Red ink may alter future of orchestra

For most of its history, the Philadelphia Orchestra has held an ambition of remarkable clarity: to be one of the world's great orchestral ensembles. And for the better part of 110 years, it has, by global critical consensus, realized that ambition.

Now, facing chronic red ink and houses only two-thirds full, the orchestra is suddenly unsure of what it wants to be. A new president, board chairman, and music director-designate are in place, embarking on a strategic planning process to reassess every inch of the organization.

The change could be profound. Will the orchestra, struggling to revive ticket sales, cut loose the Philly Pops and go into the pops business itself? Will it keep a roster of 100 or so full-time players or scale back? Will it remain a full-time, 52-weeks-a-year orchestra? If it doesn't, will it retain its near-universally acclaimed quality?

Nearly seven months into her job, president Allison B. Vulgamore offers no guarantees.

"I'm not going to predict the plan at this point," she said recently. "We simply can't go on doing the same thing and expecting a different result. We've got a great musical heritage and ensemble, but we have to pay for it. And we also have to be able to experiment with it."

What will the Philadelphia Orchestra of the future look and sound like? To answer that, the orchestra has assembled a 27-member steering committee to develop a strategic plan. The process, managed by the nonprofit Boston consultant Technical Development Corp., is expected to be finished by year's end.

Whatever the outcome, one aim of stocking a committee with board, staff, and players is to develop buy-in for the results, no matter how distasteful.

Some players are regarding the strategic plan, and board chairman Richard B. Worley's threat of bankruptcy, as hammers for management to use in arguments for concessions on pay and work rules. The musicians' chief fear is becoming an abased "regional" orchestra - a vague term for an orchestra local in scope with humbled artistic goals.

Vulgamore is at least reassuring on the question of the orchestra's geographic reach:

"Obviously, we're here to sustain a great orchestra for the city of Philadelphia, for the world, for the nation, for Asia, for Europe," she says. "So what we have to do is balance the standard of excellence and the art with the business perspective that makes sure that we can operate by choice the way we want to - produce the kinds of concerts and programs we want to - but that we can also pay for that."

Vulgamore argues that the orchestra has a "structural deficit," and the numbers are frightening. Leaders are forecasting no deficit on a $44 million budget for the fiscal year that ends Aug. 31, but that comes only by virtue of raising nearly $7 million for a one-time emergency bridge fund. Put simply, expenses are outstripping income.

That doesn't mean, however, that lower expenses are the only option for closing the gap. The orchestra board could, in theory, give more, and in fact, it is the board that is largely behind the $7 million pledged or paid to the extraordinary bridge fund.

But how committed is the board? Nearly a year after fund-raising began, 20 percent of its members still have not given to the bridge fund.

"But we do expect 100 percent by the end of the year," Vulgamore said. "Lots of people have varying trust obligations and timing issues."

Now the orchestra has taken its bridge fund campaign beyond the board, with a proposed goal over two years of $15 million. She won't venture specifics, but Vulgamore believes the red ink will be stanched through a combination of adjustments.

"We're going to have to earn more money," she said, "going to need to attract donors back . . . who have been waiting and wondering, and, frankly, we're going to have to measure the cost structure a little bit."

But changing the behavior of the orchestra's largest constituency could be more elusive. Attendance has been dropping for decades. The opening in 2001 of Verizon Hall - about 500 seats smaller than the Academy of Music - stimulated attendance, but the decline soon resumed.

Last season, only 74 percent of available Verizon tickets were sold. Even fewer ticket buyers showed up to hear the 100 or so performances; on average, the hall was 65 percent filled. (The orchestra has been operating without a vice president for marketing.)

Empty seats mean unrealized income amounting to millions of dollars this season. An orchestra spokeswoman could not say specifically how much.

Philadelphia's difficulties are not unique. The orchestras of Cleveland, New York, and Pittsburgh are running deficits. And though major orchestras' seeping red ink is hardly new, the specter of severe contraction has been raised by the Detroit Symphony Orchestra, where management is proposing a 28 percent pay cut for musicians, employment reduced to 39 weeks, and elimination of a dozen positions.

The recent appointment of Yannick Nézet-Séguin as music director-designate (he arrives in 2012-13) spurred the one-day sale of nearly 500 special $99, seven-concert subscriptions. Still, next season's subscriptions are down 3 percent from last year.

The findings of the strategic plan promise implications for the orchestra's many partners. A merger-in-process with the Philly Pops has been held in abeyance pending the plan's outcome. A rental-fee renegotiation with the orchestra's landlord, the Kimmel Center, also will wait, Kimmel president Anne Ewers said.

The orchestra's relationships with its several current and potential summer homes are pending as well.

Vulgamore and Longwood Gardens director Paul B. Redman have restarted talks for a summer series in a still-dreamed-of performance facility at the 1,050-acre horticultural center in Kennett Square, both said. Longwood is developing a master plan that will encompass new building, including performing-arts facilities, and is expanding its performing arts offerings, Redman said.

"I hope that if they really are going to . . . measure differently, or additionally, performing arts and horticulture, then it's really logical for those two strengths - their knowledge about running a venue and bringing large groups of people in - to be married with a great art form," Vulgamore said.

"We're talking about a short-term relationship, and the possibility for a long-term relationship," Redman said, adding that chamber music concerts with orchestra members are planned, as well as the full orchestra's return next summer.

Vulgamore will also be "redefining" the orchestra's relationship with its three summer venues, including the Saratoga Performing Arts Center, where it has spent three weeks every August since 1966.

Who will follow Charles Dutoit, whose tenure as the arts center's artistic director ends this summer? Will the orchestra continue its current programming there or veer toward pops? Who will call the shots in programming repertoire and engaging guest artists - the orchestra or the Saratoga arts center? "It's an open slate at the moment," Vulgamore said.

The orchestra will play several weeks at the Bravo! Vail Valley Music Festival next summer, and is in talks for a relationship beyond.

Then there is the Mann. The orchestra's presence in Fairmount Park began in 1930, and the business arrangement has taken various forms. Right now, the Mann develops programs, hires guest artists, does marketing, and sells tickets. The orchestra is paid a fee. That's been good for cash flow - "they've paid throughout the summer. That is a wonderful big deal," Vulgamore said - but it has created instances in which the orchestra was not necessarily the focus.

A recent notable one came last week, when the orchestra performed with former Secretary of State Condoleezza Rice as pianist, and singer Aretha Franklin - a "free spirit," as Vulgamore puts it.

Among the evening's curiosities: players sitting idle as Franklin sang to a recorded classical track by another orchestra. "I think there were a ton of surprises that both of us, the Mann and the orchestra, would say came with the excitement of working with Aretha Franklin," Vulgamore said. "The orchestra sitting and not playing, with another orchestra playing on tape, was not in the cards. Calling someone up from the audience was not in the cards.

"It created a great show - not the taped part - but it created excitement. I think there is a way the concert can continue to happen . . . where we have the right mixture of the orchestra and contemporary talent. . . . The orchestra doesn't need to be there if it's not being utilized."

One of the balances to be considered is the number of concerts sustainable in Philadelphia year round. If local demand is oversupplied, the orchestra may roam. Residencies in China and Montreal are being explored. The 2011 European festivals tour is still on, Vulgamore says, but the orchestra has no sponsor. "Currently we don't, but it doesn't mean we won't."

Every activity must be paid for, she said, and most questions about the future are being deferred until they can be answered in the strategic plan: "No rock will be left unturned. Just can't," she said.

"The magnitude of the problem is going to have a magnitude of response. It's just too out of whack."