more flanagan report analysis

Brian Rood, member of the Kansas City Symphony and ICSOM President, has written an interesting and accessible analysis of the methodology, history and findings of the by now practically infamous Flanagan Report. You can read it in its entirety after the jump.

Response to the Flanagan Report

Much has been written about Robert Flanagan’s recently released report on orchestras, “The Economic Environment of American Symphony Orchestras”, commissioned by the Mellon Foundation. My perspectives are not only those of an ICSOM Governing Board member but also of a member of the original Elephant Task Force (ETF), which I served on from 2003 to 2004.

Professor Flanagan’s Report is troubling in several key areas.

One is the process used to choose Flanagan and the circumstances surrounding that choice. Another is the financial data used, which constitutes the very foundation of his research and, therefore, his conclusions. Also of great interest is the lack of attention paid to other expenses within orchestras’ budgets. Flanagan chose to focus solely on musicians’ salaries rather than any other workforce within our orchestras. One can only ask, “Why?” And, finally, what was the rush for this particular report over other worthy projects?

First, let’s take a look at the process involved. Flanagan was commissioned by the Mellon Foundation to research orchestral economics in 2006, with support from the League of American Orchestras. (At that time, the League of American Orchestras, or the League, was still named the American Symphony Orchestra League.) The main focus was to study whether the deficits encountered by orchestras at the turn of the decade were structural or cyclical.

This very subject was one of the first discussed by the ETF in late 2003. The ETF was composed of Mellon Forum participants and included board presidents, executive directors, musicians and Mellon officers along with two consultants. One of the burning questions discussed was the structural/cyclical issue. Musicians on the ETF maintained that the deficits were cyclical-due, in no small part, to the horrific events of 9/11. Another view was that orchestras increased their expense budgets too greatly during the economic expansion of the 1990s and that revenues moving forward simply could not keep up. After a great deal of consternation the ETF decided to leave this question alone and to focus on looking forward rather than behind. As many know, the ETF delivered its presentation to the Mellon Orchestra Forum in 2004 and later to members of the ICSOM Governing Board. The presentation included further research and ideas on the four challenges or deficits originally described by Jamie Ireland in his paper, “Caging the Elephant.” The ETF presentation contained a future orchestral model that could potentially be both artistically fulfilling and economically viable. Included were perspectives on organizational culture and my personal favorite, community engagement. While many orchestras have made recent strides towards becoming more engaged with their communities there is great potential yet untapped. In my opinion, we should be spending more of our collective time and energy on further developing relationships within our communities.

Returning to the Flanagan Report, the ETF did discuss inviting an expert to review financial data in order to shed further light on the structural/cyclical question. Knowing that Ron Bauers had worked with many Mellon orchestras, musicians on the ETF naturally suggested that he be engaged. Others thought that Bauers may have appeared to be too “union friendly.” However, anyone who knows Bauers knows that he is a numbers person. His interest is to help musicians and management alike understand an orchestra’s true financial picture, whatever it may be.

After the 2004 presentations, the ETF lay dormant for many months. From 2005 to 2006 meetings were held that involved Mellon and League leadership as well as members of the ETF. Subsequently, Flanagan was commissioned to undertake this study. It appears they thought that Flanagan would stay on track as well as take an unbiased approach. What is interesting to me, though, is that the decision was made to engage someone who had considerably less experience with orchestral finances than Ron Bauers, who would have been ideally suited.

Much of the data used by Flanagan for his study was supplied by the League in terms of its OSRs, or Orchestra Statistical Reports. This data included attendance figures and financial information including musicians’ salaries and benefits. It should come as no surprise that there continue to be perceived problems with the OSRs. In fact, following meetings between League and ICSOM leadership during the 2004 ICSOM Conference, the Collaborative Data Project (CDP) was created to help mitigate these problems.

Let’s revisit a few of the issues with the OSRs. The numbers supplied to the League for the Flanagan Report were based primarily on management-generated internal reports and not audited financial returns. It is not a secret that musicians have been skeptical of these numbers for decades. To make matter worse musicians were routinely denied access to this information until just a couple of years ago. There were other bookkeeping and data entry problems that differed from orchestra to orchestra and, sometimes, within each orchestra, due to changes in the chief financial officer and/or executive director positions, different accounting methods and the impact of FASB regulations.

In any event, musicians have not had much faith in the OSRs, particularly as the contents were kept from musicians even during negotiations. These points were firmly articulated during the ETF discussions and later with League leadership. It is perplexing that Mellon and the League sanctioned a study based on the OSRs. If this study was so important then why was it not postponed long enough to allow the development and implementation of the CDP?

Representatives of the AFM, ICSOM and ROPA attended one meeting last July with representatives of Mellon, League, the ETF and Professor Flanagan. The preliminary draft we viewed included research on the dramatic rise of music director salaries, which far exceeded those of musicians. Interestingly, the final Flanagan report’s primary focus on orchestral salaries was that of the musicians alone. A great deal of attention was paid to the development of musician salaries in this report and even more in Flanagan’s January study, simply titled “Symphony Musicians and Symphony Orchestras.” Where is the focus and research on staff and music director salaries and why was this not deemed important to a study on orchestral economics?

Why should there be so much concern about this one report, you ask? While I have just scratched the surface, there is still a ticking time bomb. Who will be the first management and/or board to use the Flanagan Report against their own musicians during negotiations? Why I am so skeptical? Well, this is exactly what happened four years ago. As you may recall, one board president erroneously credited the work of the original ETF as supportive of the position of his orchestra’s board and management that the collective bargaining agreement with their musicians was a “Roadmap to Extinction.” Henry Peyrebrune and I requested that Mellon Program Officer Catherine Maciarello set the record straight as to the true nature of the ETF’s work. Thankfully, she did. In an open letter to Mellon Orchestra Forum Participants and shared by permission with the delegates at the 2004 ICSOM Conference, Catherine stated:

“The (Elephant) Task Force was never intended to conduct independent research or to present conclusions about the general state of the orchestra field. As you know from the presentation, complete data was collected and analyzed for only one orchestra, and much work still needs to be done to refine the model and to determine its applicability to other orchestras. At best, the model offers a tool that individual orchestras within the Forum might use to engage all constituents in a productive dialogue about the future. None of the Task Force materials should be considered definitive, nor should they be used publicly in any way, especially to defend a particular position.”

Finally, due to the release of the Flanagan report, there is renewed debate as to the merits of engaging in cross-constituency work involving musicians. Many musicians feel “burned” by their participation. Others see only potential harm to musicians with no advantage to “being in the tent.” As a Governing Board member and the chair of my local orchestra committee I have to field this question on an almost daily basis. Due to the issues raised here, my ability to lead others back into “the tent” has been seriously compromised by the report and the process that led up to its release.

My address as ICSOM President to the 2003 League Conference finished with the following words: “For our relationship to flourish, chances will need to be taken, continued trust will need to be earned, and respect will need to be given. Undoubtedly, there will be bumps along the road. How we deal with those bumps will tell us just how far we’ve come and how far we have yet to go.”

My sincere hope is that this Report will prove to be just a “bump along the road.” Borrowing from ICSOM Chairman Bruce Ridge’s recent response, “We must stop doing this to ourselves.” Are there no more productive ways to use our collective time, energy and resources? I will gladly be among the first to sign up for groups that focus on advocacy to counter the negative rhetoric that pervades our discussions all too often.

Brian Rood
ICSOM President
Kansas City Symphony Musicians’ Committee Chair
ETF Member, 2003-2004

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