Pittsburgh Symphony Orchestra expects larger deficit, but aims to boost revenue
August 28, 2014 12:00 AM
Like orchestras across the country, the PSO has faced declining ticket sales but may be faring better than peer organizations.
By Elizabeth Bloom / Pittsburgh Post-Gazette
The Pittsburgh Symphony Orchestra is projecting a deficit of roughly $1.4 million at the end of its 2014 fiscal year, which concludes Sunday.
The figure is higher than last year’s shortfaIl of approximately $1.1 million, which had been revised from an initial forecast of $1.475 million.
If the PSO balances its roughly $30 million budget by the end of next fiscal year, it will be eligible for $5 million from the Heinz Endowments; if it does so for three consecutive years, it will receive $12 million from the Simmons Family Foundation.
“We are in talks with the Heinz Endowments and with the Simmons family quite often during the year, letting them know where we are and keeping them apprised of the financial situation, and we are working toward a balanced budget scenario,” said Scott Michael, the PSO’s senior vice president of finance and chief financial officer.
While he did not specify how the balanced budget would be reached, he noted that the PSO board is working on a strategic plan that will focus on increased revenue generation.
Like orchestras across the country, the PSO has faced declining ticket sales but may be faring better than peer organizations. For the decade beginning in 2002-03, ticket sales for PSO classical concerts fell 3.7 percent. The Chicago Symphony Orchestra had a smaller decline at 2.4 percent, while orchestras in Philadelphia (23.5 percent) and Cleveland (29.8 percent) experienced much more significant drops, according to data provided by James Wilkinson, PSO president and CEO.
“We have been very good over the last several years of maintaining expenses relatively flatly,” Mr. Wilkinson said, “but we haven’t been able to increase revenue to build any kind of a cushion, not only for providing increases to the musicians and to the staff … but just in general, the cost of doing business has gone up each year.”
He added, “The senior staff has been on the 10 percent salary reduction since March of last year.”
While the PSO has completed several strategic plans, “invariably the plan was created, put on a shelf, and nobody paid any attention,” Mr. Wilkinson said.
He believes this time will be different. The PSO has created a board committee to develop the plan and work with staff to ensure that its goals are met. It is expected to be finalized by the end of the calendar year.
The organization also has commissioned a motivational study to understand why people choose to attend or not to attend concerts. For example, the study is looking at members of certain demographics that typically attend these concerts to find out why they don’t go.
Despite the looming deficit in its operating budget, the PSO’s endowment grew about $10 million since last year to $125 million, Mr. Michael said.
Elizabeth Bloom: email@example.com or 412-263-1750. Twitter: @BloomPG.
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