Harmony & Discord

The Cleveland Orchestra is in a financial crisis, and the plan to fix it isn't going as well as anticipated. Can one of Cleveland's most beloved institutions (even by those who've never seen the inside of Severance Hall) recover?
The Cleveland Orchestra has some problems.

You won't hear them if you go to Severance Hall. The world's best classical musicians still perform with precision and intrigue and flair. You won't hear about them from visiting conductors. They still rank this group among the best in the world, and list on their résumés that they once had this orchestra under the control of their baton. You won't see them by looking at the schedule. The orchestra still regularly tours to the most challenging and prestigious venues around the globe, places where most orchestras would dream of an invitation, let alone a chance to return year after year.

The Cleveland Orchestra is top-tier and world class. No doubt. But the Cleveland Orchestra also has some problems.

The orchestra has lost money every year since 2001. It has had to dip into its endowment to pay the bills. Fewer people are donating each year and attendance continues to drop.
Three years ago, the orchestra, mulling its financial future, considered scaling back to a regional orchestra, forfeiting its among-the-best-in-the-world status. Instead, it convinced a dozen donors to commit to one-time gifts that would sustain the orchestra's mounting deficits for five years while it implemented a plan to make this shrinking, poorest big city in the country support an orchestra of this caliber.

What's at stake here is holding onto one of the few — one or two or three — institutions in Cleveland that can truly be listed among the best in the world. This group is the reason people in Austria and Germany and Great Britain know of Cleveland, Ohio. Classical music students list Cleveland Orchestra musicians as "heroes" in their MySpace pages.

This goes beyond the minority who prefer Classical music to Classic Rock. This is a piece of Cleveland. It's a reason to be proud of our city.
Around the country, several orchestras in gritty, blue-collar towns whose main industry had left have also seen their orchestras scale back. The Cleveland Orchestra was at that brink three years ago, facing the same decisions as St. Louis and Pittsburgh, but with the added twist of being one of the best in the world.

In October 2004, Cleveland Orchestra executive director Gary Hanson, a thin, professorial type, stood before some of the city's wealthiest and most powerful people to explain that declining Cleveland could no longer support a world-class orchestra solely on its own.

No one in the room thought scaling back was a good idea. If they had, they probably wouldn't have been invited. This group — dubbed the Select Committee on the Future of The Cleveland Orchestra — was comprised of board members, big financial supporters and community leaders. They were being asked for support in the face of crisis.
Hanson asked each member individually if he or she was committed to helping. Yes, said Peter B. Lewis, billionaire former CEO of Progressive Insurance. Yes, said Norma Lerner, wife of the late Al Lerner, founder of MBNA Corp. (She finished alongside Lewis on Forbes magazine's 2004 list of the richest people in the world.) Yeses from everyone, 17 in all, a Who's Who list of influential Clevelanders, from David A. Daberko, National City Bank CEO, to Daniel Lewis, a philanthropist and Peter Lewis' little brother.

"We were concerned," says Jeanette Grasselli Brown, a member of this special committee who attended every meeting, and who also sits on the orchestra's board of trustees. "The orchestra's position was perilous."

After two more meetings, the committee unanimously signed off on the administration's plan and directed Hanson to present it to the board of trustees. "There was a realistic option in front of us. We didn't have much time, and we were told things were only going to get worse," Brown says, giving some of the first public insights into the private meeting.

Basically, the idea was to earn more money in Cleveland, bulk up the $123 million endowment and break even instead of lose money when playing out of town. To accomplish that last goal, the orchestra restructured how it tours. Instead of one-night stands and brief visits in communities, the orchestra would cultivate relationships by spending a few weeks in a city each year. Then donations could be solicited and the orchestra could apply for grants in addition to collecting ticket sales, allowing the orchestra to continue to perform at elite concert halls, but also not lose money while doing so.

The first big money-earning residency is in Miami, and the orchestra performed there in January and March.

"Miami hasn't been an easy path. The complexity of undertaking this initiative is substantial," says Hanson. "The reason we're being successful is that we have to be. The people who are working on this initiative are so passionate about the excellence of the orchestra, nobody ever pauses and says, •What if it doesn't work?' Force of will can create outcomes that wouldn't be there if you didn't have to succeed."

