Can the Band Play On?
In August, the Houston Symphony returned to the cradle of classical music for a weeklong series of concerts in four different European cities and three separate music festivals. For the quick jaunt, the orchestra was joined by its former music director and current conductor laureate, Christoph Eschenbach, in what appeared to be the final hurrah between the two before the symphony cuts the umbilical cord and picks a new music director this fall. The tour, with stopovers at the Rheingau Musik Festival in Wiesbaden, the Schleswig-Holstein Musik Festival in Hamburg and the Lucerne International Festival in Switzerland, was a chance for the musicians and patrons, including new board president Rodney H. Margolis, to revel in the symphony's lofty status among American orchestras, a position attained mostly through the baton of the man standing on the podium for these concerts. At Lucerne's new concert hall, the Culture and Congress Center, a picturesque and acoustically pristine venue that is surrounded by water on one side and mountains on the other, the Houston Symphony charged the Swiss audience with repertory favorites that, according to the orchestra's Web site, left the crowd asking for more. The musicians responded with two encores.
Just days after the triumph of the American South on European soil, the Houston Symphony, sans Eschenbach, returned to its home turf to greet the city's hoi polloi at the aging Jones Hall for the annual Theater District Open House. The open house, in true American fashion, was a less-than-subtle, sometimes ostentatious attempt to attract new subscribers to a form of entertainment that many of them wouldn't touch with a ten-foot baton. Outside Jones Hall, a timpani-costumed barker tried to lure passersby into the marketing-driven event. It seemed like an all too apt metaphor for an orchestra with major artistic aspirations, but without a music director or an executive director. The Houston Symphony, as it opens its 2000-2001 season, may be considered world-class by classical fans across the Atlantic, but back home, the musicians are still just a bunch of longhairs with an identity crisis and an undefined direction, a group in desperate need of publicity stunts to prove itself to its own community.
Since its inception in 1913, the Houston Symphony Society has existed at the expense, and for the pleasure, of the wealthy. From Ima Hogg through Hugh Roy Cullen, the main responsibility of the board of directors was that of check writing. It simply didn't matter if the orchestra made money or was supported by the city; someone could always be counted on to make up the difference at the end of the year. In 1940 Jesse H. Jones and his wife, Mary Gibbs Jones, through their charitable Houston Endowment, contributed $250 to the symphony, the first of many ever-increasing gifts the fund would award the organization. Ten years later they funded the first broadcasts of the symphony on KTRH-AM to make the music available to all Houstonians. It was the first time someone realized the "Houston" in Houston Symphony meant more than just the donors.
During the early days of big giving and big galas, the baton was held by many luminaries, from Leopold Stokowski to Sir John Barbirolli and even André Previn, whose open-living arrangement with Mia Farrow prior to his divorce apparently did not sit well with the local bluehairs. Nationally, in the 1970s, the musicians unions and their demands began to grow in number, while pop culture kept younger audiences entranced with rock and soul, precipitating a downhill trend for what many already considered to be a dying Eurocentric art form. By the oil bust of the 1980s, the Houston Symphony was in a serious downward spiral. For both board members and donors, there were more exciting, hipper organizations: the Museum of Fine Arts, Houston Grand Opera, Houston Ballet. As financing dwindled, the symphony was forced to slash salaries and cancel tours, recordings and renovations to its home at Jones Hall. In the final seasons under music director Sergiu Comissiona, the orchestra itself seemed to lose interest in it all, as did audiences.
And then came Christoph Eschenbach.
A self-described "monk of music," with black-on-black attire and collarless suits, Eschenbach programmed the seasons, chose the repertory, auditioned players, cajoled the board members and schmoozed donors. He made the orchestra play up to its potential, and he made the world recognize just what that potential was. He demanded perfection, or as near to it as the musicians could play; he also insisted on recordings and European tours, two costly ventures that he thought were necessary for the experience and morale of the players, as well as the profile of the organization.
Wax, with his silver beard and expensive shirt, looks as though he could be a slightly eccentric CEO or the arts administrator that he was. As of September 1, he officially left his post as executive director of the Houston Symphony, a position he had held since 1987, or 1 B.E., "before Eschenbach." In March of this year, the symphony released a short statement saying that Wax was resigning "to move on to new challenges." More than five months later, Wax is not sure where those challenges lie for the long term, but has for now accepted a position as interim executive director for the San Antonio Symphony, whose chief unexpectedly resigned.
