Analyzing the Almanac Interview

On today’s docket: analyzing Doug Kelley and Tony Ross’s November 30 appearance on Almanac. Please watch it or read the transcript before continuing.

I believe this is the longest live interview that a Minnesota Orchestral Association (MOA) representative has given. Over the months, the musicians have been much more interested in speaking to the public than the MOA has been. Musicians spoke with us individually after their convention center concert. In late October, Ellen Dinwiddie Smith gave an in-depth interview with Matt Peiken. (This proved to be one of the more clarifying media events of the lockout so far.) The musicians also have provided an email address on their website that you can use to get in contact with them, and their Facebook page is thriving. Contrast that with the MOA’s relative silence. We’re still waiting on Mr. Henson to accept Mr. Peiken’s request for an interview, and for Mr. Campbell and Mr. Davis to accept Drew McManus’. The only reciprocal contact we have with management is via its Facebook page…and that’s marginally reciprocal, at best; the responses there consist of little more than regurgitated talking points. (Go ahead and check it out for yourself.) Also, the MOA’s recent annual meeting was closed to the public, and no announcements of any kind of open meeting have been made. So I’m going to assume that this Almanac segment is about as lengthy and in-depth a live discussion as the MOA is willing to risk. What else am I supposed to think?

As you can imagine, this frustrates me to no end. Rightly or wrongly, it makes me feel as though the MOA is hiding things and is afraid, contrary to what they keep asserting. If they don’t have anything to hide, and if they aren’t afraid of anything, then why aren’t they answering as many questions as possible? Why aren’t they giving more live interviews? Anyone can write an editorial or say a few sentences to the Pioneer Press without making a fool of themselves. Those are not difficult things to do, and I can say that with authority, because I’ve done both. The tricky part is engaging with another person in front of an audience – thinking on your feet – being able to defend and articulate your vision in a fair, respectful, factually accurate manner. It becomes increasingly obvious that Mr. Henson, Mr. Campbell, and Mr. Davis don’t feel up to the task of defending their position. Prove me wrong, gentlemen. Please.

Anyway. Here’s my point: the longest interview they’ve given has only lasted ten minutes, and that’s with both sides involved, so it’s probably actually closer to five, and that’s really sad and ridiculous, and it pisses me off. Consequently I’m going to hold Mr. Kelley to a very very very high standard of truth tonight. If this is the longest live interview the MOA is willing to give, then they’d better make it as accurate as possible.

***

Erik Eskola: Well, Mr. Ross, let me start with you. The independent audit that has been sort of at the center of this is due out next week. Will that get things off the dime here, or – ?

Tony Ross: No, we’re really looking for an independent financial analysis, not an audit that is produced by their side. There’s so many fuzzy numbers, numbers we don’t understand, that we need an independent joint analysis to be able to go further at all. And an audit just simply doesn’t do it. It looks backward. The analysis looks forward, looks at all kinds of things, as far as you know, management’s – the atmosphere of management, the workplace, the mission statement, the future of the band.

The interview began with Tony Ross articulating what musicians want to see in addition to an independent audit. There are more details about what they want on the musicians’ website:

Audits do not cover an institution’s viability, stability, business plan, strategic plan, the quality of its management, comparative performance, or present and future prospects. A joint, independent financial analysis would review all of these things, and would assess current and future trends, opportunities and risks.

