Philadelphia Orchestra to file for bankruptcy protection

[Scarpia]

The NY Times reports the Philadelphia Orchestra is likely to file for bankruptcy protection in the near future.

http://www.nytimes.com/2011/04/16/arts/music/philadelphia-orchestra-may-file-for-bankruptcy.html?_r=1&hp

A nice welcome for Yannick Nézet-Séguin, set to arrive as the new music director in 2012.

[Coopmv]

They need to do a PSO Live like the LSO Live line of recordings that have been released by LSO under the leadership of Sir Colin.

I read about this potential bankruptcy filing many months ago ...

[The new erato]

The problem isn' getting discs issued, it's the production cost of these discs given the scary salarys demanded for recording sessions with major US orchestras.

[Lethevich]

The problem isn' getting discs issued, it's the production cost of these discs given the scary salarys demanded for recording sessions with major US orchestras.

I also get the impression that US orchestras have two big problems:

1. the salaries (as you mention), but also some examples of counter-productive union activity
2. the orchestras probably don't cost more to run than in Europe, but previously they relied on private sources rather than the government, but in modern times such philanthropy towards classical music seems to be drying up

It's unfortunate to see this happen to a big name

[stingo]

I got the news via email as a subscriber to the orchestra. Info can be found here.

[Mirror Image]

This is sad news indeed as I have enjoyed many of the Philadelphia Orchestra's performances on record for many years now. I wasn't aware of their financial difficulties, but this is not surprising as the United States isn't exactly a cultural mecca nor is it a country that's particularly interested in higher art.

[Xenophanes]

One opinion is that it's basically a revenue problem.  How's the fundraising for the Philadelphia Orchestra? They've got a large population base, so why can't they raise enough money?

And of course, it seems another attack on not only union collective agreements but also on pensions. Some of the musicians may seek other employment.

[Scarpia]

One opinion is that it's basically a revenue problem.  How's the fundraising for the Philadelphia Orchestra? They've got a large population base, so why can't they raise enough money?

And of course, it seems another attack on not only union collective agreements but also on pensions. Some of the musicians may seek other employment.

How can a bankruptcy be anything other than a revenue problem?  The orchestra isn't collecting enough cash to pay its bills, so it must either get more income or reduce expenses.  Bankruptcy gives the orchestra flexibility in renegotiating its obligations, such as salaries, pensions, rents on the concert hall and other obligations.

[stingo]

As near as I understand it, the orchestra doesn't have debt, and has ample assets to cover the $15 million shortfall this year. Of course, running at a deficit isn't a long term solution. I think some believe that pensions are the real target, which may be why all 5 musicians on the orchestra voted against the filing.

[Scarpia]

As near as I understand it, the orchestra doesn't have debt, and has ample assets to cover the $15 million shortfall this year. Of course, running at a deficit isn't a long term solution. I think some believe that pensions are the real target, which may be why all 5 musicians on the orchestra voted against the filing.

In the times article the management spokesperson explicitly stated that the pensions are the real target.  Management claims pension obligations will cost 46 million, the orchestra claims only 8 million.  There was also talk of renegotiating the rent of the Kimmel center. 

[Xenophanes]

How can a bankruptcy be anything other than a revenue problem?  The orchestra isn't collecting enough cash to pay its bills, so it must either get more income or reduce expenses.  Bankruptcy gives the orchestra flexibility in renegotiating its obligations, such as salaries, pensions, rents on the concert hall and other obligations.

Yes, but why is there a revenue problem? You say it must get more income, so why doesn't it? The suggestion is that the board of directors hasn't gotten into fund raising seriously enough.

And, as has been said, the orchestra has plenty of assets. Bankruptcy is not needed. Or do you take management's word for everything?