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Grieving orchestra to strike? Here’s the management’s case

The management of the San Francisco Symphony Orchestra has issued the following statement in an attempt to rebut the causes given by their players for authorising an all-out strike. The only element missing from the statement is any reference to the half-billion dollar construction program planned by the SFSO, while cutting its players’ health benefits.

sf.symphony

 

March 7, 2013

 

SAN FRANCISCO SYMPHONY NEGOTIATIONS FACTS:

 

CURRENT STATE OF NEGOTIATIONS

The current extended collective bargaining agreement for the orchestra musicians of the San Francisco Symphony expired on February 15, 2013.  Negotiating sessions with the union representing the musicians began in September of last year and are currently ongoing. We will continue negotiations with our musicians and their union on March 12, as overseen by a federal mediator, and are hopeful that a new agreement can be reached soon. At this time, all public concerts and events will take place as scheduled.

“Our musicians are the center of our organization and are among the most talented in the world.  We are working with the union representing the musicians and a federal mediator to develop a fair agreement that recognizes the musicians’ stature as one of the top orchestras in the country, but one that does not compromise the future artistic quality or financial stability of the institution,” said Brent Assink, Executive Director of the SF Symphony.

CURRENT MUSICIAN COMPENSATION

The average musician compensation is currently over $165,000 annually.  In addition, musicians receive 10 weeks paid vacation, paid sick leave, a full coverage health care plan with no monthly contribution for individuals, and a maximum annual pension payment of $74,000 upon retirement.  In the past four years, SFS musicians have received salary increases of 17.3% (4.3% average increase per year).

 

LATEST PROPOSAL TO THE MUSICIANS

Our most recent proposal keeps these benefit levels in tact in addition to multi-year salary increases that keep them among the top three highest paid orchestras in the country.

 

TRANSPARENCY OF FINANCIAL INFORMATION

As a non-profit organization, the Symphony provides transparency about its finances in fully audited and publicly available documents in accordance with the law.  The administration has responded to all of the union’s specific requests for information in a timely manner, throughout the negotiations. All official requests, pending one which is still in discussion with the union, have been responded to as of March 6, 2013.

 

DAVIES SYMPHONY HALL RENOVATION EXPLORATION

The SFS Board of Governors has, for a long time, been thinking about what might be needed to prepare the orchestra for its second century, including identifying and growing new artistic programs and sources of revenue.  At this time, the organization has engaged in exploratory and planning discussions regarding future programming, existing facilities, and potential expanded facilities for its home, which opened in 1980.

 

LEADERSHIP COMPENSATION

Music Director Michael Tilson Thomas and Executive Director Brent Assink are among the most talented and respected in their field, as are the musicians of our orchestra.  The Board of Governors of the San Francisco Symphony awarded Executive Director Brent Assink a one-time longevity bonus, paid in 2011 and 2012.

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Comments

  1. Using an average to inform the public about salaries is disingenuous and misleading. The team negotiates for the base salary – which is much much less than $165k. And anyway, $165k doesn’t go far for a family of four in S.F. these days.

    • Be careful here, especially if members of the SFSO are hoping for public support.

      According to the US Census Bureau, the median household income in San Francisco is $72,947, and has declined around $8k from 2007. Salary increases of 17.3% doesn’t seem so bad in comparison. Could this be the Achilles heel of the musicians’ position?

    • Are you kidding me? $165K “doesn’t go far for a family of four”? How many families in the Bay Area are getting by on far, far less than that? And what about the spouse of this family, doesn’t he/she also work? That would put them (well) above $200K, no? If that’s not enough, they need to reexamine their life style. Sorry.

      What I really resent about these musician’s fulminations is that, sure it’s easy to rail at the fat-cat, idiot board, it’s easy to complain about capital projects, but what they don’t say is who ends up paying for their bloated salary/benefit packages? This ends up being passed down to the paying customers in the form of high ticket prices. Most of whom make far, far less than they do. Music for the rich and by the rich is what it ends up being.

      Thank goodness for my crack audio system.

      • That is ridiculous. Would you pay the top surgeons crap and expect them to operate on you? They are at or near the top of their field, why should they not receive a good middle-class salary? They have more overhead than you, most likely. Look at what the baseball players make.

        • Surgeons, at $500K are overpaid, too. In any country but the USA their income is a lot closer to the average income, albeit higher than that average. At least they save lives, however.

          I’m all for surgeons, as well as musician, making “a good middle class salary.” I don’t consider $165K middle class.

          Since you bring it up, look at what waitresses make, look at what delivery van drivers make, look at what adjunct college professors make… What’s your point? Some people make more, some people make less. Baseball players make more, a lot more (minimum salary $490K, average $3.1 million) They also play in front of 120,000 on a weekend, plus the ones watching on TV. Classical musicians play in front of a couple of thousands a weekend, if that. No comparison.

          • In all fairness, in a place like the SF Bay Area $165K is middle class, assuming the player doesn’t have a partner who makes even more. If you have a family of four, you are paying $5K a month in rent or you bought something for more than $1m. Food is more expensive, transportation is more expensive, taxes are higher. Private school for your kid – not unheard of for “middle class” families – will be $20K/year. $165K is not poor but it does not buy the comforts and luxuries that it would in Indiana or Ohio.

