Are dinosaurs falling? Are deficits "structural"?

NPR had a story yesterday morning on Morning Edition that, rather than commit what used to be considered journalism, rounded up the usual suspects on the subject of whether orchestras in their current form are unsustainable (come to think of it, he said/he said different is what’s considered journalism these days):

2012 will go down as a year of orchestral turmoil in the U.S.: Strikes, lockouts and bankruptcies erupted time and again as once seemingly untouchable institutions struggled financially…
Both the Minnesota Orchestra and the Saint Paul Chamber Orchestra face large deficits, caused by declining revenues, increased expenses and the lingering effects of the poor economy. So [Minnesota Orchestra President and CEO Michael] Henson says his ensemble needs to cut $6 million a year from its budget, and that means cutting musicians’ salaries. “That is an approach that most orchestras have sought to avoid over the years,” Henson notes, “because for the most part they have sought to avoid the conflict that that produces.”

Well, that and the fact that, by doing so, their orchestras will sound less good as time goes by and the folks that run orchestras generally want to avoid that. And, of course, lots of orchestras have not found it necessary to “avoid” that approach because they manage to raise the revenue required to make that approach irrelevant. Henson’s own orchestra managed to avoid that approach for decades until Henson came to town with the orchestral equivalent of a shiny new sheriff’s badge.

A year ago, Stanford University economist Robert J. Flanagan published The Perilous Life of Symphony Orchestras, a book based on his study of the finances of more than 60 top orchestras.
He resists using the term “tipping point,” but he says the funding model for orchestras has always been problematic — and that the economic downturn brought things to a head. Many communities established orchestras in the 1960s and ’70s, aided by funding from the National Endowment for the Arts and by the philanthropic support of foundations and individuals. However, costs increased, and orchestras became more dependent on those donations to keep ticket prices affordable. Flanagan says that many orchestra boards also wanted to be generous to the musicians in the orchestras they loved.
“Of course there are two signatures on every collective bargaining agreement, so some of it reflects what the musicians push for,” Flanagan observes. “But some of it reflects what management seeks to sign off on. And it appears that over the years, many collective bargaining agreements have provided for more expense than the communities in which the symphonies are located can afford.”

Let’s be clear: there’s not a town in the US that couldn’t afford the orchestra it’s got if the community chose the orchestra as a priority. And there’s not a town in the US that wouldn’t make that choice if the town’s orchestra had the right board, making the right case to the community and the right choices internally to make orchestras more attractive to their communities.
Let’s also be clear that Professor Flanagan – who is a very competent economist and not a person who appears to be out to hurt anyone – is not an expert in the field of non-profit management, governance, or economics, and in fact does not appear to completely “get” just how profoundly non-profits differ from conventional enterprises – which, sadly, is something that he shares with many of our board members, a surprising number of managers, and an even more surprising number of musicians.

And this, according to Detroit Symphony Orchestra music director Leonard Slatkin, leaves an important question to be answered by each community: “How are we going to balance the incredible skill of these musicians, the need for music in the different communities, and what is a very difficult time in this country economically?” he asks.

More supportive music directors than Detroit appears to have would help. Does Slatkin really think that he knows anything about the economics of orchestras aside from how to get paid very, very well by them?

Bruce Ridge leads ICSOM, the International Conference of Symphony and Opera Musicians. He also plays double bass with the South Carolina Symphony. He points to the New Jersey Symphony, the New York Philharmonic and the Houston Symphony, which have all had extremely successful fundraising years. He says the National Symphony Orchestra in Washington, D.C., just negotiated a four-year contract that included raises for musicians.
“The question really to be asked is not why some orchestras have had difficulty,” says Ridge, “but rather why are some orchestras doing so well? How have they succeeded?”

That’s one question. The more important questions – and ones which both Bruce and the constituency that is ICSOM continue to dodge – are whether or not Flanagan might be right in believing that orchestras in their current form are unsustainable and what could be be done either to fix that or to avoid it.
The question that he folks quoted in this article, are trying to answer, without using the phrase, is whether or not orchestras have a “structural deficit” that can only get worse over time? One question they’re not trying to answer, though, is just how we’d know if we did or didn’t suffer from such an ailment. That’s odd, when you think about it, because the first question really can’t be answered until the second one is asked.
Which is what I’m going to do in the next post.