Dallas Symphony Faces Insolvency, Creates New Action Plan

Unless fortunes change the Dallas Symphony will run out of money in late January. But they believe that won’t happen — because they’re instituting a new business plan. KERA’s Jerome Weeks has the story.

Dallas Morning News story (pay wall)

KERA radio story:

Expanded online story:

Tuesday night Dallas Symphony Board Chairman Blaine Nelson (left) told a group of top donors that based on current revenue and expenses, the symphony will be insolvent within 90 days.

In an interview with KERA Nelson explained.

NELSON: “We have a line of credit for $11 million, and that’s guaranteed by our foundation assets. However, our foundation has only given us permission to draw on that line of credit up to $8 million and it’s estimated that we will be at or exceed that $8 million by sometime either in January or February.”

The Dallas Symphony has recently received acclaim for its improved performances under conductor Jaap van Zweden. Just last week, van Zweden was named conductor of the year by the journal, Musical America.

But Nelson says, that acclaim has not translated into ticket sales or sufficient donor support for what is the largest arts organization in Texas. The symphony has run multi-million-dollar deficits the past two seasons and looks to run another one this season.

NELSON: “I mean, our paid attendance, on average, for all concerts is less than 65 percent, so the hall is virtually empty. Our contributed revenue from an annual fund, from an operational support, has been on the decline as well.”

The sympony has already reduced staff and negotiated a wage freeze with the musicians’ union for the fifth straight year.

Following KERA’s inquiry Thursday, the symphony released what it calls a new business plan. The plan confirms what Nelson told donors, that the symphony will cut back on programming for next season by reducing the number of classical music performances and the Pops Concert series. Musical director van Zweden and composer Marvin Hamlisch will conduct the same number of concerts as originally planned.

But Nelson says he isn’t sure what will happen if the credit limit is reached — though he doesn’t think it will be reached. He’s asking donors to dig deep and contribute. Last year, the symphony raised the money for a $20 million matching grant. But most of that money is restricted in how it can be used. Part of the new business plan, Nelson says, involves asking those donors to lift those restrictions.

NELSON: “The one thing that I couldn’t do is face this crisis and not be transparent and not communicate it because I wouldn’t want something bad to happen and then have people come to me and say, ‘Well, why didn’t you tell me? I would have helped.’ What I’m doing is I’m telling them and I actually have every confidence that people will step up and help.”

Keep reading for the news release from the DSO:

Dallas, TX (Nov. 9, 2011) – The Dallas Symphony Orchestra (DSO) today announced a new business model and action plan designed to sustain a secure, vibrant and exciting future for the Dallas Symphony.

The new model provides an approach that can sustain the new level of artistic excellence has achieved under Maestro Jaap van Zweden, by adjusting DSO operations to the realities of the 21^st century. The plan will reduce operating expenses in a way that protects artistic quality, boosts revenues and increases he Orchestra’s outreach into the community.

Maestro van Zweden was recently recognized as America’s best conductor by Musical America, which cited the increased performance artistry achieved by DSO under his direction.

“The DSO Executive Board enthusiastically approved a new plan, which we are already putting in place,” said Blaine L. Nelson, Chairman. “This action plan will create a sustainable future that extends the superb quality DSO has achieved, increases community support and lays a stronger foundation for fundraising efforts.”

The plan involves devising a new business model better attuned to the 21^st century arts environment. Key elements include:

Adjusting the number of performances starting next season, to better balance the number of Meyerson concerts with community demand – 62 Classical and 24 Pops performances;
Providing the same number of concerts conducted by Maestro van Zweden and Marvin Hamlisch as originally planned;
Extending DSO’s reach into the community with more community concerts, such as ones planned for the Allen ISD Performing Arts Center, scheduled for next year;
Providing more community organizations with opportunities to sponsor special events like one Fluor Corp. has arranged for its stakeholders next year;
Increasing DSO’s highly popular music education programs for children and adults; and
Increasing DSO’s collaboration with other arts organizations so more can enjoy DSO’s superb music.

“Like many arts organizations, we have been affected by the financial wave that has hit arts funding across the U.S.,” said Nelsen. “Orchestras throughout the country are realizing that a new business model is required for the 21^st century, and recent deficits indicate we are no exception.”

“We’ve been listening to what the community is telling us, so our new plan better aligns our performance schedules with attendance patterns,” said David Hyslop, Interim President and CEO. “Starting next season, after making schedule adjustments, we will be able to accommodate all of our patrons who attend the Meyerson, reducing expenses while making the orchestra available for more concerts and special events out in the community.”

“Given the fiscal restraints challenging orchestras across the country, a new approach is needed. Our new business plan addresses that,” Nelson said.

“We’ve reduced staff, cut other expenses, implemented wage freezes and secured a practical contract with our musicians, and now we’re doing more with a new business model that can serve as a catalyst for a sustainable future,” Nelson said.

“Inspired by this plan, many of our Board and Executive Committee members are already substantially increasing their giving to the Symphony. But to truly succeed, we need support from our donors, subscribers and the community at large,” Nelson said.

With this new plan for sustainability in place, we’re also asking our supporters to make attending concerts and giving to the Symphony a top priority,” Nelson said. “Our commitment to make the Dallas Symphony a leading orchestra and ambassador for our city is stronger than ever.”