Investing

The Death Of Classical Music in America

1. Philadelphia Orchestra

  • Founded: 1900
  • Location: Philadelphia
  • Operating Revenue: $33.08 million (FY 2010)
  • Structural Deficit $14.5 million (FY 2010)
  • Allison Vulgamore, CEO (Since 2009)

The Philadelphia Orchestra was driven to seek Chapter 11 last month for the same reasons many private companies do:  its expenses ($46 million) were quite a bit higher than its revenue ($33.08 million).  . ‘Although The Philadelphia Orchestra has no long-term debt, it is operating at a significant loss based upon declining ticket revenues, decreased donations, eroding endowment income, pension obligations, contractual agreements, and increased operational cost,” The Orchestra said in announcing the bankruptcy.  A spat of emergency fundraising was expected to reduce that shortfall to $5 million, but that only covers this season.  Undaunted, the Orchestra is planning a $160 million fundraising campaign.   The orchestra was without a CEO for 10 months, which surely didn’t help matters.

2. Baltimore Symphony Orchestra

  • Founded: 1916
  • Location: Baltimore
  • Total Revenue: $21.7 million (FY 2009)
  • Deficit: $5.3 million
  • Paul Meecham,  CEO

The Baltimore Symphony Orchestra is faced with the unenviable problem of competing for corporate patrons and ticket sales with National Symphony Orchestra in neighboring Washington,  D.C.   Its struggles have only gotten worse as the economy slowed down.  Charity Navigator shows it has a negative net asset value of $3.3 million.  In 2010, musicians agreed to accept a pay freeze for this season and take a 16.6% pay cut for the next two seasons.

3. Columbus Symphony Orchestra

  • Founded: 1951
  • Location: Columbus, Ohio
  • Total Revenue:  $6.9 million (FY 2009)
  • Surplus:  $285,529
  • William B. Conner, Jr., Executive Director

The Columbus Symphony Orchestra calls itself the only full-time professional orchestra in Northern Ohio. Unfortunately, its modest financial success  has come at a steep price. In March 2010, the musicians agreed to $1.1 million in wage cuts through 2011.  The organization’s board had threaten to shut its doors permanently unless wage concessions were made.

4. New York City Opera

  • Founded: 1943
  • Location: New York
  • Total Revenue: $5.99 million (FY 2009)
  • Deficit: $5 million (Current)
  • George Steel, General Manager and Artistic Director

The New York City Opera was founded to make opera accessible to American audiences, perform new music and to give breaks to U.S. born singers.   Think of it as an alternative to the Met.   The current season is up in the air.  We’re working very hard to get this institution on a sound financial footing,”  Board Chairman Charles Wall told The New York Times that he is donating $2.5 million to help cover the deficit and seeking contributions. “The opera has ceded time to New York City Ballet, with which it shares the David H. Koch Theater, in exchange for a reduction in payments,” the paper says.

5. Houston Symphony

  • Founded: 1913
  • Location: Houston
  • Operating Revenue: $8.72 million (2010)
  • Deficiency From Operations (2010) $14.85 million
  • Mark Hanson, CEO

In 2009, The Houston Symphony announced sweeping austerity measures including furloughing musicians and staff and reduce the pay of conductors to save $900,000.  It didn’t seem to do much good.  The organization’s annual report shows that its deficit in 2010 was $14.85 million, the highest it’s been since at least 2006. Revenues were at their lowest level since 2007.  As of the 2009 fiscal year, the Orchestra had negative net assets of $16.1 million.

6. Detroit Symphony Orchestra

  • Founded: 1914
  • Location:  Detroit
  • Total Revenue: $23.58 million (FY 2009)
  • Deficit: $11.89 million (FY 2009)
  • Anne Parsons, CEO

The Detroit Symphony Orchestra has had a rough few months, including a six-month long musicians’ strike that was settled this month.   According to Dynamic Arts Consulting, the DSO has been caught in an economic maelstrom since the start of the recession as Detroit’s auto industry fell into decline.   Its finances are a mess as corporate support withered away.  “The financial crisis of 2008 greatly affected the DSO, which subsequently lost $19 million in ticket sales and remains in default on the terms of its $54 million real-estate debt (to build Max M. Fisher Music Center and restore Orchestra Hall),” the company says.  The rest of the season has been canceled.