The changed circumstances put huge pressure on boards and management as they tried to juggle challenged finances while keeping stakeholders, such as workers, engaged.
The MSO, like its orchestral counterparts, has done a lot of juggling. At issue is how the MSO pulled it off.
Things turned sour when the board opted to temporarily stand down its musicians and put them on the federal government’s JobKeeper program in response to the financial impact of COVID-19.
Until then, the musicians had been negotiating to take a 50 per cent pay cut for 12 months. The board’s rejection of the proposal and announcement of a stand-down, along with the decision to retain two-thirds of the administrative staff – who took a 20 per cent pay cut – heightened tensions and destroyed trust.
In contrast, the Sydney Symphony Orchestra came to an agreement with its musicians and administrative staff agreeing to pay cuts of up to 30 per cent, as chief executive Emma Dunch took a 40 per cent pay cut in what the chairman described as an “unprecedented” slump in revenue.
According to Ullmer, the SSO faced different circumstances and the proposal put forward by the MSO musicians would have cost $2 million more than a temporary stand-down, which would have resulted in a “very significant loss” and left its reserves severely depleted going into a tough 2021.
‘How do you have an orchestra without musicians?’
But, at the end of the day, choices were made about the treatment of musicians and administrative staff. It has created tension between management and the musicians.
It raised questions about the board, leadership and corporate governance and set in motion a chain of events, including the launch of a petition that called on the government to stand down the board and managing director over its handling of the matter.
The petition was started by the highly regarded Phillip Antippa, a cardiothoracic surgeon, violinist, director and founder of medical orchestra Corpus Medicorum, who has strong links to the MSO.
It attracted thousands of signatures globally. “No other symphony orchestra in Australia has done this,” one supporter wrote. Another said “shame on you MSO management and board”. Yet another said: “How do you have an orchestra without musicians?”
Ullmer said the managing director has his full support. “Her motivation has always been to act in the best long-term interest of the MSO,” he said, adding that some stakeholders have sent letters of support for keeping the MSO going in troubled times.
Interestingly, since the stand-down, the board has gone back and authorised a further $1 million of support for the musicians for this year. “We felt this struck the right balance between the short-term need for compassionate measures and the long-term imperative to protect the future viability of the MSO,” he said.
Ullmer has been trying to put out fires with stakeholders, writing a letter in response to the many complaints that have been sent or posted online.
In his letter, he said if no action had been taken the solvency of the MSO would have been threatened by the end of the year.
“The board has worked hard to find an acceptable compromise with the musicians, but in the end the board had to take action to ensure the orchestra was viable when the COVID-19 crisis and ensuing recession are over,” he said.
But it has created a lot of bad blood. Some stakeholders are looking at ways to improve the corporate governance of the orchestra, which is ultimately owned by MSO Holdings.
For instance, the constitution allows for an unlimited number of members to be admitted as members of MSO Holdings, yet it currently only has four – four directors of MSO Pty Ltd, including Ullmer and three others.
It means those four directors can approve changes to the constitution and the board’s composition without external member approval. In contrast, the Tasmanian Symphony Orchestra’s holding company has over 300 members.
Ullmer says it is something the board will discuss but says he doesn’t see the benefit of bringing another layer of management to the MSO. But if enough stakeholders revolt Ullmer may not have much choice.
He has been on the board for 14 years and says he is passionate about the MSO and has no plans to quit. He says his role there has been likened to Hotel California.
Ullmer is also hopeful that relations with musicians can be repaired. The first olive branch was extended when musicians were given the news they could start coming back to work from Friday, May 22.
Ullmer also wants the government to step up and give the arts sector some certainty by agreeing to extend JobKeeper beyond September 28.
He cited experts, such as Deloitte Access Economics, which predict it could take at least five years before the arts returns to the same level of activity as before the pandemic.
“This is why the sector is crying out for support. That is also why artists and arts lovers are so worried about the future, and why we must protect the long term viability of Australia’s world class artistic institutions like the MSO.”
Adele Ferguson is a Gold Walkley Award winning investigative journalist. She reports and comments on companies, markets and the economy.