Following my previous post about the unfortunate Philadelphia Orchestra — and why their bankruptcy could be a tipping point for the entire classical music business — here are some gloomy details. Sorry for the gloom, but it’s important to understand what’s going on.
For another overall description of what’s happening, here’s what the Philadelphia Orchestra said in a message to its patrons: “Our structural deficit has been created by a decline in ticket revenues, decreased donations, eroding endowment income, pension obligations, contractual agreements, and operational costs.” Note the term “structural deficit.” This means not just a history of losing money, but a built-in guarantee that you’ll lose money, because what you do — putting on concerts — costs more money than you’re able to take in.
The structural deficit, said the orchestra (in the document linked above), is $14.5 million each year. The Philadelphia musicians, we know, think these problems could have been avoided, that they stem from bad management. But other organizations have them, and in fact they’re endemic throughout the orchestra business, whether orchestras choose to talk about them publicly or not. I first heard about structural deficits years ago, at a private meeting, from people who ran major orchestras that weren’t Philadelphia.
Next: the causes of the problem, in more detail. (I’ll also post some things that aren’t as depressing. Though remember that I’ve also said this should be a time when we inspire ourselves even more strongly with our love for classical music. This will see us through the crisis, and help resolve it.