An orchestra on the brink 

click to enlarge Krzysztof Urbanski

Among the many signs that the city is destined to see a protracted fight between labor and management at the Indianapolis Symphony Orchestra is the arrival of professional PR reps on the scene, taking their spots on the battlefield to compete for the hearts and minds of the city.

The musicians are represented by Beck Communications, through which they’ve submitted newsreleases accusing the Symphony Society, the organization which runs the ISO, of trying to destroy the orchestra as we know it through proposed cuts to the number of full-time musicians (to 69 musicians, fewer than the 80 thought to be the minimum for a full-scale symphony orchestra); to the length of the orchestra’s season (to 38 weeks, so that the ISO would no longer be one of the country’s 18 year-round orchestras, as promotional materials have long bragged); and to annual salaries (a 41 percent cut on average).

The ISO, which already has internal PR resources, continues to work with Borshoff PR (a company whose services include crisis management) to get out the word that all cuts are necessary to keep the symphony afloat and to forge a sustainable business model — and that, besides, musicians haven’t made enough time to negotiate with the board, and the ISO has already made all the cuts it can internally, reducing its staff from 78 to 45 employees over the last two years.

One thing seems almost sure, regardless of the competing narratives: The first two weeks of the season will most likely be canceled and the players locked out, with the ISO contending that they can’t afford to extend an existing three-year contract beyond its Sept. 2 expiration.

Holding the line

The union is seeking to maintain standards which the American Federation of Musicians has fought hard to establish over the past half-century — namely a longer season that allows orchestra members to be paid on a full-time basis; a larger orchestra size that allows for those full-time players to play standards of the classical canon; and robust pension plans. All of these elements play into the artistic quality of an orchestra; and according to the union, to drastically reduce the number of weeks or players would drastically compromise the symphony’s sound and ensemble quality, such that an orchestra that has built up respect over the years would quickly lose it.

The union argues that their counter-proposal to reduce wages by 13.9 percent in the first year (with increases in years thereafter to 1.25 percent off the current wage in the contract’s fifth year) and to take 14 unpaid furlough weeks over five years — while maintaining a full-sized complement of 82 full-time musicians — would address the ISO’s financial difficulties, a claim that ISO management rejects as far too optimistic.

The ISO argues that it’s impossible to maintain those standards in the current economic climate, and that the organization — which presents programming that, more often than not, doesn’t involve the full complement of full-time musicians needed for the classical series — needs to adjust to the needs of the community and the market. They note that the ISO is running an annual deficit of $10 million, that the ISO Foundation’s endowment would be essentially depleted in three to four years at the current rate of spending, and that an $8 million credit line is maxed out. And while the board says that it would love to maintain the kind of full-time symphony that’s been built up over the past 25 years, it’s become impossible given the financial situation — or rather, it would mean compromising the ISO’s other programming in order to sustain its classical programming.

That programming — referred to as other product lines by board members and acting Chief Executive Officer Jackie Groth during an interview — includes key concerts series such as Pops, Symphony on the Prairie, Time for Three’s Happy Hour and Yuletide Celebration; and community, education and outreach programs such as the Metropolitan Youth Orchestra and Discovery Concert Series.

The programming issues lay bare a philosophical difference between the artists and the management.

The mission of the Indianapolis Symphony Orchestra, as administered by the Symphony Society, is to “inspire, entertain, educate and challenge through innovative programs and symphonic music performed at the highest artistic level.” The union contends that the society is failing to adhere to that mission by proposing steps that would degrade the ISO’s artistic quality — and result in more time devoted to concerts with little or no “symphonic” element (e.g. Symphony on the Prairie concerts that don’t feature the ISO). The ISO, focusing on the “innovative” part of that mission, contends that proposed changes would leave the ISO a leaner, more flexible organization better capable of meeting the needs of the community.

Round one: Symphony Center

The board looked beleaguered on a Friday afternoon at Symphony Center, the ISO’s office complex adjacent to Hilbert Circle Theatre. ISO Chair John Thornburgh was enthusiastic, but his bloodshot eyes said something about the hours he’s and and his cohorts have spent in a boardroom overlooking Washington Street; a spread of bananas and empty carbs had been lunch for board members, the acting CEO and others, and was to be a day-long marathon dealing with the complications involved with negotiations.

The demeanor of acting CEO Jackie Groth, who took over after Simon Crookall’s resignation from the position earlier this year, and chair-elect Martha Lamkin suggested a mixture between anxiety, openness and frustration — at a situation that has rolled out of control, at a union that they feel isn’t bargaining in good faith, forcing a lockout situation because of what they describe as the union’s unwillingness to negotiate over a holiday weekend.

To be clear, neither the ISO nor its board has directly accused the union of bargaining in "bad faith," in the legal sense, or threatened a "lockout," as such. Still, such terms might be colloquially used to sum up their attitude toward what they see as intransigence on the part of the union (i.e. the union's "bad faith" or failure to meet at reasonable times with an open attitude) - and to describe their plan to cancel the first two weeks of the season if a contract agreement isn't reached by Sept. 7 (a "lockout").

(Richard Graef, the ISO horn player leading the union’s negotiation team, countered that the union was not unwilling but unable to negotiate over the holiday weekend, adding his opinion that the board is exaggerating the urgency of the situation. Musicians offered a one-year stopgap contract that would have allowed the season to go forward, but the ISO ignored it, Graef said. The contract, proposed a 13.9 percent pay reduction for the year, including four furlough weeks, with a projected draw of $6.3 million on the endowment — $2.3 million more than the draw proposed by the ISO, but far less than the $11.4 million drawn during the 2011-12 season. The ISO says it rejected that contract on the same grounds it rejected the union’s five-year proposal. Talking on the afternoon of Sept. 4 just before NUVO went to press, Graef said that musicians offered to meet on Sept. 5 and were still waiting for an ISO response. Thornburgh reported on Sept. 4 that the ISO was attempting to coordinate a Sept. 5, which he says was offered with little advance notice.)

“For well over 10 years, we’ve had a divergence between expense increases and relatively flat income,” Thornburgh kicked off the discussion, noting that a capital campaign begun in 2008 to raise $100 million generated only $13 million. “Our board and our management believe that it’s important that we address this on a sustainable basis because we all love the orchestra; we live in this community. We all want the orchestra to be here not just today but for the long haul.”

The ISO reports an annual deficit of $10 million, a number the union contends is exaggerated, and proposed, according to Thornburgh, to drastically reduce its yearly “draw” on an overtaxed endowment (from 13 percent to five percent figure the ISO thinks more sustainable), while cutting other spending.

“A few years ago, we had $130 million in the fund. Thirty-seven million of that foundation is restricted; it can’t be spent,” Thornburgh continued. “If you look at our obligations in terms of unfunded pension liability of roughly $15 million and a fully drawn line of credit of $8 million, if we continue to spend at our current rate, we would have exhausted our unrestricted funds in a very few number of years ... we think it’s in the three-to-four-year time horizon. If you look at return rates on that amount of money, we couldn’t support an orchestra of any magnitude at that level.”

Graef, who said he’s long been involved with administration of musician pensions, contended that the ISO’s pension liability is, in fact, $9 million. Thornburgh insisted the pension figure is greater, and that $15 million is required to bring the plan current. Graef also said that neither the credit line nor the pension liability need be paid off at the same pace as proposed by the ISO. As such, he said the immediate pressure on the foundation’s unrestricted funds would be far less than the board fears.

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