The Perilous Life of Symphony Orchestras: Artistic Triumphs and Economic Challenges by Robert J. Flanagan (review)

During the recent global financial crisis, businesses once accustomed to hefty profits were suddenly reporting unprecedented losses. Not surprisingly, nonprofit performing arts organizations faced an even grimmer reality, facing untenable funding cuts that threatened to deplete an already fragile resource base. The challenges facing symphony orchestras are particularly acute. In the last decade nearly a dozen orchestras have filed for bankruptcy, while countless more have grappled with the day-to-day realities associated with producing and presenting symphonic concerts. Nevertheless, many of these organizations continue to exceed artistic expectations, overcoming financial constraints to create art of remarkable breadth and quality. Robert Flanagan’s new book explores the paradox between these artistic triumphs and economic shortfalls, shining an analytical light on the challenges facing orchestras in the twenty-first century. His argument—that this is not a new phenomenon caused by a sputtering economy, but instead the result of an outdated organizational structure—challenges musicians, administrators, policy makers, and audiences to rethink the role orchestras play in contemporary society.

Flanagan’s background as an avowed amateur musician and award-winning economist orients this study, which nests a series of statistical analyses within a broader historical narrative that traces the causes and consequences of the orchestra’s current structure. Although he devotes some attention to how orchestras operate in Europe, he primarily examines orchestras in their American context, drawing on data from the League of American Orchestras and other industry sources to identify and analyze trends from the fifty largest U.S. ensembles (by budget size) between 1987 and 2005. The analysis is presented in a way that is easy to understand, limiting financial jargon to a minimum and placing more in-depth explanations of statistical procedures in the book’s appendices. A study that could have easily become a dry research report reads more often as a compelling story with significant practical implications. Important points are reinforced with pie charts and other graphics, and results are supplemented with a rich and relatively balanced collection of quotes drawn from industry experts. As a whole, the book provides an easily digestible narrative that should be of interest to orchestra scholars, administrators, and audiences.

Before reviewing the content of Flanagan’s findings in more detail, it is worth asking what’s new here. The economic challenges confronting orchestras today have been the subject of considerable attention and research for some time, due in part to the complex amalgam of individual philanthropy, foundation grants, government support, and ticket sales that support orchestras’ operations. The present study is rooted conceptually in research undertaken by two Princeton economists, who in 1966 identified and investigated the “cost disease” associated with the live performing arts (William Baumol and William Bowen, Performing Arts—The Economic Dilemma [Cambridge, MA: MIT Press, 1966]). Flanagan’s analysis does little to build on these findings, although his focus on the orchestra and use of updated data yield several new insights. Moreover, much of the material presented in Flanagan’s book comes directly from a report prepared for the Andrew W. Mellon Foundation (Robert J. Flanagan, Report to Andrew W. Mellon Foundation: The Economic Environment of American Symphony Orchestras [New York: Andrew W. Mellon Foundation, March 2008]; see http://www.gsb.stanford.edu/news/packages/pdf/Flanagan.pdf, accessed 15 September 2012). The Mellon Foundation, along with a group of industry stakeholders coined the “Elephant Task Force,” hired Flanagan in 2008 to assess the financial challenges facing contemporary orchestras. His assessment posits that the cost and revenue structures of orchestras, and the disproportionate growth of musician salaries in particular, are unsustainable and incongruent with the current funding environment—a finding that serves as an obvious foundation for this book. Curiously, the role of the report as a first draft of sorts is never explicitly discussed or referenced in the book itself.

The bulk of Flanagan’s analysis can be broken into a...