The Pittsburgh Symphony Orchestra, under a looming mandate to strip away its deficit to win major grants that will help sustain the organization, is making strides in that direction.
The PSO will have a deficit of $1.475 million at the end of the 2012-13 fiscal year, which ends Saturday. That's roughly half of what it was at the end of the 2011-12 fiscal year.
Along with the new musicians' contract that in June was negotiated a year ahead of schedule and was made possible by a $1.2 million gift from Michele and Pat Atkins, the deficit reduction is a positive development for the PSO. Like many American orchestras, the organization has struggled to stay out of the red in recent years.
"Given that our deficit last year was $2.9 million, I'm very happy with the progress," said CFO Scott Michael.
Despite the reduction, "we were looking for a deficit that was going to be much better," he said. The figure was hurt by an unsuccessful Broadway series, which generated lower than expected tickets sales.
The PSO must balance its books by 2015 to qualify for a $5 million grant from the Heinz Endowments. If it does so for three consecutive years, it will receive an additional $12 million from the Simmons Family Foundation. Mr. Michael is optimistic about the PSO's prospects for meeting those goals.
"We're on a glide path to balance the budget by [2014-15]," he said.
The deficit reduction was made possible by both revenue generation -- including continued annual fund growth, higher ticket sales, successful rentals of Heinz Hall and resumed state funding -- and cost-cutting measures.
Annual fund growth has lingered at around 5 percent for the past 30 years. The state of Pennsylvania chipped in $700,000 in grants. The PSO received no state funding in 2011, though it had received upward of $2.5 million in previous years.
The PSO will focus future efforts to reduce the deficit on revenue generation, through higher ticket prices at some price points and beefed-up marketing efforts. Still, the PSO's average ticket price is among the lowest for peer orchestras, according to Mr. Michael.
He also said there will be cost-cutting measures, though he did not go into details about them. They will not compromise the artistic goals of the PSO, he said.
The PSO's budget for the 2013-14 fiscal year is $32 million, up slightly from $31 million this past year.
The deficit figure is subject to audits in October.
Elizabeth Bloom: firstname.lastname@example.org, 412-263-1750 or on Twitter @BloomPG.