Keeping Stable During Tough Times

Financial Vice President's Report

Volume CX, No. 5May, 2010

Jay Blumenthal

It would certainly be my preference to start this column on an upbeat note. However, throughout 2009 the economy remained mired in the doldrums and the music business continues to struggle.

The deficit we experienced at Local 802 in the first half of 2009 deepened considerably over the second half of the year. As compared to the $17,124 deficit on June 30, 2009, we ended the year (December 31, 2009) with a deficit of $180,538. This deficit is due primarily to diminished work opportunities for our members resulting in a reduction in the amount of work dues coming into Local 802.

While our increased deficit is alarming, we are fortunate in having experienced several years of surpluses which allow us to absorb what turned out to be a very challenging 2009.

The bulk of our income comes from work dues derived from three areas of the music business – Broadway, Lincoln Center and recording. These three areas of the business generated significantly less work dues income than expected in 2009.

By comparison, in 2003 we had well over 400 seats filled by musicians on Broadway. Today we have approximately 270 seats filled by musicians. This reduction is due to fewer musicals (more straight plays) and some musicals using smaller orchestras (in part due to “special situations,” which allows producers to use less than the minimum number of musicians for that particular theater).

The result was an 18 percent reduction in work dues income from Broadway when compared to 2008.

Recording work dues income was down 23 percent due in part to less jingle work, a gap in reuse payments between the end of the Conan O’Brien Show and the start of the Jimmy Fallon Show and less New York film scoring.

Work dues income from Lincoln Center (the Met, New York Philharmonic, New York City Ballet and New York City Opera) was down slightly (4 percent) in 2009 compared to 2008. This decrease is attributable mostly to fewer work weeks for New York City Opera.

Finally, nearly every sector of our business showed lower work dues income for 2009, down an overall 18 percent when compared to the prior year.

In dollars, we received $788,589.61 less in 2009 work dues income than we received in 2008.

Without any real improvement in sight, our challenge has been (and continues to be) practicing fiscal restraint while maintaining the high level of service our members have come to expect and supporting initiatives important to achieving union goals and objectives.

The new officers have taken steps to curb controllable expenses.

The normal annual increase for non-bargaining unit Local 802 staff was lowered to cost of living only.

Rates for vendor contracts have been negotiated aggressively in an effort to reduce costs.

In addition, since work has slowed, when feasible we have combined certain staff positions as vacancies arose.

These cost cutting measures should help, but nothing will have as positive an impact on our bottom line as an improved economy with all musicians returning to work.

Until that time, if the deficit continues to grow significantly, more difficult decisions could be in the offing.

Proprietary software

Implementation of the core modules of our Local 802 proprietary software is scheduled to occur this month.

As these core modules mostly impact our internal workflow, members may not immediately experience huge changes in the way they conduct their business with the local.

However, as other modules are introduced, members will eventually enjoy the ability to pay dues online, view personal union information and contact various Local 802 departments.

Announcements will appear in Allegro, in Local 802 Notes and on our Web site as these new capabilities become available.

Computers and wireless

Just off the first floor Club Room we now have three computers set up for member use. Please feel free to stop by to check your e-mail or search the Web. If you happen to have your own computer, wireless service is now available on all floors of the union building.

LM-2 report

Local 802’s Labor Management report was completed and uploaded to the Department of Labor (DOL) website on March 25, 2010. Please take the time to visit the DOL site and review this information. The following address will get you to the query page.

On a personal note

As most of you are aware, this is the beginning of my third term as your financial vice president. I have served with three administrations, each of them quite different from the others. As expected, there is a learning curve for new officers – though Tino and John are acclimating quickly. The officers are working well together as a team and I look forward to meeting future challenges with both of them.