Pittsburgh symphony upbeat despite $1 million deficit
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A tentative look at the Pittsburgh Symphony Orchestra budget shows a $1 million annual deficit, but there are reasons to be optimistic about the orchestra's growth and fiscal stability, President Larry Tamburri said yesterday.
Last year's budget was $1.2 million in the red, so the deficit for the 2005-2006 year was incrementally better. Mr. Tamburri said draft numbers on other important parts of the symphony's finances -- including ticket sales, its endowment and annual fund-raising drives -- are experiencing growth that should help further.
The Pittsburgh Symphony Orchestra is one of the oldest orchestras in the country and respected worldwide for its virtuosity; it often receives top accolades when it tours Europe, as it did recently following a tour of the United Kingdom.
A new "chairman's council" organized by PSO board chair Richard P. Simmons is also coming to the symphony's aid. The council will be stacked with about 20 Pittsburgh-area business leaders, who will work on revitalizing symphony finances.
"We're seeing progress for our organization on several fronts. I am optimistic, barring any unforeseen circumstances," he said in an interview yesterday, before the PSO's annual meeting. "The important trend lines are trending positive, and that's a really good sign."
Those trends include:
Increased ticket sales. Ticket revenues dipped to less than $2.6 million in 2004-2005 but are back up to roughly $3 million now. Mr. Tamburri said he did not have an exact count on how many tickets were sold, but said the PSO is on track to sell Mellon Grand Classics subscriptions to 55 percent of the house at Heinz Hall, as opposed to 33 percent two years ago. The symphony changed its subscription plan last year, which may affect those numbers.
Increased net assets. The PSO's assets, which largely include its endowment fund and ownership of Heinz Hall, have risen from $105 million in 2001-2002 to more than $120 million in 2005-2006.
The symphony dips into the endowment fund each year to help pay its operating expenses, taking about $6 million the last budget year. The endowment grew by $10 million over the year, so after covering the $6 million in operating expenses and the deficit, $3 million was left over.
Mr. Tamburri said no layoffs or other cuts should be necessary to offset last year's deficit, saying it would be dampened by the growth in the endowment and ticket revenues. It is also pursuing additional government grants.
The symphony's budget is usually about $30 million each year. Salaries and benefits for musicians make up about 70 percent of expenses; the income side of the ledger is fueled by ticket sales, annual fund-raising, the endowment and government grants.
The PSO has long-term challenges, in artistic direction as well as paying the bills.
As for the long-term budget, the symphony board adopted a strategic plan this summer, which may include a new capital campaign to fund both the endowment and Heinz Hall infrastructure needs. The chairman's council announced by Mr. Simmons will also address the fiscal issues.
Artistically, major symphony orchestras such as Pittsburgh are usually led by well-known music directors, who act as their public face and main artistic force. After the departure of the PSO's last director, Mariss Jansons, the PSO in 2004 adopted a new leadership model by hiring three men to jointly lead the orchestra .
With the announcement by one of those three -- Sir Andrew Davis -- that he will be leaving after next year, Mr. Tamburri said the new model will have to be re-evaluated.
"We wanted to have a model to work within for a two- to three-year period and wanted to see what works and what doesn't work with that, what the future might bring with that, and we'll have to make some decisions this year about that model," he said.
The PSO is "still working through the concept. We have found parts of it that have worked extremely well and some other parts don't work as well, so we really have to work on that this year."
Musicians have thrived by having more participation in the orchestra's leadership, he said, but others (both in the orchestra and the Heinz Hall seats) have pined for a single baton-leader to lead.
"Whether it's in part perceived or real," said Mr. Tamburri, "there are people who find the need for the icon to be extremely important."
First Published October 20, 2006 12:00 am