Minnesota Orchestra risks big losses: season, Vänskä, Carnegie

  • Article by: GRAYDON ROYCE , Star Tribune
  • Updated: September 3, 2013 - 11:06 PM

Fallout from labor dispute could include Carnegie dates, new season and Osmo Vänskä.

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Music Director Osmo Vanska conducting the orchestra at the Concertgebouw in Amsterdam in 2010.

Photo: Jeff Wheeler, Star Tribune

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Showing a grim resolve in the face of worsening financial projections, Minnesota Orchestra leaders Tuesday conceded that the ongoing dispute with union musicians could cost the orchestra its renowned conductor and prestigious performances at Carnegie Hall.

Richard Davis, chairman of the orchestra’s negotiating team, said management will stand firm in the 11-month lockout, despite the looming prospect of outcomes once deemed unthinkable — including the departure of Music Director Osmo Vänskä, the cancellation of key concerts at Carnegie Hall and delaying the start of the 2013-14 season in the newly remodeled Orchestra Hall.

“Osmo may have to leave,” Davis said in a meeting Tuesday with the Star Tribune editorial board. “The board is resolved to know that that is a risk. Carnegie, the opening of the hall. All three may have to fall.”

Davis, board chairman Jon Campbell and CEO Michael Henson gave the bleak assessment on the same day that they released an analysis by AKA | Strategy of New York that said the orchestra may face budget shortfalls even worse than those already cited by management.

The musicians called for renewed efforts to reach a settlement.

“What we don’t need right now are threats; we need solutions,” said Blois Olson, spokesman for the musicians.

“A studied and careful solution by an esteemed mediator was put on the table and rejected by management,” Olson said.

Last week, the orchestra said it had reached agreement with Vänskä and Carnegie Hall that musicians would need to be back rehearsing by Sept. 30 to be ready for the Carnegie dates, Nov. 2-3. To do that, management said it would need a contract signed by Sept. 15. Vänskä previously said that a Carnegie cancellation would trigger his resignation. Musicians favor a proposal offered by former diplomat George Mitchell that would end the lockout for four months while the two sides negotiate. Management rejected that idea as too costly.

Davis said it is “incumbent on both parties” to reach a settlement of the contract dispute, which has become the longest at a major U.S. orchestra.

He said that if no deal is reached by “the end of the year,” there would be permanent damage to the orchestra.

The board has said the Orchestra cannot continue to operate with structural deficits. In order to balance budgets, unusually large withdrawals were made from endowment funds, until the past two years. Even in those years, however, the organization drew more than the recommended 5 percent of assets.

Limits to fund-raising

In his analysis, AKA | Strategy’s Anthony Knerr wrote that he believes it is “unrealistic to think the Orchestra can fund-raise its way out of its current financial difficulties.”

Campbell said Tuesday that a feasibility study commissioned by the orchestra board “made it very clear we could not raise another $6 million a year,” which he said is the figure the board needs to address its deficits.

“We’re the only city supporting two professional orchestras,” Campbell said, referring to the St. Paul Chamber Orchestra and the Minnesota Orchestra. “And we’re told that the current level of giving is under stress and we may never get it back.”

Knerr’s report largely mirrored what annual independent audits have revealed about the Minnesota Orchestra. However, in addition to operating deficits, the report found troubling a “severely underfunded” defined-benefit pension and a $9.3 million taxable bond due in April 2015.

That money was part of $11 million in debt assumed in 2005 to help balance budgets from 2002 to 2005.

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