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Will ASO musicians be “locked out”? As deadline looms, union offers to take 11 percent pay cut

The ASO's musicians union expects to be locked out on Aug. 26.
The ASO musicians may be locked out on August 26.

The Atlanta Symphony Orchestra is moving headlong into the final days of contentious labor negotiations between its 93 musicians and the orchestra’s board and management. On Wednesday, the Atlanta Symphony Orchestra Players Association released its most recent counterproposal, a plan that includes an 11 percent pay cut for the musicians based on a corresponding reduction in compensation for management and senior staff. The union says the plan would save almost $5 million over two years.

In a telephone interview Thursday, ASO President and CEO Stanley Romanstein would not comment on the specifics of the musicians’ proposal. He did, however, say that he “appreciates the sincerity” and “seriousness” of the proposal.

“What all of us are looking for is a complete long-term solution to the ASO’s financial challenges,” Romanstein said. “All of us understand that to come up with a partial solution that solves some of the deficit, or that solves it only for a year or [two], is not something that any of us would want or that any of us would agree to. It’s a long-term problem. It requires a long-term solution.”

Last week, Jim Abrahamson, chairman of the ASO’s board of directors, sent a letter to union officials that offered little room for compromise. “In the past, we have all worked diligently to shield the players from the economic strains of the business,” he wrote. “That is no longer an option. The members of the orchestra must now participate more fully in shouldering the burden.”

The collective bargaining agreement between the ASO and its musicians expires August 25. Union officials have said management wants the musicians to accept about $20,000 each in annual salary reductions. According to the union, management wants a total of $3.1 million in salary cuts.

The beginning base salary for an ASO musician is $88,400. The ASO says the average salary, including benefits, is about $131,000. The musicians say the ASO ranks 14th in salary among the top 18 full-time American orchestras.

According to a letter from the union to the board, the musicians have been told they will be “locked out,” with health benefits canceled, if no agreement is reached by the deadline. The union claims the ASO decided to start its season later than usual this fall in anticipation of a lockout. The last work stoppage at the ASO was in 1996, and it lasted 10 weeks before a new deal was reached.

The union says that such a steep cut in pay will leave the orchestra unable to retain or attract top musicians. “The troubling state of affairs … threatens to inflict long-term damage,” the union said in its letter. “Numerous orchestra members are preparing for auditions elsewhere. Three have been invited to play with the New York Philharmonic this coming season, and may not return. We must take steps to stanch this talent drain and resolve conflicts that will otherwise hasten the demise of a great orchestra.”

Details of the negotiations were first reported by The Atlanta Journal-Constitution on August 9. A joint statement issued by Romanstein and Virginia Hepner, the new president and CEO of the Woodruff Arts Center, the ASO’s parent organization, confirmed that the musicians and management have been in negotiations since early March.

ASO management has put up a FAQ page about the negotiations on the orchestra’s website, and the players’ association has established a website of its own with a news blog, as well as a Facebook page.

At the core of the negotiations is the fact that the ASO has run annual deficits since 2003. According to management, those deficits have ballooned into a projected cumulative debt of almost $20 million for fiscal year 2013. The orchestra has a projected $45 million budget for the coming year, with a projected deficit of $5 million.

The musicians’ union has cautioned that the projected cumulative debt figures should be examined more closely because none of it is owed to outside creditors. It says that about three-fourths of the debt is owed to the ASO’s own endowment fund as loans from interest earned and that one-fourth of it is assistance from the Woodruff Arts Center.

Borrowing from an endowment’s pool of interest means that removed money cannot itself earn more interest through the fund’s investments. The mathematics of compound interest works equally well on investments as it does on debt. Interest left in an investment fund, when it grows, grows in a non-linear manner; thus a 7 percent annual interest rate will double the principal in 10 years. That’s the kind of thing governing boards tend to think about in terms of long-term planning, especially since investment funds took major hits in the economic crash of 2008.

“The ASO is a family, and we’re having a disagreement right now among the adults about how to best use our resources,” Romanstein said. “I hope that we can stay away from the ‘us versus them’ kind of thing, because I don’t think that’s who we are. Our problems are serious, our proposals are serious, and we are working together in order to craft a solution that will keep us vibrant and financially stable for years to come.”

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