The good times are back in Cleveland

Five years ago, many were predicting that Cleveland – a city in worse social and economic crisis than Detroit – would not sustain its cultural amenities. How wrong they were. The orchestra has just turned in a budget surplus and boosted its endowment to $172 million.

Gary Hanson, its president, will be retiring on a high. Press release below.

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CLEVELAND — The audited financial results of The Cleveland Orchestra’s 2013-14 fiscal year  were reported at the Annual Meeting of the Musical Arts Association on Tuesday evening, December 2.    President of the Board of Trustees, Dennis W. LaBarre, announced a year-end budgetary surplus to the assembled Association members at the meeting in Severance Hall, the Orchestra’s home concert hall since 1931.  The Musical Arts Association is the non-profit organization that owns and operates The Cleveland Orchestra, Severance Hall, and Blossom Music Center.

Financial achievements of the past year included the third consecutive balanced annual budget —through increased ticket revenues, increased contributions, and ongoing  cost control.  At year end, the Orchestra’s 2013-14 revenues of $49.6 million exceeded expenses of $48.7 million.   This was achieved with year-over-year revenues increasing  3% from 2012-13, while expense growth was held at just 1.5% over the previous year.   This is the third consecutive year of balanced operating results, each made possible by special fundraising secured to support operations during a campaign to increase the endowment and the Orchestra’s long-term financial strength.

Advance copies of the Orchestra’s published Annual Report were distributed at the meeting and will be made available to all Musical Arts Association members in the coming weeks.  The report features year-end messages from Dennis LaBarre and Executive Director Gary Hanson, as well as a financial summary and an overview of the year’s concert and community activities.  The report highlights the thousands of individual, corporate, and foundation donors, plus contributing government agencies, all of whom made the positive outcome possible through their support.

In his message, Mr. LaBarre outlines the numbers for the year — including a record $10.6 million in Annual Fund support.   He highlights the Orchestra’s Sound for the Centennial Campaign, with efforts to date having achieved $62 million in cash and pledges to the endowment, and $50 million in legacy commitments.  The endowment today stands at $172 million — up from a low of $97 million following the financial crisis in 2008.  Building on this success and strong vote of support from Northeast Ohio, the Trustees and staff will now focus on the Campaign’s successful completion by 2018.

“Expanding the endowment to provide a greater contribution to operating budget will provide the Orchestra with the financial strength to remain secure during future difficult economic cycles,” Mr. LaBarre said at the Annual Meeting.  “Once this is achieved, we can focus our fundraising efforts on an ever stronger Annual Fund and special fundraising for specific artistic and community initiatives.”

“The achievements of the past year were considerable,” said Mr. Hanson in his remarks.  “The annual financial results reinforce the success of recent years, while artistically the Orchestra reached new heights.  From coffee shops to cathedrals, from Blossom to Severance Hall, over the past year we continued our dedication to community engagement.  Our second annual neighborhood residency, titled ‘At Home in Lakewood, Ohio,’ served to strengthen the bond between The Cleveland Orchestra and the citizens of Northeast Ohio.  Concert attendance by young people under age 25 surged to over 41,000 in the past year, with young people now making up over 20% of the audience for classical concerts at Severance Hall, taking us well on our way toward securing the youngest audience of any orchestra.”

 

 

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  • We should be happy that the Cleveland Orchestra is doing well financially, but there is also a much darker side to this story. Cleveland is following the pattern of major orchestras poaching the funding from other major cities in order to survive. In this case, Cleveland even went so far as to become a scab orchestra.

    After a contentious strike in 2000, the Florida Philharmonic Orchestra was permanently closed due to bankruptcy 2003. At the same time, one of the FPO’s board members, Daniel Lewis (a Cleveland native,) gave the Cleveland Orchestra a $10 million donation, the largest in its history. The $10 million could have kept the FPO going, but it was given to Cleveland instead. The Cleveland Orchestra was then given a permanent residency in Miami.

