Recent bankruptcies and strikes have tended to grab most of the headlines, but one orchestra to suffer the slings and arrows of the downturn for months in relative silence was South Carolina’s Charleston Symphony. In early February 2009, the organization broke the news to the public: the orchestra was experiencing severe cash flow problems and needed to immediately slash $500,000 from the $2.9 million budget. By March the following year, after months of emergency fundraising, severe staff cuts, and failed negotiations with musicians over a new contract, the Charleston Symphony had to declare a temporary suspension of operations—just months shy of its 75th anniversary. Aside from a one-off anniversary concert in October, things were looking grim. But in early December 2010, the organization announced a new agreement with musicians—which cut the core number from 46 to 24—that allowed them to get back onstage and finish out and finish out the season.
Now, with the Charleston Symphony back on sound footing and now looking ahead to 2011-12, the first full season under the new musicians contract, SymphonyNOW spoke with longtime board member and current Chairman John H. Warren, III and Executive Director Daniel Beckley, a former bass trombonist with the orchestra, about the process of turning the organization around, and what they’re doing now to keep it headed in the right direction.
Ian VanderMeulen: The Charleston Symphony’s financial issues were first made public in early February 2009. What was going on before that, and what was the critical point you came to where you had to go public with that?
John H. Warren, III: Two things happened at the same time. First, in the early to middle 2000s, the economy was doing very well, the symphony was doing very well, and the symphony entered into a three-year contract with the union, which provided for 46 core musicians, and driving a budget of almost $3 million. Then we got the beginning of the downturn in the economy and as a result of that we had fewer contributions, fewer ticket sales. So the ramping up, which was very ambitious, resulted in a cash flow problem. On a five to ten year look-back that budget probably would have been too much. And looking at the future, we saw no way that cash flow problem was going to disappear. So we had no alternative but to reduce expenses, and reducing the expenses means reducing the number or pay to the musicians, since that’s the largest item on the expense side. So we then began negotiation with the union and publicized our financial problems.
VanderMeulen: Some cuts were made around mid-March of that year—did that seem to be enough at the time?
Warren: No, those cuts were necessary on a cash-flow basis but there was no idea that we would all of a sudden ramp up and be able to meet that contract. Renegotiation of the union contract would be required, which the union and the musicians resisted strongly for a long period of time.
VanderMeulen: One of the arguments musicians made was that they were not being utilized as much as they could be under the then-current contract—what do you think of that claim?
Daniel Beckley: We had the musicians contracted at a salary level that was negotiated at the same time that we were expanding the core to 46. So the services that that salary bought were just over-saturating the market—we were performing more than we could get audience for.
VanderMeulen: So that must’ve been a key in the renegotiations then.
Beckley: Right. If you look at the other orchestras that have $3 million budgets, they don’t have near that many musicians. And too much of our budget was going just to salaries—to the point where we couldn’t afford to put on concerts.
VanderMeulen: So you suspended concerts temporarily in March 2010. What led up to that?
Warren: We hoped it would be temporary but we said we were “going dark.” The musicians were resisting renegotiating the contract and we were running out of money. Since we couldn’t pay them at the rate they wanted to be paid, and we could not get them to the table to negotiate the master agreement, the choice was to either go into bankruptcy and try to renegotiate that way, or to suspend operations, or to dissolve. And we took the most optimistic view, which was to suspend operations. Part of our job was convincing musicians that there wasn’t any money. They didn’t believe that. But suspending operations, cancelling the season, and returning the subscription money, I think convinced a number of them that we were telling them the truth.
“The choice was to either go into bankruptcy and try to renegotiate that way, or to suspend operations, or to dissolve. And we took the most optimistic view, which was to suspend operations.” –John Warren
VanderMeulen: As far as those three choices—filing for bankruptcy, dissolving, or suspending operations—was that a difficult decision to make? How did you wind up with that?
Warren: Actually, it was difficult to make because those of us who wanted to go forward had to convince a lot of the board not to file for bankruptcy and just close it down. There was a group that felt we just needed to shut it down for a couple to three years, and have somebody else restart it. The difficulty was convincing people to take the optimistic view. But there were a number of us who’d been on the board for a long period of time, one or two affiliated with the city of Charleston, that felt just as I did—that we needed to do everything possible to keep it alive as the same organization, and that going dark had the best chance of the organization continuing.
VanderMeulen: You managed to put together a concert to celebrate your 75th anniversary in the midst of what sound like pretty intense negotiations. How did that come together and why was that important for the community?
Warren: It’s interesting how it came together. Adam Parker, who’s a reporter for the Post and Courier and follows the symphony, was at our board meeting where we discussed the fact that we were shutting down during the 75th anniversary season. He made a statement which resonated with me, which was, “It seems like if you did one concert, showed the community that you could do one concert, showed the community that you and the musicians could get together and perform music, that that would be a good thing, it might help you in the effort to go forward.” I made the motion then, at that meeting, that we do that. There was fear amongst the management that going dark and telling the musicians we didn’t have enough money to pay them and then paying them to play a concert was a direct conflict. So five or six of us on the board who felt strongly about it, including a representative who works for the city of Charleston, outside the board structure altogether we raised the money for that 75th anniversary concert, both to celebrate the 75th anniversary and to show the community—and show ourselves as well as the musicians—that we could work together.
