“Many financial approaches have been tried over the past 50 years to improve the financial condition of orchestras. Yet, the industry as a whole appears to be in the worst shape it has ever been in…If orchestras are to assume the undisputed pre-eminent position they once held in the American cultural landscape, they must begin to redefine themselves. This research on the financial condition of orchestras is clear. It tells us that the orchestra industry is probably not just caught up in a brief economic downturn. We are living in a fundamentally new society with new definitions of culture, recreation, education, philanthropy, and a new set of presumptions about the role of the arts in communities. All of these things will shape the financial context for orchestras in the future. We can ignore these realities, but we do so at our peril…”—The Wolf Report
In 1991, consultant Dr. Thomas Wolf and his associates carried out a comprehensive 25-year study entitled “The Financial Condition of Symphony Orchestras.” Commissioned by the League of American Orchestras, it became known as “The Wolf Report.”
The League followed up two years later with what was projected to the second of three installments, “Americanizing the American Orchestra.”
Together, the two studies offered some stark truths about the sustainability of the 20th Century orchestra model. They generated much heated controversy.
Recently I talked to Tom on the occasion of the 20th anniversary of “The Wolf Report”.
Tony: It is 20 years since you undertook your study. My recollection is that you predicted much of what has occurred in the interim.
Wolf: In a way, yes. But remember, the study was primarily looking at the past, charting historical trends. It was three volumes long. Only in the introduction did I talk about what might happen if the trend lines of the previous quarter century got extended into the future. I did predict the serious financial crisis and major deficits we see today. So I guess you could say that much of what I predicted has occurred.
I would argue that the orchestra industry must undergo a paradigm shift –not a process of small-scale, selective tinkering but a basic transformation in the way business is conducted.—The Wolf Report
Tony: I remember there being quite a lot of controversy around the report. Why was that the case?
Wolf: When I originally presented the results of the study at a League conference in 1992 at a plenary session, it was well received. And initially the press was positive. The New York Times and other major media reported the findings. But in the next couple of years when people realized the implications of what was being said, it became controversial. It got quoted a lot in negotiations as a rationale for keeping musicians’ salaries flat. And then when the Americanizing the American Orchestra report came out from the League a couple of years later, a report that was a follow up to mine and one on which I worked, the press went wild, stating that orchestras would be ruined if they followed the prescriptions of that report. Orchestra leadership did not like the bad press and an effort was made to get the reports buried and get on with business as usual.
“For all the report’s obeisances, this policy shows little allegiance to music or to the orchestra and almost total allegiance to commercial success and financial security. Cynically led by its managerial class, the orchestra is explicitly urged to lean toward pop and make courting audiences its primary activity. The only people being asked to ‘assimilate’ culturally are those who uphold the importance of the orchestral tradition.” “In bringing the racial politics of the streets into the concert halls, it may very well Americanize the orchestra into extinction. This report is a disgrace.”
On Americanizing the American Orchestra, Edward Rothstein, New York Times, July 11, 1993
Tony: As I remember, there were also some people who tried to refute your findings including other researchers. What was your reaction?
Wolf: As I said, the study was never intended as a statistically accurate predictor of the future. It was primarily about the past and no one ever challenged our findings about the 25-year trends. What bothered them were my predictions about the future and my recommendations for correcting the problems. Ten years after the report was written, my predictions did look as though they were off. Don’t forget the state of the economy in the 90s – it was a boom time. The stock market went into the stratosphere. Endowments were growing by double digits. This meant that even when many orchestras took large amounts of money out of their endowments to cover short falls, their net worth kept growing. So the problems that I had predicted were masked, though I continued to claim they were there. Eventually it became clear that the growth was unsustainable. September 11th, 2001 is a convenient date to mark the change and that happened around the tenth anniversary of the report. A decade after that, the bankruptcies and the bitter strikes we see today are the legacy.
“Where does the orchestra industry find itself 10 years after Thomas Wolf’s address to the League? For the 1999-2000 season—the season for which the Wolf Report projected a $64 million deficit—the industry posted, according to the League, an estimated $84.5 million surplus (extrapolated from 203 responding orchestras to approximately 1,800 orchestras). Total revenues and expenses for the season were, respectively, $1.267 billion and $1.183 billion. The Wolf Report projected 2000 revenues at $946.5 million and expenses at $1.01 billion, greatly underestimating the prospects for growth in the industry.”—The Wolf Report and Baumol’s Curse, Douglas Demster, 2001
Tony: If you were to choose one factor that is responsible for the deterioration of the finances of orchestras over the 25 year period you studied, what would you choose? Or isn’t that a fair question?
