Elizabeth Bloom's Pittsburgh Symphony Orchestra strike chat transcript: 10.13.16
October 13, 2016 11:13 AM
Members of the Pittsburgh Symphony Orchestra went on strike Sept. 30.
Elizabeth Bloom: Welcome to the chat. We'll get started at 1 p.m., but feel free to submit questions now.
Elizabeth Bloom: All right, here goes. Feel free to ask more questions if the spirit moves you.
Guest: How long do you think the strike will go on?
Elizabeth Bloom: Last week, I was asked on WESA whether I expected the strike to last as long as the PSO’s previous work stoppage – which was 46 days, in 1975. I would say the answer to that is yes. Management has said its last contract offer was its best one, and there are no plans I know of to get back to the negotiating table. And the musicians seem very firm in their unwillingness not to accept that last, best and final offer.
psu: What % of the overall costs of the PSO go to musician salary? Especially when compared to administrative and marketing salaries/costs.
Elizabeth Bloom: It was about 48 percent of the budget last season. Total artistic costs (e.g., musicians’ salary and benefits, fees for guest artists, music director salary, etc.) amounted to about 70 percent of the budget. Management has told me administrative costs and marketing costs each represent 12 percent of the budget, and hall operations are 6 percent.
At about $32 million, the PSO is a lean organization, compared with other orchestras of this size. Management has described other efforts to cut costs, including slashing salaries of the senior staff and not hiring full replacements (for now) for two big administrative positions.
Guest: Doesn't the PSO have a big endowment? Why doesn't it take money out of that?
Elizabeth Bloom: Don't quote me, but last I checked, the endowment was about $115 million. It already takes out 7 percent of its endowment — and that is currently the legal limit in Pennsylvania. It’s really hard to build up an endowment if you take out as much as it is likely to grow in a given year, so the organization would like to reduce that draw.
worldssmallestviolin: Isn't 91K enough to live on in Pittsburgh? Can't they make money teaching private lessons in their 10 weeks of vacation?
Elizabeth Bloom: Certainly, $91,000 is a healthy salary for most folks in Pittsburgh. The musicians would counter that they don’t compare their salaries with what typical Pittsburghers make, but rather with other orchestras. Their 2015-16 base salary (~$107,000) would currently rank 10th in the country (and probably about 3rd or 4th if you include cost of living), and musicians would like to remain in the top 10 because they believe that would ensure they stay one of the best bands in the country. (Also, even during vacation, musicians still have to practice to keep up their chops.)
Yes, a lot of them do teach privately or at local universities. Musicians also point out that they often have played their instruments for decades and have spent immeasurable amounts of money on school, instruments, lessons, auditions, etc. Of course, those matters – whether compensation for lingering student debt or arrangements to offer private lessons – aren’t negotiated in the contract.
Management counters that slashing salary won’t affect the orchestra’s quality, given the number of talented musicians seeking work these days and what they argue is still a competitive salary and benefits. Most musicians make more than the base salary, and the orchestra will continue to do other prestigious activities (such as make recordings, go on concert tours, etc.). And managers also say the organization simply can’t afford to pay musicians a base salary of $107,000 much anymore.
Jamie: Is Peduto doing anything to mediate?
Elizabeth Bloom: As far as I know, no, at least not right now, although I've seen some stuff on the PSO musicians' Twitter feed asking him to weigh in. My guess is he'll stay mum on the issue unless it gets really ugly. The PSO is a big boon to Pittsburgh's reputation — a way the city sells itself to companies thinking about opening headquarters here, for example — so I expect he would be interested in making sure nothing grave happens. He got involved in the August Wilson Center debacle, although that organization isn't really comparable to the PSO.
Guest: Will this affect other events at Heinz Hall, like the Elvis Costello concert?
Elizabeth Bloom: It could. Even if the PSO musicians aren’t involved in a concert, other members of the American Federation of Musicians might be, and any union folks are barred from crossing the picket line (it comes with a steep fine and a lifetime ban from the union, from what I understand). So if guest artists have union musicians, they’ll almost certainly have to postpone or cancel. Other artists may decide to cancel or reschedule out of solidarity. On social media, the musicians have made pleas to artists booked at Heinz Hall to “honor” the picket line. Comic Brian Regan postponed his Oct. 8 show because of the strike, although I can’t say whether he had AFM musicians. It won't affect non-Heinz Hall events, like Pittsburgh Ballet Theatre or Pittsburgh Opera, since those organizations have their own orchestras.
Brian: A large percentage of the Pittsburgh season seems to be pops -- movie music, 80's rockers, cabaret crooners, etc. Presumably they feel these concerts will draw new audiences. Do you know how their ticket sales have been for these concerts? Are weak ticket sales partly to blame for their financial troubles?
