The St. Paul Chamber Orchestra on Tuesday reported its first deficit in nearly a decade. Its 2012 fiscal year ended with a shortfall of $895,000 on expenses of $11 million.
The results cover a year that ended June 30 -- well before fall concerts were canceled because of a labor dispute.
Describing "a major financial challenge," SPCO president and board chair Dobson West predicted even larger deficits in the future "if significant changes are not made."
The SPCO deficit is about 9 percent of expenses. In contrast, the Minnesota Orchestra is expected to announce Thursday a 2012 deficit of about 19 percent of its expenses. Musicians of both orchestras are locked out over failures to agree on new contract terms.
Earned income made up just 15.7 percent of total SPCO revenue of $10.1 million. That is largely the result of low ticket prices. Also, a membership program was instituted last April that allows patrons to see an unlimited number of concerts for $60 per year.
Pricing has become a sticking point in negotiations, as musicians have argued for ticket bumps to boost revenue. Management says that data show the low prices decrease marketing costs and stimulate donors, resulting in positive finances. Attendance last year was 128,000, up 9 percent from 2011.
Contributions account for two-thirds of SPCO revenue. Corporate giving was off 7 percent from the previous year, continuing a trend that has seen a slide of more than 35 percent over the past decade. The Annual Fund -- gifts from individuals, corporations and foundations -- is about 20 percent smaller than it was before the 2008-09 recession.
West said the SPCO avoided deficits since 2008 by reducing expenses by $1.5 million -- including the layoff of 17 percent of its administrative staff and salary reductions for senior management. Musicians also gave concessions, although union compensation was up 8.5 percent in fiscal 2012, according to numbers from the musicians. In dollar terms, that represented about $234,000.
