Ted Simons: The economic recession has been tough on arts organizations. Tonight's "Arizona Artbeat" visits the Phoenix symphony, where management and musicians are working together to compose a sustainable future. ¶¶
David Majure: Starting and stopping. Doing it again and again to get it just right. This is a typical rehearsal for the Phoenix symphony orchestra. The current season ends in June. After a brief summer break, it's back to work in September. The 2011-2012 season is going to be a crowd pleaser, according to assistant conductor Joey Young.
Joseph Young: Any concert they go to next season, they're going to hear something, some blockbuster classical works. It's a really can't-miss season. We have Broadway, we have the rat pack, we have even Motown. I think this is a time for anyone to see the symphony. We have something for our patrons who are very supportive of us, or people who are just have seen symphony hall and are afraid to come in. It's not a stuffy place. It's really something great going on here almost every week with the symphony. ¶¶
David Majure: Today symphony hall is alive with music. But earlier this year, financial problems threatened to silence it.
Charles Berginc We know very well what the problems are. We see it all over the country. There's orchestras dying by the second, and many that are hanging on just by a thread. ¶¶ So the effects from a couple years ago with the economy dropping has -- is really rearing its ugly head continuously in the arts.
David Majure: Chuck Berginc has been with the symphony for nearly three decades. He's the orchestra's principle trumpet and he represents musicians in labor negotiations with management. Two years ago, musicians made a significant sacrifice to keep the orchestra from going under.
Charles Berginc Yes, we did. We were asked to take a 19% cut, which we didn't do happily, but we did it as necessity. We knew that that was going to be an issue. So we needed to do something to try to help the situation out. And actually we were told and we had negotiated a settlement that would give us some restoration next season. That took us to the present negotiations that we just had. ¶¶
David Majure: Earlier this year the symphony was in poor financial shape. Its new CEO Jim ward slashed budgets and asked musicians for help.
Charles Berginc: He was very honest and direct with us, and he was a very good listener, and I never felt and the musicians never felt he was going to put us in a position where we needed to then continue to take a beating, that we needed to understand and we did, and we were able to put off that restoration for another year. So we agreed as we had in the past two years to have a wage freeze. We agreed to just continue with the same wages we've been making for another season. What we wanted to make sure was that Phoenix had a symphony. That was foremost to us. We have a fairly large base of fans that really enjoy our music, and we can't do this forever without their support. And so the fact that we provided an ability for us to continue to provide music for them, I'm looking forward to their support in the future that they can step up and help us take care of bills.
David Majure: Berginc says there's a general feeling that the symphony is headed in the right direction. He sure hopes so, because he's not sure musicians can give much more.
Charles Berginc: I don't expect to do this for another year next year. Another wage freeze? I don't believe so. But that remains to be seen. We don't have a contract, and we'll have to sit down and talk about that. But I would anticipate that the management would understand that we're not going to be able to just take the same salary for four, five, six years in a row. We're going to need to see some growth or it's going to be -- we're going to be unable to continue. So I think that they would understand that. That's my guess.
Ted Simons: And joining me now to talk about the Phoenix symphony's finance and the future of arts funding in Arizona is Jim Ward, the interim president and CEO of the Phoenix symphony. How financially sound is the Phoenix symphony?
Jim Ward: Much more than it was when I came aboard. We were basically facing an expense model for next season that we didn't feel that we could meet. And not dissimilar to previous conversations you've had today, we had to decide that we needed to live within our means, make the appropriate cuts to do that so that we could provide music for the Phoenix community.
Ted Simons: When $1.5 million is cut from the symphony, what gets cut?
Jim Ward: It was combination of things. We have a lot of expense levers within our business model. One of them are the musicians. And as you saw on the package previous to this, they took a 19% pay cut two years ago, which was the largest of any American orchestra. My envious job upon appearing was to sit down with them again and I think this community needs to give great credit to the sacrifices of these musicians who agreed to not take back this restoration in their salary. So that was part of it. In concurrence, we needed to restructure on the management side, make cuts there as well, and we made some cuts from a production perspective to the season. That combination created our ability to move forward.
Ted Simons: You mentioned the musicians. How did you get labor and management on the same page?
