The Nashville Symphony Orchestra is headed either to financial restructuring or bankruptcy court after announcing last week that it would not renew a letter of credit that had been supporting around $100 million in debt. What happens next may largely depend on how generous bank lenders are feeling after the symphony essentially decided to default, leaving them with the hefty bag.
How the move will affect the symphony’s 85 orchestra musicians is also uncertain, but precedent would suggest they might be bracing for impact.
In June 1988, after suspending operations earlier in the year due to financial struggles, the symphony filed for bankruptcy after five months of negotiations with the orchestra’s musicians failed to produce an agreement that would mitigate some of its money troubles. That step came three years after a brief musicians’ strike over contract negotiations.
In 2006, the symphony opened its grand concert hall, the Schermerhorn Symphony Center, built by way of $102 million in bonds. That’s the debt the symphony will be defaulting on unless it can strike a deal with lenders. The symphony also suffered millions in losses as a result of the May 2010 flood, one factor, among others, that symphony board Chairman Ed Goodrich and President Alan Valentine were sure to note in their recent letter announcing the decision to patrons.
Elsewhere in the country, where symphony orchestras are faring no better, musicians’ pay and benefits have typically been on the chopping block. In Louisville, where the symphony orchestra has struggled financially for years, musicians have been asked for concessions in pay and benefits, among other things, as a means of making up for significant budget shortfalls. San Francisco Symphony musicians are currently striking over contract negotiations, after that organization has consistently operated at a deficit. Symphony musicians in Indianapolis returned to the stage in October after agreeing to a pay cut, and similar scenarios can be found in Seattle, Philadelphia and Detroit.
Representatives with the Nashville Musicians Association, the local musicians union that includes orchestra members, declined to comment because they said the situation is “still developing.” The union is set to begin contract negotiations with symphony management this summer.
It would not be surprising for givebacks — that is, salary or benefit concessions from the musicians — to come up during those discussions. But orchestra members here have less to give than their counterparts in other cities. Nashville’s orchestra members receive a minimum salary of $60,000 per year, a substantially smaller amount than players in cities like San Francisco, where orchestra members earn an average of $165,000 per year.