During the summer of 2013 it became increasingly clear to the management and board of the Milwaukee Symphony Orchestra that there would be a substantial operating deficit for the 2012–2013 fiscal year (which ended on August 31). This was due in large part to the withdrawal of several major annual gifts that functioned as bridge funding. A large annual deficit would be a problem in and of itself; what turned it into a crisis was the fact that the MSO had retired its credit line in 2011 with transfers from its endowment funds and had substituted for it a new, and much smaller, line of credit. The combination of the two made getting through the 2012–2013 season appear impossible to the board.
This cash crisis had its source in several long-standing problems. One was that the orchestra neither owns nor controls its main venue, the county-owned Uihlein Hall, so that the MSO competes for weeks in the hall with other tenants, including the Milwaukee Ballet, the Florentine Opera (for which the MSO is the orchestra), and touring Broadway productions. Another was the orchestra’s reliance on the United Performing Arts Fund, a kind of United Way for arts groups. Funding from UPAF had decreased almost $1 million annually over the past 10 years, while the obligations upon the board and management to help UPAF with its fundraising took a great deal of time. Combined with a chronically low earned revenue percentage and a succession of unsuccessful endowment campaigns, these factors all left the orchestra dangerously dependent on very high levels of annual giving for continued survival.
The Players’ Council (the local term for the orchestra committee) learned about the potential cash crisis in August. While no proposals had been made by management to re-open the collective bargaining agreement, which would be in its last year, the Council anticipated that most of the possible scenarios would require the musicians to have both legal and PR advice. So after the local sent Council chair Scott Kreger to the ICSOM Conference in August, the Council engaged attorney Kevin Case to help with possible negotiations and consultant Randy Whatley of Cypress Media (and ICSOM’s PR consultant) to assist in making our case public should the need arise.
The need did arise, and quite soon thereafter. On September 25 the Council, along with Kevin Case and Randy Whatley, met with MSO management and board representatives to hear their ideas for solving the problem. MSO President and CEO Mark Niehaus (who is on leave from his position as MSO principal trumpet) described his solution as one where everyone would do something: musicians, staff (whose numbers had already been reduced to below 30), the board, the big donors (who would have to come back on board), UPAF, Uihlein Hall, and the community at large. He de- scribed his growing discouragement, after he started in September 2012, with the mindset of some of the most powerful people in town, who believed that the solution to the MSO’s chronic financial issues was simply a much smaller orchestra (what became known as “the Naples model,” as many wealthy Milwaukeeans winter there and know the local orchestra). He made it clear that the board did not support that concept, but that significant savings were going to be required from the orchestra in order to make the other pieces of the solution fall into place, and in order to reach those savings, management was asking to re-open the CBA.
Management’s conceptual proposal was rather surprising. It focused primarily on the reduction of orchestra size from the current 77 full-time musicians to somewhere around 65 through attrition and voluntary early retirements. Cuts in health insurance (which, in Wisconsin, is quite expensive compared to surrounding states) were also proposed, as well as spreading the 40 current contiguous weeks of employment over 44 weeks in order to get more weeks in the hall. Most surprising, though, was that management was proposing neither a cut in work weeks nor a cut in weekly salary.
After long hours of internal discussion and a meeting with the orchestra, the Council agreed to re-open the CBA on several conditions, the most important of which was that the Council and management would “work together to devise and execute a public relations campaign.” Management and the board had some serious reservations about what the Council came to describe as “calling the question” of the MSO’s continued existence. Eventually, though, they agreed to such a campaign, in part because they had no better alternative and partly, I think, because they understood that the musicians had the most at stake in the continuation of the MSO and deserved a say in what the campaign to save the orchestra would look like.
Negotiations were relatively short but quite intense. Management got much of what they proposed, although they made concessions in some work rules. The final deal was reached in late November, and the public campaign kicked off with articles and features in most of the local media during the first week of December. A very important goal, and one which was met, was to gain the support of the editorial board of the Milwaukee Journal Sentinel, with whom members of management, the Council, and the Board met jointly. Their editorial in support of the campaign had a major impact on community thinking. Not mentioned in the campaign was a hard date to achieve the goal of $5 million in new donations, but the Board informed the Council at the end of negotiations that the orchestra would be shut down under the “financial emergency” clause of the collective bargaining agreement if the goal wasn’t met. In the end, the goal was met, although not by the original date.
Are there lessons for other struggling orchestras in the successful resolution of Milwaukee’s crisis? Likely the most important is that “save the orchestra” campaigns can work, but only if all the internal groups—musicians, management, and board—are really in agreement on the message, at least in the short term. Such agreement is not easy; we were lucky to have the right people in all of the key positions and a long history of reasonably cordial relationships. There were those in the orchestra (and no doubt on the board as well) who believed that such cordiality and reasonableness in the past were largely responsible for our current situation. But, whether or not that was true, most believed that a more confrontational stance during this crisis would have been fatal. As things stand now, the orchestra is still working and has a couple more years to address the underlying causes of our chronic financial woes.