From a handpicked head honcho who was instrumental in securing Eschenbach, to a stopgap job at a smaller orchestra in a blue-collar town, Wax, and some of his board, ultimately may have fallen victim to the very music director whose fame they enjoyed but whose demands they could not always satisfy, at least financially.
"We committed ourselves to more projects than we had revenue coming in to cover," admits Wax. "But at what point do you say no, if it's going to do great harm to the organization?" So the accolades kept rolling in and the money kept rolling out. Like a colt whose legs are too long for its body, the orchestra was growing disproportionately. Local audiences and individual donors were not keeping pace with the artistic development. Things came to a head in 1997.
That was the year the musicians, in a testament to Eschenbach's bewitching baton, swallowed a 7.7 percent pay cut and played without an American Federation of Musicians union contract. Despite the concessions, it was also the year that the organization's debt almost doubled. According to the Houston Symphony Society's IRS reports for its fiscal year ending May 31, 1997, the debt jumped from $4,780,000 to $7,029,666. Part of that was a revolving line of credit at Texas Commerce Bank. Lots of nonprofit arts organizations use a bank line of credit to keep cash flowing while waiting for government and foundation grant cycles and seasonal ticket sales to kick in. The symphony's line of credit for that year capped at $1,029,666, which in itself wasn't a problem. The problem was that the group had overspent to the extent that a separate $3 million long-term note had to be doubled to $6 million, and the organization's endowment was used as security, a guarantee, for the loan.
Endowments, funds usually raised through community campaigns or inheritances, are money in the bank. They are used to secure an organization's operation, allowing a performing arts group or museum to use the interest for special purposes or to make up for cash-flow shortages. The idea is to not touch the principal, and in some cases the board may make that an actual covenant on the endowment.
"It is certainly not recommended to borrow against your endowment," says Grace Chang of the American Symphony Orchestra League, an association that encompasses many of the country's 1,800 orchestras, including the Houston Symphony. "And it is certainly not common." Also not common was the extent to which the Houston Symphony was fading financially.
That same year, even by doubling the loan, the symphony still ran $1,403,124 in the red. The following year, the organization's fiscal year ending May 31, 1998, the orchestra finished the year ahead by $334,594, yet the long-term debt had crept up to $7,689,756. Gifts from individuals, corporations and foundations nudged upward, but ticket sales roughly held steady, bringing in $18.7 million, compared to $17.3 million the previous year. Spending stayed the same, at an average of $18.5 million each year.
Yet some wonder what kind of revenues the symphony could have generated if only it had had better administrators, a thought echoed in a 1998 Houston Chronicle op-ed penned by the then-chairman of the players' negotiating committee, Tom Elliot, who quotes from a 1995 Dini Partners analysis of the organization: "The symphony must either take the necessary steps to upgrade its administrative, marketing and development capabilities to match the quality of [the orchestra] or be forced to scale back its operations."
Likewise, a former corporate granter remembers receiving what amounted to a form letter from the symphony every year asking for money. "Then there's David Gockley [general director of Houston Grand Opera] calling you every week, asking you to lunch. It makes a difference." If Wax was a bit reclusive -- curiously, his advice for his successor is to "have a real presence in the community; you cannot be isolated, you must be part of it" -- then Gockley is the extrovert of the arts scene. Among local arts administrators, Gockley is seen as a sort of Superman, being everywhere at once and schmoozing everyone in sight. That's part of the reason that this year's HGO ball is expected to net close to $1 million, while last season's symphony soiree reportedly took in little more than $600,000. And yet the symphony was pleased with that amount, a fact that's not hard to understand when you hear the stories of a symphony gala in the not-too-distant past that lost money, some say as much as $300,000. Sources say the chair that year was chosen for name appeal, not for her talent at raising money. "She didn't even buy a table herself," says a former board member. But such misguided attempts were not uncommon at the symphony.
