Strike latest: Lyric Opera struggles to reclaim high ground

Having lost the first crucial wave of public opinion, the Lyric has put out a justification 24 hours later for its hardline position vis-a-vis the orchestra musicians.

One line stands out on first readng: ‘Lyric is very proud of its 80% occupancy’. That’s nothing to be proud of.

Here’s the statement:

Lyric’s Proposals

FACT: Lyric has made a fair offer to the musicians of the orchestra. We are committed to paying an excellent wage for work that is done but we can no longer pay for work that is not done.

· Under the new contract proposal, Lyric is offering average annual take home wages of $82,500 per orchestra member for 22 weeks of work and 20 hours of work per week. Any work over 20 hours per week is paid as overtime.

· Lyric will continue to offer full health benefits to all orchestra members and their families year-round. In 2018, Lyric paid 92% of the total cost or $954,000 while orchestra members paid 8% or $86,000, as their total combined contribution. The current proposal maintains this benefit.

· Lyric will continue to pay into an expensive defined benefit pension plan for the orchestra. The contribution has increased and next year will be 11.99% of wages.

· As an example of the inefficiencies embedded in the current agreement, during the 2016/17 season, Lyric paid $1.8 million in wages (not including the cost of benefits) to orchestra members for work weeks that Lyric could not use. These payments were guaranteed by the contract. Lyric’s proposals only seek to reduce a fraction of these payments.

· The new contract proposal provides for additional work when The Joffrey Ballet moves to the opera house in 2020 and continues the offer of additional work on the annual musical. During the 2019/20 season, the planned Ring Cycles represent an additional five weeks of work for 95 orchestra musicians at a cost of more than $1.5 million to Lyric.

· IATSE (ratified) and AGMA (subject to ratification) have agreed to contracts with similar provisions.

FACT: We are offering wage increases for musicians – but only for the time they are working.

Put simply, Lyric’s current contract requires Lyric to pay musicians for 24 weeks of work when its season is only 22 weeks. This weekly pay guarantee dates back more than 10 years, when Lyric had 86 performances in its season. In Lyric’s current season, only 56 performances are scheduled because that’s the maximum number supported by audience demand. Lyric needs to align musicians’ weekly guarantees with the length of the season.

FACT: Lyric’s proposal does not reduce the size of the orchestra used for any Lyric performance. It reduces the number of people who are guaranteed payment whether or not they play.

Lyric is committed to supporting a world-class orchestra with the full sound and artistic expertise required for each opera performed.

Lyric currently employs 74 regular orchestra members, all of whom are paid for the currently guaranteed 24 weeks, whether the score of the opera being performed calls for 74 players or not. Lyric is proposing the number of guaranteed players be reduced to 69 – through attrition only.

The number of musicians taking part in each performance is determined by the needs of the opera. For some operas, that will be significantly more than 69, and Lyric will pay additional members accordingly. For other operas, it will be less, but Lyric would still pay 69 under the terms of its proposal.

FACT: The current contract requires Lyric to pay musicians for eight radio broadcasts that no longer take place – this is not sustainable.

In addition to their regular pay, musicians are paid a fee for live radio broadcasts when they occur. Lyric just can’t afford to pay them when it is not actually broadcasting. Although Lyric would love to continue its opening night broadcasts, it has been unable to raise sponsorships to support them. Lyric continues to explore new ways to increase access to its artform.

Lyric’s Budget and Ticket Sales

FACT: Lyric’s budget has grown because it has added activities like the annual musicals and community engagement initiatives that pay for themselves and provide revenue to help underwrite Lyric’s grand opera season.

Lyric’s budget was $60M in 2012 when Lyric only did eight operas on the main stage. When Lyric added activities like the musical and community engagement initiatives, its operating budget grew to ~$78M. The $84.5 million 2017 budget quoted in some union materials was an anomaly because of three large-scale new productions that season.

Diversifying its activities is helping Lyric create new revenue streams and, over time, expand its audience base. The new activities more than pay for themselves and, in fact, offset deficits from the opera budget.

FACT: Ticket revenue appears flat over the past 6 years, but the composition of that revenue has changed dramatically.

Total revenue today is comprised of revenue from many activities beyond grand opera.

Ticket revenue from opera ticket sales has actually declined to less than $20 million from more than $25 million in 2012. The 2018 total revenue budget from ticket sales was $25.5 million, which included $6 million in sales from the musical.

