Musicians in the Minnesota Orchestra have approved a two-year contract extension and a 25% pay cut.

In a deal announced Monday, the orchestra's board and union musicians ratified an amendment outlining work rules and compensation cuts during a pandemic that has taken a financial toll, nixing live audiences through at least the fall.

If, after a year, the whole orchestra returns to performing for full audiences, those pay cuts would be reversed.

"There is a realization on our part that not selling tickets or having earned income has an enormous effect on our bottom line," said Timothy Zavadil, chairman of the musicians' negotiating committee, on Monday.

Both musicians and managers described the negotiations as productive and respectful, reflecting a friendlier tone since bitter contract talks led to a 15-month lockout that ended in 2014.

"What I feel like we were able to do collaboratively with the musicians was to identify a path forward that supports both musician and organizational needs in the middle of the pandemic," said President and CEO Michelle Miller Burns, "but also thinks about the organization long-term."

The musicians' cuts are part of $5 million in cost reductions for fiscal year 2021, Burns said.

Even before COVID-19 hit, the Minnesota Orchestra was in the red. The orchestra posted an operating deficit of $8.8 million for fiscal 2019 — the biggest in its history. Burns said that the organization is still "closing out the books" on fiscal 2020, which ended this summer, but that it "surely will end with a deficit" as well.

Music Director Osmo Vänskä will take a 35% salary cut for fiscal 2021. He will conduct the orchestra Oct. 2 in its season premiere on Classical MPR and Twin Cities Public Television that, because of safety precautions, will feature ensembles of fewer than 25 musicians onstage performing to an empty Orchestra Hall.

"We want to get back to performing. We want to get back to full houses. We want to get back to the full orchestra," said Zavadil, who plays clarinet and bass clarinet. "And we are very grateful that our management and the board share those goals as well."

In a news release, board chairwoman Margaret Bracken called the agreement "a common-sense approach ... that acknowledges the uncertain time period we are living through."

The contract extension, which runs through August 2022, maintains the musicians' existing medical and dental benefits. A so-called side letter outlining COVID-19 terms goes into effect Oct. 1 and runs through August 2021. It would expire — restoring musicians' salaries to last year's levels — if by then the orchestra is able to perform concerts with a full orchestra and without limits to audience capacity.

If not, the terms and cuts outlined in the letter extend for another year.

Musicians had already taken a temporary 20% pay cut in June in response to the pandemic, while leaders, too, reduced their pay.

Without in-person concerts, the orchestra is keeping about 200 part-time staff members on hiatus, Burns said Monday. Because of the shift to virtual programming, the organization is shifting staffing, too, she said. About 15% of staff members have had their hours, and pay, reduced. Burns herself is taking a 20% pay cut.

Negotiations on the musicians' contract, which expired at the end of August, started before the pandemic shuttered Orchestra Hall and changed everything.

Zavadil has led the musicians' committee during past contract negotiations. Thanks to "shared goals," these talks were "always productive," he said. He declined to disclose the vote count but said it was "overwhelmingly" in favor.

"We were able to have some really wonderful, thoughtful, exploratory discussions," Burns said. "This is very much a we're-all-in-it-together scenario."

Jenna Ross • 612-673-7168 • @ByJenna