When orchestra boards fail us

Financial Vice-President's Report

Volume 113, No. 10November, 2013

Tom Olcott

Last month was musical hell. We lost the New York City Opera, and the situation in Minnesota got even worse, thanks to the sad departure of its music director, Osmo Vänskä. But the larger issue is how the media likes to play these stories, which is that “market forces” are responsible for the woes of the classical music. It’s all about supply and demand, say the pundits. But that’s wrong.

Few reports investigate the underlying failures of imagination and effectiveness of the economic masters of the symphony orchestra, which are its boards of directors. Few reports evaluate the ability of boards to identify funding sources. Few stories point to successes in the field. In short, the press coverage of all these matters is woefully incomplete – and sometimes inaccurate as well. Our colleague Bruce Ridge, the chair of ICSCOM, has written an eloquent evaluation of the press coverage of our industry, but the analysis of board effectiveness is, to my knowledge, unexamined in a general way.

As to the media coverage of the New York City Opera’s downfall, we actually have an example of well-researched story. On Oct. 12, the New York Times published a story written by the widely experienced and estimable economics correspondent James B. Stewart. He describes the opera’s incompetent executive board, repeatedly requesting the state’s permission to drain its endowment in order to address operating expenses. The permission to drain a New York-registered nonprofit organization’s endowment requires the approval of the state attorney general. It seems that Andrew Cuomo (who was attorney general at the time) approved all such withdrawals. The bottom line, as the Stewart article describes, is that a vast endowment was drained in order to pay operating expenses, while, at the same time, the operating expenses component was not seriously understood by the board and was, therefore, not appropriately funded. The state is supposed to provide oversight of a nonprofit’s board and to preserve a nonprofit’s endowment. This didn’t happen. NYCO was free to ignore its statutory obligations, and the state was apparently either ignorant of NYCO’s true financial circumstances, or complicit in the decision to take NYCO down. As reported, this is very much not a pretty picture, and to date there is no alternative depiction of NYCO’s demise.

And then there is the Minnesota Orchestra, a premier performing ensemble, now locked out for more than a year, while its board has authorized the renovation of its performing space lobby and demands 25 percent pay cuts to the musicians. The board’s stance has led to major defections from the orchestra’s performers, including, as I’ve said, music director Osmo Vänskä. There is no end in sight to this dilemma. Thankfully, AFM members nationwide have pledged assistance to the Minnesota Orchestra musicians, and this year’s AFM convention alone raised $71,000 in donations. (To donate, visit Ironically, the Minnesota Orchestra’s board is not as committed. Apparently, according to the board, there will be no major orchestra in Minnesota. That board would rather have a restored venue than an orchestra to fill it.

That might sound familiar. The Koch Brothers restored the New York State Theatre at Lincoln Center to make it more “opera-friendly.” A costly endeavor, to be sure. Now the opera is gone. The Minnesota Orchestra opted to make major hall lobby renovations. A costly endeavor to be sure. Now that orchestra has been locked out for more than a year. No one knows if the Minnesota Orchestra is as “gone” as NYCO, but who can say? Does renovation equal dissolution?

Most importantly, who can regulate the amazing irresponsibility of the boards, whose behavior has led to these incomprehensible, unnecessary and irresponsible results? Apparently not the state government, although that is supposed to be its job.

My only certain conclusion is that the incredibly skilled musicians of the AFM have nothing to do with these execrable outcomes. Our aim is to preserve our art, and our participation in that art. Can boards meet that simple goal? Stay tuned, because the simple answer remains unclear.