LSM Newswire

Tuesday, February 3, 2009

Despite Successes, Portland Symphony Orchestra is Fighting for Survival



Despite Successes, Portland Symphony Orchestra is Fighting for Survival
Safety net eradicated, Maine's largest performing arts organization is forced to confront immediate needs and develop a path to sustainability

PORTLAND, Maine In this inaugural year of Robert Moody's tenure as Music Director, and on the eve of its 85th anniversary season, the Portland Symphony Orchestra (PSO) is experiencing record ticket sales, with attendance at Classical and Pops concerts at the highest levels in its history.

Despite these successes, however, a combination of market downturn leading to decreased endowment value and years of producing community-oriented programs that operate at a loss has forced the PSO to make cutbacks in every area of the organization, including staff layoffs, reducing education programs and canceling the popular Independence Pops concerts.

Music Director Robert Moody stated: "We are experiencing such an exciting time in the life of PSO, with tremendous energy and electricity coming from our wonderful musicians, and amazing support from our community. But these are challenging times, and we must rise to these challenges in a way that is true to our most basic mission of highest artistic quality and fiscal integrity. I am confident that we can come together as a community to provide a stronger foundation for our PSO, one of New England's foremost and prized cultural assets."

The PSO's invested assets (also referred to as the endowment) have lost more than a third of their value since September 2008. A healthy orchestra has at least a three-to-one ratio of endowment to operating expenses. Even at the peak of the market in 2007 the PSO's was 1:1; now it is well below that.

School budget freezes across the state have had a significant impact on the PSO's ability to provide the same level of education programming as in years past, and foundation grants for education are down 60% from last year.

While the 2007-08 season ended with record levels of individual giving, so far this year over $108,000 has been lost through donors decreasing or withdrawing their past support, most citing the economy as their reason.

Executive Director Ari Solotoff explained: "We have great artistic momentum and had taken steps before the financial fallout to reduce costs; however those actions are simply not sufficient to cover the gap between our expenses and our income, especially given our depleted endowment. We are facing a possible shortfall of over $220,000 this year, an untenable risk given that the PSO has incurred an accumulated deficit of almost $2 million over the past eight years. Even with these painful cost reductions, we could face more drastic cuts in the next three to six months."

Board President Gordon Gayer added: "An organization's endowment is its safety net. You can spend the money, but there are consequences. In recent years we have drawn on our endowment to support programs like Independence Pops and KinderKonzerts. These programs have real value and benefit to the community but they do not pay for themselves. And now the stock market crunch has driven down our endowment to the point where it can no longer function as our financial safety net."

Details of the cost savings measures are as follows:

Independence Pops Canceled:
Ģ Has lost on average $65,000 each year; the PSO cannot sustain this loss in the current environment, despite a desire to present summer programming throughout southern Maine
Ģ Corporate sponsorships for Independence Pops are down by 65% since 2003
Ģ Attendance is highly weather dependent and has declined over 50% in the past 5 years
Ģ Last year performed in four locations: Bridgton, Brunswick, Cape Elizabeth, Sanford

Administrative & Overhead Expenses Reduced:
Ģ Senior staff 10% pay cut effective February 1
Ģ 20% workforce eliminated (2 positions); staff reorganized
Ģ Non revenue-generating budgets frozen or cut
Ģ Renegotiating fees and seeking in-kind services wherever possible

Education Programs Reduced
Ģ Even before the economic downturn in October, PSO took steps to adjust KinderKonzert schedules in locations where the program expenses exceeded revenues. The Freeport site has been eliminated entirely, six other sites have fewer performances. Those sites are Center Conway, Portland (Reiche School), Shelburne, South Hiram, South Portland, and Waldoboro
Ģ Elimination of two performances of spring 2009 Youth Concerts, and adjusted repertoire for remaining concerts to require fewer musicians and lower music rental costs

