Sunday, August 25, 2002

Cleveland Orchestra forced to cut back

The Associated Press

        CLEVELAND - The sagging economy and declining business donations contributed to the Cleveland Orchestra's largest loss in nearly a decade, $1.3 million for the season that ended this year.

        The Musical Arts Association, which runs the orchestra, is cutting expenses and delaying some programs as a result. The upcoming season's main activities remain safe, the association said.

        “There's a huge set of external factors affecting us, as they're affecting everyone else,” Thomas Morris, the orchestra's executive director, said Friday. “These are issues over which we have no control.”

        Income was short $2.7 million for the 2001-02 budget year that ended May 31. The loss was reduced to $1.3 million by cutting $1.4 million in expenses.

        The budget for the 2002-03 season is $38 million.

        The orchestra has canceled plans for a television taping of the Sept. 14 debut concert of new music director Franz Welser-Most.

        It also suspended national radio broadcasts but not local ones. Maintenance and repairs to the orchestra's home, Severance Hall, are postponed, and staff members must pay more for health insurance.

        From 1992 through 2001, the orchestra had a balanced budget, which it defines as revenues within 1 percent of expenses. There were deficits within that margin of $20,000 in the 1998-99 season and $176,000 in 1999-2000.

        Revenue and expenses grew about 5 percent a year over the decade.

        The nonprofit's endowment fund more than doubled in that time, to a high of $155 million in 2000, and still is among the largest for major American orchestras. Donations from individuals, corporations, foundations and government also more than doubled.

        The orchestra's good fortunes took a downturn along with the U.S. economy.

        Stock market losses erased $50 million from the endowment, making it $105 million this month, the association said.

        Several corporations that once made large donations have left northeast Ohio, such as BP America and BF Goodrich.

        Corporate donations in the 2001-02 season were down 29 percent from the previous year, and government grants fell 10 percent.

        Mr. Morris doesn't expect this round of financial difficulties to be short but said the orchestra won't compromise its artistic product.

        “I'm reminded that through the 1990s, everyone said you can't sustain 20 percent growth in the market, and it will change,” the director said. “Well, it's changed. That's the bad news.

        “The good news is: It will change.”


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