Subscription revenue has fallen to ~$13 million today from ~$20 million in 2008.

Additionally, most of Lyric’s new tickets sales come from single-ticket sales or small bundles of performances – both of which have a significantly higher cost of sale relative to the full-season subscriptions that at one time filled the Opera House.

FACT: We have maintained our occupancy rate because we have reduced the number of grand opera performances to align with patron demand.

Lyric is very proud of its ~80 percent occupancy rate, which is still among the highest in the industry. However, it’s important to remember Lyric’s occupancy rate is a result of a decreased number of performances.

FACT: Lyric has continued to renew the vast majority of our subscribers, even as we needed to transition them to series that include performances on different days of the week.

With the decline in Lyric’s total number of performances, it is no longer possible for subscribers to come on the same day of the week for all the performances in their subscriptions. However, Lyric’s retention rates for transitioning subscribers to new subscription series have been exceptionally high.

The decline in Lyric’s total number of subscribers predated the reduction in performances numbers and is a trend opera companies nationwide are experiencing.

FACT: Lyric has created and implemented a comprehensive marketing plan that is in line with today’s marketing best practices.

Lyric’s current marketing plan includes dedicated strategies towards retaining its existing patron base while also focusing on attracting new consumers. The plan includes a comprehensive digital strategy, personalized patron communications, dedicated patron research and targeted emarketing initiatives.

Lyric’s Fundraising

FACT: Lyric is good at raising money and Lyric supporters are among the most generous and loyal anywhere. At the same time, Lyric exists as a public trust, and our donors expect accountability around all aspects of our business, including our agreements with our unions.

Lyric has not lost the ability to raise money. Lyric simply needs to give its donors a compelling reason to invest in this company for the long term. Its donors expect – and deserve – real change.

Donors give to Lyric out of love for the art form, and they give because they know a great city deserves a great opera company and a strong Lyric Opera is good for Chicago. Fully 50 percent of Lyric’s operating budget comes from contributed revenue. The fact that IATSE and AGMA have reached agreements with Lyric management to help address its problems will motivate donors.

However, simply launching another special campaign like Breaking New Ground to provide funds to be drawn on when needed for operating costs is not a sustainable strategy. Donors want to invest in something they know will support Lyric far into the future. While they appreciate the cost-savings initiatives Lyric has already achieved and the new sources of revenue created, achieving fair and efficient union agreements is an important indicator of success for donors. This was borne out by the recent extensive study conducted by Grenzebach Glier + Associates, a highly respected fundraising consultant.

UPDATE: Within minutes, the Lyric issued a correction to its statement (incorporated above). Chaos reigns.

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  • JC says:

    They get a third more than the average annual income and work a quarter of the time. If that’s true, their demands are unjustifiable.

    • Ralfy says:

      Any board or management that publishes that musicians “work” only 20 hours a week is being willfully deceptive and manipulative. Obtaining and maintaining the skills required to perform at such a high level IS NOT part time work and anyone who would claim so doesn’t understand the nature of the job. So either they are lying or ignorant, which is it? It’s the equivalent of saying football players only work 6-7 hours per week. The fact that they would publish that trash is enough to make me incredibly sceptical of any their other points.

      • JC says:

        If we leave aside the 20 hours before overtime part, even $82,000 for half a year’s work is great.

        The trouble with leaving aside the 20 hours is that musicians themselves make a lie of the idea that that is full time by accepting other work those weeks.

        Everyone wants musicians to be well paid but the truth is the demand isn’t sufficient and they can’t keep being protected by agreements from a different time. In demanding to do so, they are putting at risk the future of their art and the careers of young musicians.

    • Bruce says:

      If it makes any difference, you can divide a musician’s annual salary by 2,080 (52 weeks x 40 hours) to get an idea of how much per hour a job pays in terms of “full time employment.”

  • Vaquero357 says:

    The problem for the musicians is the way their situation comes off to the average person, most of whom would LOVE to have a job with a base salary in the $82K range….with FULL benefits (in the last two decades, employees have been kicking in larger and large portions of their medical coverage)….for 22 weeks of work – less than half a year – with a work week of 20 HOURS before it kicks into OVERTIME. Where can I get this deal? Sign me up!

    OK, I get it: people who can play in world-class opera company’s orchestra aren’t thick on the ground. And yes, it takes many years of study and practice and a costly conservatory education to be able to perform at this level. But as the audience for the “product” they’re involved in producing decreases, how can one justify ever *increasing* compensation for these musicians?

