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Symphony's financial crisis could lead to sale of Heinz Hall
Heinz Hall is the symphony's principal financial asset
Pittsburgh Symphony Orchestra
Mark Kanny can be reached via e-mail or at 412-320-7877.
The orchestra is facing a period of instability, with severe fiscal problems compounded by the announced departures of music director Mariss Jansons and managing director Gideon Toeplitz. Restoring financial order is the first order of business, one that will affect the quality of music director that can be hired.
Symphony officials point first to the state of the national economy to explain its money woes. The decline in stock market values hurt the organization both directly and indirectly. Investments of the symphony’s endowment and other funds have declined in value, while the portfolios of those who do or might contribute to the symphony also have shriveled.
But apart from fluctuations of the stock market, the Pittsburgh Symphony has had a long-standing problem with low donations to its annual fund, which makes it more dependent on the money it can draw from its endowment than other top orchestras are.
Although the symphony is working to increase donations to its annual fund, it would be imprudent of the board to count on changing a decades-old pattern anytime soon.
The board also cannot expect the stock market to bounce back quickly. As the board has committed itself to maintaining the quality of the orchestra, massive reductions in artistic expenses happily won’t be the path to be taken. Half of the symphony’s budget is spent on orchestra salaries and fees for conductors and soloists.
Therefore, the traditional Pittsburgh solution of adding to the endowment is the likeliest course. Only six years ago, the symphony completed a capital campaign that raised $60 million, but the national economy was thriving then.
Apart from investments, Heinz Hall is the symphony’s principal financial asset, listed on the books at just short of $13 million, but worth several times that amount.
In interviews after Toeplitz announced his resignation Dec. 9, board president and chief executive officer Tom Todd said the symphony is interested in ideas about how to "monetize" Heinz Hall. In fact, a board committee explored the issue of selling Heinz Hall during Lorin Maazel’s tenure as music director.
The Pittsburgh Cultural Trust is the obvious prospective buyer.
"It is an interesting idea," said Trust president Kevin McMahon. "The responsible way for me to comment is that the community should look at every possible way to help to support the symphony."
Todd, who emphasized that he was speaking for himself and that the board has not taken up the issue, made three points about a possible sale of the hall:
A more radical course would be for the symphony to merge with the Cultural Trust. In 1986, the National Symphony merged with the Kennedy Center in Washington D.C.
McMahon, who came to the Cultural Trust from the Kennedy Center, where he was chief executive officer, said, "I sometimes spent as much as 60 percent of my time managing the orchestra."
While McMahon emphasized that there have been no official talks on a merger, he said, "In private conversations, a few people have speculated there would be some synergy. … I would be open to anything that would help the symphony stay as good, if not get better, because I care so much about it, personally."
Rita Shapiro, executive director of the National Symphony, said the Kennedy Center and the National Symphony share fund-raising, marketing, press and public relations, general council and government liaison. She is a Kennedy Center employee who reports to the independent board of the National Symphony, which has its own budget independent of the umbrella organization.
"There’s only an upside, artistically and financially, to being part of the Kennedy Center," Shapiro said. "We do our own artistic planning, but can be part of thematic festivals."
As an example, she mentioned a Shakespeare festival with operas, ballets and symphonic music presented alongside the plays that inspired them.
But there are profound differences between the two cities and their cultural institutions.
The National Symphony was a local orchestra at a time when the Kennedy Center had a national and international reputation. In Pittsburgh, the reverse is true: The symphony is a world player and the Cultural Trust is local.
"The National Symphony had nothing to trade," McMahon said. "They didn’t have a big endowment and they didn’t own their own home."
The fact that Heinz Hall is a multipurpose hall would make it especially attractive to the Trust. Selling Heinz Hall wouldn’t be a simple matter, nor would living with the new arrangement. There are prices to be paid for loss of independence, as the Philadelphia Orchestra found out last year when it moved from the Academy of Music to the Kimmel Center. Scheduling problems can be severe. Even Philadelphia Orchestra auditions have had to be curtailed in the new hall to permit stagehands to prepare for a show.
But other options in Pittsburgh may be more problematic. Selling Heinz Hall may be the symphony’s only real option.
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