Many people have been following the recent contract extension at the Cincinnati Symphony Orchestra, and I wanted to take a moment to reflect on what I consider to be some of the noteworthy aspects. I don’t wish to speak so much about the details of the agreement but rather on the process that led to an outcome that successfully addressed the goals of musicians, board, and management. At a time when many orchestras are experiencing strained labor relations, especially in the face of scarce resources, it’s important that we look at a successful outcome.
I spoke recently with orchestra president Trey Devey and with Paul Frankenfeld, president of AFM, Local 1, and associate principal violist in the CSO. They each shared with me various dimensions of their process. What they told me echoes much of what I learned when I talked to the CEO and committee chair of the Pittsburgh Symphony Orchestra, where there was also a successful and early settlement.
Both Trey and Paul explain that they started with an agreement on three challenges that had to be addressed, not as individual constituent needs, but as institutional needs that were embraced equally by all the parties. The challenges were to 1) meet the compensation requirements of the musicians, 2) solve a long-term structural financial problem, and 3) address the unfunded pension liability in the orchestra’s private, frozen pension plan. All agreed that a successful outcome had to address these challenges.
That in and of itself is a good foundation for negotiation; i.e., recognizing the interdependence of the challenges and shared ownership in finding solutions.
So that’s number one.
Number two was that there was a long history of shared information between management and musicians. This goes back many years. At the Cincinnati Symphony they have a Communications Committee of musicians and management representatives that meets every month to, as I understand it, to look primarily at what was happening with the orchestra’s finances. They looked at every grant that came in, every grant that didn’t come in; they looked at box-office revenues. So there was up-to-date, minute-by-minute reporting where the orchestra stood financially. There was nothing hidden, and this was all common knowledge among the musicians and management. This instilled, as one might expect, trust between the musicians and the management. This goes back for a very long time—Paul said at least 20 years. So they have this very strong sense of trust among the musicians and management and board. He attributes that to strong relationships, consistency of leadership; kudos to Steve Monder, whose 37-year tenure as president was instrumental in creating an openness and sharing of information. Paul also commented that they believe the CSO enjoys the spirit of collaboration and that they think that building strong alliances over the long-term among stakeholders is really the way to go, as opposed to drawing lines in the sand.
Number three, Paul also pointed out the importance of communication in between negotiations. As you will recall from the extension announcement, this extension was the result of conversations in between contracts. And, a major donor’s representative participated in the talks with musicians and management. This created a sense of ownership in the outcome that eventually translated into a major gift that was an essential piece of putting the puzzle together.
Let’s go back to the contract for a moment and look at a couple of highlights. The orchestra did, in fact, succeed in making great progress on all three goals. The above-referenced donor, the Nippert Fund, helped take on the unfunded pension liability, mitigating a structural problem in the orchestra’s balance sheet and operating fund. The musicians, by extending the rate at which their compensation would increase, gave the board and management time to meet those expenses. Everyone’s playing a part here: musicians have deferred raises, and management is bringing to the table new income to offset the structural problem of the unfunded private plan pension liability.
Some might say, “If we had an $85 million donor we could have good outcomes, too.”
Perhaps. But as I understand it, the $85 million gift in 2009 from Louise Nippert, creating the Nippert Musical Arts Fund, did not just fall out of the sky. There had been good relationships among the symphony, the opera, and the ballet. One central goal of the gift was to ensure that the relationship stayed in place and that the orchestra would continue to be the orchestra for the ballet and the opera—which is a structural benefit, because it locks in weeks of employment for the orchestra. Similarly, the effort of the musicians and the management to try to work together on the structural problem and the structural deficit over the next five years inspired Mrs. Nippert to be a partner in helping out.
The point is, just having philanthropic resources in a community is no guarantee of accessing them. This wasn’t just somebody throwing money at the problem; this was the orchestra working together to solve a problem, and involving the funder in the discussions and trying to be part of the solution. You might say they earned the support. They handled the money issues very judiciously so as to mitigate uncertainty in the future.