Philadelphia Orchestra Association announces balanced budget at Annual Meeting

(Philadelphia, October 11, 2005)

At its Annual Meeting on September 27, 2005, The Philadelphia Orchestra Association highlighted the artistic and financial successes of the Orchestra’s 2004-05 season, including a projected balanced budget for the fiscal year 2004-05.

“Last season we maintained our focus on being a world class performing arts institution while continuing our progress towards financial responsibility and a balanced budget,” said Association Chairman Richard L. Smoot. “The Association’s financial administration is better than at anytime in its recent past, and this is a major accomplishment. I would like to extend my heartfelt thanks to the Orchestra’s Board, staff, musicians, and volunteers for their hard work in making this a successful year.”

“This has been a remarkable year of remarkable accomplishments,” said Interim Executive Director Elizabeth Warshawer. “Our success would not have been possible without all constituent groups working together. Our staff will continue to work collaboratively with our musicians and Board members to sustain the positive momentum we have achieved this past year.”

Key Artistic Highlights of the 2004-05 Season

• Opening night concert for the Carnegie Hall season with cellist Yo-Yo Ma and soprano Renée Fleming. The concert was the first of the Orchestra’s five-concert series at Carnegie Hall and was later televised on PBS.
• Continuation of Mahler cycle in November, with Christoph Eschenbach conducting Symphony Nos. 5 and 9.
• Four-week Late Great Works festival – featuring late works by Mozart, Strauss, Mahler, Tchaikovsky, Wagner, and Berio – led by Christoph Eschenbach.
• Return of former music director Riccardo Muti, for the first time since 1998, at the request of the Orchestra musicians. Mr. Muti conducted a sold out benefit concert to the delight of both audiences and critics.
• Signing of groundbreaking recording partnership – the Orchestra’s first recording contract in 10 years – with Ondine Records, an independent recording company located in Finland. The agreement was made possible by an innovative arrangement allowing the musicians to participate in revenue-sharing as well as joint ownership of the Orchestra’s artistic product.
• Critically acclaimed three-week tour of Asia in May and June to Japan, Singapore, Kuala Lumpur, Hong Kong, Taipei, and Seoul.
• Fortieth anniversary season at the Saratoga Performing Arts Center featuring star soloists – including Martha Argerich, Itzhak Perlman, Van Cliburn, Gil Shaham, and Yo-Yo Ma – under the direction of Charles Dutoit.

Major Financial Accomplishments in FY 2004-05 (unaudited projections)

• Projected balanced budget for fiscal year 2004-05.
• Endowment campaign topped $100 million in pledges as of August 31, 2005. The 2005 year end total endowment totaled $132 million as compared with $100 million for fiscal year 2004.
• Ticket revenue and fees from other appearances were $17.7 million (compared to $17.1 million in the previous year) with subscription concerts sold to 89.2% capacity.
• Fundraising revenues increased 22% over fiscal year 2004 with over 3,000 new donors contributing through a challenge grant from the William Penn Foundation which matched new or increased gifts. Increases were also realized in the areas of foundation giving (53%) and corporate sponsorship (25%). The Orchestra received over $1 million in sponsorship of its tour of Asia as compared with $145,000, which it received towards tour sponsorship in the previous year.

An additional key success of the 2004-05 season was the negotiation of a three-year labor agreement with the musicians of the Orchestra. The agreement, reached in November 2004, has provided the musicians and the organization with opportunities to earn additional revenue, raise endowment funds, control spending, and work together toward artistic and financial goals.

Founded in 1900, The Philadelphia Orchestra has distinguished itself as one of the leading orch­estras in the world through a century of acclaimed performances, historic international tours, best-selling recordings, and its unprecedented record of innovation in recording technologies and outreach. With only six music directors piloting The Philadelphia Orch­estra through its first century, the ensemble has maintained an unparalleled cohesiveness and unity in artistic leadership.

This rich tradition is carried on by Christoph Eschenbach, who became the Orchestra’s seventh music director in September 2003. His acclaimed first season in Philadelphia saw the launch of the Orchestra’s first-ever multi-year cycle of Mahler’s complete symphonies and ended with a tour of the music capitals of Europe. The 2004-05 season celebrated the works of the great masters, and included a four-week festival entitled Late Great Works featuring late works by Mozart, Strauss, Mahler, Tchaikovsky, Wagner, and Berio. In October 2004, Mr. Eschenbach and the Orchestra opened Carnegie Hall’s season with an all-Strauss program, featuring Renée Fleming and Yo-Yo Ma and broadcast on PBS’ Great Performances. The season closed with a three-week tour of Asia.

In May 2005, Mr. Eschenbach and the Orchestra announced a three-year recording partnership with Ondine Records, the Orchestra’s first recording contract in 10 years. Taken from live concerts, the first recording under the agreement is scheduled to be released in fall 2005. Other recent highlights include the launch of the public phase of a five-year, $125 million endowment campaign, entitled A Sound, A City, A Civilization, in 2003. The Orchestra’s 2002-03 season celebrated Wolfgang Sawallisch’s 10 highly acclaimed years at the Orchestra’s helm and paid tribute to his artistic achievements with the release of a Grammy-nominated three-disc set of Schumann recordings, the first recordings made in Verizon Hall at The Kimmel Center for the Performing Arts. In 2000, the Orchestra celebrated its 100th Anniversary, and in the following year, moved to its new home in the Kimmel Center.

The Philadelphia Orchestra annually touches the lives of more than one million music lovers worldwide through its performances (more than 300 concerts and other pre­sentations each year), publications, recordings, and broadcasts. A major winter subscription season is presented in Phila­delphia each year from September to May, in addition to education and community part­ner­ship programs. The Orchestra presents a series of concerts each year at New York’s Carnegie Hall, performing encores of some of its acclaimed concerts from Philadelphia. Its summer schedule includes a month-long outdoor season in Phila­del­phia at The Mann Center for the Performing Arts, free concerts in local neighborhoods, and a three-week residency each August at the Saratoga Performing Arts Center in upstate New York.

The Kimmel Center for the Performing Arts hosts the Orchestra’s home subscription concerts.
The Center includes two performance spaces, the 2500-seat Verizon Hall, designed and built especially for the Orchestra, and the 650-seat Perelman Theater for chamber music concerts. Designed by architect Rafael Viñoly along with acoustician Russell Johnson of Artec Consultants Inc., the Kimmel Center provides the Orchestra with a state-of-the-art facility for concerts, recordings, and education activities. The landmark building is named in honor of Philadelphia businessman and philanthropist Sidney Kimmel, who gave the largest individual gift toward its construction. Kimmel has served on the Board of Directors of The Philadelphia Orchestra since 1995.

The Kimmel Center for the Performing Arts (KCPA) and the historic Academy of Music (where the Orchestra performed for 101 seasons) are operated to­gether as a single cultural facility by Kimmel Center, Inc. (KCI). A variety of Philadelphia’s other performing arts groups serve as resident companies for the two buildings. KCI owns, manages, supports, and maintains the KCPA. Kimmel Center, Inc., also manages the Academy of Music, owned by The Philadelphia Orchestra Association since 1957, and where the Orchestra continues to present the highly anticipated annual Academy Anniversary Concert and Ball.