    So regardless of the skill required for the job, if the number of paying customers keeps going down, compensation can’t keep going up. Especially when they’re already making far in excess of what’s needed to have a very comfortable middle-class lifestyle.

    • Old Man in the Midwest says:

      Very well said.

      • Vaquero357 says:

        From one old man in the Midwest to another – thank you.

        I do want to be clear that I’m not against the musicians. I’m not saying they’re greedy, except in the sense that, like all of us, they want to be paid as well as possible for their work. Whether we’re conscious of it or not, all of us tend to see the amount we’re paid by the institution we work for (or clients, or customers, or etc.) is a measure of how much our work is *valued*.

        My concern is that they’re in an industry that can’t support the salary levels they’re asking for. This is a business where about 1/4 of the organizations income comes from folks who pay for seats to see and hear opera. Then they have to go begging hat-in-hand for donations to cover the rest. That’s part of what the large back-office staff is for: fund raising to cover the enormous part of the budget NOT covered by earned income.

    • Drea says:

      You seem to be under the impression that the Lyric Opera has not been doing EXTREMELY well in the last few years… They are not struggling. They projected $25.95 million in ticket sales this year, which is far MORE than past years.

      In fact, their budget increased about $24 million from 2012 to 2017 ($60.4 million in 2012 to $84.5 million in 2017). The orchestra has seen NONE of that $24 million increase in funds. In fact, when adjusted for inflation, their wages have seen a significant decrease since 2011 (5.1% to be exact.)

      Meanwhile, management’s salary has increased nearly 20% in that same time period, specifically that of Anthony Freud, whose annual salary is $800,000 (it was raised 16% in 2016 alone, RIGHT after they cut down medical benefits for its players).

      And speaking of medical benefits, while you touch on the point that musicians spend years and years of intense practice and training to do what they do, we should also talk about injury. To play at the level that they do, there are almost always injuries and corrective surgeries needed within their lifetime- and cannot pay for said services without compensation. Overcoming these physical barriers to keep their musical prowess up is also part of their extremely difficult job.

      If you do your research, the orchestra’s last proposal to management proposed tying wage increases directly to the rate of inflation- no more no less, which is completely fair in this market. Despite how “excess” you believe $82k to be, you cannot disregard the greed and hypocrisy of the management that is making almost TEN TIMES that, and continues to pad their own pocket instead of compensating their musicians in turn.

    • buxtehude says:

      Yes very well said.

      Another point, that at least some of the public sees, is that there is an over-supply of fine orchestral players, just as there is an over-supply of instrumental soloists; and that many talented people so crave a life in music that they’re ready endure uncertainty and even poverty.

      Normally this would leave all players very vulnerable to the general erosion of good middle-class incomes, especially as audiences die off and donations fade. For more than eighty years now though strong unions have protected their employed members; cough up or die, has often been their response to admins claiming distress.

      • Johnqpublic says:

        Well then god bless the unions for making sure that people who have achieved so specialized and difficult a skill are not exploited by management who makes 10x their salary and a board that makes more in month than they’ll make in a year.

      • Old Man in the Midwest says:

        If I say anymore I may give away my cover.

        Suffice to say it is I agree with this thread.

        Old Man in the Midwest

  • AJ says:

    I respectfully disagree.

    I am a donor and a patron of the arts. I give to many arts organizations who do not have any earned income, and to foundations as well. This seems an issue of poor arts management, not misappropriated career goals.

    Musicians of this caliber have masters and doctoral degrees. They have expensive tools of the trade. They work more than 40 hours a week. As a result, They produce an excellent and beautiful artistic product.
    Begging hat-in-hand? Is that what foundations and non-profits do?

    I am a donor and a patron of the arts. I give to many arts organizations who do not have any earned income and foundations as well. This seems an issue of poor management, not misappropriated career goals.

    Musicians of this caliber have masters and doctoral degrees. Additionally, they have expensive tools of the trade. They work more than 40 hours a week. They have been studying and practicing since childhood.

    This is the arts, this is not a corporation. Even if this were a corporate venture, management ought not to treat the most valuable employees so poorly. There certainly would be some resistance.

    I was put off by the Lyric Opera of Chicago’s statement. They clearly think little of the donors and patrons to issue such a statement.

