8/7/09 – SOON Open Letter To Board

SOON (Save Our Orchestra Now).

The NHMF is facing a crisis unparalled in its fifty seven year history.
Relations between the management of the Festival and the orchestra players are at an all time low and the musical prospects for future seasons are problematic.  Many long time benefactors and patrons are sufficiently disgruntled that they are choosing to withhold future season ticket purchases and donations.

Plans have been proposed to relocate the Festival from Silver Hall in Plymouth to a new concert hall in Center Harbor that must be designed, funded and built by the opening of the 2011 season. Under the management’s stated plan, the orchestra as we know it, will cease to exist by the 2010 season.  It is the announced intention of David Graham and Henry Fogel, to replace a substantial number of veteran players with student musicians.

Paul Polivnick had been the Music Director of the Festival and the orchestra’s conductor for the past seventeen years.  His contract was to run through the end of the 2009 season;  last winter he was informed that his services would no longer be needed after the first 2009 concert.  The remaining five orchestral concerts are to be led by guest conductors. They are strictly guest conductors. They are not auditioning. The Festival is being diverted in an entirely new musical direction without a Musical Director and without input from the orchestra players.

A concerned group of long time supporters of the Festival, including a number of former Board members, feel strongly enough to have organized into a voice of reason. We call ourselves SOON (Save Our Orchestra Now) because we see the real possibility of a calamitous end to the story as it is presently unfolding. We feel that the present Board has been systematically misled regarding both the desirability and efficacy of the “new vision” for NHMF. We respectfully propose the following list of questions for the Board consider so that they can understand more clearly the perilous path that Graham/Fogel has chosen to follow.

Has the Board carefully studied the financial feasibility of the new hall or have they merely been reassured by David Graham that all will turn out well?  What is the construction budget? What are the important financial milestones (how much money needed by when)? What is the renovation budget for Red Hill Inn (RHI)? Has there been a professional evaluation of the RHI condition? Will the project be fully funded by donations or will long term financing be required?  If the latter, has any bank made a commitment?  How much will it cost to maintain the Hall and RHI annually? What is the size of the endowment that will be necessary to maintain the Hall and RHI? (It should be at least 20 times the annual expenses).  What hard evidence has been given that the fundraising effort for the hall/renovation/endowment  will not interfere with fundraising for the operation of the concert season? Does the budget rely on grants to any extent? If so, who will write the grants?

It has been recognized by Graham/Fogel that there will be a loss of ticket sales and donors in the Plymouth area when the move takes place. The claim is that this loss will be offset by new patrons from the Lakes Region.  What is the quantitative evidence for this claim? Has there ever been a serious survey to establish the magnitude of Plymouth area attrition vs. the potential audience and new donors from the Lakes Region?

The scope of the Concert Hall project has been greatly reduced over the ten year period since its conception. What concert hall facilities are still planned in addition to an auditorium and a stage?  Are there to be teaching/practice rooms for students? Bathrooms? A green room for the orchestra? A smaller recital hall? A backstage area? A place to store instruments (pianos, tympani, harps)? Dressing rooms for conductor and soloists? Is the Concert Hall to serve as the rehearsal hall? To what extent is the building winterized? Will it be heated?  If not, where will musical instruments be stored?  Why haven’t the orchestra players or Paul Polivnick been asked for their input over the years?

What is the long term plan for housing the orchestra and students?  Why hasn’t this been discussed with the orchestra players?  What is the budget and timetable?  (The Concert Hall project has been in the works for over 10 years. Housing should be a well developed issue by now.)

If students are to be part of the orchestra, where will they come from?  Who will screen, evaluate and select? Who will decide which orchestra members will be retained? How?

It has been stated repeatedly by Graham/Fogel that audience attrition is the major factor driving the proposed changes.  What is the hard evidence for this statement? (Every 2009 Thursday performance has been at or near sellout levels.) What marketing efforts have been made over the past five years to enhance ticket sales? (There is one billboard outside of Silver Hall that sometimes announces “Festival Concert”.  Where are the banners on the lamp posts, the posters in store windows, the radio interviews with players and soloists, the appearance in Boston and NY newspapers of press releases which describe the Festival?)  Why do so many long term visitors to the area profess surprise when they hear we have a Festival Orchestra?
What evidence is there (aside from the assurance of Graham/Fogel) that replacing a proven orchestra with an orchestra consisting of a small core of veteran players mixed with students, will attract a music loving audience in greater numbers than heretofore?

The claim has been made that by deleting the chorus concert, the Festival has saved $100,000.  What is the quantitative evidence for this claim? This should be easy to confirm or refute by a quick perusal of the budget. How much of  the money saved by deleting the chorus is offset by the loss in ticket sales to patrons who love choral music, as well as family and friends of the chorus?

Has anyone carefully studied the financial statements of the Festival to see how the year end net assets of the Festival (exclusive of restricted donations that are earmarked for construction of the new hall) have evolved over time?  Study of public tax records give an imperfect picture, but it would appear that year end assets have fallen from $1.09 million in 2002 to $866K in 2007, a 22% decrease. Is the Red Hill construction and renovation  project likely to reverse this decline or will the necessary fund raising effort divert donations away from the operations side of the Festival, thereby amplifying this undesirable trend?

The situation in which you, as a Board member find yourself, is best understood by way of an analogy.  Suppose you were a Board member of a for profit corporation that has had a long (57 year) history of producing and selling to a niche market.  Your customers have always been loyal and quite happy with your product and service. Labor relations have been ideal. The workers have been enthusiastic contributors to the success of the company. Many have served for nearly 40 years.

One day, your CEO announces that there are clouds on the horizon. Sales are declining for your company and for the rest of the industry.  To remedy this situation, he hires a highly paid Director of Product Development (who has no formal R&D training).  In short order the new Director of PD announces that your company’s product line is not good enough. Shortly thereafter, the two of them present the following Plan to the Board:

1. Your product line is to be radically redesigned.
2. The existing manufacturing facility is to be replaced by a newly constructed state of the art facility in a new city.
3. The company’s Operations Manager is to be fired along with a significant fraction of the work force. The latter are to be replaced with apprentices. (This is the brainchild of the Product Development Director. He admits that it is an experiment, but he is confident that it will help the company run lean and mean.)
4.  There will be no operations manager for the foreseeable future. His duties will be assumed by the Director of Product Development (who is not an engineer).
5. The surviving veteran workers will be required to train the apprentices (in addition to their normal workload).
6. The loss of customer resulting from relocation and change of product will be more than offset by the efficiency of the new facility and superior nature of the new  product line. Moreover, new customers will be attracted once they notice the utopian mentor-student composition of your company’s work force.

When asked by the Board to give more details about the Plan, the CEO explains that it came to him as a vision in a dream. When pressed further, he admits that details are lacking, but that the Board should have faith in him, based on his track record to date. When asked how this will affect the financial condition of your company, the CEO assures the Board that there will be a hugely successful IPO, which he confident that the Board will enthusiastically subscribe to.

As a Board member, you have a fiducial duty to represent the best interest of existing stockholders. The CEO is proposing a large number of simultaneous changes in the nature of the company’s operation. Although you are protected from stockholder lawsuits by Director’s insurance, you still are bound to exercise due diligence.  That being said, would you rubber stamp these proposals without asking lots of questions and getting input that was independent of the CEO’s “vision”?.

Arthur Albert
7 August, 2009