CSO Facing $1.4 million Shortfall

(first published in The Cincinnati Post Feb. 21, 2004)

The Cincinnati Symphony Orchestra board will hear options next week for trying to deal with an operating deficit that officials said Friday would approach $1.45 million in the fiscal year that ends Aug. 31.

The shortfall, caused in large part by declining investment income from its endowment, is more than three times the $420,000 deficit the orchestra recorded last year.

An ad hoc finance committee of the CSO board has been working on solutions to the problem, said board president Daniel Hoffheimer, and will make a presentation to the full board Tuesday.

The object of the meeting, he said, is have the board "fully informed about what all the facts are, all the circumstances and all the trends."

Hoffheimer declined to call it a crisis meeting, however.

"I announced to the board several months ago that we would need to schedule one or two special board meetings during which we would deal only with the economic structure of the orchestra and maybe a month later have a follow-up meeting at which we try to put into place a specific plan that would enable us to balance the budget permanently over a certain number of years," he said.

Hoffheimer doubted that anything would be voted on next week.

"I do expect that there will be some consensus that will have started to gel around certain questions," he said. "It is sort of obvious that we will be looking to the musicians to work together with us and participate in the solution."

Salary concessions are expected to be an issue, said Eugene Frey, president of the Cincinnati Musicians Association, the collective bargaining agent for the CSO players.

"The largest single item, after salaries, is health care, which is so contentious all over the country," he said.

The musicians' current contract expires in August and serious negotiations are not expected to begin until July, Frey said.

Musicians and the orchestra "have a long history of a great deal of mutual respect" said Paul Frankenfeld, chair of the CSO players committee. "We are all going to endeavor to preserve that mutual respect."

Orchestras across the country are facing similar financial woes because of declining investment revenue, attributed to the stock market's struggles, and rising costs. The CSO's predicament has been complicated by the fact that it has had to dig more deeply into its endowment -- now taking nearly 9 percent annually, compared to 6 percent in the past -- to make ends meet in its $31 million annual budget.

It has also seen a significant drop in corporate support.

CSO President Steven Monder said "there is not one single solution" to the orchestra's situation. "It's going to take collaboration and cooperation among all the parties."

Despite the orchestra's financial problems, a tour of Europe remains in the works for next season, although sponsorships are still being sought, said Monder. The hope is to capitalize on the heightened profile the CSO has achieved under music director Paavo Järvi.