Jim Ward: I think we're fortunate to have musicians that are very savvy, chuck, for example, has been with the symphony for over 30 years. I think perhaps an approach that I took coming in was being very open and honest and transparent with them. Laying out the financials, agreeing that they were in fact problematic for us going forward. Listening to their concerns, understanding some areas that we could do better with the administrative side. And so working together over a period of time, we came to a model that ended up being the next season.
Ted Simons: Is this model and these cuts and this financial overhaul, if you will, compare that to what you're seeing in symphonies around the country. How financially sound are they, are they doing similar practices?
Jim Ward: Well, I will tell you it -- I think we exist in stark contrast to what's going on around the country. The Detroit symphony has just come off a fairly acrimonious six-month negotiation. Philadelphia has declared bankruptcy. Louisville has declared bankruptcy. Syracuse has discontinued their season. Honolulu has shut their doors potentially forever. And I suppose in our negotiations we could have ended up there. But to the great credit of our musicians, who put the community of Phoenix and music to that community before Frankly their own needs, they agreed to work with us financially so that we could continue to provide music.
Ted Simons: Talk about the idea of the symphony working with the opera. With the ballet, with other arts organizations out there, first of all, was everyone in their own orbit before, is there more cooperation now?
Jim Ward: Well, I think that is one of the fundamental issues that I'm passionate about. You're right. I believe it's going to be very difficult in good economic times or poor, for all of our organizations to exist in their own silo and to a degree they do today. I think there are opportunities to create economies of scale across our organizations, at least the live performing arts organizations, the ballet, the symphony, and we're currently in discussions exploring that as well. Because if we can continue to reduce our cost structure by creating those economies of scale, not only is that better off for us from a stability perspective, we have a better narrative to go back out in the community and say, we've taken hard cuts just like you have, and let's work together to create a great stable arts organization here in Arizona.
Ted Simons: And there does haven't that be that separation as far as organizations are concerned.
Jim Ward: Not necessarily, in different ways they could, but we haven't cracked it yet, but there are many different ways we can economize right now.
Ted Simons: I’ve got to ask you, how does a Tea Party congressional candidate wind up as the CEO of the Phoenix symphony, what’s going on here?
Jim Ward: Well, that's a great question. It's not very often you get the opportunity to run a symphony. But coming off of the campaign and I lost in the primary, the chair of our symphony board, a gentleman who was a supporter of mine, said, Jim, I don't know if you would ever consider this, would you? And I did, because I was classically trained in piano from the age of 6, I played the Obo and the Bassoon in orchestras through college, my undergrad minor was in music. I'm passionate about music. And although I maybe couldn't serve the community in a political aspect I can certainly provide a service to the community by helping the Phoenix symphony and other arts organizations to provide the great level of art that we have here.
Ted Simons: I ask the question because I think some of our viewers would wonder about the GOP maybe being hostile to the arts. Tea Party in particular. You don't necessarily see those things as symbiotic. Talk to us that, a misconception?
Jim Ward: Yes, I think that's a gross misconception. Look. Here's what anybody fundamentally understands, and you talked about in your last segment. Should the largest arts organization in the state of Arizona, which is the Phoenix symphony, go down for whatever reason, it's just another nail in the coffin of our ability to diversify our economy and track business here. The cultural arts are an economic engine in any thriving community. And I believe everyone understands that. But just the same, these organizations have got to live within their means. They cannot outspend their revenue. And in the case of the symphony, that's what was happening. So we're going to take care of our business, we're going to live within our means, we are going to prove that we can do that. And then we're going to go back out into the community and say, look, let's get behind the arts here.
Ted Simons: Philosophically, government funding, how do you stand on that for the arts?
Jim Ward: Well, I will tell you I can only speak from a Phoenix symphony perspective. Government funding only represents about 4-5% of budget.So – and frankly given-- that's gone down significantly obviously given the current budget situation in the state of Arizona. My personal belief is, I think we first need to figure out ways to live within our means, to create a business model that is sustainable, we need revenue from ticket sales, contributions and of course endowment, there's no reason why we can't figure out that kind of a business model. If at the end of the day we can do that without government funding, I'm fine with that.
Ted Simons: Jim, good to have you here. Good luck with the symphony.
Jim Ward: I thank you so much.