The Philadelphia Orchestra’s Bankruptcy

Many friends have used the word "sad" to describe the news that the Philadelphia Orchestra's board of directors voted to file a Chapter 11 petition in the U.S. Bankruptcy Court in Philadelphia.  I can agree that there is some sadness attending this event, but I would point out that Chapter 11 is about hope, about optimism.  It would be truly sad, indeed tragic, if the board's reaction to the orchestra's financial situation were to file a petition to dissolve the orchestra and liquidate its assets to satisfy creditors.  (The Honolulu Symphony's board recently took that route.) That would mean that they could see no way out to being able to continue running a first-class symphony orchestra in the city of Philadelphia.  But the board's reaction in authorizing a Chapter 11 means that they strongly believe that there is a way to do this, if given the chance to start fresh.

That's what Chapter 11 is about: making a fresh start.  Putting the cash flow crisis on hold with some breathing space to engage all concerned parties – musicians, administrators, creditors, donors and other potential supporters – in a creative conversation about how to have an economically viable first-class symphony orchestra in Philadelphia.  I understand that the musicians' representatives strongly opposed the bankruptcy filing.  That is understandable, perhaps, but short-sighted.  The orchestra management reported that their cash flow situation was so desparate they could only meet payroll a short while longer.  The musicians need to be a major part of the solution to this problem, and I don't think that this would necessarily be to their long-term financial disadvantage.  An appropriately creative financial restructuring to put the orchestra on a sound basis can only benefit them in the long run, even if it requires some short-term sacrifice.  That they are in the midst of collective bargaining over a new contract is actually fortuitous in this sense; the timing is obviously right for serious talks about how to make it work financially.

I have no personal knowledge of the Philadelphia Orchestra's financial situation.  But I go back a long way with this orchestra.  When I was first becoming aware of classical music as a young child, I "learned" Shostakovich's 5th Symphony and Sibelius's 1st Symphony from 78 rpm recordings in my father's collection by the Philadelphia Orchestra (with Stokowski and Sibelius).  I thrilled to the Rachmaninoff Piano Concerto No. 2 with the composer and the Philadelphia Orchestra, also on 78s.  And there was that great old recording of Sibelius's Lemminkainen Suite, one of the handful of mono LPs in my dad's small collection – a recording that unfortunately has never resurfaced on CD. (Their later stereo remake with Ormandy for EMI is excellent, but I'd love to get to hear the older recording again.)  When I started buying classical recordings as a teenager, there were some great Philadelphia Orchestra recordings among the earliest in my collection – Stern & Ormandy in the Prokofiev Violin Concerti, Entremont & Ormandy with Saint-Saens Piano Concerti, a marvelous collection of orchestral marches, Virgil Fox and Ormandy in the Saint-Saens Organ Symphony — all among the early favorites in my collection.  When I moved to NYC in 1977, I began to hear occasional concerts by the Philadelphia Orchestra at Carnegie Hall, led by Ormandy, Muti, Sawallisch and Eschenbach over the course of more than 30 years now.  Although I've never heard them perform live in their home hall, I feel like I know this orchestra, and I love it very much and admire it as one of the finest.

My impression is that major American symphony orchestras today have generated excessive overhead through too much staffing up on the non-musical end, and that economies can be achieved in the administrative end.  I would imagine that it may be possible to renegotiate arrangements with various creditors to stretch out payments, and work out a more liveable rental deal with Kimmel Hall.  It may be possible to work out more flexible arrangements with the musicians' union.  I would hope that an orchestra of this magnificence could figure out ways to generate more revenue from recording and live broadcasting of their concerts, and that Philadelphia individuals and corporations might be persuaded to step up to a greater level of philanthropic support.  (I, for one, have been disappointed with the programming of their recordings in their contract with the Finnish label, Ondine, and haven't bought many of them.) 

Surely, if everybody has the goal of sustaining the orchestra over the long run, Chapter 11 should be what it is intended to be: a fresh start to make it possible for an important organization to maintain its viability.  Now it's largely a question of attitude on the part of all concerned.