Cleveland is a world different from Miami.

In Miami, the skyline is translucent. Things are growing fast. More than a dozen cranes tower above the skyscrapers downtown. Most of the new buildings are condominiums, and many of them are near the Carnival Center for the Performing Arts, a new $472 million facility that houses operas, ballets, theater performances and other orchestra shows.

Cleveland is established. The biggest growth downtown, the Euclid Avenue Transportation Project, is spurred by grants from the state and federal governments. People are fleeing the center city. Discussions by city planners don't revolve around managing growth but preventing more people from heading to the suburbs or out of Ohio altogether.

Those who took in a performance at the Carnival Center in March were young, with gelled hair and dresses that would make more than a few of the typical Severance Hall audience members blush. In a March performance, after the Romeo and Juliet Overture, the aisles filled with all those who weren't in their seats by the time the concert began. Sorry, Miamians, fashionably late doesn't cut it in our orchestra world. They make you wait outside.

Severance Hall has a few young folks who got in through the Campus Club with discounted tickets, but mostly it's filled with an older crowd dressed in their pearls and favorite neckties. At a February performance, a number of people could be seen adjusting the volume of their hearing aids as the musicians began playing.

The performance halls themselves say a lot about the cities.

The Carnival Center is comprised of two big buildings, a theater and a music hall. They're connected by an open-air bridge that overlooks a plaza that extends over a major road. It's in a sketchy neighborhood peppered with new construction. The music hall's simple, straight lines along the walls and seats contrast with a swirling wood-lighting and speaker assembly.

It's so Miami. Each level includes several places where concertgoers can mill around with the purpose of being seen from the entranceway. The staircases are designed to showcase people as they stroll down, says architect Roberto Espejo, a senior associate with the architecture firm Pelli Clarke Pelli. That firm also designed the Society Center (now the Key Tower), Cleveland's largest skyscraper.

The acoustics are wired. With the push of a few buttons, the concert hall's walls morph to bounce the sound better for different types of performances.

Cleveland's Severance Hall is old but classy. It opened in 1931. There's not really any place to be seen. Actually, from the outside, it can be a little hard for a first-timer to figure out how to even get inside. The lower lobby used to be where the rich Clevelanders could enter with their cars — people with old money. People who now have streets named after them.

The walls and ceiling are ornate, and they have a good story behind them. Like most good stories, no one is sure if it's actually true: The design is based off the wedding dress of Elisabeth Severance. The Severances initially donated $1 million to build the hall, but Elisabeth died and her husband, John, gave three times as much so that the hall could be completed and named in her honor. The ceiling and walls, featuring lotus blossoms, are pretty, but changing the acoustics is not as easy as pressing a button. The orchestra has altered the acoustics twice in Severance Hall, first in 1958 and then in 2000 as part of a $36 million renovation. 

The March crowd in Miami received the kind of performance Clevelanders already enjoy. It featured pianist Horacio Gutiérrez. He's a big guy who shifts his tuxedo pants around his waist with a forceful purpose before sitting down center stage. Yet still, you can tell he's something special just by the way he looks at the piano.

He is a force — a globally cheered musician. He wallops the keys as he performs Tchaikovsky's Piano Concerto No. 1. It's easily recognizable to the ears, but to anyone who's had a few piano lessons, it's a feat that needs to be seen.
The initial pounding, dominating notes seem created for a bear of a man like Gutiérrez. But as the notes shorten and the piano picks up its pace, you want to wipe the man's reddening brow for him.

He throws himself at the music, mashing the keys as the violins contrast the almost barbaric pounding of chords with a smooth waltz-like sway. During the few pauses he gets, he slashes for the handkerchief to dry off. He looks physically fatigued by the time the third movement comes.
The rest of the orchestra seems to dance with the piano; they pause as his 10 fingers blur into 20, intricately climbing the scale until the orchestra lets out its final breath: a long B-flat from the entire ensemble. Immediately after finishing the piece, he stands to collect his applause.
The crowd erupts. He is called out for several curtain calls at this Friday night show, the second trip the Cleveland Orchestra has taken to Miami during this inaugural year of the residency. As the Carnival Center empties, all anyone can talk about is the piano concerto. The too-cool-for-the-room chic drops for the same lauding that happens in Severance Hall: "Amazing!" "Did you watch his hands?" "This is truly a world-class orchestra!"

