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Balancing the Scores: The Financial Health of Canadian Symphony Orchestras

March 18, 201518 March 2015

Issue
Arts organizations (heritage, visual arts, orchestras)

Article Link
http://orchestrascanada.org/resource/balancing-act/

This presentation examines Canadian statistics related to “Baumol’s cost disease”, which states that expenses might rise prohibitively over time in labour intensive sectors, such as the arts, “where productivity gains are limited”. An American researcher recently examined the “perilous life of symphony orchestras” in the U.S., where expenses have indeed risen faster than revenues. The researcher found that the negative impacts of rising costs “have been staved off by an increase in private sector support” for American orchestras.

The Canadian data in the presentation relate to the finances of 48 orchestras between 2004-05 and 2011-12. Over this eight-year period, revenue increases matched expenditure increases, resulting in no “earnings gap” in Canada.

The presentation indicates that the revenues of Canadian orchestras increased significantly more than those of American orchestras between 2004-05 and 2011-12. Government subsidies, performance-based revenues, and non-performance revenues all grew more for Canadian orchestras than American ones during this timeframe. Private sector support saw little change in both countries.

Expenses have grown much more slowly for Canadian orchestras than their American counterparts. The differences between Canadian and American orchestras are most pronounced in terms of marketing expenses, production operations, artistic costs, and performance expenses. In addition, Canadian orchestras’ expenditures have been more flexible, reacting more quickly to economic cycles.

The presentation concludes that “Canadian orchestras keep a better balance between revenues and expenses” and are also “more responsive to economic conditions” than American orchestras.

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