Seattle Symphony resumes talks over expired contract; challenges remain

The Seattle Symphony's recent troubles have put it in the same company with orchestras nationwide whose economic woes have been thrust into the spotlight.

After eight months of talks, symphony musicians haven't accepted management's offer of a new contract, and the old one expired Dec. 31.

Musicians and management resumed talks on Friday.

Across the country, orchestras are seeing endowments tanking and donations plunging as the recession drags on.

Last week, musicians with the Cleveland Orchestra, one of the top-tier symphonies in the nation, walked off the job for a day over a proposed pay cut.

The New York Philharmonic, another of the top five U.S. orchestras, reported a $4.6 million deficit. And closer to home, the Bellevue Philharmonic shortened its season, reduced staff and cut musicians' pay.

At the same time, the symphony faces some unique challenges. It's negotiating a new contract with its musicians union while seeking to fill its two top positions. And its endowment is relatively low.

"It looks like the perfect storm with the timing," said James Tune, president and CEO of ArtsFund, which raises money for the arts in Western Washington.

The symphony is among an elite group of 25 professional orchestras nationwide with budgets over $15 million and contracts of at least 35 weeks of performances.

Founded in 1903, the symphony made tremendous artistic strides under the 26-year tenure of music director Gerard Schwarz.

Schwarz has announced he is stepping down at the end of the 2010-11 season.

Musicians' view

The musicians say they want the symphony to continue that artistic growth, and that pay cuts and other management proposals threaten that.

The latest offer was rejected unanimously by musicians' union members, who said the contract term of five years was too long. They also said the proposed pay cut — 10 percent — was too much.

Their minimum base pay is lower than that of a number of comparable orchestras nationwide: $78,750, with about $68,000 of that paid for by Seattle Symphony and the rest by Seattle Opera.

Minnesota contract

At the Minnesota Orchestra, for instance, the musicians negotiated a contract that would have taken them from a base of about $95,000 in 2007 to $120,016 in 2012, although the union recently agreed to make $1.8 million in salary concessions. (The Minnesota Orchestra's budget is about $8 million more than Seattle's.)

Seattle musicians also objected to a proposal allowing an unlimited number of unfilled positions, which they fear could be filled by less-qualified temporary players. Executive Director Thomas Philion says management intends to hire as the budget allows.

Artistic excellence

The symphony board and management say they are dedicated to artistic excellence but simply must balance the budget.

After two years of balanced budgets, it ended the last fiscal year with a $1.2 million deficit on a $24 million budget. The accumulated debt has reached $4 million. It's drawn about $3.1 million on a $4 million bank line of credit.

"We are experiencing a severe financial crisis which threatens our viability as one of the city's most revered nonprofit organizations," said board Chairwoman Leslie Jackson Chihuly, in a letter to the musicians.

The recession, unsuccessful attempts to get larger donations and the ineffectiveness of short-term, crisis-driven fundraising have led to cash-flow problems.

Furloughs instituted

The symphony has already cut six staff, instituted furloughs and frozen pension benefits.

"Donors have specifically asked us to ensure balanced budgets before they will write checks," Chihuly said in her letter.

Any union contract has to fit into a longer-term, five-year financial and artistic plan that includes sustained balanced budgets, she said.

In some financial aspects, the Seattle Symphony is a leader.

It's the top orchestra in the country for percentage of revenue that comes from ticket sales, according to the League of American Orchestras.

But it lags in its endowment, worth about $24 million, which is low. The board acknowledges it should be closer to $100 million.

Low endowments

But some other Seattle arts organizations have low endowments, too. Seattle Opera's stands at about $21 million; Pacific Northwest Ballet's at about $10.6 million.

Tune, the ArtsFund president, says endowments here are generally lower than at more established arts organizations on the East Coast, which were often funded by philanthropists more than a century ago.

In contrast, he says, many local arts organizations only started developing their endowments significantly in the 1980s, as the area became wealthier.

Another factor is that the symphony board spent much of its fundraising energy on Benaroya Hall, which opened in 1998.

"You can't build an endowment at the same time you're building bricks and mortar," said Melinda Bargreen, former longtime Seattle Times classical-music critic.

And typically it's harder to raise money for an endowment because it's not as glamorous, she said.

Wooing donors

For now, the challenge is to woo donors at a time when there's uncertainty over the musicians' contract and top leadership. In addition to Schwarz's departure, executive director Philion has said he will leave in June.

To assure donors, symphony management and musicians "collectively are going to have to present a plan that people find credible, that inspires the confidence of donors," Tune said.

"It's clearly not there yet. That doesn't mean it won't be."

Janet I. Tu: 206-464-2272 begin_of_the_skype_highlighting              206-464-2272      end_of_the_skype_highlighting begin_of_the_skype_highlighting              206-464-2272      end_of_the_skype_highlighting or jtu@seattletimes.com

Information in this article, originally published Jan. 23, 2010, was corrected April 5, 2010. A previous version of this story incorrectly stated that Gerard Schwarz was stepping down at the end of the current concert season.