BSO faces $1 million deficit for fiscal year

Sept. 11, economy part of reason for the shortfall

April 12, 2002|By Tim Smith | Tim Smith,SUN MUSIC CRITIC

The Baltimore Symphony Orchestra, which has successfully balanced its last six operating budgets, faces the prospect of a $1 million deficit at the end of its current fiscal year Aug. 31. The threat has spurred joint action by administrative staff, the board of directors and musicians aimed at heading off that shortfall.

"The board of directors reacted to the news the way everyone else has, with some surprise and disappointment," board treasurer Philip English said yesterday. "But this is not an unusual circumstance for a symphony orchestra in this day and time."

Concerns about the budget have dogged the BSO since the start of its season, when the annual fund-raising gala fell short of its revenue target by $117,000, the stock market dive cut into the orchestra's endowment (now $70 million, down from $75 million), and several "Meyerhoff Presents" events run by the BSO failed to meet ticket sales projections.

"The problem is not isolated in any one area," said BSO vice president and chief financial officer Douglas Mann. "The economy has certainly played a part. And in the weeks immediately following the Sept. 11 attacks, we lost income from canceled educational concerts. We also had to spend money out of pocket to enhance security around [Meyerhoff Symphony Hall]. And there have been increases in our insurances."

By January, a deficit of $750,000 looked likely.

"At that time we identified another $250,000 that could swing either way," Mann said. "We got more solid numbers in early March, and it took time to go through them and get a handle on where we are."

The analysis put that $250,000 in the projected red ink column, bringing the potential debt to the $1 million mark. It could have been an even larger number, but cost-cutting efforts in recent months have already trimmed about $600,000 from this year's budget. (Any savings associated with the elimination of the BSO Chorus will not be realized until next year's budget.)

"It's a situation that can't be solved overnight by going to your current donor base and asking for more money," English said. "That's why the board, the staff and the players have agreed to initiate this collaborative effort to stem the tide.

"This has to be a longer process than trying to stick a finger in the dike. We are going to have to look at the business and financial model that we have in place and figure out where we went wrong."

The seven-member players committee of the orchestra, senior staffers and officers of the board met a few weeks ago to begin discussions on the fiscal crisis. The full orchestra was informed of the situation in a meeting on Wednesday. Advisers from the Symphony Orchestra Institute, a private foundation established in 1994, will be brought in to help with the process of addressing the deficit and avoiding future ones.

"The institute can help an orchestra with more progressive organizational development," said Jeffrey Stewart, chairman of the BSO players committee. "The musicians are willing to do our part. We hope we can bring some fresh perspectives and new ideas."

Although increased costs associated with the orchestra's contract have put pressure on the budget, it is too early to tell if the musicians will be asked to make any concessions in an effort to balance the budget. Other artistic costs, such as the frequent hiring of extra players for concerts (music director Yuri Temirkanov's preference for a large orchestral sound is involved here), have also hindered the bottom line.

"We honestly don't know what our next steps are," BSO president John Gidwitz said. "But we won't do anything that will affect the quality of the concerts."

The recently announced gift of $1 million to the BSO from the Alex. Brown & Sons Charitable Foundation will not be used to address the deficit.

"It wouldn't make sense to use that as a onetime stop-gap," Gidwitz said. "The idea is for that money to be able to grow."

No changes in the BSO's plans to tour Japan in September are expected. Funding for that trip will come from corporate and private underwriting, grants from state and local governments, and concert fees paid by presenters in Japan.

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