Pittsburgh Symphony Orchestra makes 'great strides' financially, audit shows
The Pittsburgh Symphony Orchestra has begun to dig itself out of a financial hole, said a financial analyst who reviewed its 2013 audit.
The symphony's net assets climbed $23.6 million in 2013. A change in its pension obligations accounts for half that, said Ken McCrory, a partner in the Downtown accounting firm of ParenteBeard.
“By almost any measure, this was a very good year for the symphony. Two more years like this, and they will be in excellent shape,” he said.
Scott Michael, chief financial officer for the symphony, said its endowment reached $125 million this week. The audit shows an endowment of $115.5 million at the end of 2013. The symphony also lowered its deficit to $1.1 million in 2013 from $2.9 million the year before.
“I think we made great strides,” Michael said.
The symphony commissioned the audit because it is a requirement to receive funding from the Allegheny Regional Asset District, which supports parks, libraries, stadiums and cultural groups with half of the proceeds of Allegheny County's additional 1 percent sales tax.
“They had a good year in the growth and the value of their endowment. They also showed continued strength in contributed support, but they still have a deficit that they haven't been able to close,” said David Donahoe, the asset district's executive director.
The symphony is seeking $1.2 million from the district for 2015, up from the $1.1 million it received for this year.
“The PSO continues to face significant financial challenges,” symphony officials wrote in their application for funding. The application predicts deficits of $1.4 million in 2014 and $716,248 in 2015.
The financial health of a performing arts venue can affect everything from ticket prices, the number of performances, the size of an orchestra to the very survival of the organization. Musicians of the Minnesota Orchestra went back to work this year after a 15-month lockout and a $1.1 million deficit in fiscal 2013. The Philadelphia Orchestra emerged from bankruptcy last year after reducing the number of musicians and their pay.
The Pittsburgh Symphony's audit, conducted by the Downtown firm of Schneider Downs, also says that between 2012 and 2013:
• The annual fund soared from $7.1 million to about $12 million.
• Investments grew $9 million.
• Revenue from non-orchestra performances or the rental of Heinz Hall rose from $400,000 to more than $2 million.
Expenses for the orchestra and administration, meanwhile, remained at about $21.5 million. The cost of productions and maintaining Heinz Hall grew from $11.5 million to $13.8 million.
“It's hard to control costs on buildings. If a roof leaks, you can't put it off,” McCrory said.
Michael said the symphony board plans to finish a strategic plan by the end of the year that aims to boost revenue. The board is scheduled to approve a fiscal 2015 budget next week.
Bill Zlatos is a staff writer for Trib Total Media. He can be reached at 412-320-7828 or email@example.com.