The world-renowned Philadelphia Orchestra, long considered one of the best in the nation, will be filing for Chapter 11 bankruptcy protection -- an apparent first in recent history for a major U.S. orchestra.
Board Chairman Richard Worley said members made a nearly unanimous vote Saturday to file for reorganization in a federal bankruptcy court in Philadelphia after a "long meeting, thoughtful meeting, emotional meeting."
"We're running low on cash, we're running a deficit, and we have to put ourselves in a position to attract investment funds to help us," Worley told reporters.
Allison Vulgamore, president and chief executive officer, also cited a "tremendous decline" in audiences over the past five years.
Officials stressed, however, that concerts would go on as scheduled, including Sunday evening's performance of a symphony by Gustav Mahler, and they said a revitalization campaign was planned to increase revenues by about two-thirds and bring in new art and audiences.
John Koen, chairman of the members committee, which represents the musicians, said the five musicians at the meeting were the only "no" votes on the 65-member board.
"It was a terrible letdown. I think this is a tragic decision for the orchestra," said Koen, who said he has been with the organization for almost half of his 44 years. "A big orchestra has never done this before. It's impossible for the musicians not to feel betrayed by the board of directors. It feels like a vote of no confidence for the future of this orchestra that's been around for 111 years and world famous for 99 of those years at least."
The orchestra is expected to take in a combined $33 million from this season's ticket sales, fundraising, endowment income and other revenue, according to its financial records. That won't cover its $46 million operating costs, and its projected deficit is $5 million despite an emergency fundraising effort.
Philadelphia Orchestra musicians who object to a bankruptcy filing distributed leaflets to the audience before Thursday night's concert, calling such an action "unnecessary" and saying it would have "both an immediate and a long-term devastating impact" on the orchestra. Union officials and others have cited the orchestra's $140 million endowment, but Vulgamore said use of that money was restricted.
Musicians, who in recent years have agreed to take pay cuts totaling millions of dollars, have expressed concern about the effect of bankruptcy on their pensions. Worley said that would be worked out in negotiations, but officials want orchestra members to have a "reasonable and respectable pension."
The orchestra's management is seeking a 16 percent pay cut and other concessions from the musicians as part of ongoing contract negotiations. Players say there have been no talks since March 27, and none are scheduled.