    The Cleveland residency has made it impossible for the musicians of the FPO to reform their orchestra. Cleveland thus became a scab orchestra. The details of this sordid history are here:

    http://en.wikipedia.org/wiki/Florida_Philharmonic_Orchestra

    I’ve noticed that numerous arts administrators are now talking about the Cleveland scab model becoming a new norm to help the big orchestra survive.

  • William, there are plenty of us in Cleveland who would prefer to see our orchestra here full time. I won’t comment on how the situation unfolded in Miami. But it does strike me as odd that the Miami metropolitan area, population 5.5 million with high property values and thus a higher tax base, is unable or unwilling to support a full time symphony orchestra – while the Cleveland metropolitan area, population 3.5 million with far lower property values, is.

  • Another fly in the FPO’s demise is MTT’s New World Symphony, a post-conservatory, young professional’s training orchestra giving concerts and having master classes from well-known musicians including members of the Cleveland Orch.

  • Dear Norman,
    I regard you as a friend, but when you make wild comments to the effect that Cleveland is worse off than Detroit, it confirms the suspicions of your critics. You have much to offer that is constructive, so please don’t undermine your own authority with really dumb comments like this.
    Best wishes,
    Robin

    • Dear Robin
      Looks at the stats of the past five years. The socio-economic situation in Cleveland is at least on a par, if not worse than, Detroit.
      best
      Norman

  • In any case, it’s part of a pattern across the entire upper Midwest region of the USA now called the rust belt due to all the closed factories. They were not able to survive outsourcing, free trade policies, and moving plants to Southern states where unions were not supported. The destruction of these cities was in many respects based on economic policies whose effect on the cities was predictable. The idea that so many jobs could be replaced with service industries and high tech firms was nonsense.

    From 2000-2012, Detroit has lost 26% of its population and Cleveland 18%. Youngstown, Flint, and Gary are other examples. Cultural institutions were obviously deeply affected by this distruction. In addition to population and metro GDPs, the decline is readily measurable in statistics on crime, fatherless children, broken trust, reduced opportunities, and declining levels of education.

    • It is also important to understand that this deregulated, winner-take-all economic concept is being applied to cultural institutions as well. In the style of corporations like Wal-Mart, Target, Lowes, and Applebees, a few top orchestras will take over the donor base in a wide-range of cities and destroy the local institutions. This will have the same effect on musician unions as it did the UAW. A few musicians at the top will greatly benefit while those below will be impoverished. We already see that the salaries in the top 6 U.S. orchestras average around $150,000/year while the average salary for ROPA (regional) orchestras is only $13k per year — less than one tenth the amount even though they often serve metro populations of around one million people.

      And we see how the Met, which pays its musicians about $200k per year centralizes opera production through its broadcasts while the rest of USA has almost no opera at all. We rank only 39th in the world for opera performances per capita — behind all of Europe, and just ahead of Costa Rica in position 40.

  • Must arts attendance be a zero sum game, as one commenter suggests, in which the larger orchestras, like PacMan, gobble the smaller ones by drawing their attendees and their contributors? Or can there be a win/win approach, which benefits all performing arts organizations? I suggest the latter. New York theater, especially the areas in mid-town called Broadway, seems to operate as a win/win. And a lose/lose. Yes, the big musicals and a few star studded dramas or comedies draw a huge number of fans for years in the case of musicals (the first couple of years from the NYC environs, after that, more out of towners) and for months or more for those with big name stars who usually have intentionally a limited engagement (so the star can run back to Hollywood and make some serious money, before returning to the stage again). True, the New York City Opera failed even when it was based in the Lincoln Center complex, but that may be a unique set of bad decisions. I suggest that those of us who love the arts stop the whining and get more creative. Including seeing other local arts organizations as collaborators as well as competitors–what used to be called in the IT world coopetition. If it takes playing pop tunes once in awhile to get people in the door and exposed to an orchestra, so be it. If the orchestra needs to travel to a locale where younger people hang out, that might help. Let’s learn from Cleveland and others that have come back or look to be doing so.

    • Cultural exchange is vitally important. That’s why localities should have a culture to present, and why more powerful orchestras should not loot the donor base of orchestras in stress (as happened with Cleveland in Miaimi.)

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