Minnesota Orchestra Can Claim Both Best and Worst of 2013
NEW YORK (TheStreet) -- The 2013 Grammy-nominated Minnesota Orchestra's ongoing contract dispute between its musicians and board continues to amaze, showing both the best and the worst about the classical music world.
On the side with the worst, the orchestra's administration in October refused two contract settlement proposals from the musicians and, as a result, lost their music director Osma Vanska. Citing a $6 million deficit, the orchestra board claimed the musicians' concessions were not enough.
A spokesman for the musicians was quoted by the Minneapolis/St. Paul Business Journal Afternoon Edition Newsletter as saying management had "chosen to drive the car that is the Minnesota Orchestra over the cliff."The musicians have been locked out of the hall since October of 2012 during the ongoing contract dispute and concerts have been cancelled. Negotiations began in April 2012, six months before the existing contract expired. Management claims the musicians refused management's offer and failed to return with a counterproposal for over a year. Musicians disagree, claiming on their Web site that they have offered 10 proposals over the last year. On the side of the best, however, the musicians also have refused to accept that they can't play for audiences. Reformed as The Musicians of the Minnesota Orchestra, they have scheduled 10 concerts on their own, billed as "Music for Minnesota." Included in those concerts are guest soloist appearances by violinists Itzhak Pearlman and Joshua Bell. The group is handling all the organizational challenges themselves, including hall rental, marketing and contracts with soloists, and has so far raised $600,000 on their own to pay for the concerts, as part of a "March to a Million" fund drive.
Both the board and the musicians have said they would prefer to reach an agreement and the musicians have said they stand ready to fold the remainder of the concert season in with the Minnesota Orchestra should there be an end the stalemate. In the meantime, over the past year, the board completed a $50 million renovation to the group's concert hall, with most of the money, over $40 million, being raised by the board in a separate campaign. The board hopes to gain additional revenue through rentals of the hall. Fundraising for the hall was part of a larger effort to raise $110 million, the rest of which would go to the group's endowment and artistic initiatives. Target (TGT) was a major contributor. General Mills (G), United Health Group (UNH) and Wells Fargo (WFC) also offer significant financial support to the organization, in addition to funds the group receives from private donors and government grants. The work stoppage has resulted in a 24% reduction in non-musician salaries and benefits costs over the prior year season, according to a statement from Patrick Bowe, the board's treasurer, on the orchestra's Web site. However, the lockout has also raised legal and other costs, including workers compensation for the musicians, while drastically shrinking operating revenue as a result of the loss of ticket sales. From the beginning of the dispute, the board has contended that the group's large endowment, currently estimated at $140 million, cannot be repeatedly tapped to cover expenses. In a note on the orchestra's Web site, the board says that while the endowment can be used to cover expenses in an emergency, "If the Orchestra had continued to operate at its previous rate of spending, our endowment would have been depleted by 2018." It is unclear what projection of stock market performance was used for that estimate or if it includes the endowment portion of the current fund drive. The contract offer for musicians in September would have resulted in a 25% reduction in minimum compensation over three years. A prior offer would cut compensation by 30%. The musicians insisted that such a reduction would make it impossible to maintain the orchestra at its current level of expertise and professional reputation. They returned with a counteroffer, reducing salaries and benefits back to 2007 levels, a proposal described by the board as "too little too late."
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