Before the musicians even revealed that they were seeking such things, resident guest-blogger Mary Schaefle was thinking along similar lines in her two entries here on SOTL:

Do management and the Board have a new set of projections for future years? A review by an investment analyst, which is typically not part of an audit, is needed…

As I pointed out in the comments section of Emily’s earlier post on the endowment, the draw amounts released by Minnesota Orchestra do not match their tax forms. That means percentages are off as well. Yes, we once again need that accountant…

You may remember my suggestion in the last article for an independent financial analysis. The questions I’m raising here wouldn’t be answered by that kind of oversight. A respected leader in performing arts management, preferably orchestra management, would be the best person to review the strategic plan to ensure it is sound…

Of course I don’t know if the musicians are seeking exactly what Mary is suggesting or would suggest. But we do seem to be coalescing around the same general idea: we want a team of outside specialists to come in to provide additional perspective on many subjects, such as the feasibility of the strategic plan, future investment projections, comparisons of the Orchestra with other similar organizations, etc., etc., etc. And I wonder what we should be calling this…review? inspection? examination? scrutiny? study? I don’t know what word to use, and for a writer like me, that’s frustrating! The phrase “joint independent financial analysis” may cover part of what we want to see happen, but I’m not sure that it covers all of it. For instance, I don’t think that someone just tuning in would necessarily understand from the phrase “joint independent financial analysis” that we’re also discussing things like having someone review the strategic plan, or quality of management, etc. On the other hand, I have no idea what to actually call what we want. Hmm.

Sorry; that was a bit of a tangent. But it was a thought I wanted to throw out there before I forgot.

Back to the interview.

Cathy Wurzer: You’re still dealing with a structural budget problem, no matter how you slice it, correct? According to information from the Star Tribune, minutes of board meetings and that kind of thing, you’ve had the structural budget problem for a while. And from 2009 to 2011, there was no public mention of any trouble. So I’m wondering here. You opened the door to accusations that you misled the public, your donors, and lawmakers during that time.

Doug Kelley: Well, I’m glad you asked, because I’d like to put that to rest.

As you’re reading the rest of Mr. Kelley’s response, look for where he puts it to rest.

We, like every other organization, we have income, and we have expenses. And they are certified by an outside accounting firm every year. And those numbers are given to the musicians. We file a tax return. Everybody knows you don’t lie on your tax return. And that’s given to the musicians every year. I think the dispute this week is about the budget and how that works. Let’s say we budget $8 million to come from the endowment, and at the end of the year the expenses are greater and we draw $10 million from the endowment. That number – every penny – is accounted for. It goes down, put on all the income tax return and everything else. It’s as transparent as you can be, and we have done that every year, and those numbers are public. The musicians have them. If they want to do a forward-thinking analysis, the first place they’d go would be to a certified financial statement or tax returns. Those are sort of the gold standard documents in financial analysis. And I think that the musicians should really kind of back off the accusation that we misled the legislature. We gave them every number and were totally transparent with them.

Did you catch the part where he explains why the MOA didn’t mislead the public? Where he explains why there were no mentions of trouble from 2009 to 2011? If so, you’re seeing something I’m not. I didn’t realize how blatantly he avoided the question until I worked up the transcript. I shouldn’t have been, but frankly I was shocked. And at this point I have a pretty high shock threshold.

Since I’m an obsessive detail-oriented freak, let’s break his words down even further.

We file a tax return. Everybody knows you don’t lie on your tax return.

Yes, apparently Doug Kelley believes it’s impossible to lie on your tax return…? (Not that I’m saying the MOA has. But to give as proof that they haven’t the sentence “everybody knows you don’t lie on your tax return”? That’s weak.)

 I think the dispute this week is about the budget and how that works

The dispute “this week”? Wow, way to treat us like teenagers whining because we can’t get the latest iPhone. This kind of dismissive attitude will work well to regain our trust. *thumbs up*

If they want to do a forward-thinking analysis, the first place they’d go would be to a certified financial statement or tax returns.

Notice he says “the first place”…insinuating that it wouldn’t be “the only place.” Is Doug Kelley making our argument for us?

And I think that the musicians should really kind of back off the accusation that we misled the legislature.

