Frequently Asked Questions About The Baltimore Symphony’s Contract Negotiations
Frequently Asked Questions About The Baltimore Symphony’s Contract Negotiations
Updated September 13, 2019
We know this is a difficult time and the intensity of our discussions only reiterate what we know at our core – that the power of music is undeniable, and that the BSO is a beloved and important cultural anchor for our community and our region.
We hope the information compiled below will help provide additional context and clarity on what is certainly a complex and long-evolving situation.
Where are we as of today?
The BSO lifted the lockout on September 9, 2019, a day on which the BSO also presented a proposal – made stronger by close friends of the BSO, including a bonus fund that would effectively increase musician compensation by 2.8% for the 2019-20 season – that responded to concerns expressed by our musicians in an effort to reach a temporary agreement and open our new 2019-20 season as originally scheduled.
As of September 13, 2019, the musicians have not come back to work, including a rehearsal in preparation for the Season Preview weekend concert.
As a result, please note the following updates regarding the 2019-20 season opening plans:
- Free Season Preview Concert – Originally scheduled for this Saturday, September 14, 2019, this concert is postponed to next Saturday, September 21 at 8 pm at the Meyerhoff Symphony Hall. BSO Associate Conductor Nicholas Hersh will conduct the program which includes works by Mozart, Brahms and Mahler as well as movements from Tchaikovsky’s Symphony No. 4 and Beethoven’s Symphony No. 9.
- Star Wars: The Empire Strikes Back – In Concert - Performances originally scheduled for Thursday, September 19 at Strathmore, and Friday and Saturday, September 20 and 21 at the Meyerhoff, will be postponed to spring 2020 (future dates to be announced within the next two weeks). If you currently hold tickets for the Star Wars performances, the Ticket Office will be in touch with you as soon as new dates are confirmed. We will issue new tickets for the rescheduled dates. Your seat location will not change; however, your previous tickets (concert tickets and parking passes) will no longer be valid and should be destroyed.
To contact the Ticket Office directly on these or other performances please call 410.783.8000.
As a reminder, the Baltimore Symphony Orchestra’s Annual Gala Concert and Celebration was already rescheduled to Saturday, May 9, 2020, featuring world-renowned violinist Itzhak Perlman. For more information including public ticket sales and sponsorship opportunities, please click here.
The BSO remains committed to continuing to bargain in good faith with our musicians and hopes we can come to a resolution soon. Just as many orchestras before us have done, we too will come through this period in a stronger position.
What is the BSO’s proposal for a new Collective Bargaining Agreement?
While operating as a 52-week orchestra for many years, the BSO has never had a 52-week performance season.
In October 2018, the BSO proposed a new Collective Bargaining Agreement that upholds a 40-week performance schedule with a robust subscription season from September through June of classical and pops concerts, education programming, holiday concerts and special events. This proposal also provided for additional weeks of optional summer services that would allow special events and beloved summer traditions like Star Spangled Spectacular at Oregon Ridge to continue. While this proposal would have minimal impact on our audiences, it did include a reduction from 9 weeks to 4 weeks of paid vacation for musicians as well as reduction from the previously allotted 120 paid sick days per year – all while maintaining a comprehensive, year-round benefits and pension plan. And while there was a proposed decrease in the weeks of contracted summer concert services, the proposal included an increased weekly wage for 40 working weeks as well as a stipend for each non-working week, an approach similar to that taken by other major orchestras. The stipend is important as it provides a vehicle for modest compensation and more importantly benefits for our musicians as they perform in summer music festivals and seek other work – as many already do.
The BSO’s original proposal also addressed work rules related to audience development to provide for greater accessibility and community engagement, all key to growing audiences and revenues. Read a more detailed summary of the BSO’s original proposal here.
A new proposal was offered in September - how and why has the BSO’s proposal changed?
The BSO has become increasingly aware over recent months that while its original proposal would move the institution down the path of greater sustainability by achieving balanced budgets in the near-term, it does not leave us any less fragile.