          • I live in the SF Bay Area and I can guarantee that $165K/year is above the middle class. It is a very good salary.

  2. Rosalind says:

    Is it more expensive to live in San Francisco than London?

  3. Ghillie Forrest says:

    *LATEST PROPOSAL TO THE MUSICIANS

    Our most recent proposal KEEPS THESE BENEFIT LEVELS INTACT [caps mine] in addition to multi-year salary increases that keep them among the top three highest paid orchestras in the country.*

    Is this not true, then?

    As for renovations, they do mention them even if they do not mention the figure. Disingenuous, certainly. But not the total absence of “any reference” indicated by the intro.

    I didn’t, however, detect any mention of the fact that management salaries have bene increased to keep top level managerial talent. It is time these orchestras — which, granted, ought to have very able managers for jobs that are often more multi-disciplined than others at a comparable seniority level — realised that there is NO PURPOSE to top-level managers if they are not retaining top players. And that the latter deserve to be well-compensated in the first place, but in any case not the sharp end of the stick when the organisation as a whole has to retrench.

    • The base pay at SF is $141K. The base pay at Chicago is $145K. The base pay at LA is $143K. These are the top three orchestras in terms of pay in the country. There has been no exodus from SF because of crappy pay.

      I think the pay these musicians get is totally fair and appropriate. However, I worry that we are seeing the same trend at the upper level here that we also see at the upper level of executive compensation. Everybody has to be ahead of the median, so the median moves by leaps every year because so many people want to be ahead of it. Given that SF is already in the top three and separated by only a couple thousand dollars from the very top, is it so important for their salaries to match the top? To BE the top? Is a one-year freeze and then further 4% raises really so abhorrent, so insulting, to players who are already near the top of the pay scale? What exactly does “retention” mean when you’re already at the top? SF players can’t just call the manager in Chicago and say “hey, we all want to come there! We need that $4K bump!”

  4. Roberto Gonzalez says:

    San Francisco is now as expensive a city to live in as New York City. Rents are going through the roof, thanks to a Mayor that is in the pockets of real-estate speculators and owners.

    • You don’t need to live in SF. Go to Marin or the East Bay, for example, for a better quality of life. The commute to Davies Symphony Hall is quite easy.

  5. I find it amazing that in this day and age these sums of moneys + perks are being argued with. Though I am sure SF is a very expensive city, life is expensive and most families in the US have both parents in the work force. To me, 165K approaches WALL STREET level compensation. We are talking about the not for profit world people, where grants are running in short supply. Be glad you have a great job, with great benefits and a great conductor to make music with. Go out make music and enjoy your good fortunes. Some other people are not as lucky as you.
    It is hard to be sympathetic to the musicians, I am sorry, and I am a musician myself.

    • I’m not always too sympathetic with musicians of top level orchestras, but San Francisco is a really expensive city – and has been for a long time. $165k/year is not Wall Street pay, except maybe for the secretaries. Is it fair pay for a highly trained musician who had to beat out 100 other well-qualified applicants for the job?

      I have a hard time understanding how the management/board are crying poverty, when the orchestra has an endowment of $300 million (which has increased 83% over the past ten years), and apparently the wherewithal to raise half a billion dollars for a new capital project (what it would be escapes me, seeing as their hall is just 30 years old and was renovated about 18 years ago). Even in San Francisco it seems you could build TWO new halls for that kind of money.

      • The endowment is not money to be freely spent. I suspect they might even need to ask the secretary of state for permission to tap the principle. Also, please see the sad example of New York City Opera, which had a considerable endowment of $60m and nearly wiped it out over the course of a few lean years to cover operating expenses such as salaries (which were drastically cut, not simply frozen for one year.)

        We may question the wisdom of starting a capital campaign now – although the recent 100th anniversary celebration might provide momentum for a big start – but capital campaigns often happen above and beyond normal fundraising/sales. That’s the point. In a long string of bad years, yearly budgets will always feel pressure. Great organizations like the SFSO are always pushing themselves to have campaigns, special initiatives, and so on, despite the challenges they produce (and despite the fact that a lot of people think their marketing and development personnel aren’t worth the money they’re paid). I don’t know what they want to spend and why, but I will tell you that Davies Hall has very bad acoustics and it’s a major impediment to the orchestra.

        Also, with the exception of high-flying traders and execs, $165K is pretty good pay on Wall Street. They aren’t all millionaires.

        • Endowment money cannot be freely spent, but in general it’s a sign of an organization’s financial health. Usual draw as I understand these things is about 6% ($18 million in this case), and would be reasonable if they’ve been averaging 6.2% growth each year (which an 83% ten-year gain would suggest). Nobody (including me) suggested drawing on the principal, so the NYC Opera example isn’t a relevant counterargument here. It’s great that the SFSO thinks they can raise a lot of money for major capital projects, but one of the arguments surely will be that their fabulous orchestra needs a better facility – in which case you don’t raise big amounts in a capital campaign on one hand and freeze your players’ pay with the other.