Canceling Side By Side program with Portland Youth Symphony Orchestra
Ģ This would have been the third year for this program which places the region's most talented young musicians on stage with PSO musicians
Ģ Funding applications to local foundations were rejected

Artistic Expenses Reduced
Ģ Saved $40,000 by reducing production elements for Magic of Christmas 2008
Ģ Orchestra will hold more rehearsals in Rehearsal Hall vs. on stage to reduce Merrill rental fees
Ģ Changing repertoire for March 24, 2009 Tuesday Classical concert to reduce number of extra musicians
Ģ Reducing the number of rehearsals for select concerts (reducing services and therefore income for musicians)
Ģ Seeking reduced guest artist fees for the remainder of the season

Economic and Community Impact
Maine's largest performing arts organization, the Portland Symphony has a $2.8 million budget. Taking both organizational and audience spending (such as parking, eating out before concerts, etc.) into account, the estimated economic impact of the PSO in Portland is $4.6 million, representing 16% of the total economic impact of the arts in Portland. (Source: Americans for the Arts "Arts and Economic Prosperity" survey and impact calculator.)

With critically acclaimed performances and broad community engagement, the PSO is widely regarded as one of the top symphony orchestras of its size in the country. Over 80,000 people are reached each year by PSO performances, including 30,000 schoolchildren through its educational programs. Thousands of tickets are also provided to social service agencies such as Portland West's Neighborhood Arts Access program.

"Any attractive community places a very strong emphasis on the sustainability and growth of arts and culture, and the PSO is a cornerstone of the arts not just in Portland, but throughout the region. In fact, organizations like the PSO are critical to attracting a diverse workforce and growing business," said PSO Trustee Jonathan Ayers, Chairman, President and Chief Executive Officer of IDEXX Laboratories. "I am particularly proud that the PSO makes it possible for Maine schools to have superb musicians available to teach our young people, and I am confident that the PSO will remain an integral part of our very special arts community."

"The news that the PSO will not be performing their Independence Pops this summer at Fort Williams on July 4th weekend is tragic, but should not come as a surprise, " says Alex Fisher, Founder/Chairman of Planet Dog. "The increase in costs to put on a show of such magnitude has become cost prohibitive for organizations like the PSO."

"Quality of life is a central element in Portland's continuing vitality. The PSO is a critical part of our region's cultural richness, and we are lucky to have the PSO adding their special magic to our community," states Christopher Hall, Senior Vice President of the Portland Regional Chamber. "It's also important to remember that the PSO contributes many millions of dollars a year in direct economic benefits to area employees, small businesses and non-profits. In short, the PSO is an important part of what makes our region thrive, both culturally and economically."

Matt Jacobson, President/CEO, Maine & Company adds: "The strength of Maine's economy, and recovery from our current state, is dependent on the sustainability and growth of ALL sectors. And for the state's largest city, Portland, the arts and entertainment community is led by the Symphony. The PSO has been a cultural leader for our families and community. It's important that all Maine residents and business leaders realize the significant contributions the PSO has provided to the city and state for years, and how our individual and corporate support are needed to continue this great artistic treasure."

"The Portland Symphony Orchestra is essential to the vitality and financial well-being of Portland," notes Richard Lucas, president, Maine District, KeyBank. "It is especially important to recognize the PSO's role in education and outreach to the youth of our community through their programming. There is a strong correlation between students involved in music and the likelihood of their attaining a higher level of education. We are truly fortunate to have access to live classical music, performed by professionals, in one of the most beautiful halls in the country right in our own community. The importance of supporting this historical cultural institution cannot be underestimated."

Brian Petrovek, Managing Owner/CEO, Portland Pirates: "A thriving arts and entertainment community is vital to the quality of life we enjoy in Portland, and the Symphony plays a key role in the artistic and cultural makeup of our city and our region. As we continue to support local businesses, restaurants, sports and other entertainment venues during these challenging times, we share an equally important responsibility to preserve this local treasure, which brings live music of the highest caliber to each of us, and to our children."

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