Welllllll, unfortunately for management, lots of other people are going to keep beating on that drum, even if the musicians would for whatever reason stop. I for one am not backing off my personal belief that Michael Henson straight-out lied to the legislature. I know that many of you agree with me. The Minnesota AFL-CIO is promising to “urge Legislators to look into the situation in January.” At least one legislator is feeling betrayed, and going so far as to urge her colleagues to “think critically before voting on any legislation that would further direct public dollars into the Minnesota Orchestra (or the St. Paul Chamber Orchestra).” In future I think Mr. Kelley would do well to acknowledge that the MOA has, rightly or wrongly, lost the trust of a large segment of the public, as well as musicians.

Okay, onto the next chunk…

CW: However, Mr. Henson in January 2010, talking about bonding money in front of the committee said, “On the financial front, we have announced balanced budgets over the last three consecutive years. We are facing the current economic downturn with stability.” But that wasn’t the case.

DK: The orchestra’s 110 years old. It’ll be on for a long time after this dispute is over.

Around in here I almost start feeling pity for Doug Kelley, and for the impossible argument he’s being asked to sell. Because in order to make his case semi-convincingly, he’s forced to resort to the following logic: if something is 110 years old…it is immortal.

This is a 110-year-old woman named Mary Brown. She attributes her cenetenarian status to “having an inquiring mind, not driving and sprinkling all of food with plenty of salt.” She is also, if I’m following Doug Kelley’s logic correctly, immortal.

Here’s a question for Mr. Kelley. It sounds stupid, but bear with me. What is the Minnesota Orchestra? Is it any old group of orchestral musicians with the label “the Minnesota Orchestra” slapped onto it? Or is the Minnesota Orchestra these specific musicians – this specific ensemble? If we use the former definition, then yes, the Minnesota Orchestra will likely continue to exist after this dispute is over. However, I believe that most of us would prefer to employ the latter definition. And we know that it’s very possible – if not probable – that this Minnesota Orchestra will not exist after the lockout ends. There are too many fabulous players taking too many attractive auditions. Trust me.

But. So when you take that $10 million out of the endowment and you cover your expenses, you match income with expenses. That’s a balanced budget by anybody’s definition.

Oh, for…crap’s sake.

Does this mean that if I get a cash advance from my credit card, and buy a wicked expensive viola, and therefore match my income with expenses for the month, that I’m facing my fiscal future with stability? Really?

Look, I’ll be extremely generous and grant Mr. Henson the “we have announced balanced budgets” bit, on the technicality of the verb. But the “facing the current economic downturn with stability” part…? I mean. Come. On. Cathy Wurzer is absolutely right: that was not the case.

And the other thing I think that’s a little exasperating is the musicians knew we were trying to figure out how to put the best face on it. We talked to the musicians about that. We shared those numbers with them as early as 2010.

…Maybe you did, but why didn’t you share them with us? And remember, not only was the MOA not sharing those numbers with the public, they were actively misleading the public about those numbers. But of course nobody from management ever mentions that. Talk about exasperating.

DK: Yeah, let me just say, what happened in between the time before and now in how we report these numbers is the recession. The musicians have been shielded from the recession.

Yes, musicians apparently…have no realization that a recession has occurred. Those self-absorbed dunderheads! So busy playing…and making the Orchestra the greatest in the world…they didn’t notice the global fiscal apocalypse. For shame, musicians. Get out from under your rock once in a while. Geez.

You had a 25% increase from 2007 to 2012.

Now this I found interesting, because the MOA website says, “The musicians still received a 19.2 percent increase over the five years of the contract.” (If you want to verify that figure, it’s under Have musicians offered concessions in response to the Orchestra’s financial challenges?“) As Tony Ross said in the interview: these are “fuzzy numbers.” Is anyone else amused by the irony that Doug Kelley refutes claims of fuzzy numbers…by citing fuzzy numbers?

And you remember that first big meeting – I think you were just referring to it – Richard Davis and Michael Henson came in front of you and told you exactly what they were doing. They said, you know, we have reported that we have balanced the budget and we have announced that publicly. And we’re also telling you that we’re about a million five short and we’ve done that because of donors. And you guys knew every bit about that, and that’s why I think it’s so disingenuous to go to the legislature.

