The story so far
- The Atlanta Symphony Orchestra has racked up deficits for 12 consecutive years, but the push toward a sustainable model took new urgency when the accumulated debt rose to $23 million by the end of fiscal 2012, including $18 million borrowed against earnings on the orchestra's endowment.
- Seeking significant concessions to halt the red ink, management locked out the musicians during tense 2012 collective bargaining agreement negotiations. After a month without pay, the players agreed with great rancor to a $5.2 million wage reduction over two years (an average of $14,000 annually for each) and other cuts, including one that reduced the orchestra's size from 95 to 88 full-time musicians.
- In 2013, Moody's Investors Service downgraded the Woodruff's credit outlook from stable to negative, largely because of the ASO debt.
- The orchestra finished the 2014 fiscal year with a $2 million operating deficit on a budget of $37 million.
- Eight months of negotiations for a new collective bargaining agreement this year proved unsuccessful. Management said its final proposal was for a four-year deal with an escalating salary increase topping out at 4.5 percent in the final year. The musicians propose a roughly 15 percent salary increase over four years —- basically the amount the players gave up 2012. Another point of division was health care, with the musicians being asked to shoulder a greater share of the cost, which they said would turn management's raise offer into a net decrease.
- Management locked out the players on Sept. 7 after the the collective bargaining agreement expired without a new one in place, and canceled concerts through Nov. 8. Four days later, the ASO Players' Association issued a statement that charged: "The Symphony has been placed in the position of turning deficits that have been engineered by the WAC with the intention and for the purpose of extracting more concessions from the Orchestra's musicians."
- ASO president and CEO Stanley Romanstein resigned Sept. 29, saying in a statement that he didn't want to be an "impediment" to management reaching a labor agreement with ASO musicians. In fact, the U.S. Federal Mediation and Conciliation Service announced Friday that it will provide mediation services to the ASO starting next week.
Instead of making soul-stirring music to start its 70th anniversary season, the Atlanta Symphony Orchestra has produced mostly sour notes for the last four weeks.
The musicians were locked out by management for the second time in two years on Sept. 7 when the two sides could not reach accord on a new collective bargaining agreement, and a war of words commenced.
Management may control the purse strings, but the musicians have commandeered the social media. Constant posts and comments by the players and their supporters on their Facebook page and Tweets on their Twitter account have pushed management back on its heels. The barbs got so brutal on the ASO's own Facebook page that management turned off commenting.
The ASO Players’ Association has issued multiple strongly worded statements to the media — accusing leaders of the ASO and its parent non-profit, the Woodruff Arts Center, of poor fund-raising, weak management and even malfeasance. Classical music blogs, some more opinion-oriented than journalistic in nature, have spread the accusations across the virtual universe. The ASO has released scattered statements of its own, usually with figures the other side immediately disputes.
A target of some of the harshest musician critiques, ASO president and CEO Stanley Romanstein, resigned on Monday, saying in a statement that he didn't want to be an "impediment" when the sides restart negotiations.
The musicians considered Romanstein, who served as lead negotiator, a figurehead to start with, and have said in statements and posts that the real power resides with the Woodruff’s Governing Board.
Douglas Hertz, that board’s chairman, has not actively participated in the negotiations and was content to stay out of the media glare. But the steady stream of Players’ Association accusations, including that Woodruff leaders have engineered ASO deficits so as to extract more concessions from the locked-out musicians, have sparked him to speak publicly about the debacle for the first time.
In an exclusive interview with The Atlanta Journal-Constitution, Hertz firmly denied allegations that the Governing Board is willing to permanently damage the ASO for the sole purpose of halting its losses.
He said he was anxious for both sides to return to the business of music, and that one reason he was coming forward was to push the Players' Association to accept federal mediation. In fact, the U.S. Federal Mediation and Conciliation Service announced Friday that it will provide mediation services to the ASO starting next week.
Hertz, an Atlanta native and president and CEO of United Distributors, a beverage distribution company, grew up in a family grounded in philanthropy and arts patronage. The Alliance Theatre’s Hertz Stage was named for Hertz’s father, Jennings Hertz Jr. With a gift of $1 million, Doug Hertz endowed the ASO’s Jill Hertz Chair, named for his mother, who herself was an orchestra volunteer.