In 2001, the Florida Philharmonic Orchestra had some problems.

Its demise means there is no longer a full-time professional orchestra in Miami.

In October 2001, then-executive director of the Cleveland Orchestra Thomas Morris was invited by the Florida Philharmonic Orchestra to Miami to talk about the future of the south Florida group.

The Florida orchestra had struggled financially for years. While the Florida Philharmonic had a great deal of dependable income, a gap had to be filled every year through "extraordinary groveling," says a former senior staff member with the Florida Philharmonic who asked not to be identified.

In that private meeting, Morris shocked board members by suggesting the orchestra was not sustainable and should close, the senior staff member says. The board immediately looked for new solutions and was inspired to work harder to save it, the senior staff member says.
Morris, reached by cell phone, says he remembers the meeting but not what was said.

In January 2002, Daniel Lewis was elected chairman of the Governing Council of the Florida Philharmonic. Lewis made his fortune at Progressive Insurance, with his brother Peter B. Lewis. While he's still a major supporter of the Cleveland Orchestra, he owns a home in Miami, too.

According to a Miami Herald article, Lewis saw himself as the man in charge. The orchestra was without an executive director, and he would be the one to hire a replacement. He would do all the hiring and firing.

Geoff Hale, a disgruntled bassoonist from Miami and former head of Miami's musicians' committee, says he was hopeful at the time but now calls that reaction naive: "I think the only reason he joined our board was to kill the orchestra."

Between 2001 and 2002, Daniel Lewis donated $1.5 million from his pocket to the Florida orchestra.

In March 2002, Daniel Lewis also gave $10 million to the Cleveland Orchestra, the largest single gift in Cleveland Orchestra history.
A year later, the Florida musicians were asked to take a dramatic pay cut — about 18 percent off of base pay, less vacation time, less pension, and a greater burden of health insurance costs. They agreed.

Two weeks later, in April 2003, Daniel Lewis announced that the orchestra was in a desperate situation. "Our backs are up against the wall," Lewis told the Palm Beach Post.

He said the orchestra needed $20 million by the end of the week or it may declare bankruptcy. Since the previous December, Lewis had personally contributed more than $1 million, bringing the total amount he'd given the Florida orchestra to $2.5 million. He pledged an additional $16 million of his own money if local philanthropists would give $48 million.

When the money didn't come by the end of the week, he gave another week, saying instead the orchestra only needed $4 million, but needed it within a week, according to a Palm Beach Post report.

The Florida Philharmonic filed for bankruptcy May 14, 2003, after the board of trustees approved the decision.

Gail Meadows, a Miami Herald columnist, wrote an opinion piece titled "Philharmonic's financing story doesn't sound right." She asked in the column why the desperate need for cash was revealed three weeks before bankruptcy was filed instead of earlier.

Daniel Lewis, who was reached by cell phone by Cleveland Magazine more than a month before this article's deadline, declined to answer any questions. He said he'd be happy to speak, but only once the orchestra's public relations staff instructed him to do so. The public relations staff then received numerous interview requests by Cleveland Magazine. They said only that Lewis would be unavailable for comment. Daniel Lewis was also given another opportunity to comment before this story was printed.

In 2004, Daniel Lewis, as a member of the Select Committee for the Future of the Cleveland Orchestra, presented a plan for Cleveland to grow a donor base in Miami. Later, he made a more detailed pitch to the board of trustees.

The Cleveland Orchestra announced on May 9, 2005, that it had come to an agreement for a 10-year residency in Miami.

Hanson, the executive director of the orchestra, says the demise of the Florida Philharmonic has nothing to do with the Cleveland residency. He says any hint of impropriety is simply rumor and labels any connections between the series of events as "conspiracy theory."

The normally relaxed man leans forward in his chair as he's asked questions about any connection. He's annoyed with the questions, and he says so.

"Dan has been an important contributor and active fundraiser," Hanson says. "Dan had no connection between the demise of the Florida Philharmonic and the presence of the Cleveland Orchestra in Miami."

