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Sunday, September 2nd, 2012

Indianapolis to Downsize, Downgrade Orchestra

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.

Leadership Failures

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.

21 Comments
Topics: Arts and Culture, Strategic Planning
Cities: Indianapolis

21 Responses to “Indianapolis to Downsize, Downgrade Orchestra”

  1. Civis Romanus Sum says:

    Permanent municipal orchestras are actually a fairly recent innovation. When Mozart and Beethoven were composing one orchestral work after another, they didn’t even exist. I think the oldest US orchestra still in existence (NY Philharmonic) only dates to 1842. And they didn’t have to compete against recordings or many other orchestras.

    I can foresee a situation in the not too distant future when there are only a few full-time orchestras in the US, with others being formed on a more ad hoc, flexible basis. Which doesn’t mean that the art form will die; it will just be presented in a different way, as was the case before the massive growth of cities in the 19th century.

    There are other factors involved in the health (or lack thereof) of orchestras in America. However, a lot of them are aesthetic or program-related (IMHO they play it way too safe on programming; playing the same stuff over and over again won’t get me out of the house), and are largely independent of urbanological concerns.

  2. Quimbob says:

    What are the 17 full time orchestras?

  3. PeterW says:

    The ISO was very good. Not, perhaps, quite world class…but very good.

    However, as you point out, there have been a lot of leadership failures, including hiring an absentee music director who lived in Europe all but five weeks of the year.

    I had kind of just assumed that the ISO would overcome its financial issues by becoming the Carmel-Indianapolis Symphony Orchestra…but I guess not.

  4. STP says:

    “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.”

    You might as well be describing America in general with this comment.

  5. Chris Barnett says:

    STP highlights the same comment I focused on.

    We’ve discussed before the transactional nature of today’s elites in any city. If you’re about “doing deals” (whether investment funds or real estate or luring new business with incentives or scoring “the big game”) as opposed to building a successful long-term business, you’re looking for the next big score.

    Arts investments have some value as venues for dealmakers, but that is declining in a 24/7 connected world. They also provide some bragging rights, but my sense is that the newly-rich today prefer private bragging spaces (multimillion dollar art collections, private parties with big-name music stars, ultra-private 40,000 SF homes in Fantasyland settings).

    This is a huge issue: how to fund the civic amenities of the future. In the “no tax increases” world, private philanthropy seems the only way. But has civic education and a sense of “noblesse oblige” declined so far that it won’t happen?

  6. Ziggy says:

    “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.”

    This to me was the key insight. How much proof does the voting public need to understand that billionaires – Republican, Democrat, or agnostic – are not Main Street America’s friend?

  7. Matthew Hall says:

    How could you not mention the Cincinnati opera, symphony, ballet, and theater scene? They go from strength to strength, thanks to both wealthy donors and broad popular support. Cincinnati is a model of high culture in a medium-sized midwest metro.

  8. TJinIndy says:

    ^^ Maybe because he wasn’t talking about anything that had anything to do with Cincinnati.

  9. Matthew Hall says:

    Now, now. No need to be testy. Aaron wrote, “Orchestras in financial trouble seem to be a dime a dozen these days” followed by a mention of Cleveland’s symphony orchestra. A mention of the growing success of Cincinnati’s high arts orgnanizations is completely appropriate.

  10. Peter says:

    “What are the 17 full time orchestras?”

    I’m interested in that as well.

  11. Chris Barnett says:

    Here is something interesting from more than a decade ago regarding symphony orchestras, and possibly the source for the assertion that there are 17 full-time orchestras: http://www.mellon.org/news_publications/annual-reports-essays/presidents-essays/the-orchestra-forum-the-orchestra-forum-a-discussion-of-symphony-orchestras-in-the-us

    Unfortunately, the League of American Orchestras (referenced in the Mellon paper) does not seem to have a list available on their website.

    A lot depends on “full time”. Some orchestras play a 42-week season and consider that “full time”.

    Perhaps we can crowd-source. There’s the old “Big 5″:
    -Boston
    -New York
    -Philadelphia
    -Cleveland
    -Chicago

    Add the National (DC), LA, Cincinnati, Pittsburgh, Baltimore, Colorado, Indianapolis, St. Louis, SF, Kansas City, Utah, San Diego, Detroit, Minnesota, Atlanta, Dallas, Milwaukee, Buffalo, Nashville, Houston, Seattle, Memphis.

    I’d offer this list of 27 as the “major” US symphonies and leave the argument over “full time” to others.