7 thoughts on “The Philadelphia Orchestra’s Bankruptcy

  1. could you comment on the theory of an organziation with an endowment of $140m+ and no debt making a ch 11 filing. Their claim is, I think, that the endowment is restricted. This seems to be a play to reduce compensation and pension obligations to the unionized orchestra players. I didn’t see that the aptly named Vulgamore (sounds like Pynchon or David Foster Wallace) is taking a pay cut despite continuing to lose audience by playing the best of the 1800s every night.

  2. It is depressing to hear that the fabulous Philadelphians have filed for bankruptcy. I heard them live at a Prom concert in London, in I think 1980. The programme was Tchaikovsky (Pathetique) and Prokofiev (Romeo and Juliet) It remains in my memory as the best orchestral concert I can recall attending. Muti conducted, he had just succeeded Ormandy, and the ” Philadelphia Sound” was still in place. Just before reading your blog I ordered a reissue of the Schuman symphonies with Levine conducting the Philadelphians. It was also nice to see a few Ormandy recordings reappearing in Sony’s latest re-issue series (“Sony Originals” which reproduce the original LP cover art).
    I read Yannick Nezet Seguin is set to take over in Philadelphia. He got amazing results from the New Zealand National Youth Orchestra a couple of seasons ago. I hope he will help revive the fortunes of this great orchestra.

  3. I am not acquainted with the orchestra’s finances, as my knowledge is limited to what I’ve read in the press coverage. Filing a bankrupcty petition does not automatically result in protection under the bankruptcy law; the court first has to determine that the petitioner’s financial situation qualifies them for such protection.
    Which means that if they have a big unrestricted asset sitting around and no debt, the court might dismiss the petition.
    But endowments for non-profits like orchestra do tend to have lots of restrictions on their use, especially if they consist heavily of funds left through bequests or directed donations for particular purposes. (For example, some well-endowed orchestras have named chairs, financially supported by restricted donations to establish the chair under which the income earned from the endowment funds go to compensate the occupant of the chair.) I have no personal knowledge, as I’ve stated above, but it is entirely possible that large portions of the income from the orchestra’s endowment are required to be directed to certain expenses and not others.
    I remember hearing once from a friend who was on the faculty of the University of Texas Law School that people in Texas assumed the law school was swimming in money because of the big endowment, but it turned out that uses of income from the endowment were heavily restricted and, in fact, the law school was not really “swimming in money” when it came to meeting their ordinary operating expenses.
    I suspect that a reorganization would, as I suggested in my main posting, require achieving significant reductions in administrative expenses, whether through pay cuts or reduction of positions.

  4. What was particularly nice about the new CD reissues were that most of the Vivaldi disc and some of the Scandinavian disc consisted of recordings that had not, to the best of my knowledge, previously been available on compact disc. That said, Ormandy/Philadelphia in Vivaldi from the late 1950s and early 1960s does sound a bit anachronistic,and the sound quality is not quite the best. The Scandinavian album is more directly ‘up their alley’ and sounds quite acceptable. I’ve also gotten the Levine/Schumann set but haven’t had a chance to listen yet. I remember being thrilled as a law student hearing Levine conduct a Schumann Symphony as a guest with the BSO back in the mid-1970s.

  5. It’s good to see Sony have another batch of “Sony Originals” out next month, including some more Ormandy’s and Szell’s Slavonic Dances. Strange, though, that I have yet to see any review or comment on this reissue series either in print or on any of the online review websites. Nor does Sony see fit to advertise these recordings.

  6. Most of them are reissues of material that has previously been available on CD, the main selling point, evidently, being nostalgia among older collectors for original covers. I bought one of the Ormandy releases, since it had a few items that weren’t previously available on CD. What would impress me more would be if they went back into archives and made more stuff available that has not been on sale to the public since the days of mono LPs. There were some terrific Ormandy/Philadelphia recordings from the first decade of the LP that have still gone missing.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.