MnOrch management launches its own financial analysis, cancels concerts

UPDATED WITH MUSICIAN REACTION 6.45pm

20081106_orchestra_47.jpg Citing frustration over lack of progress in discussions with locked-out musicians over an independent analysis of the orchestra’s finances, management at the Minnesota Orchestra today announced it has launched a study on its own. The musicians are however crying foul, saying it’s management doing the foot-dragging

Management also canceled concerts through May 12th.

If you haven’t been following this closely, here is a quick play-by-play: today’s move is the latest twist in an argument which has been going on for months. Musicians requested the independent analysis back in August, saying it needed the information to make an informed counter-proposal to the management contract offer presented in April last year. Management refused for several months, saying the organization’s annual audits should be sufficient. After the last contract lapsed at the end of September management locked out musicians on October 1st.

Things seemed to be taking a turn for the positive in early January when management said it would join with the musicians for the analysis in order to move the negotiations forward. However discussions since then have only produced an agreement on who would do the analysis. Even then the two sides had to pick two analysts because they couldn’t agree on one and, on top of that, the names were kept confidential.

Today’s development comes after management says it grew frustrated with the lack of progress. Orchestra President Michael Henson says the orchestra board decided to move forward on its own when the musicians insisted the scope of the analysis extend beyond simple finances.

“And unfortunately we began to see those parameters expand to include an examination of our artistic decision-making process and the quality and effectiveness of the board,” Henson said this afternoon. The board decided to move on with an analysis on narrower terms.

However musicians say management has stepped out of line. They say management and musicians had agreed to a framework for the study. Then the players say management wanted the following language inserted in the agreement. “It is understood that this financial analysis/review is not intended nor will it encompass subjective matters such as the artistic quality of the music director or the musicians, the comparative quality of other orchestras, programming decisions, performance of management or staff, or board quality/competency.”

The musicians objected to this language, and said so.

Tim Zavadil, chair of the Musicians Negotiating committee says the examining the artistic decisions, board performance and making the comparisons with other orchestras is what makes this an analysis as opposed to an audit.

He says the musicians were under the impression they were still talking about how to do the analysis and he was flabbergasted to hear management has decided to go ahead on its own instead of together with the musicians

“That would be the best way to go, to do it jointly,” Zavadil said this afternoon. “I am sure if we did one they would say well that’s just one that the musicians did on their own. I don’t know what our response will be if they release this information.”

Management hired Anthony Knerr, managing director of AKA Strategy to do the analysis. He has had no connection with the Minnesota orchestra up till now. Henson says he expects the results of the study to be available by the end of May and they will be shared with the musicians. A fundraising feasibility study to judge whether there might be more fundraising capacity within the Minnesota community for classical music is already underway, with results expected by mid-May.

Henson says he remains hopeful that musicians will present a counterproposal soon so negotiations can begin.

He says the round of cancellations announced today through May 12th are an extension of that hope.

“It’s important to stress we still have concerts that go through to early June,” he said. “And we are still very much hoping to stage Sommerfest. So there is potentially very much music-making in the summer.”

However the musician’s Tim Zavadil says he doesn’t know how this can go forward. He says the paycuts management wants to make in the musicians contract is like asking the players to make a $5 million investment in the orchestra, and any investor considering such an investment would want information about the long-term prospects of a company in question.

He points out how management initially resisted the idea of an analysis. “And now when we thought we were still discussing the parameters, they claim they are going ahead without us. It’s almost like they liked the idea so much they have stolen it.”

  • Elizabeth Erickson

    If Richard Davis treated his stakeholders at the US Bank the same way he, Jon Campbell, and Michael Henson are treating the stakeholders of the MN orchestra (i.e patrons and donors) he would be kicked out the door. Why do these people think it is OK to treat everyone— musicians, patrons, donors, state legislators, and tax payers with such contempt? It is not OK and I am livid that the money that I have given to the orchestra is paying for lawyers who are helping management starve out the musicians. These people don’t love the orchestra! No one who truly loves our orchestra could treat its members this poorly. There are members on the executive committee for the MOA who are known to NEVER attend classical concerts. How in the world do they have a clue about what makes a great orchestra if they have so little interest in ours? Enough, already. Submit a proposal that can be taken seriously by the musicians. How can they make a counter offer that forces them to choose between cutting off their right arm or the left arm? They are not working under your ridiculous and disrespectful conditions. And guess what, no one of high caliber in the entire music world wants to either. And thanks to your delay tactics, everyone from Vienna to Taipei knows about how you treat musicians because our musicians have been playing all over world for the past 7 months. Way to promote your organization!