  • Bernardo Marc says:

    AGMA, the union for opera choruses, soloists, stage managers etc has a rule prohibiting chorister from rehearsing on their own time. This rule is to prevent large companies from having an expectation that they show up ready to go and instead forces the company to budget for adequate rehearsal time to teach and stage music. This only effects large paid choruses (Met, Chicago Lyric, San Francisco, Houston, etc). I’m not sure if the orchestra union has similar rules.

  • operalover23 says:

    Given the published comments on fundraising success, I am surprised no one has pointed toward excessive executive salaries. 990s from 2015 show a deficit of over $12 million, yet the chief fundraiser was paid $321,935–a lot in any sector, especially the arts.

  • Former Lyric Donor says:

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    Apparently this concept does not apply to the administration itself, as Anthony Freud enjoys an $800,000 per year salary with an increase of 16% in the past few years in spite of the statistics Lyric cites in their fact sheet. According to Lyric’s 2016 Form 990, the vice president of marketing makes $200,000 per year. Are their salaries going down as the number of performances decrease? (And trust me, no one is buying tickets to see them.)

    Just like Freud himself, orchestra members are full-time employees who in many cases have devoted their entire careers and given up other opportunities to fulfill their obligations to Lyric Opera. If one particular production requires less personnel, those musicians who are not involved do not suddenly have a month of vacation. They are typically busy rehearsing or performing one or two other operas and cannot pick up extra work. Paying musicians a stable salary is part of ensuring that the world class orchestra capable of playing everything from Wozzeck to Jesus Christ Superstar is maintained. (In fact, the orchestra is perhaps the ONLY thing that has been consistently good over the 25 years I’ve been attending Lyric performances.)

    Professional musicians are not props. They are highly skilled people with lives, stressful jobs, and the same kinds of responsibilities outside work as the rest of us. They represent a fraction of Lyric’s budget, yet–along with the singers–are one of the most important parts of the artistic product that pays Freud’s salary. They are not an appropriate place for cost-cutting measures.

  • Former Lyric Donor says:

    My previously posted comment omitted the opening paragraph:

    “So regardless of the skill required for the job, if the number of paying customers keeps going down, compensation can’t keep going up. Especially when they’re already making far in excess of what’s needed to have a very comfortable middle-class lifestyle.”

    Apparently this concept does not apply to the administration itself, as Anthony Freud enjoys an $800,000 per year salary with an increase of 16% in the past few years in spite of the statistics Lyric cites in their fact sheet. According to Lyric’s 2016 Form 990, the vice president of marketing makes $200,000 per year. Are their salaries going down as the number of performances decrease? (And trust me, no one is buying tickets to see them.)

    Just like Freud himself, orchestra members are full-time employees who in many cases have devoted their entire careers and given up other opportunities to fulfill their obligations to Lyric Opera. If one particular production requires less personnel, those musicians who are not involved do not suddenly have a month of vacation. They are typically busy rehearsing or performing one or two other operas and cannot pick up extra work. Paying musicians a stable salary is part of ensuring that the world class orchestra capable of playing everything from Wozzeck to Jesus Christ Superstar is maintained. (In fact, the orchestra is perhaps the ONLY thing that has been consistently good over the 25 years I’ve been attending Lyric performances.)

    Professional musicians are not props. They are highly skilled people with lives, stressful jobs, and the same kinds of responsibilities outside work as the rest of us. They represent a fraction of Lyric’s budget, yet–along with the singers–are one of the most important parts of the artistic product that pays Freud’s salary. They are not an appropriate place for cost-cutting measures.

    • JC says:

      You are right, everyone involved needs to cut their cloth to suit the new reality. Musicians and management.

    • Vaquero357 says:

      I agree that executive compensation is out of line here, too. Everything I said about the volume of paying customers affecting musicians’ salaries applies just as much to the E-suite. (My guess is the rest of the office staff isn’t nearly so well compensated.)

      I’m also wondering if Lyric is somewhat a victim of the heady times in the late 1980s/early ’90s with houses sold out more than 100%. I was a regular attendee through the ’80s, but only single tickets. I remember distinctly trying to buy tickets, only to find everything was totally sold out…..and thinking, “Myeh, I’ll just got to something else.” Lyric dropped out of my “rotation” and never re-entered before I moved away from the area.

