Sunday, September 2nd, 2012
Orchestras in financial trouble seem to be a dime a dozen these days. Yet another such saga is playing out in Indianapolis, where the board is planning to downsize and downgrade the orchestra, going from one of only 17 full time orchestras in America to a part-time ensemble with fewer players making 41% less.
I might be expected to be someone who would shriek about how terrible this is. But while it certainly would be a loss to the city in some way, as far back as 2008, in an article I would strongly encourage you to read entitled “The Decline of the Midwest Cultural Institution,” I actually suggested that the city consider downgrading the orchestra myself. And this coming from a guy who is passionate about classical music, if much more opera than symphony oriented.
A top quality, full time orchestra is a huge mouth to feed financially. Some cities like Cleveland, which has a world-renowned orchestra, derive considerable branding benefits from their orchestra. But Indy’s orchestra, despite its high quality, doesn’t generate those branding benefits. Its orchestra basically functions as a local ensemble. It isn’t doing recordings, winning Grammys or doing much touring. The question is, should Indy continue to spend that much on what’s effectively a local orchestra, when they could have a decent part time orchestra for probably half the money or less? I’m not sure the status quo is a good use of civic funds.
Obviously the situation for the Indianapolis Symphony Orchestra looks to be a huge loss for the community. It is the one local arts organization where Indianapolis is legitimately comparable to America’s best. Once eviscerated, it’s very unlikely the ISO will ever be rebuilt.
But unlike say Chicago, which can afford to operate basically everything at world class levels, smaller cities have to make choices. And Indianapolis has not been afraid of making those choices. Many have pounded the city for pumping billions into sports while ignoring the arts. It’s certainly valid to make that complaint, but I think the city has considered the matter and simply decided to put down its marker on sports. That’s where they think their success has come from, where they’ve gotten good bang for the buck, and where they are going to make their stand, for good or ill. Art, by contrast, is not the hill the city has decided it wants to live or die on. I think the city’s leadership is comfortable with that, and the fallout from where they’ve chosen to put their chips. (Certainly there’s been no major effort to intervene as other arts organizations have folded, moved to the suburbs, or cut back, so I’m not expecting much now). The market will judge if Indy has made the right move to pile so many chips on sports in the future, but clearly in the past it seems to have paid off. So why wouldn’t the city choose to keep betting on its winning horse?
The other thing Indy has been willing to do is prune assets. Every city out there has some variation of a strategy around “building on assets.” But saying something is an asset is just another way of talking about “the stuff we did yesterday.” The real question isn’t just what previous generations did. It’s what this generation is doing for the future.
Also, legacy assets like the ISO don’t sustain themselves on their own. They require continued investment by the community just to maintain. You can end up pumping so much money into propping up legacy assets that you’ve got nothing left to build anything new. Many cities would have been well advised to cut loose legacy assets or economic clusters long ago. As it is, too many wait until manifest unsustainability forces their hand, meaning little can be salvaged. (In the case of the ISO, had it taken decisive action five or so years ago, it would have been left in much stronger position as it would not have drained its endowment so badly).
Indy hasn’t been afraid to let the past go. It used to have a pro tennis tournament, but let it go under rather than pour money into it. They decided they couldn’t be a top site in that sport and renovating the stadium wasn’t a useful expense. The real estate would be better used for other purposes. Similarly, someone commented (I assume it’s accurate) that for the first time in forever Indy didn’t host any Olympic trials. Even staying focused on sports generally, they’ve been willing to evolve where they are going and drop things that no longer make sense. This is portfolio rationalization at its best.
I could give further examples, but I think this willingness to prune is actually a sign of health. That doesn’t mean losses aren’t painful, or that every decision proves to be right, but attempting to hold on to the past forever is a part of the disease that has killed far too many places.
The Changing of the Guard
But while I think the ISO downgrading may ultimately be the right move for the city, it does illustrate a sort of changing of the guard or economic progression that has happened.
Midwest arts organizations have in many cases struggled as their cities have struggled economically. Even in relatively well off Indy, the fact that the ISO is one of only 17 full time orchestras tells of a time when an even more robust city punched above its class.
