Philadelphia, PA (Top40 Charts/ Philadelphia Orchestra Association) The Philadelphia Orchestra, one of the leading orchestras in the world and renowned for its acclaimed performances, historic international tours, and best-selling recordings, today announced the decision of its Board of Directors to file for Chapter 11 bankruptcy protection in the United States Bankruptcy Court. This decision was based upon several critical financial challenges currently facing the organization, specifically its rapidly dwindling operating funds and a structural deficit of $14.5 million. Although The Philadelphia Orchestra has no long-term debt, it is operating at a significant loss based upon declining ticket revenues, decreased donations, eroding endowment income, pension obligations, contractual agreements, and increased operational costs. The decision to file will allow The Philadelphia Orchestra to continue to make incredible music while the organization and its finances are restructured. All remaining concerts for the 2010-11 season, including this evening's performance of Mahler's Symphony No. 4, will go on as scheduled.
"We have made the difficult, but necessary, decision to enter into a reorganization process," said Richard B. Worley, chairman of The Philadelphia Orchestra Association's (POA) Board of Directors. "Faced with such substantial financial challenges beyond the growing structural deficit and a lack of additional operational funds available to The Philadelphia Orchestra, the Board of Directors has chosen this path as the best means to help reset our financial obligations. This is a first step forward toward financial health and stability for this great Orchestra."
In addition to the POA Board of Directors voting to restructure, the Boards of Directors for the Academy of Music (AOM), a subsidiary of the POA, and Encore Series Incorporated (ESI), the non-profit agency under the POA that presents the Peter Nero and the Philly Pops concert series, have also voted today to enter into reorganization. All three entities filed jointly in United States Bankruptcy Court.
"This Orchestra is an icon of Philadelphia and an international treasure," said Allison Vulgamore, president and chief executive officer of The Philadelphia Orchestra Association. "Its presence is vital to the city's reputation and more, it is a keystone of the Center City district, with its many businesses and cultural institutions. We are committed to sustaining this world-class jewel and we have a strategic plan that will move the Orchestra forward with vision and purpose. This plan will grow audiences by enhancing the concert experience and connecting patrons with the music in fresh, innovative ways. It will also encourage mutually beneficial patron relationships and reposition the Orchestra on sound financial footing. While there is much work to be done, we are well-prepared to execute this plan and we are confident that it will allow us to successfully emerge from this process."
The Orchestra also announced today that it will launch "Listen with Your Heart," a public fundraising campaign. "Acclaimed artists and conductors define The Philadelphia Orchestra," said Vulgamore. "It is their world-class talent-and our desire to more intimately share that talent with our patrons-that will drive this fundraising campaign and our strategic plan. This Orchestra has had extraordinary yesterdays of which we are immensely proud. We need the City of Philadelphia to recognize that the Orchestra has an extraordinary today under the current leadership of Charles Dutoit and a remarkable tomorrow with the arrival of Yannick Nezet-Seguin in 2012. We need your support to ensure that this City, our musicians, and this organization retain their world stature."
The decision to restructure the Orchestra now ensures that there is sufficient funding to successfully complete the 2010-11 concert season in June. Again, no concerts have been postponed and/or cancelled due to this decision and The Philadelphia Orchestra Association does not anticipate having to take any such action for the remaining performances of The Philadelphia Orchestra or Peter Nero and the Philly Pops. Further, the POA intends to place all revenues for the upcoming 2011-12 concert season in escrow until these performances take place. This decision serves to provide additional comfort to patrons that the POA intends to stage a 2011-12 season.
"Although at a crossroads, we believe that this decision allows us to begin a new chapter for the Orchestra," said Worley. "This new chapter will be defined by its financial health as well as an even greater investment in the art and a re-commitment to the innovation for which The Philadelphia Orchestra has always been known. We ask the citizens of Philadelphia to join with us as we fight for this cultural institution-an institution that has helped define this city's greatness."
The Philadelphia Orchestra Association is being advised by Dilworth Paxson LLP, its legal counsel, and Alvarez & Marsal, its financial advisor.
To learn more about the organizational decision to restructure and how to support The Philadelphia Orchestra through tickets sales, subscriptions, or a donation, please visit www.philorchtoday.org. For more information regarding The Philadelphia Orchestra, its current concert season, and its history, please visit www.philorch.org.
About The Philadelphia Orchestra
The Philadelphia Orchestra is among the world's leading orchestras. Renowned for its artistic excellence since its founding in 1900, the Orchestra has excited audiences with thousands of concerts in Philadelphia and around the world. With only seven music directors throughout more than a century of unswerving orchestral distinction, the artistic heritage of The Philadelphia Orchestra is attributed to extraordinary musicianship under the leadership and innovation of Fritz Scheel (1900-07), Carl Pohlig (1907-12), Leopold Stokowski (1912-41), Eugene Ormandy (1936-80), Riccardo Muti (1980-92), Wolfgang Sawallisch (1993-2003), and Christoph Eschenbach (2003-08).
After 30 years of a celebrated association with The Philadelphia Orchestra, Charles Dutoit currently continues the tradition as chief conductor and Yannick Nezet-Seguin has assumed the title of music director designate until he takes up the baton as The Philadelphia Orchestra's next music director in 2012.
The Philadelphia Orchestra annually touches the lives of countless music lovers worldwide, through concerts, presentations, and recordings. Each year the Orchestra presents a subscription season at the Kimmel Center for the Performing Arts, education and community partnership programs, and annual appearances at Carnegie Hall and the Kennedy Center; it also regularly tours throughout the world. Its summer schedule includes performances at the Mann Center for the Performing Arts, free Neighborhood Concerts throughout Greater Philadelphia, and residencies at the Bravo! Vail Valley Music Festival and the Saratoga Performing Arts Center. For more information on The Philadelphia Orchestra, please visit www.philorch.org.
