Detroit Symphony posts $3.8 deficit

Posted on: December 11, 2009

In Friday’s (12/11) Detroit Free Press, Mark Stryker reports, “The Detroit Symphony Orchestra’s deficit soared to nearly $3.8 million dollars on a budget of $29 million in 2009, underscoring the precariousness of the orchestra’s finances in Michigan’s depressed economy and jeopardizing the artistic growth and momentum that has been building under new music director Leonard Slatkin. A confluence of factors led to the spike, according to figures the orchestra released today at its annual meeting: a $1.6 million drop in corporate gifts compared to 2008; $1.2 million less in earned revenue, including an $837,000 drop in ticket sales; and $350,000 less in investment income from the orchestra’s endowment, which was battered in the stock market. To pay for operations the orchestra had to borrow $3.2 million from its endowment funds. … The value of the endowment fell from $85 million to $59 million in the fiscal year that ended on August 31, a drop of 31 percent. … the shortfall raises the fundamental question of whether the DSO’s cost structure is sustainable. Simply put, earned revenue and fund-raising are not keeping up with expenses, and the pressures are increasing. … ‘It is possible to build a sustainable model,’ said DSO board chair Jim Nicholson. ‘But it won’t happen without a lot of work, and there has to be significant sacrifice from everyone.’ ”

Posted December 11, 2009