VanderMeulen: Soon after that Music Director David Stahl passed away, which must have been a really emotional time. What impact did that have?
Warren: Well it had all sorts of impacts. He was a close personal friend of mine. I was the president of the symphony when he came here 25 years ago, so he’s been a personal friend for that long period of time. I knew that people on the board knew that what he would want us to do was do everything possible to keep going. And that provided an additional impetus to do that.
VanderMeulen: You announced the contract which allowed the orchestra to get back on stage in early December.
Beckley: Yes, our contract took effect on December 6. We had many intense negotiations to get to that point. But the musicians realized that we were in fact telling the truth and changes had to be made.
VanderMeulen: Daniel, you took over as executive director around that time. What drew you to the organization?
Beckley: Well, I had been involved with the Charleston Symphony for probably four or five years prior to that, as a musician and as a board member. I came on I think after Johnny did, just when things were starting to get really interesting with the budget cuts. So I was very active in the whole negotiation and investing a lot of energy and time into the symphony, and was very passionate about its success in this city. So seizing the opportunity to lead it full time was a move I decided to make.
VanderMeulen: At the time the musicians agreed to the new contract they also called for new leadership. Do you feel that there is a sense of renewed trust, especially you having been a musician with this orchestra yourself?
Beckley: I do think that helped because the musicians knew me personally and knew that I was passionate about making this work.
Warren: I think it was leadership on the board that musicians wanted replaced. We didn’t really have an executive director for Danny to replace. And it was not just the musicians but the community itself, through a forum process, that had expressed that a board change was necessary at the top. So the board agreed to change. Chairman Ted Legasey and all the members of the executive committee agreed that they should resign. At that point the Mayor and the Coastal Community Foundation executive director got involved and asked me to assume the chair, which I did. And over the last five months we have replaced about half of the board, as well as all the executive officers—the committee chairs, the executive committee. But the musicians recognized that when the chair and the executive committee resigned they were ceding to the request that there be a change in management.
“We have begun looking at ourselves more and more as a service organization rather than a charity.” –Daniel Beckley
VanderMeulen: What steps are you taking now to make sure the organization stays solvent? A couple of things you’ve mentioned elsewhere are the capital campaign and the “three-pronged approach.” Can you elaborate?
Warren: Danny and I both realized when we came on at the beginning of the year—end of December and January—that there was no way to raise money for the fiscal year that just ended in June and then go right back and raise money for next year. So we have a $1.5 million “Fund for the Future” campaign for both years, which we’ve been active on since March. We’ve raised a half a million of that already. We were in the black for the first year in a long time at the end of the fiscal year. We still have significant money to raise. We’ve hired a development director Alana Morrall, whom we’re very lucky to get; she comes to us from the Baltimore Symphony and has a lot of experience. We intend to raise an additional million dollars and we are trying to do that by the beginning of next season. We have not used any of the subscription money and we don’t intend to, but we do have an endowment we can borrow from. So we will have an intensive campaign probably starting in the middle of August running through the first of November. A part of that campaign is an attempt to get 25 industries and or people to commit to $25,000 apiece. Rather than getting two people to commit to $100,000 we want as much community participation as we can get. We have been very successful. We have nine so far who have committed to that—industries that have been in this community a long time and have had a philanthropic past have stepped up.
Beckley: As far as moving forward, you mention that three-pronged approach. Our focus is on orchestral music, chamber music, and education. So everything we do fits in one of those three buckets. We have begun looking at ourselves more and more as a service organization rather than a charity. The old symphony model of you’ll only ever have 40 percent [of your budget] in ticket sales and you’ll have to raise 60 percent in contributions—we feel we can do better than that. So we’re putting a premium focus on earned revenue and finding ways that we can serve a greater population than just our little city of Charleston, and within that greater population serve a greater number of people.
VanderMeulen: Looking back, do you think the impact of the economic downturn was the primary factor in what happened with the orchestra, or were there structural things as well that you have now fixed or are trying to fix?
Warren: We’re fixing structural things but I don’t think it was a significant factor. I think it was an over-ambitious budget for a community of this size, together with the economic downturn occurring at the same time. Even in good times the budget would’ve been ambitious.
VanderMeulen: And now you’re at $1.3 million annually?
Warren: $1.7 million. Actually, Danny and I are getting ready to recommend to the board that we go up to $2 million because of increased revenue. We’re not increasing the contributions required, but we’re trying to increase the revenue.
VanderMeulen: Are there hopes to build it back up to the previous level of almost $3 million?
Beckley: We’ll grow this orchestra as needed to support what we’re able to earn in revenue.
Warren: But we’re not going to make the same mistake again. It will be very slow.
Beckley: The benefit of this change now is allowing us to put on more exciting concerts—both for the audience and for the musicians. Where we were doing Brahms’ First Symphony with 46 musicians because we were blowing our budget just on salaries, now we’re able to do Mahler Two with 90 musicians, and high quality musicians from around the East Coast. So they’re on board, they’re excited about it. But just to emphasize that we’re much more outward focused on our community’s needs rather than our needs, and that that’s a critical way forward.