  12. Most people here are probably aware of this, but Atlanta’s Symphony Orchestra has encountered a similar insolvency and subsequent gridlock, though theirs seems mostly to exist between the musicians and management. http://www.ajc.com/news/entertainment/arts-theater/aso-musicians-in-a-stalemate-in-tense-contract-tal/nR3Jr/ It appears a bit more heated at this point, too.

    But, aside from the monetary shortfalls, everything about the ASO is of greater magnitude (including the size of their management)–and this is a symphony that both records and tours somewhat regularly.

  13. Matthew hall says:

    cincinnati’s orchestra isn’t having any of these problems. I wonder why?

  14. Matthew Hall, Cincinnati hasn’t experienced this problem because one donor, Louise Nippert, recently gave it $85 million.

  15. Peter says:

    Louise Nippert sounds like a wonderful person.

  16. Rod Stevens says:

    I appreciate the subtlety of Aaron’s argument, that when it comes to using the arts competitively, cities have to squirrel their resources. But I’m not sure that the “competitive” lens is applicable here.

    In steady of thinking of arts as a competitive tool, think simply about livability, what it takes to make a place livable. Many cities have many arts organizations, which may or may not be professional, and which may or may not be exceptional. Some places like Sarasota have a number of arts institutions, even though none of them are remarkable. Collectively, however, they make that city a great place to live. So national ranking and notoriety need not necessarily be metrics for funding. It is more a question of what people in the city can do. If you are in San Diego and have beaches and deserts to draw you in March, you are probably not going to go into a concert hall. Nor, if you are in Indiana, and down to the final four of the state basketball tournament, are you going to be very concerned about the latest production of Turandot. On the other hand, if you want to retire to the Gulf Coast of Florida, and every other city there is a cultural wasteland, you might, just might, move to Sarasota, because it has a decent opera, arts and dance company that remind you of what you used to enjoy in New York or Chicago.

    This gets to another difference that we need to be careful of: going for big blockbuster, fame-enhancing attractions, when it is more the stuff of everyday life that adds to the quality of life in a place. Hopefully we are getting to a point where city leaders are more interested in delivering services and experiences to their own residents first, and thinking about tourists and visitors second. Wake me up when the 30-year boom in convention center building is over!

  17. Matthew Hall says:

    Louise Nippert was just the kind of local wealthy donor Aaron talked about. Of course, such people can’t support arts institutions if those institutions don’t exist in the first place. As importantly, Nippert didn’t just throw her money at the symphony and other arts organizations, they have had clear increases in ticket sales and other sources of income in recent years.

  18. Chris Barnett says:

    In looking into this, the recurring theme for the major orchestras since the 1990s has been “financial crisis”. Philly just came out of BK. San Diego went out of business a couple of times until they received a $150M endowment. Many orchesras endured strikes, trying to cut wages or jobs or both.

    Symphonies have a problem not unlike auto racing and football: home technology improvements (TV and audio) have made live performance less worth paying for.

    Plus, there’s just less interest in symphonic music today.

    It adds up to a serious market problem. Not just in Indy.

  19. DaveOf Richmond says:

    Responding to Chris Barnett’s 2:34 comment, this list was presented in 2008 on some site, claiming these were the 20 full time orchestra at that time, according to ISCOM:

    Atlanta
    Baltimore
    Boston
    Chicago
    Cincinnatti
    Cleveland
    Dallas
    Detroit
    Ft Worth
    Houston
    Indianapolis
    Los Angeles
    Metropolitan Opera
    Minnesota
    National
    New York Phil
    Philadelphia
    Pittsburgh
    San Francisco
    Utah

    I checked Utah and Ft. Worth, since they seemed to be the least likely on the list to be 52-week orchestra’s, and they both still claim to be. Minnesota is questionable – apparently they pay their musicians 52 weeks, but don’t actually perform all 52 weeks. I think Detroit has fallen off the list this year. If you remove Detroit and Minnesota, that gives us 18.

  20. Max Power says:

    Billionaire owners of sports teams are probably not the guys to look to for donations *to* public institutions. They generally spend their time getting handouts *from* the public, in the form of taxpayer-funded facilities to operate their businesses.

  21. MSH says:

    ISO, while good, have internal issues (have been for a while). Matthew, ISO endowment is currently @ 80 million BUT, they can only use 4 mil of that for some insane reason. Central Indiana has several big name contributors (Glicks, Eskinazi’s, Fairbanks’, etc) that give handily (cultural trail, Hospital, education) but that is no longer really trickling down to organizations like the ISO and their own fundraising efforts fell way short of what they were wanting so they discontinued it. I theorize one of the reasons the ISO tends to not get the local buy in is because they basically advertise to one part of town and that’s north, leaving the south, east and west sides in the dark.

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