CLEVELAND, Ohio -– Union musicians and Cleveland Orchestra managers have struck a new labor agreement.

The two sides announced Friday the ratification of a new contract retroactive to Aug. 31, when the previous contract, signed in 2012, expired. The new deal is valid through the 2017-18 season.

"There's a lot of momentum going right now, and nobody wanted to disrupt that," said James Menger, the orchestra's chief financial officer and lead negotiator. "This allows that momentum to keep going."

The new contract is between roughly 100 members of Local 4 of the American Federation of Musicians and the Musical Arts Association, the governing body of the orchestra, led by Dennis LaBarre.

The agreement marks a smooth end to a lengthy so-called 'play and talk' period, and extends the peace that has reigned at Severance Hall since 2010, when orchestra members waged a brief strike.

Bassoonist Jonathan Sherwin, chair of the musicians committee, described this round of negotiations as "somewhat more contentious" than in 2012, but also said the orchestra "responded well" to the concerns of the musicians.

In particular, Sherwin said, the contract -– ratified by a 72-percent majority –- narrows what he called a growing gulf between musician salaries at the Cleveland Orchestra and other major ensembles.

"We have been keenly aware of a widening gap between our compensation and those of our peer orchestras," he said. "We were successful in stopping that widening."

Both Sherwin and Menger declined to discuss specific financial terms of the new contract. However, both parties confirmed that the deal calls for annual increases in weekly compensation and retirement benefits, along with improvements in working conditions when touring. Base pay, according to the most recent figures available to the public, is approximately $120,000.

In return, both parties said, the musicians agreed to certain recording and broadcast provisions, to higher shared healthcare premiums, and to donate 12 services over the contract's duration. These can be concerts or other appearances, at home or on tour, from which the orchestra can earn revenue.

"We think it's a fair agreement," Sherwin said. "We're very pleased that they were willing to address the professional concerns that we had."

The momentum Menger described is seen in the orchestra's latest annual report, which revealed a string of institutional successes including record philanthropy, higher attendance, endowment growth and a small budgetary surplus.

Having a new contract in place, Menger said, frees the organization to focus anew on those matters, to push forward with artistic planning, with ongoing strategies for attracting new listeners, and increased fundraising efforts.
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"Both parties wanted that from the beginning," he said. "There was a shared belief that we all have a stake in this."

​Read the article on cleveland.com. 

I’ve seen a lot in my time as a classical music writer/blogger. I’ve covered a number of labor disputes involving orchestras and opera companies, and have seen a number of bone-headed, tone-deaf actions as a result. As this point, I assume I’ve pretty much seen it all.

And yet, I continue to be surprised.  It seems that there are still plenty of labor disputes plaguing the world of classical music, and they continue to generate breathtakingly bad ideas.

Let me share the most recent—one that unfortunately has transpired in Philadelphia, the home of one of the United States’ most celebrated, venerated orchestras. This one is a whopper.

* * *

First a few words of context.

The Philadelphia Orchestra stunned the world in 2011 by announcing bankruptcy, during a time of tremendous upheaval at the orchestra. The decision drew harsh criticism, in part because the Orchestra’s financial endowment was one of the largest in the country.  Many suggested the Orchestra filed bankruptcy simply as a maneuver to get out of its pension obligations to its musicians, as well as to force a 20% pay cut on them. A later report detailing all the luxurious perks in CEO Allison Vulgamore’s compensation package only reinforced the idea that the bankruptcy proceedings were a sham. Nevertheless, it went through.

Read the entire article at Maskoftheflowerprince.com

Ah, “sustainable.” It is a buzzword of the moment, showing up in discussions ranging from the environment, manufacturing, agriculture… even the arts. Of course, everyone wants to be sustainable, thinking that they, their product, or their service will stand the test of time and last forever.

Like all popular buzzwords there is value to it, and I applaud the notion that we have to look at both the long-range prospects and the long-range effects of the things we do.

But as often happens, the term has been misused by people who fundamentally misunderstand its meaning.

I’d like this willful misuse of the term to stop—particularly among arts organizations.

                                                 A Misunderstood Concept

Over the past few years, labor disputes have rocked a number of performing arts institutions, including the Minnesota Orchestra, the Detroit Symphony, Atlanta Symphony Orchestra, Saint Paul Chamber Orchestra, and the Metropolitan Opera. And new labor disputes have continued to pop up like dandelions, in places like Hartford, Connecticut and Binghamton, New York. In each of these cases, management explicitly argued that the organizations’ operations, programming, and labor contracts were no longer “sustainable.” In their words, these things represented a huge financial drain on the organizations and were killing the organizations from the inside. Similarly, leaders of the San Diego Opera used this same rationale to liquidate the company altogether.

