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Minnesota Orchestral Association stands pat on leadership, reports $1.1 million operating deficit

What remains to be seen is if there’ll be any change in negotiating tactics with orchestra musicians.

The MOA on Wednesday reported an operating deficit of $1.1 million for fiscal year 2013.
MinnPost photo by Corey Anderson

Despite the silence at Orchestra Hall, the Minnesota Orchestral Association will make no leadership changes in the coming months.

What remains to be seen is if there’ll be any change in negotiating tactics with orchestra musicians.

That the MOA will stick with current leadership was the key development from the MOA’s annual meeting Wednesday, held at the Minneapolis Club. Annual meetings are routinely the time when leadership changes are made.

There are many — including 10 DFL legislators — who have come to believe that without a change of leadership, a settlement between the MOA and the musicians, who have been locked out for 14 months, will remain out of reach.

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The legislators, all from the metro area, sent a letter to MOA board members earlier this week calling for the resignations of CEO Michael Henson, Board Chair Jon Campbell and past Chair Richard Davis.

But those calls for leadership change did not come from the MOA’s massive board at the annual meeting. It’s uncertain whether a change in negotiating strategy was even discussed.

Campbell will stay on as chair until a negotiated settlement is reached, an MOA spokesperson said.

The decision to stay the course, however, is not surprising. MOA leadership — and apparently the vast majority of board members — believe that it’s the musicians, not management, who have been unwilling to change.

In a statement, Campbell said: “We are hopeful that we’ve reached a point in negotiations where musicians will choose to join us in negotiating a compromise settlement that helps to address these financial issues and enables the players to return to concerts at Orchestra Hall soon.’’

That’s a variation of a theme that’s been a constant since the lockout began.

The MOA on Wednesday reported [PDF] an operating deficit of $1.1 million for fiscal year 2013. That is substantially less than the $6 million deficit from the previous year, when the orchestra actually was performing.

“The fact that the organization’s deficit is substantially smaller in a year without any performances indicates the degree to which this business model is out of alignment,’’ Campbell said in his statement.

Not surprisingly, the report tried to put a positive spin on the past year. For example, the report states that “two thirds of all donors, 68 percent, maintained their support of the organization, with contributed income totaling $5.7 million, compared with $8.2 million the previous year.”

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Minnesota Orchestra summary of operating results

Year ending
Aug 31
2013
Year ending
Aug 31
2012
Revenue, gains and other support
Operating revenue
Ticket sales and service income$45$6,550
Tour revenue433
Other revenue(31)1,548
Total concert and other operating revenue148,531
Contributed revenue
Contributions and gifts2,5844,167
Oakleaf and St. Paul Fnd. distributions3,1083,066
Symphony ball958
Total contributed revenue5,6928,191
Contributions released from restrictions2,5964,367
Board-designated draws for operations3,6954,471
Total revenue, gains and other support$11,997$25,561
 
Expenses
Musician salaries and benefits$2,219$15,340
All other salaries and benefits5,6897,495
Direct concert expense4863,933
Tour expense482
Advertising and promotion6161,580
Symphony Ball327
Interest and financing550515
Negotiations and negotiations related885147
Repayment of grants previously
    received for specified purposes
1,073
General administration and facility operations1,5441,715
Total expenses$13,063$31,533
Net Operating Activities$(1,066)$(5,972)
(Rounded to nearest $000)

The other way of looking at that stat, of course, would be to note that donations were down by a third. The harsh question out of that would be what percentage of those donations will come back, assuming there is a settlement in the future.

In fairness, it should be noted that musicians attempted to paint an equally rosy picture of its accomplishments since the lockout began.

The report does acknowledge that there were concert costs even in a year in which there were no concerts.

For starters, the MOA returned a $961,888 grant to the Minnesota State Arts Board in the wake of the concert-less season.

The MOA also paid out $2.2 million for musicians salaries and benefits because usual salaries were paid for the first month of what the MOA calls “the work stoppage.” Those expenses also included unemployment compensation for musicians that was reimbursed to the state for the remainder of the fiscal year.

It appears that the word “lockout” cannot be found in the report. There also is no direct line showing how much was paid to the law firm Felhaber, Larson, Fenlon and Vogt, which is believed to be behind the lockout strategy.

One line — “negotiations and negotiations related’’ — shows an MOA expenditure of $885,000.

But overall, the tone of this report was upbeat — and filled with the conviction that it’s the board and management that’s “in the right.”

A letter to the board members signed by Campbell and CEO Henson ended on an upbeat tone:

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“When a settled contract is in hand, we must travel down these paths (building audiences, etc.) without delay to ensure a thriving Minnesota Orchestra and classical music art form in the 21st Century. We hope fervently to be able to begin that journey soon.”