MPR News Primer: Orchestra contract negotiations

Last updated Sept. 20, 2013

Latest: Observers see small but significant progress in Minnesota Orchestra talks.

Minnesota's premier orchestras face tough financial challenges that could alter the state's classical music landscape by changing musicians' pay, ticket prices and even musical quality.

Management of the Minnesota Orchestra and St. Paul Chamber Orchestra pressed musicians this year and last for changes in the orchestras' financial structure while unions fought to keep pay and benefits they have bargained for in the past. In April, the SPCO came to terms with its musicians.

At the Minnesota Orchestra, however, musicians and management dug in, trading proposals and accusations through the spring and summer while cancelling performances.

There may be some movement, finally, in that year-long dispute. Here's a guide to what's happened and what may lie ahead.

What are the orchestra's challenges?

Orchestra finances are dictated by musician payrolls, ticket sales, fundraising success, and in the case of the Minnesota Orchestra, endowment health.

Lucrative contracts signed before the recession set the Minnesota Orchestra up for a big fall.

The orchestra in 2007 agreed to a five-year contract with its musicians to raise performers' annual base wages 25 percent to $118,170, by 2011-2012.

Less than a year into the contract, the stock market collapsed, putting a serious dent in the orchestra's endowment and ticket sales. Musicians in 2009 agreed to forgo $4.2 million in wages in the contract's final three years, bringing the 2012 minimum down to about $111,566, still 17 percent more than 2006-2007.

Even with the givebacks, the orchestra recorded its worst loss to date -- $2.9 million for the 2010-2011 season, mainly as a result of loss of endowment revenue.

A rebounding stock market, slowly improving economy and excitement around the Minnesota Orchestra's concert hall renovation project has helped ease the pain. But basic problems remain. Concert ticket sales covered only about 22 percent of the Minnesota Orchestra's total expenses in fiscal 2011.

The financial woes led one observer of the local classical scene to worry the orchestra may degrade into a "glorified Pops orchestra."

What do musicians get paid?

The Minnesota Orchestra says average annual compensation for musicians is $135,000. They get a minimum of 10 weeks of vacation and up to 26 weeks of paid sick leave each year. Minimum salary this year is $111,566.

Individual musicians also negotiate additional pay called "overscale." Prior to the lock out, and under the old contract, 80 percent of the musicians received over scale payments.

Musicians say that percentage is no longer accurate as several principal players have departed as a result of the lock out. However, over scale is individually negotiated with each player, and until the new contract is agreed, it is unclear what percentage of the musicians will receive over scale.

Conductor Osmo Vänskä earns more than $1 million a year but has also taken pay cuts.

Minnesota Orchestra musicians are lower paid than those at symphonies in Boston, Chicago and New York but do better on average than musicians with similar gigs in Atlanta, Baltimore, Charlotte, Dallas, and Houston.

But the Minnesota musicians have not received pay or health benefits since the lockout began Oct. 1, 2012. Many have had to travel to other cities to work as substitutes at other major orchestras to continue to earn a living. Others have accepted freelance work in Minnesota, which affects the earning of non-orchestra musicians.

What does management want?

Pay cuts lead the list of concessions sought by management. Early on, Minnesota Orchestra leaders pressed for a deal that would have cut average musician annual salary more than 30 percent, to about $89,000, but add two more weeks of vacation (to 12 weeks). It also pushed for "more flexible union work rules" to meet consumer demand, such as scheduling concerts on New Year's Eve.

"If we were to try to balance our budget through ticket sales and donation increases, every ticket sold and every donation given would need to increase by 60 percent," the orchestra said early in the negotiations.

Under its most recent proposal, management offered two months of "play and talk," which would let musicians work under the terms of the old contract while talks on a new deal continued. If there was no agreement after the two months, a two-year contract with a 25-percent pay cut would have been triggered.

Orchestra officials say that deal would reduce average musicians'salary to $102,000 from the average $135,000 under the old contract.

The musicians rejected it.

What do the musicians want?

Musicians backed a proposal from mediator and former U.S. Sen. George Mitchell. Mitchell called for two months "play and talk" under the old contract, followed, if there were no agreement, by two months of "play and talk" with musicians taking a 6 percent pay cut. If after that there were still no agreement, the lockout would resume.

Musicians agreed to this proposal. But orchestra officials rejected it, saying it would cost the orchestra nearly $3 million with no guarantee of a settlement. The orchestra reported a $6 million shortfall last year.

While musicians have long expressed their unhappiness with the board and CEO Michael Henson, they have recently stepped up their campaign against management leadership, particularly during a debate on MPR's The Daily Circuit where percussionist Kevin Watkins, a member of the musicians negotiating committee said:

There is no trust in the leadership of this orchestra. And it's not that we don't trust the unqualified audits. It's that we don't trust that those deficits needed to be achieved, that there wasn't a better way to run the orchestra over the last two years.

What's at stake for the Twin Cities?

Twin Cities boosters have long worried that the labor battles at the Minnesota Orchestra and SPCO could damage the region's cultural offerings and reputation, pointing to similar labor strife among musicians and management at orchestras in Philadelphia and Detroit.

The overall public, though, hasn't reacted strongly. Unlike striking nurses, orchestra musicians haven't found a groundswell of public support over their plight. They earn a lot more than average Minnesotans - even with the proposed salary cuts - and don't have a daily connection to most Minnesotans.

Cleveland Orchestra musicians couldn't get much traction from the public during their one-day strike in 2010.

What happens next?

The Minnesota Orchestra moved quickly to lock out its musicians on Oct. 1, 2012, as soon as the contract expired.

St. Paul Chamber Orchestra officials locked out their musicians on Oct. 21 but the sides settled in April.

The three-year deal, ratified by the musicians on April 29, cut performers' base pay by $15,000 a year and reduced the size of the orchestra from 34 members to 28. It also included a retirement buyout for musicians 55 and older. (Ten musicians ultimately retired.) Those basic terms were similar to what the SPCO's musicians had rejected months earlier. The cut in base pay was deeper.

While the deal restarted the chamber orchestra, the chair of the SPCO musicians negotiating committee has warned the pay cuts will make it harder to attract future top musicians.

The long lockout is uncharted territory for the Minnesota Orchestra. A strike by its musicians in 1994 was settled with a new contract after two weeks.

Vänskä, credited with turning the Minnesota Orchestra into one of the world's top symphonies, has called repeatedly for management and musicians to resume talks. He fears the standoff will wreck the organization.

He's threatened to quit the orchestra if the labor battles aren't settled soon. Vänskä's resignation, if it came to that, could damage the orchestra's reputation for years, observers warn.

With the SPCO contract dispute long-settled, the spotlight remains squarely on the still-silent Minnesota Orchestra.

After nearly a year locked out, it's not clear what will break the stalemate. Recent signals, though, at least offer some hope.

MPR News reporter Chris Roberts contributed to this report.

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