Louisville Orchestra‘s 2011 bankruptcy recalls one of the morals from Prokofiev’s “Peter and the Wolf” — let down your guard, and you may get gobbled up. Back then, the ensemble had grown overly reliant on a relative handful of backers, missing signs their generosity was about to dry up amid the financial crisis.
“No one wanted to face the reality that one day support would end,” Jorge Mester, the music director at the time, told The New York Times for a story about a string of financial crises roiling orchestras that spring.
Now, five years later, the Louisville orchestra is on far more stable footing. Contributions and grants jumped 29% in the year ended May 31, 2015, bringing total revenue to $7.2 million, according to its most recent IRS tax return. After expenses, that left a $1.3 million surplus. The endowment rose about 3% to nearly $1.6 million.
Launched in 1937, the orchestra has about 170 employees and an energetic music director, Teddy Abrams, who started in 2014 after working as assistant conductor at the Detroit Symphony. Abrams, 29, is among a new vanguard of conductors hoping to attract a younger audience and a wider donor base to guard against another sharp downtown.
Against that backdrop, management and players have started negotiations for a new contract to replace one that expired last spring, according to The Courier-Journal. They’re not alone. From coast to coast this year, other ensembles have been in contract talks, too, amid a stronger economy that’s fortified players’ resolve to claw back wages and benefits lost during the financial crisis.
The tenor of Louisville’s contract talks isn’t known because negotiators aren’t talking publicly. “The organization is still a bit fragile, and we are in the middle of planning,” Executive Director Andrew Kipe told the newspaper.
But a review of the group’s recent IRS returns, alongside contract talks at other orchestras, offers a glimpse at the fraught stakes involved.
Louisville’s rank among 18 groups
Comparing finances among orchestras isn’t easy when so many variables are at work, including market size; age of ensembles; the relative strength of local philanthropy; and the egos on both sides of the negotiating table. Still, here’s one yardstick: how much of annual expenditures go toward salaries and other employee costs. At 65%, Louisville ranks close to the midrange among 18 orchestras I examined. They included regional ones in similar-sized cities: Cincinnati, Lexington, Memphis and Nashville.
They also included three orchestras offering an especially cautionary tale: Pittsburgh, Fort Worth and Philadelphia, which have all recently dealt with strikes. Pittsburgh’s and Fort Worth’s, which both started in September, are ongoing. Philadelphia’s surprise stoppage ended only two days after players walked out just before last month’s season-opening gala. (Philadelphia shares another distinction with Louisville: It also filed for bankruptcy protection in 2011.)
Louisville Orchestra’s last contract expired May 31. Signed in 2013, that agreement covered up to 56 salaried musicians for 30 weeks’ work each year, according to the CJ. It had many more players — 71 — when it filed for bankruptcy, so it’s easy to imagine the players trying to regain some of those positions. Plus, the orchestra ended its 2013 year with only a $33,000 surplus vs. the more recent $1.3 million.
At the two orchestras still shuttered by strikes, the financial situation is dire. Unlike in Louisville, both Fort Worth and Pittsburg are running substantial deficits, spurring management to trying slashing musicians’ pay. Players rejected those offers, arguing the ensembles would lose key members to other cities.
In Philadelphia, musicians ended their strike Oct. 1 after agreeing to a three-year contract that included a 2% raise in the first year and raises of 2½ percent in the second and third years. The agreement will bring their base pay to $137,800 by the final year, the orchestra said, though many players make more, said the Times.
Management’s first contract offer was for a five-year deal with no raises in the first two years, and 1% raises in each of the following three — a proposal musicians dismissed as “regressive,” according to The Philadelphia Inquirer.
Who’s paid how much?
Compensation for top executives can sometimes be a sticking point if it’s increased at a bigger rate than for players, an issue three years ago when San Francisco Symphony players struck for three weeks. Louisville Orchestra discloses compensation for only one employee, Kipe, who got $147,000, according to the last tax return; IRS regulations only require disclosure for employees and independent contractors making at least $100,000.
Abrams, the music director, is an independent contractor, according to an orchestra spokesperson. The latest IRS return, which covered only his first eight months on the job, doesn’t list any contractors at all.
In my review of 18 orchestras where music director pay was disclosed, only two were paid less than the chief executive; they were in Cincinnati and Richmond, Va. Odds are, then, that Abrams is getting paid more than Kipe’s $147,000. His compensation will probably show up in the next IRS return, to be filed in spring 2017.
Music directors can definitely pull down big bucks. The nation’s highest paid is Jaap van Zweden of the Dallas Symphony: $5.1 million, according to the latest music director survey by arts consultant and blogger Drew McManus. That included a one-time $3.3 million signing bonus, however. Six other directors got $1 million or more, including San Francisco Symphony’s Michael Tilson Thomas, a mentor to Abrahams. Thomas, an independent contractor, got $2.1 million.
Those seven directors all led ensembles with far bigger annual outlays than Louisville’s. Dallas spends $37 million; San Francisco, $75 million.
To be sure, top executives enjoy big paydays, too. Of the 18 orchestras I studied, the Los Angeles Philharmonic’s Deborah Borda topped out at $1.6 million on a $118 million budget. Operationally, it’s huge, with nearly 2,100 employees.
Ducking a final, final performance
If Louisville Orchestra’s near-death experience in 2011 recalled one moral from “Peter and the Wolf,” there’s a second, equally important one.
In Sergei Prokofiev 1936 children’s story, narrated to the audience and accompanied by orchestra, a wolf swallows a duck that escaped from the home of young Peter’s grandfather. Yet, she doesn’t perish entirely. “If you listen very carefully,” the narrator says, “you’ll hear the duck quacking inside the wolf’s belly, because the wolf in his hurry had swallowed her alive.”
Bankruptcy consumed Louisville’s nearly 80-year-old ensemble, but it survived to play on.
Related: The Vancouver Symphony Orchestra’s music director, Bramwell Tovey, does double duty as conductor and narrator in the following performance of “Peter and the Wolf.”