  • Maryann Goldstein

    Gotta love this… the MOA is “frustrated with the lack of progress”? It sure didn’t seem that way until apparently very recently, now that it looks like there might not be any MOA sponsored MN Orchestra season for next year and the Carnegie Hall Tour appears to be in jeopardy. In fact, the MOA and Mr. Henson have been absolutely chipper about how things have been going because they have not had to pay the musicians or the convention center during the lockout/lobby renovation. Anyone who has been following this situation for more than 2 milliseconds knows that Mr. Henson’s proclamations more often than not have little basis in reality.

  • NYMike

    It has been apparent for months that the MOA planned on canceling the entire ’12-’13 concert season. This administration needs to be relieved and sent packing!

  • Joshua

    “Balances in 2009 and 2010 would support our state bonding aspirations,” Bryan Ebensteiner, vice president of finance, told the orchestra’s executive committee in September 2009, “while the deficits in 2011 and 2012 would demonstrate the need to reset the business model.” – Star Tribune, 12/6/2012

    “The orchestra in fiscal 2011 reported its largest deficit ever, $2.9 million, a shortfall that could double in 2012.” – Star Tribune, 11/29/2012

    “Michael Henson, president and CEO of the orchestra, said on Friday that no immediate financial crisis exists” Star Tribune, 11/29/2012

    “There’s no single strategy to beating the downturn,’ Michael Henson asserts. ‘There has to be a whole series of strategies to maintain a focused approach. The priority is continuing the excellence in the artistic work. With orchestras across the US hard hit by the recession — the Minnesota Orchestra stands out as a beacon institution among the bad news…” – MN Orchestra website via Gig Magazine, 7/2/2010

    I think I see why they prefer to do their own financial analysis. Look at the sheer number of contradicting statements Michael Henson has made regarding the state of the Orchestra’s finances! Is it any wonder he wouldn’t want anyone looking into the books? I smell a (British) rat.

  • MNOlover

    os·si·fy (s-f)

    v. os·si·fied, os·si·fy·ing, os·si·fies

    v.intr.

    1. To change into bone; become bony.

    2. To become set in a rigidly conventional pattern: “The central ideas of liberalism have ossified” (Jeffrey Hart).

    v.tr.

    1. To convert (a membrane or cartilage, for example) into bone.

    2. To mold into a rigidly conventional pattern.

    [Latin os, oss-, bone; see ost- in Indo-European roots + -fy.]

    os·sific (-sfk) adj.

  • Mark C.

    As this dispute drags on, with all manner of foot dragging, lack of transparency, changing stories, and strange decision after strange decision on the part of the orchestra management and board, it seems as if the very parties charged with being stewards and guardians of the Minnesota Orchestra are instead bent toward its destruction. They are not being faithful stewards. I have do doubt that there are serious financial pressures that need to be addressed, but their obstinate behavior doesn’t really lend itself to seeing an interest in actually finding a solution to those challenges.

  • Michael B

    Management sure seems determined to avoid any kind of independent analysis of their books. This has to raise all kinds of suspicions.

  • Captain Spaulding

    Time to get rid of the Board and shoot the rest of the management out into deep space since they seem to think that a non-profit organization is a for profit entity with special tax status. Okay folks, how do the players begin that process?

  • Jeanne Simpson

    Michael Henson is exhibiting the same kinds of behavior that controlling, psychologically abusive spouses and parents do. Family members are so broken that they become pawns.

    By now I thought the board would see through Henson, recognize that he is a poor leader and fire him so that negotiations could move forward. They have already become his pawns.

    I believe that Michael Henson came to the MOA with the intention of breaking the union and destroying what the orchestra’s patrons came to love because it is within his personality to do so. He even fooled the state into giving the orchestra money for the renovation.

    Who will stop him?

  • Jennifer S

    Jeanne – Actually, I suspect that Michael Henson is simply the pawn of Board Chair Jon Campbell and Immediate Past Board Chair Richard Davis. Don’t forget, it was the Board that *hired* Henson, and they were most likely searching for a CEO who would willingly carry out their agenda.

    When this is all over, Henson will serve his final purpose by becoming the scape goat: He will be fired or forced to resign, allowing the real engineers of this mess (Campbell/Davis et al) to save face and slip into the background with minimal damage to their reputations in the community.

    Henson’s behavior is reprehensible, but he is a puppet. Let’s not give him so much credit.

    The real culprits are those on the executive tier of this Board, who have hijacked a high-profile, highly successful non-profit arts organization and are determined use it as an example of how to break a union so their cronies (who sit on the boards of other non-profits and employ union workers) can applaud them and follow suit.

  • Susan Bell

    Seriously — can you get rid of that board?

  • Mike

    Goodness – If management is refusing to allow an assessment of programming decisions and the artistic quality of the music director and musicians to be a part of the financial analysis, there is no way that the analysis can be accurate. These aspects have a direct impact on concert attendance and donations, and they are key to accurately assessing potential revenues.