Despite significant artistic achievements, the BSO has faced financial challenges over many decades. Recently, there have been intensive efforts to increase revenues and manage costs – including furloughs and cuts for our administrative staff (in total, administrative staff numbers and overall compensation stands lower than in 2009, while comprising less than 15% of our operating budget). Even with the efforts of many people, including extremely generous gifts, we have experienced consistent deficits with annual losses totaling $16 million over the past decade alone – a total that would have stood nearer $24 million if not for one-time, heroic gifts.
Our business model needs to change in order to control costs while expanding revenues. In this aim, the BSO has formally engaged one of the nation’s oldest nonprofit management consulting and research firms – TDC, led by Principal Susan Nelson. Having worked with many complex arts organizations, TDC’s portfolio includes work with the League of American Orchestras to promote effective capitalization of orchestras in general as well as specific peers who have navigated similar challenging transformations.
Central to the work of TDC, alongside the state workgroup, is the perspective of many stakeholders, including our musicians. Recognizing the institution’s desire to bring music back to the stage to ensure the most collaborative and impactful environment for this important long-term work to continue, the BSO presented a revised short-term proposal to our musicians on September 9, 2019, with two options:
- A one-year agreement based on a 40-week concert season and a commitment to increasing musician compensation for non-working summer weeks thanks wholly to the efforts and funds secured by a generous group of donors (collectively increasing musician compensation for 2019-20 by 2.8%); and,
- A shorter-term option essentially extending the terms of the previous Agreement, including salary and benefits, through December 31, 2019, during which time the legislative work group would continue.
In both options, a new standing BSO Board committee inclusive of musician and community participation would actively plan for the future, alongside the state workgroup and TDC engagement, while music returns to the stage. Read more about the BSO’s revised proposal here.
As in the BSO’s original proposal, the one-year option included an increase in the weekly base compensation for musicians; a commitment to adding more musicians; and, the maintenance of a 52-week benefits schedule for our orchestra.
Does a 40-week contract support continued artistic excellence at the BSO and the BSO’s status as a major orchestra?
We greatly appreciate and value the members of our orchestra and admire their superb musicianship, and the current proposal will maintain the BSO’s status as a major orchestra, committed to touring, recording and broadcasting. Of the 21 major orchestras across the country as defined by budget size, one third have seasons fewer than 52 weeks - that percentage number is higher when considering those orchestras in our immediate peer group. Our peers in Detroit, Atlanta and St. Louis have taken similar steps to adjust season length with tremendous artistic success and we are confident we can do the same.
It was announced that the BSO’s FY18 audited financial statements contained an audit opinion with a going concern emphasis of matter – what does that mean?
The BSO’s audited financial statements for the year ended August 31, 2018 contain an auditor opinion that notes substantial uncertainty about the BSO’s ability to continue as a going concern. Guidelines from the Financial Accounting Standards Board require management and auditors to assess an organization’s ability to continue operating for a one-year period after the financial statements are issued, with the evaluation based on applicable conditions and events that are “known and reasonably knowable” at the date of issuance. Uncertainty regarding the BSO’s ability to continue as a going concern is based in part upon concerns that the BSO will be unable to meet its contributed revenue and earned revenue forecasts while efforts continue to reach a new collective bargaining agreement.
It is important to know that a growing concern emphasis is neither a definitive indication of the BSO’s future nor bankruptcy. That BSO and its auditors are following accounting standards and being transparent about inherent uncertainty associated with revenue forecasts in the context of negotiations and the work stoppage at the time of filing.
The BSO’s audited financial statements also show that the financial results for FY18 have improved versus the prior three years; and reinforce the critical importance of the work underway to move the BSO to a sustainable business model. Read the BSO’s press release here.
The BSO has made its FY2017 and FY2018 public form 990s as well as the most recent audited financial statements available on its website.
A lot has happened in the past few months - how did we get to where we are today?
- The BSO put forth its original proposal to our musicians in October 2018 following the expiration of the former contract.
- As efforts to negotiate were underway and following significant advocacy by our musicians and friends of the BSO, House Bill 1404 (HB 1404) – the John C. Merrill Act – was introduced by leaders in Annapolis during the 2019 session of the Maryland General Assembly. The BSO worked collaboratively with our musicians and leaders in Annapolis to ensure the passage of this legislation, a bill calling for financial support of $1.6 million annually from the State in each of the next two years as well as authorizing a workgroup to help further examine our business model.
