Philharmonic orchestrating financial comeback

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Colorado Springs Philharmonic Executive Director Nathan Newbrough has more than doubled subscribers since 2008.

Colorado Springs Philharmonic Executive Director Nathan Newbrough has more than doubled subscribers since 2008.

Professional symphony orchestras across the country were hit hard by the recession, suffering steep declines in ticket sales and contributions. Many have trimmed programs, cut staff and musician pay.

The Colorado Springs Philharmonic, however, seems to be bucking national trends.

Since Executive Director Nathan Newbrough took the reins two years ago, the Philharmonic has more than doubled its subscriber base, expanded its programs, negotiated a multi-year contract with orchestra members and begun to reduce its structural deficit.

“We thought that our first task was to increase our subscriber base,” Newbrough said, “so last year we discounted season tickets by 50 percent and marketed them very aggressively.”

Boosting the subscriber base is particularly significant, Newbrough said, because “season ticket holders have a far greater lifetime impact on the organization than occasional attendees.

Such subscribers, he said, are more likely than occasional ticket buyers to donate, to recommend the organization to friends, and to introduce their children to live classical music. They also provide predictable revenue streams, easing budgeting and programming.

Discounting is not without risk, but it worked for the Philharmonic.

The subscriber base increased from 800 in 2008-2009 to 1,830 the following year. For the new season, which begins Sept. 25, the base has increased yet again.

“We’re already at 1,862, and even more significantly, 60 percent of our first-time buyers have renewed,” Newbrough said.

One of those to renew was Mary Ellen McNally, who had served as board president of the Colorado Springs Symphony prior to that organization’s collapse in 2003. Rifts between the symphony’s management, the board and the players were deep and lasting, with allegations of incompetence, intransigence and bad faith.

After the symphony’s demise, orchestra members partnered with community leaders to create the Philharmonic.

“I stayed away for five years,” said McNally. “I came back last year because of Nathan’s vision for the Philharmonic. I really think that he’s one of our superstars.”

The Philharmonic’s annual operating budget of $2.4 million is comparatively modest, but still presents substantial challenges. About $1.3 million comes from ticket sales, leaving a balance of $1.1 million that must be raised from contributors every year.

In past years, the Philharmonic relied upon operating support from local foundations and a few “angels,” major donors who would make emergency contributions. It was a necessary strategy, but not a sustainable one.

“You can’t depend on angels forever,” Newbrough said. “That’s one of the reasons we have an accumulated structural deficit of $380,000 — about 15 percent of the budget.”

Whittling down the deficit and reducing the organization’s reliance on major donors to fill budgetary gaps is partially a function of subscriber numbers.

“When we doubled the subscriber base, we increased the number of donor households by 50 percent,” Newbrough said. “So even though the average contribution fell by 30 percent, we held our own.”

In 2008-2009, 673 donors contributed a total of $840,000, while the following year 1,017 donors gave $994,000.

This year’s numbers are promising, too.

“This will be the first year that the budget doesn’t include a dime of angel funding,” Newbrough said.

Increased demand has forced the Philharmonic to take a step that other orchestras might envy — adding Sunday matinees to the formerly Saturday-only Philharmonic Pops series.

Diane Merrill, a former member of the symphony orchestra, who now heads the local chapter of the American Federation of Musicians, is pleased by the Philharmonic’s progress.

“There have been a lot of bumps in the road,” she said, “and we’re still not where we were (in compensation before the symphony’s demise). But I think we’re poised now to have a good period of growth. There are a lot of positives.”

Susan Edmondson, executive director of the Bee Vradenburg Foundation, a major donor to the arts in Colorado Springs, also is upbeat.

“Nathan has done a fantastic job,” she said. “He’s especially skilled in audience development. That’s not just marketing — that’s the entire relationship you build when they buy the ticket, the experience in the lobby and after the performance. But it starts with a brilliant product, and we have a great orchestra.”

Yet despite the organization’s apparent turnaround, obstacles remain — some generic, and some unique to Colorado Springs.

For starters, aging audiences are frequently cited as a reason for the decline of symphonies. Newbrough isn’t overly concerned about this trend.

“People were worrying about aging audiences in the 1930s,” he said. “Our average audience age has been pretty consistent for decades.”

High fixed expenses, such as the cost of renting the Pikes Peak Center for Performing Arts, are also a potential problem.

Newbrough wouldn’t say how much the Philharmonic pays to rent the hall, which was built to house the symphony in 1982. He did acknowledge, however, that “it’s our largest expense item.”

The center also levies a $2 per ticket fee on ticket sales.

Money will likely never disappear as an issue for the Philharmonic.

In part, that’s because in Colorado Springs, the Fine Arts Center, the Cheyenne Mountain Zoo and the Philharmonic are all privately funded. Cities such as Albuquerque, Boulder, and Denver support their major arts and cultural nonprofits with substantial public funding.

With so many worthy institutions to fund here, the question is whether rising demand will tap out the resources of the private sector.

It’s a problem for every institution, Edmondson acknowledged. But Colorado Springs has some unique characteristics.

“We have very smart artistic leadership,” she said. “They’re used to making do with less, to operating with lean staffs and controlling expenses.”

Yet the recent history of Colorado Springs is replete with examples of arts-related nonprofits which have soared, then stagnated.

In the 1950s the Civic Players and the Fine Arts Center attracted national attention. The Pioneers Museum and the Colorado Springs Symphony enjoyed many years of growth as both moved into new quarters. At its zenith in the mid-1980s, the symphony regularly sold out performances of every concert during its season.

But audiences declined, budgets suffered and the symphony dissolved in 2003. The Pioneers today is straining to find new revenue streams.

In short, the Philharmonic’s road to sustainability won’t be easy.

“I don’t anyone to think that this is a slam dunk,” Newbrough said. “The turnaround will be slow.”