"You could fill a bathtub with the stories," says principal tuba player David Kirk. An 18-year veteran of the orchestra, Kirk says musicians would always hear people complain that they gave money to the symphony and never even got a thank-you card. Of equal concern to the players is the graying of their audiences and the elitist images associated with their music. "There are younger ticket buyers and donors out there; an executive director should see that as a necessity, as a hole that needs to be filled," Kirk says.
Other orchestras were filling that hole.
During the decade of Eschenbach, as the Houston Symphony reached its artistic pinnacle and financial nadir, orchestras nationwide were beginning to recover from crisis. In an American Symphony Orchestra League study conducted between the 1990-1991 an 1997-1998 performing seasons, the turnaround was significant for many of the 109 orchestras involved in the research. The report found that symphony attendance was up by five million people; the number of concerts was up by 6,000; all categories of income were up; and the number of orchestras reporting deficits was down. Of the orchestras reporting data for all seven years, 72 percent were claiming a surplus by 1997-1998, while only 27 percent reported a deficit, compared to 49 percent in 1990-1991 season. And that's not all. The combined deficit of orchestras in the study had dropped 87 percent by 1997-1998, from $20.8 million to just $3.4 million.
At the same time, the Houston Symphony was struggling with a $7.6 million debt, declining subscriptions and a possible musicians strike. Even worse, its maestro had decided to resign. Eschenbach had seen the handwriting on the wall and realized it was time to move on. He had taken the orchestra as far as he could; he had created the highest level of professional music Houston had ever heard; and he had pushed the organization so far into the red that some wondered if it would ever recover.
"It wasn't Christoph's salary that was the problem," says Wax. "It was his artistic demands." And the fact that Houstonians simply weren't lining up to pay for them. In the 1997-1998 season, Eschenbach as music director was paid $858,988 by the Houston Symphony. In the next two years, as his work with the symphony tapered off, so did his fees, and the much more exorbitant touring and recording costs. But the bigger problems still remained: the deficit, the weak staff and board, the looming strike. Finally, in a last-ditch effort to avoid a walkout, the musicians turned to a longtime orchestra wizard, the president and guiding force of the Chicago Symphony.
"I hate to use consultant-ese," says the smooth-talking Henry Fogel from his Chicago office, "but this was an organization that was not "in alignment' with itself." The artistic side was on one page, the staff on another, the board uninvolved, and the public hardly even included. Fogel issued a report on the organization in May 1998 with some guidelines for salvation. The findings gave hope to all the stakeholders; the musicians union finally signed a contract, and the board began to wake up to the fact that it needed to be more responsive and more responsible. Musicians and board members credited Fogel with saving the orchestra. But it was too little, too late for Eschenbach, who resigned his post as music director and then, as conductor laureate, began his long farewell tour.
The spectacle of Eschenbach's drawn-out farewell has also served to overshadow the departure of his administrative counterpart, David Wax, a departure that could ultimately be of more significance to the organization's long-term stability.
"There are laurels that I don't mind resting on," says Wax, "or using as a springboard. I am leaving this orchestra artistically sound and in the best fiscal shape it's ever been in." A true enough statement, but one that relies also on the generosity of two local foundations and the fluctuations of the economy. In early 1998 endowed trusts were doing very well with investments, particularly the Houston Endowment. With more than $1 billion in assets, it is one of the largest foundations in the South, one that has, since that auspicious gift of $250 in 1940, given $7.85 million to the Houston Symphony -- almost half of that in 1998.
"We saw a need and we gave," says Steven Fenberg, community affairs coordinator for the endowment. In fact, Houston Endowment gave $3.7 million, with the Wortham Foundation covering the rest of the symphony's multimillion-dollar debt. Sources close to the bailout say one condition was that the symphony had to maintain a balanced budget; Fenberg will say guardedly only that "we always have an assurance that our money will be used wisely." Whether that means new leadership, new leadership is what the Houston Symphony will be getting.
During last year's "rebuilding" period, insiders feared that Margolis, the new board president, was pushing Wax out and trying to micromanage the orchestra. Wax has little to say about the board or Margolis, except that "the board always approved the budget." "They knew exactly what was going on," he adds.
