor costs have failed. I believe that had the board known at the outset what the result of the lockout would be, the year and a half without concerts, the loss of Vanska, and leading members of the orchestra, etc., they would never have agreed to it. At this point, I think they are continuing the lockout because they don’t have an alternative or an exit strategy. I think someone needs to provide them with one.

  32. Submitted by Paul Udstrand on 12/10/2013 - 04:03 pm.

    End the lock-out

    Several exit strategies have been suggested, and frankly they are obvious at this point. This management just won’t do what it needs to do. What we have here is a perfect storm of board and management paralysis and incompetence. They’re trapped in circular reasoning that recognizes nothing but a failed strategy as the solution and requires the musicians do something that they are clearly not going to do. It’s like they’re in a bubble of some kind.

    I know saving face of some kind may be an issue but that train left station months ago and it’s only going to get worse the longer they keep the musicians locked out. The easiest way out would to submit to mediation. That way they could claim that terms were imposed rather than capitulated.

  33. Submitted by Hiram Foster on 12/11/2013 - 05:28 am.

    Circular reasoning

    I don’t know if the problem is circular reasoning. The problem is that the musicians are not willing to play for what management is willing to offer. That may be another way of saying that the Minnesota Orchestra has come to an end. The Minnesota Orchestra won’t be the first orchestra to go out of business, and I suspect it won’t be the last. There is talk from the musicians that they might form a new orchestra. That’s not impossible. Other existing entities might also take their place. An expansion of the St. Paul Chamber Orchestra might do that. It’s regrettable that labor and management can’t come to an agreement, but ultimately that’s their problem, and outsiders can’t solve their problems for them. They should know that if they do leave a vacuum in our community, someone else will fill it.

  34. Submitted by Paul Udstrand on 12/11/2013 - 10:25 am.

    Circular indeed

    “The problem is that the musicians are not willing to play for what management is willing to offer.”

    THIS is the circular reasoning:

    The orchestra cannot survive without the demanded pay cut for the musicians. The musician’s will not accept the demanded pay cut, therefore the orchestra cannot survive. If the musicians would only accept the demanded pay cut the orchestra would be solvent because the orchestra cannot survive without the demanded pay cut.

    This is circular because it excludes every other scenario or solution. It excludes a smaller pay cut for the musicians. It excludes the possibility of a more permanent ongoing public subsidy. It’s excludes the possibility of drawing more on the endowment in in an attempt to build audience in a variety of ways. It excludes the fact that we’re coming out of the recession and investments may/have/or will grow the endowment.

    This circular thinking becomes a downward spiral as the MOA brand disintegrates. Concerts lose money so you stop having concerts etc.

  35. Submitted by Paul Udstrand on 12/11/2013 - 10:28 am.

    By the way Hiram

    I’ve been thinking about this claim that concerts lose money, maybe I should have asked this before but how exactly does that work? Do the musicians bet paid per concert?

  36. Submitted by Hiram Foster on 12/11/2013 - 12:11 pm.

    I’ve been thinking about this claim that concerts lose money, maybe I should have asked this before but how exactly does that work? Do the musicians bet paid per concert?

    I don’t know how exactly musicians get paid in terms of payment periods. But as I understand it, the orchestra runs a deficit and what the orchestra does is perform concerts. No concerts, no deficit. So that means the MOA gets to keep the income from the endowment which intended to close the gap between the cost of concerts, and a break even point. I don’t actually know this for sure, it’s not a point many others are discussing, but it seems self evident to me. And there is some evidence that this is happening. The SPCO reported a surplus, basically because they didn’t perform some of their concerts. And according the Strib, the Minnesota Orchestra musicians are losing money on the concerts they are giving, despite the fact that they don’t have at leas some of the costs the MOA must sustain. to stay in business.

  37. Submitted by Hiram Foster on 12/11/2013 - 12:16 pm.

    “This is circular because it excludes every other scenario or solution.”

    The fact that two parties are unable to reach a deal, if they are indeed unable to reach a deal isn’t circular. And I certainly don’t exclude other scenarios, it’s just the parties don’t seem to be interested in them. And there aren’t a lot of things that have been discussed that really address the deficit situation. Most of the suggestions I have seen, more recordings, more video, more concerts, either don’t have a direct connection to more revenue, or in fact lose money.

    • Submitted by Paul Udstrand on 12/12/2013 - 09:05 am.

      Not really

      The impasse is maintained by the circular reasoning.

      We can see that the suggestion that concerts lose money is a actually a myth. Even the shortened 2012 season made $1.5 million on concerts. The concerts brought in $7 million and cost $4.5 million. Other suggestions have included expanded public subsidy, partnerships with other entities, etc. The fact that Hiram ignores those suggestions in his comment and focuses on the myth of the money losing concerts reflects the circular nature of this reasoning.

      Just to recap:

      1) Management drew down the endowment to make the orchestra look more financial stable than it really was for two years prior to the lock-out. This helped them get the $50 million they wanted for renovations.

      2) Having gotten those renovations management changed course and decided that drawing from the endowment was not acceptable practice for paying it’s obligations to the musicians. They continued drawing from the endowment in 2013 in order to pay management.

      3) Management locked-out the musicians in the middle of the contract period. Suddenly the contract they’d signed two years previously when they were convincing everyone that they orchestra was in good financial condition was no longer viable.

      4) The musicians union has appeared several times to negotiate and end to the impasse, and the musicians have in fact already agreed to a cut in salary. The musicians have also agreed to and attempted to organize binding mediation. The musicians have agreed to further cuts in compensation.

      5) Management has rejected attempts at mediation and keeps re-submitting it’s original contract as if it’s a compromise. Management has called for negotiations, and the musicians have responded to that call. The problem is that management refuses to actually negotiate or compromise once they get to the table. They simply demand the musicians accept the contract.

      MOA’s claims that they’re waiting for the musicians to join them at the bargaining table are disingenuous at best, misleading at worse. Sure, they sit at the table but they’re waiting for negotiations they’re waiting for the musicians to sign the contract they’ve been demanding.

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