- The BSO had every reason to believe that the initial $1.6 million lifeline for FY20 would be forthcoming, and had expected to use this to immediately borrow funds in the form of a short-term bank loan to essentially operate ‘as usual’ while the workgroup was established and intensive discussions about the business model (and in turn, contract) would continue.
- Unfortunately, we later came to doubt that numerous items in the State’s budget would be paid, including the BSO grant. Against these unknowns, and without sufficient capital to cover the expenses of the fast approaching summer season (which has consistently performed at a deficit), the BSO had to quickly adjust course in May 2019 by cancelling the summer season and reaffirming the contract proposal originally put forth in October.
- Despite multiple requests to return to the bargaining table once the fate of the State funding and associated lifeline became so tenuous, no such counter proposal was offered. With no agreement in place, the Board of Directors had no choice but to vote to lock out the BSO’s musicians beginning on June 17, 2019.
- With performances suspended for the summer, musicians were not paid their salaries but were eligible to receive unemployment compensation. At the start of the lockout, the BSO had already paid the musicians’ health and dental premiums through June 30; and, thanks to generous contributions from members of the BSO Board of Directors and other loyal donors from our Baltimore and Montgomery County communities, the BSO was also able to provide medical and dental benefits to musicians for the months of July, August and September. Life and instrument insurance benefits were also extended through this period.
- During the work stoppage, the BSO reached a point whereby it became clear that it was appropriate and important to postpone the Gala to a new date in May 2019 (in turn, resulting in an artist change) to allow for a more appropriate focus on inclusion and community in September. The BSO’s signature fundraising event, the BSO’s Gala Concert and Celebration annually nets several hundreds of thousands of dollars for the institution’s education and outreach programs. Please learn more how to support this event through table sale sponsorship and/or ticket purchase here.
- Despite multiple dates offered by BSO management, limited bargaining sessions took place in June and July. In late August the BSO and its musicians came together in multiple sessions, leading up to the presentation of the BSO’s revised one-year and shorter-term proposals on September 9, 2019.
If the funds allocated by the state legislation will not be paid, will the workgroup continue?
Funding allocated by the legislation for the State’s Fiscal Year 2020 (the 4th quarter of the BSO’s Fiscal Year 2019) will not be received; however, the workgroup outlined by HB1404 has been formed, has begun to meet, and will provide a comprehensive report as called for by the legislation. This is an important opportunity to build on the intensive efforts that are underway.
Can’t the BSO simply call on its endowment to bridge the gap?
An endowment is not a rainy-day fund. The goal of any organization’s endowments is two-fold: to grow the principal and to generate income for the organization. To accomplish both goals, endowments only pay out a small portion of interest earned in the form of an annual draw to support an organization’s operations. In this way, a strong endowment provides dedicated income that sustains an organization in perpetuity, helping maintain a solid financial footing even in the most challenging times.
The Baltimore Symphony Endowment Trust is a separate legal 501(c)(3) supporting organization in which the principal and income of all property received are held in trust by the trustees for the benefit of, to perform the functions of, and/or to carry out the charitable and educational purposes of the supported organization, with a goal to insure its long-term ability to support the availability of symphonic music in the community. Read more from the Chairman of the BSO Endowment Trust on its support of the BSO here.
The mission statement of the Endowment Trust has been questioned in the media and by our musicians, in response to which the Chairman of the BSO Endowment Trust recently issued a new op-ed in which he unequivocally states, “ [T]he Baltimore Symphony Orchestra Endowment Trust wants the organization to survive. That is why we invest our personal time and make our own contributions to the long-term future of orchestral music in our community. This has been the purpose of the Endowment Trust since its charter was established, and there has been no change in our mission. The Endowment Trust wants to be part of finding the path to a resolution to the BSO’s current concerns but we are not and cannot be the only answer to an unsustainable business model. Larger draws from the endowment would not fix the problem, they would just kick the can down the road and ultimately impairs the Endowment Trust by depleting its foundation.” Read the latest op-ed here.
What is the support that the endowment provides to the BSO?
