MPR News Primers

MPR News Primer: Orchestra contract negotiations

by Paul Tosto, Minnesota Public Radio
Last updated April 29, 2013

Latest: Saint Paul Chamber Orchestra musicians ratified a new three-year contract, ending a months-long lockout.

Minnesota's two premier orchestras face tough financial dilemmas that could alter the state's classical music landscape by changing musicians' pay, ticket prices and even musical quality.

Management of both the St. Paul Chamber Orchestra and the Minnesota Orchestra have pressed musicians for changes in the way the orchestras are structured financially, and unions have fought to keep pay and benefits they have bargained for in the past.

Both orchestras saw their contracts expire at the end of September. Both are based in the Twin Cities, but their influence is felt statewide, drawing audiences in person and on the radio. Musicians also tour the state regularly and get involved in statewide musical education efforts.

To help understand the expected controversy, here's a guide to key facts:

What are the orchestras' challenges?

The orchestras' finances are dictated by musician payrolls, ticket sales, fundraising success, and in the case of the Minnesota Orchestra, endowment health. Lucrative contracts signed before the recession set up both groups for a big fall.

The Minnesota Orchestra in 2007 signed a five-year contract with its musicians to raise performers' annual base wages 25 percent to $118,170, by 2011-2012. But the stock market collapsed less than a year into the contract, putting a serious dent in the orchestra's endowment and ticket sales. Musicians in 2009 agreed to forgo $4.2 million in wages in the contract's final three years, bringing the 2012 minimum to about $111,566.

That's still 17 percent more than 2006-2007. Even with the givebacks, the orchestra recorded its worst loss ever -- $2.9 million for the 2010-2011 season, mainly as a result of loss of endowment revenue.

The St. Paul Chamber Orchestra is feeling similar pain. Musicians in 2011 agreed to pay and work day cuts from the pre-recession contract. It was the third straight year orchestra management sought concessions from the contract. While the SPCO ended last season with the books balanced, it is "staring down a projected million-dollar deficit for the 2012-2013 season," MPR News reporter Chris Roberts writes.

A rebounding stock market, slowly improving economy and excitement around concert hall construction projects will help the fortunes of both orchestras, but that won't come quickly. Both groups are also confronting structural changes.

Concert ticket sales covered only about 22 percent of the Minnesota Orchestra's total expenses in fiscal 2011. One observer of the local classical scene worries the orchestra may degrade into a "glorified Pops orchestra."

What do musicians get paid?

The Minnesota Orchestra says average annual compensation for musicians is $135,000. They get a minimum of 10 weeks of vacation and up to 26 weeks of paid sick leave each year. Minimum salary this year is $111,566. At the SPCO, musicians earn a base pay of $73,732 this season. A document posted by SPCO management on August 14th puts average musician pay at over $90,000.

Individual musicians also negotiate additional pay called "overscale." At the Minnesota Orchestra, 80 percent of musicians receive overscale payments from $520 to $79,243 per year. The average is $15,885. Conductor Osmo Vänskä earns more than $1 million a year but has also taken pay cuts.

Minnesota Orchestra musicians are lower paid than those at symphonies in Boston, Chicago and New York but do better on average than musicians with similar gigs in Atlanta, Baltimore, Charlotte, Dallas, and Houston.

What does management want?

Pay cuts lead the list of concessions sought by management at both orchestras.

At the Minnesota Orchestra, leaders want to cut average musician annual salary more than 30 percent, to about $89,000, but add two more weeks of vacation (to 12 weeks). They're also proposing a reduction in benefits. The musicians receive up to 26 weeks of fully paid medical leave because of the physical stresses of the job and the possibility of injury. Under the proposed contract, that leave would be cut in half to 13 weeks.

"We believe the time has come when musicians must play their part in the organization's financial recovery," leadership writes. "The orchestra is committed to keeping prices as reasonable as possible for concert-goers, whose average income is below that of its musicians. If we were to try to balance our budget through ticket sales and donation increases, every ticket sold and every donation given would need to increase by 60 percent." The Minnesota Orchestra also wants "more flexible union work rules" to meet consumer demand, such as scheduling concerts on New Year's Eve.

Musician salaries and benefits make up nearly 40 percent of the SPCO's expenses and are its largest single cost.

What do the musicians want?

Generally, the musicians have called for higher ticket prices and lower administration costs.

The SPCO's musicians want the orchestra to seek other money sources. They've talked with SPCO benefactors about raising contributions to the orchestra and have proposed "benefit concerts." They've also proposed a pay freeze but no cuts in pay, benefits or the number of musicians - an idea management has dismissed as inadequate to meet the orchestra's financial challenges.

In late September, SPCO musicians offered a plan that included a cut in annual minimum pay, to $73,000, in the first two years of the contract but rejected cuts in the orchestra's size. Management turned aside the offer, saying it would save only $100,000 over the three years of the contract.

Minnesota Orchestra musicians haven't detailed their specific offers in negotiations but have argued management's proposals would force musicians to seek better paying positions elsewhere and hurt musical quality. Musicians have also asked for an independent audit of the orchestra, including its endowments.

What's at stake for the Twin Cities?

Twin Cities boosters have worried for months that the labor battles at the two orchestras could damage the region's cultural offerings and reputation, pointing to what happened in Philadelphia and Detroit.

MPR's Roberts writes: "Two of the highest profile examples are the Philadelphia Orchestra, which is struggling through bankruptcy, and the Detroit Symphony Orchestra, which this spring reached an agreement with its musicians after a debilitating six-month strike."

Musicians warned a strike, the worst case scenario, would have long term effects, on the area's classical music scene.

Unlike striking nurses, though, orchestra musicians may not find a sympathetic ear to their plight. They earn a lot more than average Minnesotans - even with the proposed salary cuts - and don't have a daily connection to most Minnesotans.

Cleveland Orchestra musicians couldn't get much traction from the public during their one-day strike in 2010. SPCO musicians have said they want to educate the public about the unique circumstances surrounding an orchestra as negotiations continue.

A strike by Minnesota Orchestra musicians in 1994 was settled with a new contract after two weeks.

Financial woes have almost closed the SPCO before: In 1993 when it was on the verge of collapse, a "radio-thon" raised $500,000 to save it.

What happens next?

The Minnesota Orchestra moved quickly to lock out its musicians on Oct. 1, as soon as the contract expired. St. Paul Chamber Orchestra officials locked out their musicians on Oct. 21.

On April 9, after six months locked out, musicians and management of the Saint Paul Chamber Orchestra reached a tentative agreement. The three-year deal, ratified by the musicians on April 29, will cut performers' base pay by $15,000 a year and reduce the size of the orchestra from 34 members to 28. It also includes a retirement buyout for musicians 55 and older.

Those basic terms are similar to what the SPCO's musicians rejected in September. The cut in base pay is deeper.

The chair of the SPCO musicians negotiating committee says the pay cuts will make it harder to attract future top musicians. The SPCO deal could also put new pressure on the Minnesota Orchestra and its musicians to come to terms.

Minnesota Orchestra Music Director Osmo Vanska has called on management and musicians for months to resume talks. Vanska, credited with turning the Minnesota Orchestra into one of the world's top symphonies, fears the standoff will damage or destroy the organization.

With an SPCO agreement done, the spotlight falls squarely on the still-silent Minnesota Orchestra.

MPR News reporters Euan Kerr and Chris Roberts contributed to this report.