Baltimore Symphony faces deficit of $750,000 or more
After four years of balanced budgets, the Baltimore Symphony Orchestra is anticipating a deficit of between $750,000 and $800,000 from the last fiscal year.
The final figure will not be known until the official audit is completed later this fall.
“Obviously, we are not happy about this,” said Paul Meecham, the BSO’s president and CEO.
“Even with increased ticket revenue and cost-cutting last season, that was not enough to make up for softness in fundraising. And we are seeing more of these challenges as we move forward this season.”
The budget last year was $25.5 million; the current budget is about $26.5 million.
In an effort to avoid another deficit this season, trims to expenses will be made. Administrative staff will take a one-week furlough at the end of the calendar year.
One program has been changed; in March, Beethoven’s Symphony No. 7 will be substituted for ....
“We’re sorry that the staff is having a furlough imposed on them,” said violinist Gregory Mulligan, head of the players committee. “We’re disappointed at the deficit, but not surprised. If you look around the country, it seems that deficits seem to pop up when a contract with the musicians is about to run out.”
The current three-year contract at the BSO expires next September. Meecham said there were no plans to change conditions of that contract. The players have made concessions for several years to help the orchestra balance its books, accepting repeated pay freezes and cuts. Base pay was to have risen to about $90,000 this season, but that was scaled back to less than $70,000.
“Musicians’ salaries are less than they were in 2003,” Mulligan said. “But in the past 12 years, the budget has gone from $20 million to nearly $27 million. We are hoping that the organization is still committed to having a world-class orchestra in Baltimore.”
The separate board of directors that controls the orchestra’s endowment, currently valued at about $48 million, has offered to increase the annual draw from $2.5 million to $3 million if the BSO can match that extra $500,000 with new contributions.
A successful campaign to raise those matching funds, along with cost-cutting measures, “would get us to a balanced budget,” Meecham said. “I have measured confidence. We’re trying to be preventive so we don’t go back to the years of deficits the BSO once had.”
Among the factors putting pressure on the BSO’s finances are a $500,000 rise in pension obligations and a continued drop in government and corporate funding.
The BSO has been on generally firm financial footing since 2006, when its accumulated debt of more than $20 million was retired by using endowment money. Cash reserves, donations and revenue helped the organization avoid deficits in recent years.
Several orchestras around the country have experienced increased financial pressures, especially since the recession hit, and there is more talk in the industry about devising new business models.
A labor dispute at the Indianapolis Symphony ended this week after the musicians accepted a salary cut or more than 30 percent and a reduction of weeks of service; the orchestra will no longer operate year-round, as the BSO and about 15 others do.
Meecham said that no changes to the BSO’s 52-week status are anticipated but that “we have to look at all options.” A campaign to increase the endowment is in the discussion stage; a larger endowment would provide a cushion against declining revenue and contributions.
SUN STAFF PHOTO