Philadelphia Orchestra to seek bankruptcy protection

Reuters News
|
Posted: Apr 16, 2011 4:13 PM
Philadelphia Orchestra to seek bankruptcy protection

By Dave Warner

PHILADELPHIA (Reuters) - The Philadelphia Orchestra, one of the nation's "Big Five" symphonies, on Saturday voted to seek Chapter 11 bankruptcy protection, a board member said.

The 55-member board of directors approved the move, with the only opposition votes cast by five board members who are musicians, said John Koen, a cellist and board member.

The vote to take the orchestra founded in 1900 into bankruptcy took place in a law office, where musicians in the lobby played Samuel Barber's Adagio for Strings, often performed at funerals.

"It's very devastating," said Koen, who is also chief bargainer for the Philadelphia Musicians Union, which represents the players. "We're very disappointed."

Board chairman Richard Worley was not immediately available for comment.

The orchestra's decision to seek bankruptcy protection is the latest sign of the toll the tough economy is taking on some symphonies challenged by shrinking audiences, said Jesse Rosen, the head of the League of American Orchestras.

Philharmonics in Syracuse, New York, and Honolulu went out of business. In Kentucky, the Louisville Orchestra filed for bankruptcy in 2010. And in Michigan, Detroit Symphony Orchestra musicians ended a six-month strike and accepted pay cuts.

"This is not a blip," said Rosen, noting that orchestras need to find ways to attract wider audiences.

Philharmonics in Los Angeles, Nashville and elsewhere have attracted large followings and continue to do well, he said.

The Philadelphia Orchestra said in a statement its troubles stem from the fact that it has $46 million in costs, but just over $31 million in revenue. Pension costs are also pivotal.

However, the orchestra and musicians union differ greatly on the estimated pension obligations.

The orchestra estimates its pension obligation at $48 million, while the musicians union has calculated it at $7 to $8 million, Koen said. The organization also has an endowment of about $140 million, he said.

Musicians typically make $124,800 per year, although high-profile soloists can make three times that amount, Rosen said.

The Philadelphia Orchestra was founded in 1900, and its reputation blossomed under the leadership of the legendary Eugene Ormandy from 1936 to 1980.

It's also considered one of the five most accomplished symphony orchestras in the United States, along with the New York Philharmonic, Boston Symphony Orchestra, Chicago Symphony Orchestra and Cleveland Orchestra.

(Editing by Barbara Goldberg and David Bailey)