Phoenix Symphony cancels season due to financial problems

The symphony's Board of Directors made the decision, indicating it does not have the financial resources necessary to continue the season, its first with Virginia G. Piper Music Director Designate Paolo Bortolameolli, who conducted the season opener the weekend of Oct. 9.

In an exclusive interview with The Arizona Republic, Symphony President and CEO Peter Kjome called it “an extraordinarily difficult decision that will affect the lives of our musicians and staff as well as people across our community.”

Unpaid layoffs of the symphony’s musicians will take effect Monday, Nov. 2.

Financial challenges for years

The Symphony has faced significant financial challenges for many years, Kjome said. The Board and management have worked to address financial challenges through the CRESCENDO fundraising and endowment campaign and by implementing significant reductions in administrative costs.

Unfortunately, these efforts have not been enough. Despite increased ticket sales and philanthropic support in recent years, ongoing operating deficits have left the organization with substantial financial obligations that make continuing the season untenable.

Ticket sales only account for a quarter of revenues. As the Symphony’s Chairman of the Board, Mo Stein told The Republic, “We could sell the rest of the auditorium out and we still wouldn't make enough money on performances to not have to do a significant amount of income from philanthropy.”

Part of the problem with this season moving forward was that anticipated contributions for the current fiscal year had fallen short of the amount required to sustain operations, making more fundamental changes necessary.

'Necessary to move really quickly'

When the data suggested that there would be insufficient funds to cover payroll, Stein said, “It was necessary to move really quickly. And that's exactly what we've done, is taken action that's unfortunately rather drastic, but it's going to be necessary to save the organization, to go on a suspension and find a model that allows us to come back as reasonably soon as possible in a sustainable and appropriate way.”

Continuing the season without the cash flow to meet its immediate financial obligations would put the institution's future at even greater risk.

“It is vital that we have a sustainable operating model,” Kjome said. “And although we have made improvements in both ticket sales and contributed revenue, and we've been carefully managing expenses, including making expense reductions, this has just simply not been enough to strengthen our financial model sufficiently to continue.”

The board’s responsibility, Stein said, “is to minimize further losses, create a robust restructuring plan and build a financial foundation that will last."

Structural changes required 

“That's where we're headed right now is to find that model that is special, not just amongst orchestras, but what's going to work in Phoenix with our donors and our community to continue the work we think is so important,” Stein said.

“Symphonies have been doing business the same way for a very long period of time,” Stein said. “There are luminary symphonies you look at all around the country. We simply aren't going to be able to do business the way everybody does business. We should do business the way that works in Phoenix. And that means modifying our program a little bit in terms of more classics or less classics or things that appeal to wide audiences or the kinds of music that our community wants to see, including welcoming in a diverse population that exists in Phoenix.”

Not ruling out resumption   

The Board's objective is to resume performances when the Symphony has secured the financial resources and implemented the changes necessary to operate sustainably. Whether or when that will be possible remains uncertain.

Stein isn’t ruling out the possibility that the season could resume at some point.

"Any return to the season will depend on a realistic budget, verified support and the financial discipline to remain open," Stein said in a statement. "We owe that to our musicians, our staff, our patrons, our donors and everyone else who has supported this orchestra."

Info for musicians, patrons

The Symphony is communicating directly with affected musicians and employees about employment status, compensation and benefits.

The Symphony will also notify subscribers and other ticket purchasers about their options as soon as necessary arrangements are finalized.