Elizabeth Bloom: It really depends. Up until last year, both pops and classical concerts were on the decline, and special events (e.g., one-off concerts with Nelly) are bound to vary. This past season, the PSO used a marketing consultant who was able to increase ticket sales for classical and pops concerts. It was really visible in the hall, which was much fuller overall this season than I'd seen in the previous two seasons, when there was a precipitous decline. So, yes, they certainly need to look at increasing revenue, and management has plans to grow its subscriber base (which tends to be the folks who become donors). But if you're trying to lose weight, dieting tends to be a lot more effective than exercise. Similarly, cost-cutting measures are always going to be a more straightforward way to balance a budget than increasing revenues. I'll also point out that there isn't much correlation between pops/special audiences and classical audiences — just because audiences went to see a Nelly concert doesn't mean they're going to want to hear Brahms and Mozart the next season.
egbdf: What about efforts to increase revenue? Cutting costs will not be a long-term solution.
Elizabeth Bloom: (See above)
Andrew: Where is Honeck in all of this? Seems he should have at least some presence in the discussion
Elizabeth Bloom: Andrew is referring to music director Manfred Honeck. The maestro issued a statement for my first full story on the strike: "I regret that the negotiations between the management and the musicians of the Pittsburgh Symphony Orchestra have not resulted in an agreement, and that the musicians are on strike. The PSO has reached the highest levels of artistic quality with a truly global reach. I am hoping for a swift resolution so that we can get back to the business of being one of the greatest orchestras of the world.”
But he has declined to weigh in after that pretty diplomatic comment. And that's not surprising. He's an employee of the organization, but he works closely with the musicians. He was seen wearing a PSO musicians' T-shirt in August, when the orchestra was at the Aspen Music Festival, but I don't know if we can read into that too much, especially since it was before the strike. In previous instances of work stoppages, the MD's opinion can indeed carry the day. Osmo Vanska of the Minnesota Orchestra (which was locked out for about 15 months) said he would leave if things weren't worked out. Lo and behold, things were worked out. I don't anticipate Mr. Honeck getting to that point anytime soon.
worldssmallestviolin: Where's Fiddlesticks? Is he on strike too?
Elizabeth Bloom: Never much of a talker, Fiddlesticks, the PSO’s feline mascot, declined to comment.
Andrew: Can you explain the sticking point regarding retirement compensation? Seems switching to a 401(k) wouldn't be a huge blow to the musicians.
Elizabeth Bloom: Yeah, it's a little thorny. In management's last, best and final offer, they proposed immediately transitioning all musicians to a defined contribution plan with an 8 percent contribution. (The pension was frozen to new musicians several years ago, so the pension already applies only to some musicians.) Musicians, in their last proposal (which isn't their last/best/final), suggested waiting until 2019 to transition everybody over and proposed that musicians receive differing amounts of contributions (up to 25 percent) based on their ages, to ease the transition for people close to vesting their pension. Management said that would cost more than the current DB plan.
Jamie: What's the perception "on the street?" Are people in general on the musicians' side, or the orchestra administration's side?
Elizabeth Bloom: I would say the musicians have more support in the court of public opinion. They have been very active in seeking out that support — they're on Twitter all the time, they've presented their own concerts, asked people to write letters to the newspapers, etc. But it's a little easier, especially in Pittsburgh, to be on the union's side than it is to be on the administration's side and scream "fiscal responsibility!" My guess is there are a few folks who agree with management who haven't expressed it.
musicfan: Any chance they'll hire replacement musicians?
Elizabeth Bloom: I would say almost none. It would be a bad PR move, not to mention a bad financial one. For most orchestra concerts, the musicians cost more than the organization could possibly recoup in ticket sales. Paying a worse band to come in would seem unwise.
Guest: Doesn't it hurt the PSO management not to present the orchestra in concert? They lose all those ticket sales.
Elizabeth Bloom: Well, in the non-profit model, the organization in general saves money by not spending it on musicians’ salaries. Certainly, there are concerts here and there that make money, but I think management doesn’t have much of a financial incentive right now to budge on its final contract offer. But if some donors are upset at what’s going on and pull back their gifts or view the organization as not an attractive place to donate, that could make things hard going forward.
egbdf: Why are the CEO, COO and Board being so silent? I keep waiting for them to try to explain to the community their side, but they just cancelled concerts and went into frozen silence since 9/30.
Elizabeth Bloom: Like I said, I think it's a little bit harder for them to make their case, but they have made some efforts. Representatives for management appeared before the Post-Gazette editorial board, they've gone on some TV stations, and they've made their own website. But I agree with you, they have been much more silent than the musicians.
musicfan: Why should tax money fund an orchestra that only appeals to a few people? Can't we let market forces decide how much these people get paid?
