Faced with nearly 40-percent-empty houses and the threat of bankruptcy, musicians of the Philadelphia Orchestra have agreed to a freeze on minimum salaries for next season, early negotiations for a new contract, and a hiring freeze with certain qualifications.
Musicians also agreed to give up an expected increase in contributions to their underfunded pension fund while a musician-board-staff task force works to "identify viable pension plan options for musicians and staff."
The concessions could save $4.5 million, according to their employer, the Philadelphia Orchestra Association.
"It was a difficult but necessary decision to make," said members committee chairman John Koen, a cellist. But in the end, "the overall economic state of the orchestra" persuaded players, he said, declining to characterize the closeness of Thursday night's vote on the new terms.
Combined with an earlier set of givebacks and changes in work rules, the new pact could bring $8 million in savings over 2¼ years.
New orchestra chief Allison B. Vulgamore, who started work in January, said the savings were critical to the orchestra's survival. But just as important, she said, is that they are "a signal and truthful articulation of the fact that the orchestra board and management and musicians are coming together awfully quickly to look the future in the eye."
A new contract is expected to be in place by March 2011, according to the agreement between musicians and the orchestra's still-new leadership.
The orchestra began the season with the launch of a $15 million emergency drive intended to underwrite operations for this season and next. That effort is well under way, with about $8 million firmly committed, Vulgamore said yesterday.
"Now we're going back to family and friends to allow the organization to keep its doors open and audiences coming while we go forward with strategic planning," she said.
Still, even with all the musicians' concessions and the recovery fund, the orchestra is projecting a $3.3 million deficit for the current fiscal year, said chief financial officer Mario Mestichelli.
Vulgamore also said yesterday that she had hired an orchestra-marketing specialist to help revive ticket sales. Christopher Stager, a consultant who has worked with the Cleveland Orchestra and other major and mid-size orchestras, will commute from New York during the next nine months.
Vulgamore said she still expected to hire a permanent marketing vice president, but for now, "I want to get sales up." The orchestra has been operating without a marketing vice president this season, and attendance has been basically stagnant at about 63 percent.
Asked whether the orchestra would abandon its widely ridiculed "Unexpect Yourself" advertising campaign, Vulgamore said: "We're reviewing everything now."
A raise renegotiated in May would have increased the minimum musician salary in March 2011 to $131,040 from $124,800, but the concessions eliminate that increase. Many players - principal and other titled musicians - earn much more, since they have individually negotiated salaries.
The hiring freeze is to remain in effect for the duration of the contract, though Vulgamore allowed that certain leadership positions, if open, might be filled.
The freezing of pension-fund contributions will save the association an enormous sum, even if it is a stopgap - $4.7 million over three years, said Mestichelli.
The wiggle room in the amount the association expects to save - the $8 million - comes in part because the financial implications of changes in certain work rules are unknown. These rules involve matters such as how and when substitute players are contracted and how many rehearsals are needed for a particular program.
"We're not entirely sure whether all the work-rule changes will be achievable in 2011," said Mestichelli.