How the Baltimore Symphony Orchestra found itself in trouble
BALTIMORE (AP) — Baltimore Symphony Orchestra made headlines in June after musicians, donors and members of the public learned the organization is in dire financial straits.
Here’s what you need to know:
The BSO was established in 1916 as a branch of the Baltimore municipal government. The orchestra later reorganized as a private institution in 1942 and now performs out of the Joseph Meyerhoff Symphony Hall.
On May 30, BSO officials abruptly canceled the summer concert series — only weeks after announcing it — and said it would move to shrink its season from 52 weeks to 40 weeks, cutting musicians’ pay and vacation time.
To protest management’s announcement, the musicians added an unscheduled selection to that night’s performance: Elgar’s “Nimrod,” a moving piece that conveys a feeling of loss. Brian Prechtl, co-chairman of the BSO players, told the crowd at the May 30 show that musicians would not be paid after June 16. Loud boos erupted the audience.
The orchestra has struggled financially for years, losing more than $16 million over the past decade, but musicians have fought to keep it a year-round orchestra, arguing that to do less would demote the ensemble from “a world-class symphony into a part-time regional orchestra.”
News of the summer concert series cancellations came just days after Republican Gov. Larry Hogan allowed a measure to become law without his signature that had been designed to fend off the shortened season. The Maryland General Assembly passed a bill sponsored by Del. Maggie McIntosh, a Baltimore Democrat, that would award the organization an additional $3.2 million in state funding for the next two fiscal years.
McIntosh’s legislation also requires a task force to come up with solutions for the long-term health of the BSO.
However, Hogan said recently that he would most likely not release the funding, saying the orchestra has already received millions of dollars in state assistance. Under Maryland law, the governor has the discretion to decide whether to release the first half of the funding in July.
Even if Hogan releases the emergency funding, it is likely not enough to stem the orchestra’s fiscal losses, according to BSO CEO Peter Kjome.
The Baltimore Sun obtained financial documents showing the orchestra’s fiscal health is in calamitous condition. Even factoring in additional state funding, the orchestra is projected to barely make payroll in July and August, according to cash forecasts for a 52-week season. The orchestra would likely end its fiscal year with an approximately $1.5 million deficit.
For a decade, the orchestra’s expenses have been greater than its revenues, Kjome said, owing to a number of factors. He said increased ticket sales, charitable donations and government grants or a larger endowment could help bolster revenues, but he argued expenses — such as nine weeks of paid vacation time for musicians — also need to be shrunk.
The BSO’s annual operating budget draws roughly $3.6 million a year from its $60 million endowment to support its operations. If the BSO could increase its endowment to $100 million, Kjome has said, it could draw almost $2 million more a year — or roughly the sum needed to break even at the group’s current spending levels, assuming its current donation rate remains constant.
Still, many saw the proposed shorter schedule leading to fewer donations and ticket sales, not more.
Amid the financial turmoil, the Local 40-543, the union that represents the orchestra’s musicians, is negotiating a new contract. BSO musicians have been playing without a contract since January, when the last one expired.
BSO officials announced June 16 that musicians will be locked out of a the band’s facilities at the Meyerhoff Symphony Hall beginning Monday as management continues to negotiate salaries.
Orchestra management proposed slashing its season from 52 weeks to 40 — and hacking musicians’ pay roughly 20 percent, leaving 75 people with mortgages or rents, tuition payments and medical bills two weeks to come up with alternate sources of income.
Prechtl, a percussionist in the orchestra, said musicians took salary cuts in 2010 following the recession while they have seen no similar cuts made to management’s salaries.
“This has been an ongoing process that began over a year ago with management and they have not really been up front about their intentions,” Prechtl said, adding that the orchestra’s board said they would not lock the group out during the negotiation process.
“This is a union-busting move,” he said.
Information from: The Baltimore Sun, http://www.baltimoresun.com