But while saying he believes the musicians and ASO and Woodruff leaders can forge a harmonious agreement with the mediator's help, he also took some hard stands in the recent AJC interview.
On public support of the musicians and rebukes of ASO and Woodruff leaders in media coverage and blogs: "I disagree that the public has sided with the musicians. I think the artists' friends have sided with the artists. But I think the corporate community and the philanthropic community understands, like any businessperson would, we're not going to make an investment in a business that keeps losing money."
On charges that Woodruff leaders want to turn the ASO into a minor-league ensemble to save money: "It's frustrating, because the whole allegation, whether it's by musicians or supporters of musicians, or journalists who want to take the musicians' side — I'm using 'journalists' pretty loosely … for them to allege that the WAC doesn't want a fantastic symphony orchestra, or the governing board doesn't want to take care of the musicians, is so far off base if they looked at the facts."
As evidence, Hertz mentioned the work of other Woodruff governing board members including retired BellSouth executive Jere Drummond, “whose raised millions of dollars for the ASO’s endowment” and Paul Garcia, the recently retired Global Payments chairman and CEO, who along with Delta Air Lines CEO Richard Anderson raised nearly $1.5 million over the last two years to reduce the orchestra’s deficit.
“It makes you wonder, you know,” Hertz said, “are we supporting a bunch of crazy people.”
On a major point he feels is lost in the contract issues: "The sad part of it is … there are not enough people that care. If the public cared maybe we wouldn't be in this situation. When you've got less than 5,000 donors in a metropolitan area of 5 million, that's my concern. We (board, administration and musicians) need to be getting together and figuring out together how do we grow support for the symphony."
On the musicians' response that management's "last, best and final" offer before the lockout left them no room to negotiate: "Well, we are very interested in exploring alternatives. We are not, cannot and will not move from ending up with a balanced budget moving forward. But there are a lot of ways to get there, and if we were to do it together, we may be able to find a way."
On if that means that leadership would reconsider its position on giving management power over filling positions — essentially ultimate control of the size of the orchestra: "Sure. We're not stuck on anything other than a balanced budget. We would love to protect the integrity of the art, and we want to do it in a financially responsible way."
(The ASO Players' Association issued a statement Friday afternoon charging that Hertz is more interested in cutting positions than he is "in securing financial stability or in preserving the high artistic standards of the institution he has a duty as a steward to serve and protect.")
On feedback from the musicians, seconded by Spano and Runnicles, that management controlling the number of full-time players would destroy the ASO's sound: "Well, it's my impression that our symphony orchestra got the same artistic reviews over this past year as they have had in previous years. We had 116 separate musicians that played with our orchestra (who were) not part of our (88-musician) complement — 116 additional musicians who sat in just last year. Yet no one's told me that artistically that we were any better or worse."
On music director Robert Spano showing support for the musicians when maestros are typically neutral in labor disputes: "Again, we're criticized for not wanting a great symphony, right? But we signed Robert to a five-year contract (that's just beginning) with a raise. And Robert's getting paid. And we signed (principal guest conductor) Donald Runnicles to a three-year contract. He's getting paid. So don't criticize WAC management or the WAC governing board for not wanting to put our money where our mouth is. Maybe Robert's feeling a little bit guilty because he's getting paid and the musicians aren't. But he could be a big help in solving this."
On how Spano could help: "Ideas (for developing a more sustainable model for the ASO). Encouragement of the musicians to come back and talk. But he hasn't been particularly constructive to this point."
On the governing board's fiduciary responsibility to all four Woodruff divisions: "We've got a division of the arts center that threatens the ability of the other divisions (the Alliance Theatre, High Museum of Art and Arts for Learning) to produce the great work that they're doing. We owe it to everybody to make sure that everybody is pulling their weight."
On if he's concerned that negative coverage of the lockout will set back fund-raising in the long run: "Sure, I mean if it lasts too long it will. (But) a contract ended. We lost over $2 million (in fiscal 2014). Don't forget, when you have earned ticket revenues of only $5 million and have salaries and benefits just for the musicians of $10 million to $11 million, you're losing money from the very beginning. …
“Every day, we lose money.”
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