    • Norik says:

      Can’t speak to this situation specifically, but there are some jobs, marketing, IT, finance, etc where non-profits must compete with for-profits to hire the people with talent. A good person in one of these fields can get a job in for-profit and donate to the non-profit of their choice instead of accepting lower pay, an impossibly small budget to work with, and other drawbacks. The same principal applies to a CEO, if his/her experience, skills and talent are transferable. More: https://www.huffingtonpost.com/trevor-neilson/dan-pallotta-won-the-worl_b_3456660.html

  • Dave T says:

    “[Ten years ago] Lyric had 86 performances in its season. In Lyric’s current season, only 56 performances are scheduled because that’s the maximum number supported by audience demand.”

    There you have it.

  • Harold Kupper says:

    JC, the “new reality” is simply corporate speak for “workers should accept cuts” while the funds flow to the ever increasing numbers administrative/executive suites and “creative consultants.”
    The most effective way to bring people to a love of the operatic art form is for them to experience it, live in the opera house, with a great orchestra and all the other elements in place. It’s a potentially life changing, transformative experience.
    Sadly the Lyric (corporate) leadership (with weak artistic vision) is inventing a “new reality” that drastically minimizes these opportunities which in turn continues a downward spiral.
    What ever happened to the Student Matinee Series for high school kids? Has anyone ever heard of developing the next generation of opera patrons?
    More defeatism is evident with the shocking decision to discontinue the Lyric Opera radio broadcasts which reached an international audience through the WFMT network.

    • Former Lyric Donor says:

      Yes. That. Perfectly said.

      And whose responsibility is the downward spiral in which the hall is filled not by the reality of amazing theatrical experiences but by decreasing the number of performances and telling people [insert name of opera here] is like “Game of Thrones”? An administration that apparently treats its personnel like they’re a budget line item.

    • Vaquero357 says:

      According to this, the broadcasts were discontinued because Lyric couldn’t line up a sponsor:

      “In addition to their regular pay, musicians are paid a fee for live radio broadcasts when they occur. Lyric just can’t afford to pay them when it is not actually broadcasting. Although Lyric would love to continue its opening night broadcasts, it has been unable to raise sponsorships to support them. Lyric continues to explore new ways to increase access to its artform.”

      This does beg the question of how hard management worked to line up a new sponsor(s), or if they encourage donors to give their money to some other form of “community outreach.”

      I also wonder how this will affect WFMT’s syndicated summer recorded opera series, which currently nicely fills up the gap between MET broadcast seasons. Without Lyric, they’ve got an 8 week hole in that schedule.

    • JC says:

      Yes, it can be a transformative experience for some, but every arts company has a database of customers who have attended once. It’s usually around 60% of the database. Why is that? Why do they go once and not want to go again? Greg Sandow has been discussing potential reasons recently (http://www.artsjournal.com/sandow/2018/09/unconvincing.html).

    • ChiTeach says:

      Not picking a side, but as an educator, I know for a fact that student matinees are alive and well. This season they scheduled more than ever before. My students were among the more than 6,000 students who attended Lyric last year not counting the 20,000+ younger kids who experienced Opera in the Neighborhoods (source: http://www.lyricopera.org/lyricunlimited). Lyric also offers $20 tickets to thousands of full-time college students through NEXT (how I was introduced to the company) and $5 tickets to teens through the city’s TAP program. For post-grad opera fans, networking, informational events, and discounted opera tickets are also available through the Lyric Young Professional program.

  • Mark says:

    Lyric has a sponsor for the broadcasts. They told this sponsor that radio is dying and they should financially support Lyric Unlimited, Lyric’s pet project that is not even remotely related to opera. (see Chicago Voices) This is a branch of the company doing feel good things throughout the city. The truth here is this leadership doesn’t like opera as an art form. They truly believe the art form is dying. The direction is to diversify entertainment options in order to survive. You don’t need opera singers and orchestra for Second City shows, a conversation with Common and Serena Williams, John Legend, Pentatonix, Choir Choir Choir, and Straight Up, No Chaser. All of which are or have happened at Lyric. Do you see the Met Opera, or any other OPERA company doing this?

    • Vaquero357 says:

      Ha! Just what I suspected. For a while the Bucksbaum (sp?) family has been supporting the broadcasts. Not that it couldn’t happen, but it seemed odd that they’d just pull out and leave the Lyric broadcasts high and dry.

  • Mick says:

    The Sun rises in the East, taxes are collected every April, and totally idiotic comments about “what musicians should be paid” are made by people in humdrum, unskilled, office jobs. Just a few of the constants in our lives.

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