Margolis, a retired retail executive and former chair of the University of Texas-Houston Health Science Center Development Board, declined to be interviewed for this article, saying, through a symphony spokesperson, that he preferred to remain in the background. But both Kirk and Fogel sing his praises as a can-do kind of guy. "I'm a fan of his," says Fogel. Kirk admits Margolis is very hands-on but also says it has been great for the orchestra to have someone listen to them, and then make a plan and see it through. "He's definitely the one driving the car right now," Kirk says.
In fact, many involved with the symphony are excited by the prospects of trying new things, such as video and the Internet, to attract new audiences. Some, including Wax, think the next challenge will be building a new home for the orchestra. Dallas's symphony finally turned its financial picture around when it opened the Morton H. Meyerson Symphony Center in 1989. But a $150 million to $200 million orchestra hall is still more than a decade away for Houston, and industry experts agree that the orchestra, and its new executive director, first need to prove themselves to Houston audiences and donors before embarking on such a large capital campaign.
Following his resignation announcement in March, Wax agreed to stay on until September 1 to aid in the transition, even though he admits "that's a long time to be a lame duck." But the board, through either arrogance or ignorance, hasn't made use of the time. After deciding it couldn't find Wax's replacement on its own, the board finally hired a search firm in July. Korn/Ferry International is a respected executive search firm with a specialty practice in education and nonprofit associations, last year handling more than 260 such assignments. The organization found the director for the Lincoln Center for Performing Arts and the director for the National Symphony in 1981. That administrator, Henry Fogel, left to take the top job at the Chicago Symphony four years later.
Today Fogel says he is helping in the search for Houston's new executive director. In a Dick Cheney sort of way? "Oh, no, no, no, no," Fogel says with a laugh. "I am not interested." So who would be? "Well, I'm not saying they can find 50 candidates, but they only need one." The symphony likely will choose its new executive director after it announces its new music director, an event that is expected this month.
Alex Bonus with the Symphony Orchestra Institute, another industry organization, says this is a good time to hunt for an administrator. "It's currently a very volatile field," he says. "There are a lot of administrative changeovers both here and in Canada. The turnover rate for executive directors is very high; it's a demanding position and a very competitive field." He adds that Houston should be able to choose from senior management at larger orchestras or executive directors at smaller symphonies. Both he and Fogel think the Houston spot is a plum position, even if there are still problems with the board, audiences and public perception.
The new administrator, however, may have a bigger challenge than trying to erase a multimillion-dollar debt: He or she will have to try to maintain the artistic levels established by Eschenbach while trying to stay in the black. What's more, the slow-footed process of hiring an administrative head may also make the job unattractive to those candidates who would have preferred a say in the next music director. "With no input over such a major component," Wax asks rhetorically, "would you take the job?"
To Fogel's mind, the symphony's makeover has improved its standing, if not exactly raised it to the standards the organization would like. "They've gone from negative to neutral," he says. And he's not simply referring to the organization's finances. The orchestra continues to have an image problem. Say the phrase "Houston Symphony" to the average Houstonian, and thoughts of strikes, departed executives and deficits immediately leap to mind. The new executive director will have to compensate for all those negatives.
To do that, the new director will have to follow one of Fogel's 1998 recommendations and spend more time in the community. "People give to people," stresses Fogel. "If you're not out there in the community, then they don't know you."
Wax sees an even bigger obstacle: "Atlanta, Dallas and Houston -- it's a Sunbelt problem. Cincinnati, St. Louis, they all have much larger budgets than we do. I think [Houston has] done well, but we are not on the cutting edge of the arts." It's an interesting theory given the city's multiple museums, avant-garde opera, internationally recognized ballet and Tony Award-winning theater. Even the Contemporary Arts Museum doesn't run a deficit here.
"Having all those other organizations certainly says [a symphony] should work here," says Fogel. "But it also makes it more competitive for donations and board members. And the board is the strength of any nonprofit organization."
The Houston Symphony, it would seem, is caught in a conundrum: It needs a strong board but not one that micromanages; it needs a music director with compelling ideas, but one who doesn't overspend; and it needs an executive director who can lead them all down the right path. For that still-unknown pied piper, it could be the challenge of a lifetime, or a very sour note.
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