?

In the words of Bill O’ Reilly:

Honestly, Doug Kelley might as well be speaking Greek here. He lost me completely, totally, utterly. After I transcribed it, I sat on that paragraph for a while, waiting for an epiphany as to what it meant, but it never came. So a few days ago I went to Drew McManus in the hopes that he could translate the management-ese.

Here’s what I wrote in the comment section of Drew’s blog:

Is Mr. Kelley admitting that they announced the balanced budget only for the donors, thereby reinforcing the idea that the donors were manipulated, even though Mr. Kelley heavily implied earlier in the interview this was not the case? Is this admission as big a deal as I think it is? Aside from the MOA being better positioned to get what they wanted from the state legislature in January 2010, and from the musicians’ union in 2012, what would be the strategic advantage of announcing balanced budgets if you’re going to reveal in a couple years that the financial position wasn’t as rosy as you once said it was? Wouldn’t that be – in Mr. Kelley’s parlance – kicking the can down the road? Or have I totally misinterpreted this? I’m also curious what he meant by “that’s why I think it’s so disingenuous to go to the legislature.” I couldn’t understand if he was talking from the musicians’ POV, or if he was missing a word or two, or what was going on. Am I just being dense here? Does it make any sense to you?

He wrote back:

In the excerpt you quoted, I believe Kelly’s phrasing is such that there’s no way to definitively determine what he is saying here without added clarity.

So um, apparently nobody has any idea what Doug Kelley was actually trying to say. So, hey! Doug Kelley! Feel free to clarify. Comment section’s open. I have absolutely no idea what you were trying to get at. I’d be delighted to listen to a fuller explanation. (If you as a reader think you’ve cracked the code and know what he’s saying, let me know.)

CW: The musicians say, Doug Kelly, that they do not have confidence in Mr. Henson. Has the board voted – has the board discussed Mr. Henson? Do you have full confidence in him?

DK: Yes, we do. Absolutely. And we just – we had a committee meeting to discuss Mr. Henson. Mr. Henson has the unanimous full support of the board.

I know I wasn’t the only one whose ears pricked up at this. Doug Kelley saying “Mr. Henson has the unanimous full support of the board” is something very different from the entire board holding a unanimous vote of confidence in Mr. Henson…or even the entire board discussing Mr. Henson.

I brought this up with Drew McManus, since he’s blogged about the subject:

I know you had mentioned in a previous entry about how we’re not sure what is going on with the Board re: their opinion on Mr. Henson. When asked if the board had full confidence in Mr. Henson, Mr. Kelley said, “Yes, we do. Absolutely. And we just – we had a committee meeting to discuss Mr. Henson. Mr. Henson has the unanimous full support of the board.” Do you think that that’s any indication that a full vote has occurred? Is it likely? Or is it impossible to know based on those words?

Here’s what he had to say in response:

Regarding the board confidence point, I noticed Kelly’s phrasing here too in that he said the committee met to discuss Henson. Although it would be worth confirming, I believe Kelly was referring to the executive committee. If that’s accurate then no, that is not the same thing as a full board vote and/or discussion on the topic.

I’m guessing it was this appearance on Almanac, combined with Jon Campbell’s 11/27 quote, “Michael Henson is a perfect leader at this challenging time and has the full confidence of our board”, that led some bystanders to believe that a full vote had taken place. In fact, MPR actually ran an article that included the phrase “With the board’s recent unanimous vote in support of Henson“, but I (and probably others) contacted them to check if this was actually the case. It turns out it wasn’t. It is official: there has not been a vote of confidence in Mr. Henson, much less a unanimous one. Accordingly, MPR later edited the article.

So. Suddenly, any trust I may have once had in Doug Kelley has vanished. Completely. I feel extremely uncomfortable that he deigned to speak for everyone on the board, without having an actual vote or discussion to back his words up. Is it possible that every single one of the eighty-odd members of the MOA board have total confidence in Michael Henson? Absolutely! But do we have any objective evidence to back that assertion up, like we do with the musicians’ vote of no-confidence? No, we do not.