In January, the orchestra christened the hall with its first performance — a job that members of the Florida Philharmonic at one time thought they'd have.

Jonathan Sherwin, a Cleveland Orchestra bassoonist who heads the musicians' committee, says the musicians talked about the Miami venture once it was unveiled.

He says he didn't know what to think, but instead prefers to focus on being the best musician he can.

"We feel terrible about what happened there," he says. "We're not privy to the specific goings on of what happened behind the scene. I know as a group we feel terrible for what happened down there."

He says he has just had to trust that management wouldn't do anything out-of-line.

The same sentiment is repeated by others. Cellist Brian Thornton takes a breath when asked about it. "There was a lot of talk about that in the orchestra. It's never good to take the place of anyone. At the same time, our orchestra had something slightly different to give than the orchestras that are already down there."

Elaine Rinaldi gushes about the Miami concert at the bottom of the stairwell in the Carnival Center.

She's not standing in one of the enclaves designed for people to see each other being seen. She's dressed well enough to be, though, in a simple black dress that hugs her slim form. Like most others at the performance, her choice of apparel turns heads.

She talks with authority about the performance, noting details only someone with a trained ear could pick up.

Rinaldi has founded a new group, Orchestra Miami, which she hopes will become the new full-time professional orchestra. She acknowledges the Cleveland Orchestra as competition. But she's here tonight to experience a great performance, and she says she got her money's worth.
Everyone does. The buzz is overwhelming. Inside this beautiful performance hall, as you walk on a floor that doubles as public art, knowing you've just seen one of the best orchestras in the world, it's hard to think anything else. The night is just magical. And outside the hall, while it's snowing in Cleveland, it is 74 degrees in Miami. A cool breeze makes a jacket optional, but no one runs for their cars. Many abandon their indoor conversations only to resume them outside as they breathe in the night.

Taking a step back, though, away from the magic, away from the ambiance, the next day's review in the Miami Herald tells a different story about Horacio Gutiérrez's performance: "The Cuban-American pianist possesses a formidable technique, yet at times his speed and unbridled attacks got the best of him with some fitful clinkers and moments of miscoordination with the orchestra," wrote critic Lawrence A. Johnson.
The review makes you reflect: Were there "fitful clinkers?" Did I hear "moments of miscoordination?" It's easy to be swept up.

Miami is unlike anything a major orchestra has done before. While some prominent groups have residencies, few, if any, have gone this far. Cleveland committed to not only six concerts a year, but also education and outreach programs. Community members seem happy that the orchestra is giving back to Miami.

But even with the decreased competition, the plan is not hitting all its targets.

Miami broke even, as projected. The orchestra exceeded goals in ticket sales and profits from concerts in other venues, such as Tampa and Chapel Hill, N.C., where they performed on their way to and from Miami. But the orchestra did not raise as much money through donations — the mainstay for orchestra budgets — and also did not meet sponsorship goals.

The higher-than-anticipated ticket sales may be tough to match next year. Some Miami concertgoers say they came to the performance as much to see the Carnival Center as they did to see the Cleveland Orchestra.

The hall itself is struggling financially. Miami-Dade County officials say attendance has not been high enough during the rest of the year to support the center, and it is one of the reasons the center could be forced to close down for a few weeks this summer.

Leaders of the other, smaller orchestras in Miami aren't surprised Cleveland is having trouble drawing money out of the community. After all, the Florida Philharmonic was in rough shape for much of its 18 years. Previous orchestras in Miami have also failed.

Sofia Ochoa, executive director of the Miami Symphony Orchestra, says her orchestra has thrived because it has relied on slow, steady, smart growth. The professional musicians are not paid benefits, but they are offered regular work in the form of a dozen concerts a year.
"It's difficult to raise funds from the private sector," she says. "When another orchestra comes to raise funds, it makes it more difficult for us — for all the local organizations — to raise money."

In addition to so many people vying for the same money, she says, philanthropy for the arts goes against the culture of many in Miami.
"In Latin America, the state is the one that funds the concerts," says Ochoa, who was born in Cuba. "It is a new concept for most of the Hispanics to give to an orchestra. The idea of the nonprofit is made in the U.S.A. Philanthropy is a concept that in the Hispanic point of view is something for health, to help children, to help cancer. You give to charity, not to culture."

