Philadelphia Orchestra's bankruptcy battle hits same notes as Wisconsin fight

The Wister Quartet plays Saturday in lobby of Morgan Lewis, the orchestra's law firm, to protest the bankruptcy.
The Wister Quartet plays Saturday in lobby of Morgan Lewis, the orchestra's law firm, to protest the bankruptcy.
Posted: April 21, 2011

IMAGINE IF the political rock opera pitting public employees against tea partyers in Madison, Wis., had played out not with a backdrop of angry chants but with soothing string pieces by Schubert and Mozart.

Would you have the mess that now faces the renowned Philadelphia Orchestra and the looming fight over its bankruptcy?

Not unlike the political badgering in the Badger State, that depends on whom you ask.

But it's not hard to see similarities between what's emerged as a core issue in the fight over the orchestra's future - whether union benefits for the skilled musicians are too generous - and the battles between unionized public workers and GOP governors in Wisconsin and New Jersey.

Just like Wisconsin's embattled Gov. Scott Walker, the orchestra board members who voted this weekend for bankruptcy say the 111-year-old icon of American classical music can't pay its bills without additional givebacks from union members, especially on the pension front.

But musicians - who've opposed the bankruptcy filing while noting that the orchestra is still sitting on a $140 million endowment - complain that they're being turned into a scapegoat for fiscal problems that run much deeper than their pension.

Kind of like what's happened in Wisconsin.

John Koen, the orchestra cellist who also heads the musicians' committee on its board, said that a too-vigorous push from management could also create a Madison-style backlash, that management may "be choosing the thing that would make musicians more unified."

But Koen also highlighted one of the factors that make the labor dustup at the Kimmel Center very different from the public-employee union disputes flaring across the nation's Rust Belt: Its world-class, highly sought-after players may get plucked up by prestigious rival symphonies if the financial chaos isn't resolved.

The cellist said he's been assured by other board members that greater contract leverage is not the reason for the bankruptcy filing and that "quite frankly if it were - if they tried to extract more serious concessions - it would be another thing that would cause people to leave precipitously."

Koen said that even he recently applied for a cellist slot at a rival orchestra that he might not have considered in the past.

Clearly, the Philadelphia Orchestra is not your typical bankruptcy. No U.S. ensemble of such stature - conducted by legends like Leopold Stokowski and Eugene Ormandy and popularized in Walt Disney's classic "Fantasia" - has filed for protection from its creditors, even with the declining popularity of classical music among younger audiences.

Likewise, its players - who belong to Local 77 of the American Federation of Musicians - are no ordinary union. Its starting salary is nearly $125,000 a year - it had been slated to go higher before a round of concessions last year - and reportedly an annual pension for a 30-year veteran could run as high as $80,000.

Some observers say the pro football players' union is a more apt comparison than the Wisconsin teachers'. But few dispute that topflight musicians are well-paid because they're in demand.

Even on Philadelphia's conservative-leaning talk station WPHT - which has bubbled over in recent months with anger toward unionized teachers and Philadelphia carpenters - callers aren't sure if it's labor issues that are dragging down the orchestra.

WPHT host Dom Giordano, who aired some discussion of the orchestra's woes this week, said listeners seem to be more inclined to blame management, "that they don't seem to be doing a very good job at running the business."

Giordano did question, however, why highly paid and sought-after musicians even need to be in a union.

Orchestra leaders refuse to discuss the specifics of its ongoing talks with the union, which will now be rolled up into the bankruptcy proceedings. They are also seeking other ways to balance the orchestra's books, such as lower rent payments to the Kimmel Center.

But ending payments into the musicians' defined-benefit plan - which would save an estimated $3 million annually, although triggering a liability of $25 million - has been identified as a centerpiece of management's plan to halt deficit spending.

The orchestra's president, Allison Vulgamore, said in a phone interview that the unbalanced budget "didn't occur overnight but occurred over many years - and we're not going to be able to solve it overnight."

She said a balanced budget is integral to the orchestra's five-year campaign, which includes seeking $160 million in new cash from donors.

"This is not a labor issue," Vulgamore said. "It's a revenue issue."

Still, the bankruptcy filing is unusual - most seekers of Chapter 11 protection do not have a large endowment and are not debt-free like the orchestra - and it's not clear how those issues will play out in Bankruptcy Court.

Interestingly, the orchestra has assembled a cast of new players deeply involved in another recent high-profile Philadelphia bankruptcy - that of Philadelphia Media Holdings, former parent of the Daily News, Inquirer and Philly.com.

Brian Tierney, former CEO of PMH, is helping the orchestra with public relations, while Joseph Biondi, who took over for Tierney very briefly last year, is a consultant, and Lawrence McMichael of Dilworth Paxson - who represented Tierney's newspaper company - is also representing the orchestra at a rate of $750 an hour, according to American Lawyer's Am Law Daily blog.

It's not surprising in 2011 that a bankruptcy - especially one tied to the hot-button issues of labor vs. management - requires good PR. The ultimate judge of who wins and loses in the financial crisis of the Philadelphia Orchestra may not be the one wearing robes, but the court of public opinion.

But the orchestra's president, Vulgamore, is betting that most musicians will still want to continue to bask in the prestigious shadows of Ormandy and Stokowski.

"People make personal choices," she said. "I don't want to sound Pollyannaish, but our effort in Philadelphia is to remain a destination orchestra for great musicians."

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