Frequently Asked Questions About The Baltimore Symphony’s Contract Negotiations
Frequently Asked Questions About The Baltimore Symphony’s Contract Negotiations
Updated July 15, 2019
The BSO is grateful for the attention and support it continues to receive. 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. Ensuring that our community is home to such a fine orchestra for generations to come is the goal of the hard conversations facing the organization today.
We hope the information compiled below will help provide additional context and clarity on what is certainly a complex and long-evolving situation. We also want to reassure our family of audience members and donors, and the broader community, that the BSO is committed to a future whereby the BSO is a destination orchestra for musicians and guest artists that brings music into the lives of more children and youth, and that builds the next generation of symphony patrons.
Where are we as of today?
Without the additional $1.6 million in funding from the State as provided in the legislation passed in this year’s General Assembly, the BSO had insufficient funds to finance performances this summer. Without the lifeline of this additional funding that was necessary to pay musicians’ salaries during the summer and with no collective bargaining agreement in place by the end of the regular subscription season, the Board of Directors of the BSO voted to lock out the organization’s musicians beginning Monday, June 17, 2019.
The following summer concerts remain cancelled – a decision that was not taken lightly but that was an essential move to preserve the institution in the face of unanticipated cashflow challenges and unexpected news from Annapolis.
- BSO performance at Artscape – July 19, 2019
- Cirque Dances – July 26-27, 2019
The Ticket Office have contacted patrons with tickets to all of the summer concerts listed above to process refunds or exchanges. To contact the Ticket Office directly, please call 410.783.8000.
Please note important updates regarding the following special event:
- Hiplet, Featuring The Chicago Multicultural Dance Center – RESCHEDULED TO SUNDAY, MARCH 29 at 3pm at the Meyerhoff Symphony Hall. Ticketholders may use their same tickets from the original July 28 date for the March 29 performance.
Please note: the BSO does not perform on this program
With performances suspended for the balance of the summer, musicians will not be paid their salaries. The BSO had paid the musicians’ health and dental premiums through June 30. 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 can also affirm that medical and dental benefits will be provided for musicians for the months of July and August. Life and instrument insurance benefits had already been extended through this period. We are glad to be able to offer these benefits and remain focused on resuming productive meetings and working with our musicians to reach an agreement.
The BSO intends to open its 2019-20 season in September and plans to resume its schedule of rehearsals and performances beginning the week of Monday, September 9, 2019. Work will be provided for musicians beginning on that date, with benefits continuing as musicians return to work.
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. The new Collective Bargaining Agreement proposed by the BSO, provided to the Union back in October, 2018 and reiterated at subsequent collective bargaining sessions, will have minimal impact on our audiences due to the fact that the primary reduction is in summer weeks, along with a reduction from 9 weeks to 4 weeks of paid vacation for musicians. The proposal upholds a 40-week performance schedule with a robust annual season from September through June of classical and pops concerts, education programming, holiday concerts and special events. The proposal also provides for additional weeks of optional services that will allow special events and beloved summer traditions like Star Spangled Spectacular at Oregon Ridge to continue.
Importantly, the proposal upholds a 52-week benefits schedule for our orchestra. Proposed adjustments to a comprehensive, year-round benefits and pension plan include a modest increase in the current employee participation towards health insurance premiums as well as a reduction from the currently allotted 120 paid sick days per year. While there is a proposed decrease in the weeks of contracted summer concert services, musicians would receive a stipend for each non-working week, similar to the approach followed by other major orchestras. The stipend is important because it affords an opportunity for our musicians to perform in summer music festivals and seek other work – as many already do – while also receiving a stipend along with benefits from the BSO.
The proposal includes increasing the weekly base compensation for musicians and holding auditions to fill open positions.
The proposal also addresses 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 proposal here.
Does the proposed 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 less 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.
What is the business case and forward vision behind the current proposal?
The proposal reflects thoughtful analysis undertaken by the BSO’s management and Board of Directors to preserve the Orchestra. Despite significant artistic achievements, the BSO has faced financial challenges over many years. Recently, there have been intensive efforts to increase revenues and manage costs. For example, our administrative staff who support our programs at the Meyerhoff and Strathmore is leaner in numbers and in overall compensation than in 2009 (costs presently comprising less than 15% of our operating budget). Despite the efforts of many people, including extremely generous gifts to support general operations, 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. Recognizing that the collective bargaining agreement with our musicians informs not only our single largest direct expense but also the general structure and working rules of the organization as they relate to musical (and in turn non-musical) activities on and off the concert hall stage, it is where change must be focused. We must align the length of our season to market demand and philanthropic opportunity as well as focus on reaching more diverse audiences and forging more meaningful connections to our communities in Baltimore, in Montgomery County and across the state.
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. Although the auditor’s report states that the financial statements have been accurately prepared in accordance with generally accepted accounting principles, 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 not 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 present work stoppage.
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.
It seems like things have moved very quickly in the past few weeks - how did we get to where we are today?
