Musicians accuse Atlanta of financial incompetence

What happened to the millions they raised? the land they sold? Who let the arts center get into such deficit?

Yesterday, 80 chorus members joined the musicians’ picket line.

 

atlanta chorus picket

press release:

 

 

Atlanta, GA September 18, 2014

 

On September 15th 2014, Woodruff Arts Center spokesman Randy Donaldson said that it was “totally laughable” to imagine that the WAC manipulated earned and contributed revenues in an attempt to engineer posted deficits.  (http://www.artsatl.com/2014/09/news-aso-lockout-enters-second-week/)  Yet in each of the fiscal years that preceded a lockout — 2012 and the current lockout of 2014 — significant funds were received by the Woodruff Arts Center that could have mitigated, or eliminated completely, the posted deficit for each operating year.

 

In November 2011, the Woodruff Arts Center received a $15 million gift from the Woodruff Foundation.  While $5 million was allocated to retire debt held by the Alliance Theatre and the High Museum, no part of this gift was allocated to the Atlanta Symphony Orchestra.  Contract negotiations with the Musicians were scheduled to begin only four months later.

 

During FY14 (June 1, 2013 – May 31, 2014), the Woodruff Arts Center sold the 14th Street Playhouse to Savannah College of Art and Design (SCAD) for $1.9 million, and then donated all funds acquired from the sale.  WAC President and CEO Virginia Hepner admitted that, as “tempting” as it was to use the nearly $2 million to address the myriad needs of the WAC, donating the proceeds just felt like “it was the right thing to do.”

 

The Atlanta Symphony Orchestra sold the14th Street land originally intended to house the new Symphony Center in April 2014.  With the proceeds received from this sale, $15.42 million was used to pay off debt associated with the bonds on that land; approximately $6 million was left in available funds to the ASO.  The WAC decided to use $4.5 million of the remaining funds to pre-pay loan payments – payments that had originally been scheduled to take place over four years – associated with the Verizon Wireless Amphitheater.  The ASO was still left with almost $1.5 million in proceeds from the land sale.

 

The Atlanta Symphony Orchestra also received additional anonymous gifts totaling $3.121 million during the last fiscal year.

 

With the enormous influx of funds due to the sale of two properties and the gifts received last year alone, the Musicians question how such a significant deficit was still posted by the ASO; a mere fraction of those earnings allocated to operating expenses would have eliminated the FY14 deficit.  It would make all the difference if the WAC would reconsider its decisions that prohibited financial balance to occur.  It is not that the Musicians are opposed to a wise debt retirement plan, but the Musicians are opposed to one that needlessly undermines the organization’s work by not allocating any earnings like these to it directly – in essence, starving the family to pay the bank.  The WAC has repeatedly told the Musicians that the ASO producing a balanced budget is the key to greater support from foundations and donors – including the WAC itself.  Yet, the WAC seems determined that the ASO continue to post operating deficits, particularly during negotiation years with the Musicians.  The Musicians would like nothing better than to work with a vigorous, unrestricted ASO fundraising initiative to produce not only a balanced budget, but a restored luster that will attract new audiences and new fiscal support.

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  • WAC President and CEO Virginia Hepner admitted that, as “tempting” as it was to use the nearly $2 million to address the myriad needs of the WAC, donating the proceeds just felt like “it was the right thing to do.”

    Another for the firing line! Utterly unbelievable and gross incompetence!

  • It rather seems like Virginia Hepner has been carefully steering large sums of money….AWAY from the Atlanta Symphony Orchestra. Especially when leading up to contract negotiations with the musicians.

  • I’m not sure “financial incompetence” is the correct word here. I think that the financials have been deliberately misrepresented to make it appear that the Orchestra is the root of any WAC financial problems, solely for the purpose of busting the union and wresting all power from the musicians. The “incompetence” is in failing to hide their misdeeds any better than they did.

  • Isn’t the Woodruff Arts Center a “not for profit”? As such, should it be allowed to make donations at all? It isn’t a foundation whose first goal is the distribution of money to other organisms. Any money it makes should be used for the functioning of the groups within its purview, not as donations to 3rd parties.

    This whole thing is incredibly strange and stinks to high heaven of corruption and back-room dealings.

  • It looks like there needs to be an outside investigation, if not one conducted by the District Attorney’s office. I wonder whether the things that happened are within the bounds of legality. In addition, I am now more than ever of the opinion that the ASO musicians resign en masse and found their own independent organization. I know this is extremely hard to do, but as more news of utter incompetence will leak, I suspect that public favor toward the duped orchestra will increase. I also wonder how I would feel as a donor who gave large sums of money to the ASO, and now finds out that almost nothing went to it? I would tell the Woodruff Center to stuff it, and set out to find others willing to join me in a local, reginal, statewide, and even national campaign to re-found the orchestra, under the name of Atlanta Philharmonic.

    • Well….telling the Woodruff to “stuff it” does one thing right away: it makes the lockout moot. Of course, it also removes all infrastructure, and the moral high ground which they now occupy.
      No, I think they should go head to head with Ms. Hepner…particularly as these financial doings are revealed.

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