The Indianapolis Symphony Orchestra, one of only 17 full-time orchestras in the nation, is proposing shifting to part-time status as part of a plan to address longstanding financial problems.
The board and management are pushing for the changes in negotiations with the musicians’ union that continued this week, a union leader said Tuesday.
As of Tuesday afternoon, the ISO wanted to cut musicians’ annual pay by almost half as part of a plan that would reduce the orchestra’s schedule from 52 to 36 weeks a year, said Richard Graef, chairman of the Indianapolis Symphony Orchestra Negotiation Committee.
The cuts are aimed at providing financial stability in the wake of an unsuccessful effort in 2010 and 2011 to raise $100 million in a capital campaign. The effort raised just $12 million before being put on hold. The fundraiser was the ISO’s attempt to restore an endowment that plummeted from $120 million before the recession to as low as $80 million.
Management’s proposal also includes reducing the 87-member orchestra to 63 artists.
Those who remain would end up with a 45-percent cut in annual pay, Graef said.
The symphony would phase out pensions in favor of a 403(b), a type of retirement plan used by some tax-exempt organizations that is similar to a 401(k).
Musicians’ current three-year contract expires Sept. 3.
The extent of cuts is subject to change, depending on the outcome of the ongoing negotiations with musicians.
ISO spokeswoman Jessica Di Santo declined to comment on the proposed cuts or the negotiations.
“We don’t comment until we get an agreement,” Di Santo said.
The ISO’s cost-cutting is in response to a $4 million cap on how much the organization can draw from its $89 million endowment in the 2012-13 fiscal year, which starts Sept. 1, said a source close to the administration who spoke to IBJ on the condition of anonymity.
The foundation’s board of directors imposed the cap after the ISO drew roughly double that the past few years, the source said.
The ISO’s budget this year was about $25 million. Removing several million dollars in revenue essentially forced the discussions toward a shortened concert schedule, the source said.
The musicians’ union proposed concessions that Graef said would compensate for the lost revenue while sustaining the group’s artistic integrity.
The union and management both are seeking five-year contracts. Graef said musicians would accept a 12.6-percent pay cut in the first year and a pay freeze the second year, with partial restorations the following three years. The contract would finish with pay 1 percent below its current level.
Performers also would take 14 weeks of furloughs over the five years, under the union’s proposal.
If the ISO and union can’t reach agreement by midnight Sunday, one possibility is they could agree to extend the old contract and operate under it until they have a new collective bargaining agreement.
Another option is they could declare an impasse. That could lead ISO to lock out the performers, or the performers could strike.
Graef said he wants neither of those.
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