Wolf: It is absolutely fair and it is absolutely clear in my mind. One factor above all others is responsible for the problem. Until 1965, the number of concerts offered by orchestras was in large measure predicated on demand. But after that time, the push for year-round employment for musicians and the guaranteed service count for a certain number of weeks throughout the year, meant supply was no longer calibrated with demand. The number of concerts offered increased exponentially. Consider orchestras in the budget category of $5 million to $8.5 million in 1991 – one of the sub-groups I studied. They went from an average of 40 concerts a year in 1966 to 157 concerts a year in 1991. The assumption was “play concerts and they will come.” But audience growth did not keep up. This meant that marketing staffs had to be beefed up to find new audience members and there was more pressure on fund raising, so development staffs had to grow. As a result, administrative costs also increased dramatically. And ticket prices had to increase to cover the gap since the amount of the budget covered by ticket sales was dropping. The whole system got readjusted around a formula that had unlinked supply and demand. For the sub-category of orchestras I mentioned above, deficits increased over 11,000% in the 25-year period and even after adjusting for inflation they grew by almost 3,000%.
“…ICSOM, as well as many influential critics of the arts in America, find the recommended changes [in Americanizing the American Orchestra] to be profoundly wrong-headed…We and our member orchestras need to disassociate ourselves from this report, while simultaneously stating that we are willing to participate in intelligent and intellectually robust attempts to define institutional partnerships, in helping provide the public with accurate information about our orchestras, and in supporting a constructive examination of the role our art has in our culture.”—Senza Sordino, Official Publication of the International Conference of Symphony and Opera Musicians, October 1993
Tony: So despite what musicians said at the time, you did not claim that it was only musicians’ salaries that were responsible for the problem.
Wolf: No, it is actually interesting. Artistic costs as a percentage of total costs did not budge during the entire 25 year period I studied. But most people did not read carefully and assumed I was blaming everything on musicians. Musician salaries grew in proportion to overall costs – but all of these costs were unsustainable.
Tony: Does this mean that you think the trend to provide guaranteed salaries to musicians with a certain number of services and weeks was a mistake.
Wolf: As with so many things, the instincts were right but the implementation was wrong. There is no question that providing a living wage to musicians was one of the factors that increased the artistic quality of our orchestras. I was all for it. And even at current levels of pay today, I believe most musicians are underpaid for the skill levels they have attained. So many of these individuals are amazing and I wish they were paid for the skill levels they have attained (I know since I played professionally for many years and couldn’t possibly attain the level that so many of our great musicians have reached.). Finding a way to pay musicians properly might have been possible except for lack of imagination and vision. The orchestra industry and the union assumed that the only way to do so was to increase the service count through more concerts and associated rehearsals. But the market could not absorb it.
Tony: So what should they have done?
Wolf: What should have happened is that orchestras should have explored other ways to offer musicians employment and musicians should have jumped on the band wagon to help them do so. I wrote an article in 1993 about this in the International Journal of Arts Management. I spoke about the ideal orchestra and its musicians becoming the major purveyor of great music in a community. The model I was espousing is not unlike what many are fighting about today. Orchestras are gradually seeing the light. But there has been great resistance on the part of musicians. And I suppose you cannot blame them. They were trained to play concerts at a very high level. They were not trained to be ambassadors for great music in their communities or to teach and coach and play chamber music as part of the orchestra contract. It starts from the earliest moments in a conservatory. If your role model is a soloist or a first chair player in a great orchestra, you are not going to value any other career track. It is people like you Tony who have to change that and I know you are trying to do so.
Tony: Do you buy the argument that this will compromise the excellence of the orchestra if musicians are asked to do things other than play concerts together?
Wolf:Frankly, I think the argument is nonsense. I have even heard it argued that breaking the orchestra into small units for certain repertoire “compromises” its artistic quality. It is well to remember that before 1960, virtually all musicians – even those in great orchestras – put together a free-lance life and many of them preferred it. My teacher was William Kincaid, the principal flutist in the Philadelphia Orchestra
for decades and one of the greatest flutists of the 20th century. He hated the 52-week contract and said that most of his first-chair colleagues had voted against it. He actually thought it would lower the standards of orchestra’s playing.
Tony: You have actually written other books and monographs about orchestras. Do they follow the same line?
Wolf: With Nancy Glaze of the Packard Foundation, I wrote And the Band Stopped Playing: The Rise and Fall of the San Jose Symphony.
It is a very detailed look at how and why an orchestra failed. It was well reviewed by the Wall Street Journal and is still available through Amazon. Unfortunately, it too was controversial. In that book, I actually took funders to task for being enablers of bad practice. There were also lessons about the importance of responsible governance and staff leadership. Finally, I urged orchestras to be more careful in choosing music directors. Just because someone got great reviews in Berlin does not mean he or she will be a great leader in a small community in the United States. And indeed, music directors have to be community leaders if the orchestra is going to succeed.
Tony: You sound like a pessimist when it comes to orchestras. Is that fair?
Wolf: No. Orchestras represent one of the highest achievements of mankind and American orchestras are among the greatest in the world. I spent my boyhood going to Philadelphia Orchestra concerts most Saturday nights between October and May. I even got to play with that orchestra – one of the greatest thrills of my life. Orchestras will survive–not every orchestra, maybe, and not necessarily in the form we know them today. But new life and creativity grows out of crisis and already there are promising signs of change. I am optimistic.