Today, as the ISO prepares for a fall, five hours south in Nashville there’s a community whose arts profile is rising. That city just stumped for a brand new performing arts center home for their symphony, have put a major focus on upgrading its quality, and actually took home Grammys for their effort. Dallas just spent something like a billion dollars on a performing arts complex. The cultural life of the emerging cities of the South may still trail their northern peers in some ways, but it’s clear which way the trend lines are pointing. A lot of the Frost Belt cultural infrastructure is stagnant or in decline, while Sun Belt boomtowns have money to spend to better themselves across the board.
This is where economics has consequences. As those cities improve their cultural and quality of life offerings, they’ll become only more attractive to high end talent. Assuming they don’t purchase improved quality at the expense of the business friendly, low tax policies that have brought them growth – and thus far they haven’t – this will only serve to strengthen them.
Whether arts cause economic growth or are merely correlated with it, either way you still want lots of art in your town. The rising arts profile of the South is a parallel to its economic rise.
Even closer to home in Indy, north suburban Carmel just built a $150 million concert hall, and multiple theaters, one of which lured the Indianapolis Civic Theater, the oldest community theater in the United States. Whether these sizable investments, which have left the city in debt, are desirable can be debated. But they do illustrate the changes that result as the center of gravity of people, businesses, and incomes shift to the suburbs. It isn’t just about rooftops. Suburbanization affects everything ultimately.
So while I can never imagine Carmel displacing central Indy as the intellectual and cultural heart of the region, certainly now there is a more multi-polar world than ever before.
Having said all that, there are clearly serious leadership problems at the symphony. This is not all a result of outside structural forces. Money woes were apparent long ago, but nothing was done to address them. The previous music director was forced out by management, which now itself is gone. The CEO slot is empty, as are other senior posts, leaving a management vacuum.
The board itself has been operating in secret. The orchestra downgrade would have been presented as a fait accompli (which it probably still is) had there not been leaks to the press. There was absolutely no community discussion whatsoever about this, which is completely unacceptable for an organization that routinely solicits donations from the public at large. I think you’d have to judge the orchestra board as having failed in its basic duties.
Had the ISO been fortunate enough to have stronger leadership, perhaps it never would have come to these straits.
Also, while as I said, it’s fine for the community to choose sports over the opera, it’s odd how little support the orchestra has received from the civic elite. A couple years back the orchestra launched a fundraising campaign designed to boost the endowment by $100 million. The local papers reported that this was being co-led by Jim Irsay (owner of the Colts) and Herb Simon (owner of the Pacers), the two richest men in town, who were called “Indy’s billionaires.”
Yet according to the IBJ the fundraising campaign fizzled after garnering only $12 million in pledges. You have two billionaires leading your campaign, either of whom could afford to write a $12 million check each and not miss the money, and that’s all you get?
This is bound to stir quite a bit of conversation, as both of those billionaires have been the recipients of enormous public subsidies. It was the taxpayers of metro Indy who literally made Irsay a billionaire by building him a fabulous $750 million stadium with arguably a more lucrative lease than any team other than the Bengals. Simon’s Pacers recently started pulling in about $10 million a year in special city support (beyond what they already received) after they threatened to leave town if their deal wasn’t renegotiated.
Even at $12 million apiece for the ISO, Irsay and Simon would have been far ahead financially, as far as their dealings with their home town go.
Former Mayor Bill Hudnut wrote in his memoirs of the time in the 1980s when the Pacers were going to fold or leave town. He begged the Simon brothers to save the team by buying it, and reported that Melvin Simon’s response was, “Well, I’ve got to do it, don’t I?'”
How times change. Not just in Indianapolis, but across America. It used to be – and I’m talking as recently as the early 1990s here, not ancient history – that the local business and community elite could be counted on, when it mattered, to put money into their cities. Today, they are much more likely to be taking it out.
About three years ago I did an R&D project that was a concept strategy for Indianapolis. One of my 25 year goals was to create “5+ new local billionaires.” If I were creating that report today, I’d strike that line. As is becoming increasingly clear in America at both the national and local level, billionaires are a luxury few communities can afford to indulge in.