          • But the draw from the endowment is baked in to the budget. It’s part of their calculations already. It’s not a surprise windfall every year that they can use at their discretion, it’s a fixed number that is usually calculated up to 3 years in advance and then incorporated into their operating budget. So, when people say “how can you make X or Y cuts when you have such a big endowment,” I really think they are envisioning taking money out of the principal.

  6. People need to understand that an endowment is not a pot of money you can dip into in order to, for example, guarantee 4% raises for your employees every year even in lean times. It pays out a certain amount each year in investment returns – unless the market is bad, and you’re losing money – and that money goes into right into the budget. A large endowment also helps guarantee that generous pension thirty years down the line. A few really bad years can almost wipe out an endowment, even one that big, and tapping your endowment is something to be done only in dire circumstances, not to balance short-term crunches.

    I have no comment on the capital campaign other than to say that SF’s hall is atrocious. Feel free to blame management for that, but they need to do something about it.

  7. Agreed re: your comments about endowments, and I offer no response as to who might be right in this dispute, however, the stock market is going gangbusters and the hedge and equity fund managers, like the Hellman group and the Richard Blums, are cashing in big time. So, right now is also a time when the endowments are earning very healthy returns.

    As for the hall, it is too bad that when it was originally built, they didn’t get it right with better fundamentals and less glitz. Chalk it up either to architectural and engineering inexperience, management vanity and incompetence, or insider dealing. Yet, now, in our recession economy with California and its contractors still suffering (though constructions costs are now rising), and the organization is ready to drop a half a billion on a new facility. That’s not chopped liver, and if design and cost controls have not been in place, it could mean they’ve been sold on a thousand dollar toilet seat, even if the acoustics will be better than before for someone sitting on it.

    Re: financing, I don’t know whether management can tap into tax exempt or other subsidized and deferred financing, including help from the Feds, but I suspect there is (and that is something Dianne Feinstein and her husband are well positioned to help engineer, and would be a way for her to redeem at least something of her shameful record, what with her support of our war policy, drone programs, John Brennans, bloated military procurement, prosecution of government whistle blowers and attacks on civil liberties- these too are things some musicians worry about while they struggling to put food on the table.)

    That is, spread it out over forty or fifty years- the costs that is- and win the race with smart investing. So far they’ve seemed to do it pretty well.

    • Thank you for the article. It also makes clear that the funds are for an expansion, though in my years in SF, I always thought Davies Symphony Hall should have been gutted and re-engineered, but what do I know?

  8. It is unbelievable that this board would follow in the muddy tracks of the Minnesota Orchestra management with exactly the same agenda, and one totally based on speculation. It is beyond stupidity.

  9. Anonymous says:

    Last year, the SFS budget was $79.2 million, while if the musicians’ average salary was $165k their share of the pie was $17 million, or roughly 21%. I don’t think it’s unreasonable to ask for a larger share of what you are generating, especially when management is helping themselves to exorbitant raises. The executive director is taking raises almost equal to the yearly salary of a tutti violinist. Unbelievable.

    I think it would very interesting to compare what percentage of an orchestra’s budget the musicians’ share is at the other top-10 orchestras. I suspect SFS is near the bottom.

    • A couple things. Their average pay is $165K but you can add 1/3 to that (or probably more) if you want to include their benefits, payroll taxes, pension contributions, etc. So that rough calculation of $17m is probably more like $23m, or 1/3 of the total budget. (I don’t know off hand what MTT makes but I suspect it’s well over a million dollars when you include fringe benefits.)

      Also, it’s worth pointing out that budget proportions are often skewed when an organization owns and operates its own building, which is not necessarily common for orchestras.

      Finally, I know it seems distasteful to say this, but the large majority of income is not ticket sales, but donations. Again, I don’t know offhand for SFSO, but most orchestras see something like 1/3 income (or less) in tickets and 2/3 in fundraising. Of course people donate because they love the orchestra just like they buy tickets because they love the orchestra, but it’s not really accurate to say that the players, with their concertizing, are responsible for all the orchestra’s income.

  10. Capt_Spaulding says:

    SFSO is the latest example of an orchestra board made up of individuals, of whom some will undoubtedly profit from, pushing for a renovated or new concert hall. They can then concentrate on bringing outside orchestras or other musical groups whilst undermining the financials of the current resident orchestra. Visiting orchestras can then do fund-raising in that city without tapping our their home donors who have paid to have their names plastered on the shiny new hall. We will probably see the same tactic used if/when the New York Philharmonic gets kicked out of their hall for two years in 2017. They are trying to become the resident puppet orchestra of Shanghai. http://www.china.org.cn/arts/2012-11/18/content_27148799.htm

    • Both New York and San Francisco suffer from subpar orchestra halls. This is not really a controversial statement. Why should two of the best orchestras in the world, in two of the world’s great cities, have ugly halls with poor acoustics and below-standard backstage spaces? I’m not saying you are necessarily wrong about seeking other acts to come and fill seats, and how this may undermine the resident orchestra; but I think you are seeing a conspiracy in an honest effort to improve crummy concert halls.

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