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Saving the symphony

| Tuesday, Sept. 9, 2003

The Pittsburgh Symphony Orchestra can wipe out a projected $3 million deficit if all the players follow the score, contends the head of its board.

"I am cautiously optimistic that if all the constituencies participate in the solution, we can eliminate the deficit," said Tom Todd, chief executive and president of the symphony board. "We have a plan to do it."

He was discussing a projected $3 million deficit this season that is $500,000 more than originally estimated. This prediction comes on the heels of a $1.5 million deficit in 2002-03.

Todd declined to specify all the elements of the plan, but cited a few:

  • A 9 percent increase in annual donations on top of last year's 16 percent increase.

  • More sharing of services, including ticketing, with other Downtown arts groups. The symphony already shares such services as buying, health insurance and credit card processing. "I think the symphony can save hundreds of thousands of dollars," Todd said.

  • Increased support from foundations and government, including the county Regional Asset District. Todd appeared Monday night to ask the RAD board for $1.5 million for 2004, which is about twice what the symphony received this year.

    The biggest piece of the pie, however, is the one Todd declined to discuss: musicians' salaries and benefits. That accounted for 46 percent of the symphony's $31 million budget last year.

    Zachary Smith, a spokesman for the symphony's 99 musicians, said the players' median salary is about $90,200. In contrast, the base for the Chicago Symphony Orchestra is $100,000, said its spokeswoman Synneve Carlino.

    Management and the musicians extended the current contract through Sept. 21. Management has asked the musicians for $1.5 million savings in salary and benefits. The two sides will meet again Thursday.

    "We'll do what we can from our end," Smith said. "But there's a limit to how far we can go without causing permanent damage to the organization."

    He traced the symphony's financial problems to the board's inability to increase annual giving to an adequate level. Pittsburgh ranks next to last in per capita donations among the 22 largest orchestras in the country.

    "A financial structural deficit simply means the board has failed to raise enough money to support the organization," Smith said.

    The symphony's financial problems are as intricate as a Beethoven composition.

    The 13 top orchestras in the nation typically dip into their endowments to balance their budgets. Before the recession, they drew an average of about 13 percent of their money from their endowments, according to the New York City-based American Symphony Orchestra League. During the recession, that figure climbed to nearly 18 percent.

    Pittsburgh, in contrast, relies even more on its endowment and reserves. They provide 26 percent of its revenue.

    Like other major orchestras, the Pittsburgh Symphony's endowment -- the money it has invested -- took a hit with the decline of the stock market. Its endowment plunged from a high of $133 million in 2002 to less than $84 million in March.

    The symphony's other two main revenue sources are ticket sales, which cover 30 percent of its budget, and annual contributions, which cover 22 percent. The symphony plays in a market that is not only tiny compared to its peers, but shrinking. That means fewer people are able to buy tickets and make donations.

    To the nation's top symphonies, talk of deficits is as familiar a sound as Mozart.

    The Philadelphia Orchestra has run up deficits in each of the past six years and anticipates red ink of $2 million in each of the next five years unless it rights its course, the Philadelphia Inquirer reported Wednesday. As a result, management urged musicians to open their contract a year early because some potential donors would make gifts only if the symphony brought its finances under control.

    The Chicago Symphony Orchestra recorded a $1.3 million deficit in 2001 and a $6.1 million last year, Carlino said. She said a weak economy initially reduced ticket revenue and donations and lowered the orchestra's endowment.

    Chicago balanced its books this year, but expects a deficit of $3 million to $4 million next year.

    "Everybody's in the same boat," Todd said. "The question is, is a world-class orchestra worth the extra effort and funding• I think so far the community, by the extra funding we received this year, is indicating yes."

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