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Pittsburgh Symphony expects to open season $750,000 in red

Friday, September 06, 2002

By Andrew Druckenbrod, Post-Gazette Classical Music Critic

The Pittsburgh Symphony Orchestra is expecting to open its 2002-03 season with a deficit of at least $750,000.

Jody Doherty, the orchestra's vice president of public affairs, said final figures won't be available until the orchestra closes out its books later this month.

A number of American orchestras are in the same position, victims of a shaky stock market and a decline in individual and corporate donations. The orchestra's endowment, significantly invested in the stock market, has dipped below $100 million from a high of $130 million only two years ago. Its annual draw on its endowment is capped at 6.5 percent. A smaller endowment resulted in reduced cash flow toward its operating budget of $30 million.

The orchestra, which reported a $200,000 deficit a year ago, also took a hard hit at the box office, finishing about $450,000 below projected ticket sales.

While funding efforts continue, the symphony expects donations to fall short of earlier projections. Doherty said the orchestra has not yet determined what steps it will take to reduce or eliminate the deficit.

Already several prominent American orchestras have reported ending the fiscal year with operating budgets in the red. The Cleveland Orchestra announced a deficit -- its first in nearly a decade -- of $1.3 million. The Dallas Symphony posted an $850,000 deficit and the Chicago Symphony Orchestra is more than $4 million in the red.

"This isn't an orchestra problem; it is a softening economy," said Jack McAuliffe, vice president of the American Symphony Orchestra League. "But orchestras are particularly susceptible since they must commit to expenses (labor agreements, hall rentals and guest contracts) two to three years ahead, whereas the income is variable."

McAuliffe is optimistic the situation will correct itself.

"A decade ago, we hit an abrupt recession and a number of orchestras experienced a small operating deficit. Most recovered to have operating surpluses in the mid- to late-'90s," he said.

In response to its deficit a year ago, the Pittsburgh Symphony Orchestra went through a restructuring in which 10 administrative positions were eliminated. Musicians were not affected.

The orchestra opens its season Sept. 20 in Heinz Hall.

Andrew Druckenbrod can be reached at adruckenbrod@post-gazette.com or 412-263-1750.

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