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Rumors have been racing through the North Texas classical music community about a possible merger between the Dallas Symphony and the Dallas Opera. But KERA’s Jerome Weeks reports the rumors were partly prompted by a symphony memo – aimed at calming such concerns.

KERA radio story:

Expanded online story:

Three weeks ago, the Dallas Symphony’s executive board announced it was temporarily halting its search for a new CEO. It was the orchestra’s third such search in three years. The board decided it would be better to get its own financial problems squared away first. It could attract better candidates that way.

The DSO has run multi-million dollar deficits in recent seasons. Last November, it called for donations to stave off reaching its limit on its $11 million line of credit. Although it resolved that crisis, the orchestra proceeded to cut back on next season’s number of performances and has taken other measures to reduce costs and generate more revenue.

But ending the CEO search (even if it’s only temporarily) triggered speculation, including concern about whether the DSO was going to merge with the Dallas Opera.  Economies of scale that such a merger could entail include fewer management positions — and fewer musicians. Symphony board chairman Blaine Nelson was concerned about the rumors and questions, so he issued a memo to the musicians and staff.

Nelson: “We needed to be very transparent. And so the memo did, in fact, address that and all the things we are looking at as alternatives.”

The memo cites alternatives that include “collaborations and combinations with other arts organizations.” But it also states the board has not yet chosen any particular direction: “We have not yet concluded at this time what direction provides the best opportunity for our financial security and certainty going forward. As you can imagine, all of these alternatives are complex and require significant study in order to determine what is best for the future of the Dallas Symphony Association and for the great orchestra we have here in the community of Dallas.”

Symphony-and-opera mergers are extremely rare. The Utah Symphony and the Utah Opera, which joined forces in 2002, are one of the few such pairings. Because of the recession, the possibility has been raised elsewhere. In Dayton, Ohio, the opera, symphony and ballet companies all joined to form the Dayton Performance Alliance.

But the success of such a tactic amongst non-profit arts groups remains uncertain. Kennedy Center president Michael Kaiser is an expert in non-profit management and fundraising. He’s argued that mergers don’t achieve the ends they’re supposed to and mostly misdirect badly needed resources: “It takes energy away from the kinds of activities that I think really help to create health for organizations. I’m more interested in joint venturing and sharing certain costs than I am about merging corporate entities.”

Nelson says, there’s a solid reason mergers among arts organizations remain rare. Even just trying to merge health care costs among arts groups can be daunting – let alone a complete organizational union.

Nelson: “Clearly, even to consider that kind of a transaction, you’ve got to get a lot of people all going in the same direction. And to achieve a consensus there is not easy nor are we even close. I do not even know if the community would support it.”

Nelson says the symphony has reduced this season’s projected deficit from more than $6 million dollars to more than $2 million. But he says the board is continuing to look for long-term solutions to the symphony’s financial problems.

The memo follows:

Memo to Members of the Dallas Symphony Orchestra and Staff

From: Blaine L. Nelson, Chairman of the Board of Governors DSA

Subject: Dallas Symphony Association CEO Search

Many of you have inquired as to the status of the DSA’s search for our new permanent CEO.  A few weeks ago, the Executive Board of the DSA voted to temporarily suspend the CEO search process in order to explore in greater detail various alternatives to build more certainty into the financial future of the DSA.  The Executive Board determined that it was not in “good faith” to offer any CEO candidate a career position, which would require them to move from whatever position they currently hold and most probably would require them to move their family, etc to Dallas, to join an organization whose financial future was not certain at this time.

Our current executive team and board leadership has been forthcoming over the past few months with the orchestra, the staff, the Board of Governors and the public as to our financial condition, which is dire and not where we need it to be.  Although, we averted a crisis of cash at the end of the calendar year 2011, our cash situation remains uncertain and we project at this time that our cash needs are only met through sometime late this coming Fall.

We have received tremendous and generous financial support from members of our Board of Governors and donors.  Many of our board members and donors have significantly increased their giving over prior years. We are enormously appreciative of their generosity.  We have reduced our operating costs significantly in many areas, including reducing the number of productions in next year’s programming.  However, a significant structural deficit still remains and many of our major donors and community leaders have requested that we develop a plan for the future that provides more certainty as to how we will reduce that structural deficit.

Our Executive Board has been working hard and has been focusing their efforts in exploring various alternatives to address that need for a plan for the future that provides more financial certainty.  The alternatives the Executive Board has been exploring include, but are not limited to: collaborations and combinations with other arts organizations; continuing to build donor support for our existing strategy; and addressing the potential requirements of a possible state of insolvency.  We have not yet concluded at this time what direction provides the best opportunity for our financial security and certainty going forward.  As you can imagine, all of these alternatives are complex and require significant study in order to determine what is best for the future of the Dallas Symphony Association and for the great orchestra we have here in the community of Dallas.

Further communications will be forthcoming as our Executive Board draws closer to determining the direction that produces the most desirable financial situation for the DSA.  In the meantime, we appreciate all that you’re doing, in whatever capacity you work, to making some the most beautiful music that has ever been experienced in the history of Dallas.

Thank you!

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