Revisiting the Bankruptcy

It has been more than five years since the Board of the Philadelphia Orchestra voted to file for bankruptcy, becoming the first major American orchestra to do so.  At the time, the Orchestra had a $140 million endowment, owned the Academy of Music, and had no debts, according to an NPR article from April 18, 2011.

Although the filing in April, 2011 was opposed by the musicians, the public was told that it was a necessary step, and that when the Orchestra emerged from bankruptcy, things would be much better.
When the court approved the bankruptcy, the Association made wholesale changes to our pension plan. The Plan was frozen and its administration was transferred to the Pension Benefit Guarantee Corporation, a U. S. government entity. Some musicians may receive lower pensions than they would have earned under the frozen Plan. The retirement benefits which were substituted for the Plan do not guarantee the benefit level specified in the Plan. In addition, the orchestra musicians, who had voluntarily taken a wage freeze the year before, and who had donated a significant amount of money to the Association, saw their salaries reduced by more than 14 percent.  The size of the orchestra was also reduced, from 106 full-time positions to 95.

The Association, according to the Philadelphia Inquirer's Peter Dobrin, spent “almost $10 million in professional fees and expenses” on the bankruptcy, and paid settlements of $1.75 million to the American Federation of Musicians Pension Plan, and $1.25 million to the Philly Pops in the process.

More than five years later, Musicians hoped that the Association would view the bankruptcy as a temporary means to regroup and ultimately restore the kind of budget that is necessary to fund a major symphony orchestra, rather than as a way to downgrade the musicians' contract permanently. More than five years later, we are still waiting.

In a July 4, 2016 article, Peter Dobrin of the Philadelphia Inquirer reported that, “after six months of looking under the orchestra’s hood by Michael M. Kaiser, chairman of the DeVos Institute of Arts Management at the University of Maryland and former president of the Kennedy Center in Washington,” he issued a report to the Philadelphia Orchestra Association. Dobrin noted that: “Kaiser’s report shines a bright light on a troubling state of affairs, proposes to re-prioritize solutions, and suggests new ones.”
Dobrin also noted that: “The impetus for Kaiser’s involvement was last fall’s round of contract talks between the Philadelphia Orchestra Association and its musicians. In granting an unusually short, one-year deal with a 3 percent raise, management agreed to bring on Kaiser to examine why, four years after exiting bankruptcy, the association still had not generated enough earned and contributed revenue to eliminate more of the concessions musicians gave in the Chapter 11 case.”
Dobrin also wrote that: “It was not clear last week how many of Kaiser’s concepts would be folded into a new strategic plan being developed by the orchestra.” As of this writing, the Association has not adopted a new strategic plan, nor has it adopted a budget for the 2016-2017 fiscal year. Therefore, no one knows which, if any, of Kaiser’s recommendations will be implemented.
The regressive contracts under which we have worked since the bankruptcy have saved the Association millions of dollars.  We have patiently endured cuts to our salary, pension, and health care. It is time to move forward and restore us to our proper place in the pantheon of orchestras.