Minnesota Orchestra Shares Achievements of Season in Annual Meeting

The Minnesota Orchestral Association's Annual Meeting today noted the institutional milestones of the Orchestra's 2010-11 season, a year in which the Orchestra performed at Carnegie Hall and cities around Minnesota, launched a new recording cycle, finalized renovation plans for an expanded Orchestra Hall and co-hosted the national conference of the League of American Orchestras. The Orchestra reported a $2.9 million deficit for Fiscal 2011 and unveiled a new strategic plan which is designed to lead the organization to sustainability and support great artistry and community outreach.

Jon R. Campbell, who serves as an Executive Vice President of Wells Fargo, was elected Board Chair by the Orchestra's Board of Directors, succeeding Richard K. Davis, who completed a two-year term. Since joining the Minnesota Orchestra Board in 2001, Mr. Campbell has served on its Executive, Audit, and Board Development and Governance Committees and has chaired the organization's Finance Committee for the past four years. Across the Twin Cities, he has served on boards for the University of Minnesota Foundation and Carlson School of Management and chaired the boards of Fairview Health Services and the Greater Twin Cities United Way.

Highlights of the Orchestra's 108th concert season included Music Director Osmo Vänskä leading Mid-Winter Mozart concerts that culminated with captivating performances of The Magic Flute; world premieres of concertos by renowned composers Einojuhani Rautavaara and James MacMillan; the release of the first disc in a new cycle of Beethoven piano concertos with pianist Yevgeny Sudbin; a fifth season of popular Target Free Family Concerts, attended by more than 20,000; and a Sommerfest finale concert featuring Strauss' beloved comic opera Der Rosenkavalier, led by Sommerfest Artistic Director Andrew Litton.

Financial Report and Strategic Plan
The Minnesota Orchestra posted an operating deficit of $2.9 million on a budget of $30 million for Fiscal 2011, attributable to a decrease in endowment revenue, a decrease in earned revenue and an increase in contractual costs, as the organization continues to manage its five-year musician's contract.

"The economy has impacted our ability to generate the revenue necessary to keep up with rising fixed costs," said outgoing Chairman Richard Davis. "Like most in our industry, we've been skillful in managing an out-of-alignment financial structure-but the persistent economic downturn has intensified this fiscal challenge. We know that this imbalance will dramatically escalate in the years ahead unless we reset our model, and this is the work that we must now do."

Addressing the issue at its November meeting, the Minnesota Orchestra Board of Directors approved a strategic business plan that leads the organization to financial sustainability and resulting balanced budgets by 2013.

The plan calls for the organization to capitalize on the renovated Orchestra Hall to attract new audiences; maintain artistry through regular touring, broadcasting and recording; develop new performance formats and content; and engage with the community through intensive exchange and collaboration. It re-scopes the number of concerts to better align supply with demand, and it calls for a combination of major expense reductions and ambitious but achievable increases in earned and contributed revenue. "This plan demonstrates that it is possible for an orchestra to offer exceptional artistic experiences, connect with its community and operate in a fiscally sustainable manner," said Mr. Davis.

During the 2010-11 season, the Orchestra's total earned revenue decreased from the prior year by $527,000. Ticket sales across all the Orchestra's concerts-including classical, pops, jazz, Inside the Classics and presentations-ended the year at 71 percent capacity sold, virtually holding even with the prior year's 72 percent. Total paid attendance surpassing 235,000 individuals was somewhat less than Fiscal 2010's number of 250,000, due primarily to a reduction in the number of concerts offered. Approximately 70,000 people attended free events over the course of the year, from Target Free Family performances to outdoor Symphony for the Cities concerts.

Total contributions for the year, including the annual Guaranty Fund and the Oakleaf Trust distribution, reached $12.3 million, a decrease from the previous year's $13.1 million, due to a reduction in support for touring projects. Annual operating contributions and gifts were up 1.6 percent over Fiscal 2010, and the total number of donors increased by 9.9 percent over the previous year.

"It is a promising sign to see an increase in our total number of donors, and we are grateful to our Board of Directors for their outstanding fundraising efforts in a difficult climate," said President and CEO Michael Henson. "Overall, however, we need to be realistic about the fact that the economy has led to a leveling off in donor contributions and gifts compared to four years ago. We are seeing a similar downward trend with regard to endowment levels. These trends highlight the necessity of implementing our new strategic plan which transparently identifies these major issues in order to resolve them."

