BSO's debt expected to surpass $16 million

The interim president still hits optimistic note

March 07, 2006|By TIM SMITH | TIM SMITH,SUN MUSIC CRITIC

The albatross of accumulated deficits weighing down the Baltimore Symphony Orchestra is expected to get even heavier by the end of the 2006 fiscal year. If current projections hold, that deficit will increase from about $11.8 million to $16.2 million.

"There is no one in the organization who believes this is a sustainable situation," W. Gar Richlin, the BSO's interim president and CEO, said in his first interview since taking the job after the sudden departure of the controversial James Glicker almost seven weeks ago.

There are many "views on how the deficit got to where it got," Richlin said. "I am much more focused on the future than the past."

FOR THE RECORD - An article in yesterday's Today section about the Baltimore Symphony Orchestra's financial state included an incorrect figure for its endowment, which is currently $90 million.
The Sun regrets the errors.

The BSO, which has an annual operating budget of about $30 million, has been unable to balance the books since the 2001-2002 season.

Although the BSO has an endowment of about $78 million, much of that money is restricted and cannot be withdrawn beyond a modest percentage annually. Using more of that endowment to help pay off debt is "a board decision and a legal question," Richlin said.

A still-unfinished audit of the 2005 fiscal year, which ended Aug. 31, is expected to show a deficit of $7.3 million. A smaller, but still substantial, deficit of $4.5 million is projected by the end of August this year. Added to the $4.4 million accumulated deficit at the end of the 2004 fiscal year, the debt would pass $16 million.

Richlin, who has lived in Baltimore for 30 years, joined the BSO board last spring. He has been a lawyer for major firms in the area and president of Advertising.com, which was acquired by America Online in 2004. He is one of the principals of Richlin/Dale LLC, a management-advisory firm that primarily works with young companies.

Richlin has set a goal for the BSO of breaking even in the next fiscal year. "It's important to do, and it can be done," he said.

"I'm not suggesting that it's necessarily easy. My big theme is that all constituents in the organization have to be participants in this. We need to run our institutional shop more efficiently, to run it leaner. And the community will have to kick in, not just symphonygoers," Richlin said.

Achieving a balanced budget next year could encourage more faith in the BSO from that community. "People need to see a viable model," Richlin said.

There are some positive developments at the BSO. "The numbers I'm beginning to see now are better than the comparable period last year," Richlin said.

Single-ticket revenues for the main classical and pops concert series, for example, are up in Baltimore 27 percent over last year at this point. Including sales for those series at the BSO's second home, the Music Center at Strathmore in Montgomery County, the figure is up 35 percent, according to Eileen Andrews Jackson, director of public relations and community affairs for the BSO at Strathmore.

"Are tough times ahead? Absolutely," Richlin said. "But I am pleased with the quality of the staff and the commitment of the staff. Everyone knows what's going on, but everyone's pitching in. There's a lot of passion. And that makes me happy."

Jane Marvine, head of the BSO players committee, who sat in on the Richlin interview at his invitation, said, "The musicians recognize that we have to be financially viable. We cannot have a future sustaining deficits.

"We need leadership," Marvine said. "And we are so grateful that Gar stepped forward to lead. He's caring and respectful. Hopefully, this will be a new beginning."

Richlin gave no details on how he expects the organization to balance next year's budget.

"My view is that we're going to discuss all sorts of options, but, hopefully, not in the press," Richlin said. "We're going to look at everything possible."

Asked whether that might include downsizing the number of orchestral personnel or reducing the orchestra's 52-week status, Richlin said, "We haven't discussed it. I don't want to rule out anything right now."

"We are still committed to working with the board and management to find creative solutions," Marvine said, "but those solutions have to be supportive of artistic quality, which means a full-time, full-sized orchestra.

"If we don't have a [52-week] orchestra, we are talking about a quality issue. We need to have a stellar orchestra that will generate enthusiasm, retain and attract great music directors and the highest-quality musicians."

In response, Richlin said: "I know that Jane and the musicians feel passionately about this, and it's one of the things we will go into in more detail when we close the doors and discuss the contract."

The musicians' contract expires in September.

Since 2003, the players have made various concessions on salaries and benefits aimed at relieving some of the financial pressures on the orchestra.

"We did it with the spirit and commitment that it was going to take all constituents" to help reduce deficits, Marvine said, and with the expectation that "the board would raise more money and the staff sell more tickets."

As for any financial plan for next year, Marvine said that the musicians "want to make sure that [it] will be one that preserves the excellence we have and acknowledges the sacrifices of the musicians."

Marvine and Richlin spoke optimistically about the effect that the BSO's next music director, Marin Alsop, who succeeds Yuri Temirkanov next season, may have on the orchestra's financial prospects.

"She is absolutely committed to raising money," Richlin said. "She calls me up and e-mails me all the time about this. She'll tell me, `I met this guy in Davos, [Switzerland, at the recent World Economic Forum]; give him a call.'"

tim.smith@baltsun.com

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.