Among the BSO’s most extraordinary supporters is the Baltimore Symphony Endowment Trust, and the many generous donors who have contributed to the endowment. In keeping with the agreement establishing the Trust as a separate legal entity in 2006 (establishment only after $27.5 million, or nearly 30% of the endowment’s then $90 million value, was used to pay off the BSO’s then accumulated debts as well as provide fresh cash), the Trust is able to distribute to the BSO up to 6% of the funds’ rolling five-year average in the form of an annual draw. While the trust allows for up to 6%, the annual funding goal is 5% - the top of best practice standards. The Endowment Trust has in fact exceeded its annual 5% funding goal in recent years (the fiscal year 2018 draw was 5.75%).
In addition, the Endowment Trust has provided significant loans to support the BSO’s operations including a $5 million loan that remains outstanding. In May 2019, as the state legislation and associated lifeline became increasingly uncertain and understanding that the BSO was taking steps to address its financial issues and business model, the Endowment Trust took the additional step of providing a further $2.3 million loan to help the BSO meet financial obligations (including meeting the final of three payrolls in May 2019) and continue to present concerts through mid-June. The BSO is extremely grateful to have the continued support of the Endowment Trust.
What is the BSO doing to grow its endowment?
The Resounding Campaign was launched to grow the BSO’s operating endowment to a size that is more proportional to our annual budgetary needs. We have made progress in our campaign – having secured $49.6 million in commitments towards our $65 million campaign goal. Of this to-date total, $33.7 million is designated for Endowment, of which $20 million has been received, while $13.7 million is being fulfilled over time or designated as estate gifts. The balance of campaign commitments are comprised of increased giving to the Annual Fund (commitments that have largely been fulfilled and that have supported the BSO’s operations in recent years) as well as sustaining gifts for OrchKids and the BSYO.
Even with this increase from the campaign, our total endowment stands at just over $70 million (including a $10 million fund restricted for the maintenance of the Joseph Meyerhoff Symphony Hall), and our operating endowment stands at just over $60 million, an amount that pales in comparison to the endowments of our peers. For example, standard best practice used to be that an organization’s endowment should be at least three times the size of its annual operating budget, with many now equating that ideal ratio to be larger. Today, the BSO’s operating endowment stands nearer two times the size of the organization’s budget. Comparing the BSO’s endowment to other orchestras has reinforced the need to significantly grow the endowment supporting operations from the current $60 million to $100 million through the continuation of the Resounding Campaign. Please learn more about the Resounding campaign and how YOU can get involved.
How does the lock out impact OrchKids and/or OrchLab?
A year-round program, OrchKids’ programming has not been impacted and the program will serve over 2,000 students during the 2019-20 school year at 10 school sites, including two new sites, Mount Royal Elementary Middle School and The Belair-Edison School. OrchKids manages its own operating budget which has been in the black for the past three years and maintains a separate bank account. All contributions to OrchKids are restricted for only that program's use. Recognizing that OrchKids’ teaching staff operate under separate contracts outside of the collective bargaining agreement, and that only one BSO musician holds such a contract, there is not anticipated to be any disruption to the daily OrchKids’ curriculum or schedule at this time. Learn more about how to get involved in and support OrchKids.
In partnership with Montgomery County Public Schools (MCPS), OrchLab works to enrich the instrumental music curriculum, enhance student performance skills and offer professional development to music educators at select elementary, middle and high schools serving high numbers of students in poverty. BSO musicians serve as OrchLab mentors; once our musicians return to work, the OrchLab schedule will resume. Learn more how to get involved and support the BSO’s education programs in Montgomery County
How do the ongoing negotiations impact the BSYO?
As of September, the Baltimore Symphony Youth Orchestras (BSYO) has resumed regularly scheduled operations.
We understand and appreciate that this is an extremely difficult time for all involved. We are deeply gratified that our audience is continuing to purchase tickets and are eager to hear our great Orchestra performing on stage at the Meyerhoff, at Strathmore and in communities across our region this season. While recent events might make some contemplate their ongoing generosity for the organization, the reality is that we need everyone’s support now more than ever.
If you have any comments or questions, or would like to be in touch with us about how you can help, please email email@example.com. Thank you again for your support of the BSO.