Some examples:

• Management of the Atlanta Symphony Orchestra argued that ticket revenues only covered 20% of the costs of producing a classical concert, and this model “simply wasn’t sustainable.”
• Peter Gelb, General Manager of the Metropolitan Opera complained that “the percentage of operating costs covered by donations is 48 percent. That’s unsustainable. It’s not a business model.”
• Leaders of the San Diego Opera proclaimed that opera was no longer a sustainable art form in San Diego—labor costs had become prohibitive, former levels of fundraising were no longer feasible, and audiences were shrinking.
• Just this month, Twin Cities Business ran an article about the Minnesota Orchestra with the blaring title, “Does The Minnesota Orchestra Have Sustainable Labor Contracts?”
• And yesterday, the board of the Binghamton Philharmonic in New York cancelled the orchestra’s season opener, with Executive Director Brittany Hall saying, “Unfortunately, this orchestra needs to look toward the future and remain sustainable and viable.”

Unfortunately, leadership in each of these cases was completely wrong about “sustainability” and how to achieve it.

How so? Three reasons come to mind.

First, their understanding of “sustainable” was far too narrow, focusing exclusively on a particular, financial criterion. Second, they were inappropriately using an understanding of the term derived from the for-profit arena, and trying to graft it onto their non-profitorganizations. And finally, in each and every case, they tried to make their organizations “sustainable” by imposing a simplistic set of solutions to the problem: sharp cuts in the compensation packages of their union musicians and workers, plus an equally sharp reduction in programming.

With respect, this is no way to build sustainability. On the contrary, this a recipe for disaster.

I propose a different way of looking at sustainability—using more holistic criteria that can better ensure that arts organizations can, in fact, thrive into the future.

                                                  The Arts as Non-Profit Businesses

First, a couple of points. Many people seem to think that non-profits, and non-profit arts organizations in particular, are not businesses. They are. Absolutely. An ensemble like the Minnesota Orchestra employs around 90 musicians, a similar number of full-time staff, and a comparable number of part-time staff. These are real people working at real jobs, who pay taxes, have mortgages, buy cars and other durable goods, go to school, and in all sorts of ways contribute to the economy.  Plus, the Orchestra not only generates revenue itself, but serves as a catalyst for other economic activities such as restaurants and parking.  The City of Minneapolis estimates it lost $2.9 million in parking, dining and other business as a direct result of the Minnesota Orchestra lockout.

And it’s not just the Minnesota Orchestra that has an impact. Each year, the City of Minneapolis produces the Creative Index report that analyzes the economic impact of the creative sector, including music, theater, and the arts as a whole. In 2013, the arts contributed $830 million into the city’s economy, with $311 million coming specifically from non-profit arts organizations. Also, approximately 5% of the entire workforce of Minneapolis worked in the creative sector, primarily as photographers, musicians, and writers.

These are real numbers, and it is clear that arts organizations—and non-profits generally—play a critical role in the economy and in the community.

But at the same time, a point that I’ve hammered home again and again here on my blog is that non-profits have to be recognized as non-profit businesses. They are fundamentally different from for-profit enterprises, and thrive by following a very different business model. Based on my own experience as President of the Board at an arts non-profit (the Minnesota Chorale), I’ve found that leading a nonprofit requires a whole different type of skills and strategies than are needed in for-profit business.

Non-profits stand apart in that they are designed to meet a critical social need, or provide an important service to the community. They are driven by a stated mission, and their success or failure is ultimately determined by how effectively they live up to that mission. Yes, there absolutely is a business and financial aspect to doing this, but the business and financial strategies and decisions are always in service of the outcomes, not the profits.

In recognition of this special status, the IRS grants non-profits 501 (c) (3) status, which creates a special tax status and allows them to fundraise to support their operations. This is key—a non-profit that engages in fundraising has very different set of income streams than a for-profit business, and has to act accordingly.

Fundraising is not a sign that the organization’s business model has failed, and it is not a last-minute, shameful attempt to balance the books. On the contrary, it is an integral part of the organization’s business model and overall financial strategy.

So again—to be clear, an arts organization like the Minnesota Orchestra or the Minnesota Chorale is a business. But we cannot lose sight that it is a non-profit business. And that changes the equation as to what makes it “sustainable.”

Click here to read the entire article at Mask of the Flower Prince