BSO fights its deficits with layoffs

July 15, 1995|By Holly Selby | Holly Selby,Sun Staff Writer

The Baltimore Symphony Orchestra, working to reduce a growing deficit, has laid off two department heads and replaced its key fund-raiser.

John Gidwitz, executive director of the symphony, said yesterday that the staff reductions are being made to help cut the orchestra's increasing deficit, projected to exceed $2 million by the end of the 12-month period closing Aug. 31.

"This is one of many decisions we have to make on a ongoing basis," said Mr. Gidwitz. "We are constantly looking at budgets. We are doing this because we think it's best for the symphony."

The layoffs come nine weeks before the symphony's contract with its musicians expires, but neither management nor the players' union would comment on the timing. Both sides have agreed to a news blackout until a settlement is reached.

Mr. Gidwitz estimates the personnel changes will save the orchestra about $100,000 annually. They include consolidating the marketing and public relations departments, and abolishing the job of director of artistic education -- a position created earlier this year. Those duties will be reassigned to the orchestra's general manager.

Harold White, whose last day as head of public relations was yesterday, declined comment, except to say that he will continue to act as a marketing consultant to the symphony for six months.

Pat Barry Casgar, who lost her job as director of marketing, could not be reached for comment.

A new development director, Frank Pisch, a Durham, N.C. fund-raiser, is to begin work in September, replacing Patrick O'Neall. "We just felt we needed someone who had more extensive fund-raising experience," said Mr. Gidwitz.

Mr. O'Neall could not be reached for comment.

In addition to the changes announced yesterday, the orchestra also is looking for a new general manager, as earlier this summer George Alexsovich resigned to accept a similar job at the Atlanta Symphony Orchestra.

While top management positions have been cut, the symphony will add less highly paid staff positions to shoulder the work load, Mr. Gidwitz said.

"We're not cutting the number of people, we're cutting the senior management," he said.

The restructuring comes in the midst of contract negotiations with the symphony's musicians, talks that have been marred in the past by considerable bitterness and by a six-month strike in 1988.

Since then, however, both management and musicians have sought to end the friction between them.

After the 1988 strike, musicians, board members and managers formed a group called the Council for the Future, which meets once a month to share information about the orchestra's finances and its artists' needs.

In 1992, the symphony musicians performed for two months without a contract while the two sides haggled over terms. The musicians agreed to modest cutbacks in salaries and a new, less-expensive health-care program -- concessions designed to reduce the orchestra's expenses and head off further deficits.

The musicians' base weekly salary was reduced from $1,040 to $1,030 for the first 16 months of the contract, increasing to $1,050 in the last six months of the second year. In contrast to its financial struggles, the orchestra, led by conductor David Zinman, has enjoyed in recent years a range of artistic successes, including last fall's triumphant 18-concert East Asian tour, premieres of works by Michael Daugherty, and Grammy Award-winning recordings.

Artistic projects such as these are vital to the symphony, Mr. Gidwitz said.

"Concerts are the bread and butter that reach [an audience of] a half-million people," the executive director said. "But there are other activities -- like tours and recordings -- that are opportunities for a symphony to demonstrate its achievements on a world-wide basis and they are immensely important to morale."

Still, like many other symphonies, the BSO is struggling to achieve financial success. A study commissioned in 1992 by the American Symphony Orchestra League found that symphonies nationwide are facing increasing debt. In 1971, the total year-end deficit for all American orchestras was $2.8 million. By 1991, it had grown to $23.2 million.

In 1986, the BSO embarked on a $40 million endowment campaign that, with the help of a six-year, $10 million grant from the state, was intended to prevent future deficits. By 1992, however, the symphony was losing money and has continued to do so.

During the 1993-94 season, the BSO -- a private, nonprofit organization that receives funding from federal, state and local sources -- lost $650,000.

In the 1994-95 season -- the 12-month period ending in August -- the orchestra projects losses of $760,000, according to Mr. Gidwitz. That amount brings the deficit carried over from previous years to more than $2 million.

"We can endure losing that amount, but we can't continue to lose it," he said. "We had hoped to find a balance through stringent cost controls and revenue growth, but we haven't been able to."

Joe Turner, chairman of the players' negotiating committee, declined to comment on the layoffs beyond saying: "I heard about it and I understand that it was done both as an economic measure and also that Gidwitz felt that he was streamlining the staff and it would actually become more effective."

However, a financial analysis of the symphony, commissioned by the musicians, and obtained by The Sun, raised questions about why the orchestra's increased spending on marketing has not produced a parallel increase in revenue.

"With marketing expenses increasing significantly in recent years why have total revenues, especially concert income, not ,, dramatically increased as well?" the report asked. "The organization needs to develop and implement more effective and efficient revenue and support generation techniques with appropriate leadership from the executive board."

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