The BSO put forth its current proposal to our musicians in October 2018 following the expiration of the former contract. As efforts to negotiation on this proposal were underway, and following significant advocacy by friends of the BSO and our musicians, 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 (assistance given in addition to the very generous support the BSO receives through the Maryland State Arts Council) as well as authorizing a workgroup to help further examine our business model.
We 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 address our financial issues and help support efforts to operate ‘as usual’ while the workgroup was established and intensive discussions about the business model (and in turn, contract) would continue.
Unfortunately, we came to doubt that numerous items in the State’s budget would be paid, including the BSO grant. The bill was never officially signed into law, and a definitive commitment to authorize the grant was not available from the Governor’s office. Against these unknowns, and with the organization being left without sufficient capital to secure the bank loan needed to cover the expenses of the fast approaching summer season (which has consistently performed at a deficit), the BSO was left with no choice but to quickly adjust course in the last week of 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 and 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.
As of July 15, there has not been a meaningful counterproposal that addresses the organization’s urgent fiscal realities. The BSO and Musicians' Association of Metropolitan Baltimore, Local 40-543 will meet for a bargaining session on July 17, together with Federal Mediators from the Federal Mediation and Conciliation Service. At this point, the BSO awaits a response to management’s request for future bargaining dates.
The BSO intends to open its 2019-20 season and resume its schedule of rehearsals and performances beginning the week of Monday, September 9, 2019. Work will be provided for musicians beginning on that date, with benefits continuing as musicians return to work.
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 will be formed and provide a comprehensive report as called for by the legislation. This is an important opportunity to build on the intensive efforts that are underway.
If the fiscal situation is so dire, why announce the summer season to begin with?
The BSO administration and Board have communicated about the organization’s structural financial challenges – at the heart of our Resounding Campaign was the need for significantly increased endowment funds and capital to be able to increase the associated draw from the BSO Endowment Trust.
And while the BSO had emphasized that the additional $3.2 million (over two years) lifeline anticipated from the State by HB1404 was never alone sufficient to address our significant financial challenges, we were optimistic and eager to leverage that investment to secure not only the proposed loan but also additional fundraising support. As such, we worked together in partnership with our musicians. We announced a modest schedule of summer concerts in the spring as we usually do. We understand that these are extremely difficult times and, while the BSO has been very transparent with our musicians (musician representatives attend Finance Committee meetings, which reviews financial results on a monthly basis), when the future of these funds became unclear and the situation changed we needed to act quickly.
If the fiscal situation has been so dire for so long, why did the BSO go on the European Tour?
Receiving invitations to the festivals such as those in which the BSO was featured in 2018 speaks to the exceptional quality of the orchestra. The BSO is committed to maintaining this quality as well as to touring, recording and broadcasting. Regarding the 2018 tour specifically, its associated expenses were covered through festival performance fees in addition to public and private funding designated strictly for this purpose and which the BSO would not have otherwise received. Our financial challenges far predate the tour and, unfortunately, we would have been in this same situation regardless of it happening or not. As a significant cultural asset of Maryland, we are still so proud to have showcased the sounds and talents of the BSO under Marin Alsop to international audiences – and hope those audiences will be inspired to support us in the future.
It has been mentioned that there is the possibility of a bridge loan with the state – what is that for, and is it part of the grant money from the legislation?
Discussions are ongoing about a potential $1 million loan from the State of Maryland, a loan to support ongoing operations and support sustainable operations moving forward. This State loan was proposed only after the likelihood of the $1.6 million lifeline was questioned, and we appreciate the consideration of this additional support at a critical time for the BSO.
Can’t the BSO simply call on its endowment to bridge the gap?
An endowment is not a rainy-day fund. Across the board, the goal of an 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 of late, 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.
In addition to annual draws exceeding its annual 5% funding goal in recent years (the fiscal year 2018 draw was 5.75%), 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 $48.2 million in commitments towards our $65 million campaign goal. Of this to-date total, $33 million is designated for Endowment, of which $20 million has been received while $13 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 is kicking off its Summer session on June 24 without any delay – reaching 180 students at the Seed School of Maryland with powerful music, academic and social instruction and enrichment. Learn more 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. OrchLab’s schedule is tied to the academic calendar and will resume with the start of the new school year. Learn more how to get involved and support the BSO’s education programs in Montgomery County.
How does the lock out impact the BSYO?
The Baltimore Symphony Youth Orchestras (BSYO) look forward to resuming regularly scheduled operations in the fall following the planned summer break.
How does the lock out and/or cancelled summer season impact Strathmore?
Summer concerts were limited to performances at and around the Meyerhoff community, with no confirmed plans for BSO at Strathmore concerts and with our educational programming concluded with schools officially being on summer break. The BSO is focused on working with our musicians to reach a collective bargaining agreement. Our staff continue to work towards the robust schedule of classical, pops and educational programming planned at Strathmore for the coming 2019-20 season beginning in September 2019.
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 subscriptions and are eager to hear our great Orchestra performing on stage at the Meyerhoff, at Strathmore and in communities across our region in the coming 2019-20 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 firstname.lastname@example.org. Thank you again for your support of the BSO.