Ochoa says she is trying to see Cleveland's presence as a challenge to get better. After hearing the Cleveland Orchestra, expectations are raised for her own group, she says. That will help them improve.

Even more competition for dollars is coming from the fledgling Orchestra Miami. But Rinaldi says she has a long way to go before being any real type of rival.

"Everybody is competing for the same fundraising dollars," she says. "Many people are pointing fingers at the Cleveland Orchestra for taking money out of the community, because we have people who we know support the arts. That's who we look to to support the arts. The challenge for all arts groups, not just mine, is to find people who support the arts who have not been tapped into yet. That's a huge challenge. Enormous."

She formed the group after the Florida Philharmonic went under. Rinaldi says her group won't be affected immediately by the Cleveland Orchestra because her group is simply not big enough yet. Orchestra Miami's total administrative staff for 2007: Her.

The Cleveland Orchestra may also face some challenges in holding onto the donors it has already accrued. Reina Welch, a Miami resident who began donating to the Cleveland Orchestra once she received a phone call, says she'd rather be making out her checks to a group that has the name "Miami" in it.

"I'm sad we don't have our own orchestra, but I'm grateful to have a fine orchestra that we can come visit," she says. "They're doing educational programs and reaching out to the community. Our money goes back into our community. We'd rather be donating to our own orchestra with our name, but as long as they'll go out into our community, then we'll consider supporting them."

The Cleveland Orchestra will need more than a successful venture in Miami to turn around its organization.

The publicly announced plans will not raise enough money to bring the orchestra back to break-even, Hanson acknowledges. But Hanson says there are other plans that have not yet been implemented that will get the orchestra on track.

For example, the orchestra is working to expand its residency in Vienna, Austria, to become a break-even venture, Hanson says. More residencies are likely.

The orchestra is trying to find ways of increasing money coming in from Cleveland. The orchestra must grow in and out of Cleveland, Hanson insists. Northeast Ohio still has a substantial economy, he says, but it isn't growing like Miami. He's confident Cleveland will prosper eventually. Until then, he says, arts organizations in the city will need to find creative ways to sustainability.

The orchestra will be making more announcements as it adapts to the current economy. Hanson says the orchestra is growing its revenue outside of Cleveland from about $1 million a year to $5 million. But the bigger challenge may be learning how to grow the orchestra's reach in Cleveland.

Since the turnaround plan was adopted, the orchestra continues to post losses. According to the institution's annual reports: In 2005, the orchestra lost $4.4 million over a 12-month span. In 2006, the loss grew to $5.7 million, or about 15 percent of what the orchestra spent. The 2006 deficit, though, was wiped out by gifts from a dozen donors who have pledged to cover the losses of the orchestra from 2006 through at least 2009.

A computer-assisted analysis conducted by Cleveland Magazine shows the fundamental problems are worsening. Though the total amount donated to the orchestra has increased, fewer people in nearly every giving range donate to the orchestra now than did over the past five years. Despite the orchestra's best efforts to grow its donor base, the total number of donors is down 2 percent with a slow decline during those five years. That's significant because it illustrates an ongoing problem.

The total number of donors dropped in seven of 10 giving ranges during this time. Among the biggest drop-offs: About 34 percent fewer people gave in the $50,000 to $100,000 range in 2002 than did so in 2006. Biggest gain: About 22 percent more people donated $300 to $500 in the same time period.

A detailed look at the donors showed that while some maintained donation levels through all five years, and some gave more, many donors also gave less or fluctuated their giving.

Sandi McDonald, marketing director for the institution, says the Cleveland Orchestra is addressing these problems.

The solution is tough to discern because Cleveland's performance in donations and ticket sales is already enviable. The orchestra collects more per person than any comparable orchestra does from its community, and with several big corporate givers leaving town, the donor base is pretty tapped out.

Cleveland sells tickets to 5.8 percent of the community a year, a higher number of people than any other major orchestra. The number of people attending concerts was steady; the number of concerts those people attended was declining, accounting for the fall in ticket sales, McDonald says.

She says the orchestra has replaced an outdated database system and can now better track sales trends. The new system allows the orchestra to send more targeted marketing offers.