Elizabeth Bloom: Well, that’s why the orchestra is a non-profit. As someone once pointed out to me, if orchestras made money they would be like 7/11s — one on every corner. The government subsidizes organizations and allows them to fundraise precisely because those organizations’ missions cannot be supported by the typical supply-demand model, but their mission provides other benefits to society. If we didn’t have non-profit organizations, we wouldn’t have a lot of the things that make our lives richer — whether orchestras, opera companies, museums, theater…not to mention a whole bunch of other organizations that provide health care, social services, etc.
Even with the overall decline in ticket sales, tens of thousands of people attend the PSO’s concerts each year. And the orchestra represents Pittsburgh abroad in European concert halls and in recordings – it often bills itself as the city’s greatest export, a notion that the musicians are certainly hanging onto these days.
Andrew: Why was the Philadelphia strike resolved so quickly?
Elizabeth Bloom: Andrew is referring to the Philadelphia Orchestra strike, which happened to start the same day as the PSO's but was resolved less than 48 hours later. I'm not super familiar with what went down in Philadelphia, but it sounds like they met with a mediator and were able to agree to a new deal. The PSO sides met with mediators after management made its last offer on Sept. 18 but weren't able to get there. So, you just have to assume that the two sides were a bit closer in Philly than they are here. Philly also went through Chapter 11 bankruptcy several years ago (in which the musicians took a bunch of concessions), for what that's worth.
Doug: It would be great to have management and the orchestra committee chair on the TV set at the same time discussing the issues., Why has there been nothing like that yet?
Elizabeth Bloom: I wouldn't expect that to happen anytime soon. While the musicians are interested in getting back to the table, management has said it needs them to recognize the financial crisis before doing so. If they won't get together in private, why would they get together in public? It also wouldn't surprise me if lawyers for one or both of the sides advised against such a joint TV appearance.
Andrew: Why can't management pursue corporate donations more aggressively?
Elizabeth Bloom: Oh, I think they would love to pursue more corporate donations, and presumably will do so. But nationwide, corporate giving isn't what it used to be, and there are so many more organizations vying for those dollars than ever.
Doug: We keep hearing about the "new business model" that the board has come up with. Is there another orchestra of the caliber of the PSO where this new model — basically eliminating all special funding to close the gap at the end of the year — has worked?
Elizabeth Bloom: Doug, you sound like you might know a musician or two! The musicians would say, no, there is no example of this "new business model" working. They have pointed out the examples of the St. Louis Symphony, which slashed salaries by 30 percent (I believe it was in the 90s, but don't quote me on that) and is still running a deficit. And the musicians say that it's normal for an orchestra to run a deficit. But the administration counters that its financial needs are simply too large at this point, that it is not prudent to run continuous deficits, and that it already has borrowed from every possible source, including taking out a couple of loans that need to be paid back and drawing as much as possible from the endowment. Certainly, revenue growth absolutely needs to be part of the solution, but cutting costs will always be a more direct way to address the immediate cash need.
egbdf: When management says it needs the musicians to recognize the financial crisis, isn't that just a different way of saying management isn't interested in any negotiation at all and is only coming back to the table to accept their agreement? Surely there is a way for negotiations to move forward in a way that means each side is giving and taking in the conversation?
Elizabeth Bloom: Well, the most recent proposal from management was its last, best and final offer. Musicians rejected it, but they say they have a lot of wiggle room before they get out of that top 10 salary ranking that is so important to them. Certainly they could probably get a little bit closer on the matter of the DC plan, and it sounds like they're not far off on the hiring freeze. But the size and nature of that 15 percent salary cut is going to remain a sticking point.
Doug: Only who I've met on the picket line!
Elizabeth Bloom: Ha, fair enough!
Doug: Would musicians actually leave for greener pastures if manamgment gets its way? Seems that having the same job for $30k or $40k more in Cleveland or Philadelphia would be awfully enticing.
Certainly, some musicians will leave, and some are already looking elsewhere. The question is, can they be replaced with players of equal quality? Musicians say no, management says yes.
Elizabeth Bloom: Last call for questions!
egbdf: What can we in the community do about this? I understand both sides of the issue. How can we move forward or help them to come together to do so?
Elizabeth Bloom: Got $25 million?
egbdf: I'll get right on that.
Doug: Tha t $25 million is based on projections only right?
Elizabeth Bloom: Yes, Doug...based on projections. Well, it's actually closer to $20 million.
But all kidding aside, the musicians have posted a list of suggestions for ways to help, but that is obviously going to be biased toward their view. If you're truly right down the middle, like egbdf, then yeah, the $25 million donation would be the best route to go right now...that will get through that $20 million projection and then some.
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