While total investments for Fiscal 2011 climbed to $162.4 million, this was due primarily to $11 million in incremental Orchestra Hall renovation contributions over the last year. These funds will be drawn upon to pay for construction costs as the renovation project moves forward. The Orchestra's endowment draw was down by $1.8 million over the prior year.

Seeking to offset areas of loss through cost efficiencies, the organization reduced total expenses by $376,000-on top of a five percent expense reduction from the prior year-despite salary and benefit increases of 4.1 percent, which were driven mainly by contractual increases.

Building for the Future Campaign update

Fundraising for the Orchestra's comprehensive Building for the Future campaign achieved approximately $93 million towards an expanded goal of $110 million. The campaign encompasses artistic initiatives, endowment support and the renovation of Orchestra Hall. "Our community has contributed very generously to this campaign and specifically to the capital project, differentiating it from our short term issues and supporting our broad vision for the Orchestra's next 30 years," said Mr. Davis. Construction on the Orchestra Hall renovation will begin in June 2012 with the venue scheduled to re-open in the summer of 2013. The Orchestra will perform most of its 2012-13 season at the Auditorium of the Minneapolis Convention Center.

Artistic update

Throughout the meeting, Mr. Davis and Mr. Henson touched on additional artistic highlights of the year, including acclaimed performances of Beethoven and Sibelius at Carnegie Hall, the release of a recording of Beethoven Piano Concertos No. 4 and 5 with Yevgeny Sudbin and the launch of a new recording project encompassing all of the Sibelius symphonies; the continuation of the organization's Music on Demand project that offers fans digital downloads of selected works recorded in live performance; the fifth annual Future Classics concert, an evening devoted entirely to the music of emerging composers, led by Mr. Vänskä; the fourth season of the innovative Inside the Classics series, conducted by Sarah Hicks and hosted by Sam Bergman; Jazz Artistic Director Irvin Mayfield joining vocalist Dee Dee Bridgewater in a memorable jazz holiday program; the creation of a new '80s Rewind pops program, led by Conductor of Pops and Presentations Sarah Hicks; guest artists ranging from pianist Jean-Yves Thibaudet and violinist Viktoria Mullova to conductor Marin Alsop and one-of-a-kind ensemble Pink Martini; 28 Young People's Concerts reaching nearly 55,000 students from across the region; and co-hosting with the SPCO the League of American Orchestras annual conference, which brought 900 industry professionals to the Twin Cities.

In addition to live concerts, the Orchestra was heard by music lovers nationwide through American Public Media's Performance Today® and SymphonyCast programs. The Orchestra's Friday evening subscription concerts continued to be broadcast live weekly to listeners throughout the region by Minnesota Public Radio.

MINNESOTA ORCHESTRAL ASSOCIATION ELECTION RESULTS-accurate as of December 5, 2011

Directors elected to a first term: Emily Backstrom, Karen Himle, Michael Klingensmith, Sally J. Smith, John Whaley

Re-elected Directors (second term): Karen Baker, David Boehnen, Ben Fowke, Nancy Lindahl, Warren Mack, Gregory Pulles, Georgia Thompson, Maxine Wallin

Re-elected Directors (third term): Ken Cutler, Jack Eugster, James Melville, Teri Popp, Jon Salveson

Retiring Directors: John F. Farrell, Jr., Jeffrey P. Greiner, Renee LeJeune Hallberg, Janis Heaney, Nancy E. Jones, Douglas A. Kelley, Judy R. Mahoney, Michael M. Roos, Douglas A. Scovanner, Wendy Wenger Dankey

Executive Committee: Karen Baker, Patrick Bowe, Jon Campbell, Nicky Carpenter, Laura Chin, Kathy Cunningham, Richard Davis, Jonathan Eisele, Jack Eugster, Ben Fowke, Luella Goldberg, Jane Gregerson, Michael Henson, Jayne Hilde, Steven Kennedy, Douglas Leatherdale, Nancy Lindahl, Ronald Lund, James Melville, Chris Policinski, Teri Popp, Gregory Pulles, Jon Salveson, Jo Ellen Saylor, Gordon Sprenger, David Wichmann

Honorary Directors
The Honorable Chris Coleman, Mayor of the City of St. Paul; The Honorable Barbara A. Johnson, President of the Minneapolis City Council; The Honorable Eric W. Kaler, President of the University of Minnesota; The Honorable R. T. Rybak, Mayor of the City of Minneapolis

Chair Jon Campbell Emeritus Directors
Immediate Past Chair Richard Davis Andrew Czajkowski
President and CEO Michael Henson Dolly J. Fiterman
Secretary Nancy Lindahl Beverly Grossman
Treasurer Steven Kennedy

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