The orchestra is also trying to cultivate more interest from adults through an initiative called "Musically Speaking." This series includes pre-concert chats that explain the music.

The orchestra has also provided more concerts that would attract a general audience. For instance, the orchestra performed selections from the score of the film "The Lord of the Rings."

Barrick Stees, a bassoonist with the orchestra for five years, says he doesn't mind setting aside more traditional music occasionally to perform something that will resonate with nontraditional orchestragoers.

"They're just different. I don't know how you compare them," he says. "They all add to the total experience of your performance and your abilities to put out a quality concert every time."

Thornton, the cellist, says don't confuse popular with easy. And if something is fun for the audience, it usually ends up being fun for the musicians, too.

"A lot of people feel like it's pandering, but I think you have to do what you need to do," he says. "The orchestra plays those pieces extremely well. We're not making concessions artistically."

Last summer, the orchestra played at Blossom amphitheater as Merrie Melodies cartoons were projected on the screen.
These kinds of initiatives could whet the palates and may help draw even bigger audiences to Severance Hall.

But it's a balance. Music Director Franz Welser-Möst says a Cleveland audience, especially, understands good music — so much so that it surprises him occasionally. It is necessary to push the audience. They expect it.

In April, he conducted a program that included an incredibly challenging Verdi piece. This isn't a workhorse tune that's immediately recognizable. In fact, Verdi's Four Sacred Pieces are rarely performed. Even classical music critics refer to it as "heady music." After the performance, though, audience members told him how much they appreciated the piece.

"I know of only one other place where you can do a challenging program like that, which speaks for the audience in Cleveland. It is highly, highly sophisticated," he says. "We have to make sure we keep the audience highly sophisticated. I'm a very strong believer that when people get exposed to true, high quality, they'll get it. It's not about playing easy tunes."

The audience got that way through consistently hearing a world-class orchestra.

That status — one of the best orchestras in the world — dates back to the 1950s. Cleveland is in an elite group of orchestras — also including Boston, Chicago, New York and Philadelphia — referred to as the "Top Five."

"The phrase came into being in the 1950s, '60s and '70s because of record contracts," says Henry Fogel, the president and chief executive officer of the American Symphony Orchestra League. "Those five orchestras recorded with major record labels consistently. People not in the home cities heard those orchestras through records or classical music stations. They got the reputation because of that."

Indeed, several of the orchestra's current musicians say they fell in love with Cleveland listening to recordings of performances under famed music director George Szell's guidance. Fogel says Cleveland has maintained its quality through the years.

"I have always believed Cleveland to be one of the greatest orchestras in the world. If you asked 100 musicians to name the five best orchestras in the world, I would bet that Berlin, Cleveland, Chicago and Vienna would be on a very large number of those lists, but so would many other orchestras," Fogel says. "There's an American desire to rank things. You could not make a list of top-tier orchestras and keep Cleveland off of it, but the line between top tier and second tier has become fuzzier and fuzzier."

One of those people who fell in love with the Cleveland Orchestra at an early age is Sherwin.

Most nights, Sherwin is in the center of the stage behind the string players, with his bassoon. The sounds bounce unamplified around Severance Hall and into his ears. Playing in an orchestra is more than playing the proper notes. It's playing with the other orchestra members, guided by the conductor's baton, where adjustments are made and pinpoint precision is still required.

Sherwin has performed with the orchestra for a decade, but his voice still fills with awe when he talks about the group.

"I have one of the best seats in the concert hall every night the orchestra plays," he says. "There's never a day I'm not amazed at the experience."

He's listened to the orchestra for far longer than that. He grew up in Buffalo, N.Y., listening to Cleveland Orchestra records. When he talks about those childhood memories, he says he's listening to "us" play.

Once a member of the orchestra, the history is inherited. Sherwin is part of the orchestra that first performed in 1918, part of the group led by Szell, part of the new generation led by current Music Director Franz Welser-Möst, and part of whatever this orchestra is to become.
As Sherwin sits on that stage, doing his job, playing the bassoon, he's performing for this audience, but he's also performing for all the audiences of the past and those yet to come. He's a guardian of the history, tradition and prestige of the orchestra. His role, he says, is to pl
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