As Drew McManus wrote, “Although this point may seem heavy on semantics, it is perhaps useful to remember that as tensions rise, words carry greater meaning; even if they are, at times, delivered through the filter of intense emotion.”

I think the reason the musicians have been unhappy with Mr. Henson is because when he first came, he said you have this structural deficit, it is here, you need to address it, and he started to address it, and that makes everybody nervous when you start doing that, and to put it on a sustainable basis, is going to take some real changes.

Question: If the main problem with Michael Henson is his courageous leadership, then why are so many well-informed patrons also angry with him? Is there any chance that we have anger for the same reasons the musicians do? Look, I’ve devoted the last three months of my life to trying to understand Michael Henson and what he’s done with the Minnesota Orchestra. I’ve read literally hundreds of articles and blog entries and press releases about this situation, from both sides. I’ve written over two dozen in-depth articles. I’d be delighted to debate Michael Henson, live and on-the-record, in front of the entire music world. I’m confident I know as much as anyone in the public knows about this situation. And I can guarantee you, my problem with Michael Henson is not his addressing a structural deficit.

EE: How’s this going to get settled?

DK: You know what? I hope that instead of going off on these frolic and detours, we just come back to the table and help us settle and solve this problem.

TR: We made counters, and if you want us to make a more detailed counter, we need that financial analysis. And I’d like to ask you, Doug: what are you afraid of?

DK: We’re not afraid of anything –

TR: Well, let’s have it!

I don’t really have anything to say about this exchange besides it was dramatic and riveting and popcorn GIF worthy. So:

TR: For once in the minutes it says, and there’s very few times they speak of this, there’s a gift of half a million dollars. And the board says, what should we do with it? It was given to the orchestra. Well, ten percent of it goes to operations. And ninety percent of it goes to the building fund – the lobby part of the building fund.

Weary sigh. I’d love to hear more details about this. Honestly, I’d love to hear any details about anything having to do with the MOA’s finances. I wish we had more, but I’m so glad that we have Mary aboard to help us try make sense of the numbers we do have. *waves to Mary* (By the way, she’s working on part three of her Minnesota Orchestra Financials Series! No rush, Mary, darling, but we can’t wait to read it!)

So. With that, I come unceremoniously to the end of the longest live interview a representative from MOA management has yet given. And it wasn’t even that long: ten minutes and six seconds, according to the Almanac website. And about half of that was Tony Ross speaking. And within the space of those five minutes, I had to sort through Doug Kelley’s misrepresentations, weak excuses, non-answers, logical fallacies, a paragraph of complete gibberish…and I was even forced to email MPR to fact-check one of Mr. Kelley’s statements. That’s…not good.

If Doug Kelley is the most eloquent and persuasive communicator the MOA can field, then clearly the MOA is having trouble fielding eloquent and persuasive communicators.

Either that, or not even a lawyer can defend the MOA’s position.

6 Comments

Filed under My Writing

6 responses to “Analyzing the Almanac Interview

  1. Sarah

    I am trying to ignore the possibility that the Board thought everyone – musicians, audience, public – would just immediately roll over and take it. And that it would remain a “two-sided” deal (mgmt vs. musicians). Instead, there is this huge audience and other stakeholder component that has been totally ignored (this is in addition to trashing the musicians). Do they really think we are that stupid, ignorant, and uncaring? That we are susceptible to the charms of used-car salesmen (with apologies to most used-car salesmen)? Help me here.

    • Yeah, I hear you, for sure.

      It is difficult to know exactly what they were thinking! It would be interesting to have access to more minutes and see where they discussed us (if they discussed us). The only minutes that I know that are public are here, courtesy the musicians…

      In September 2009, the minutes say, “Negative outcomes would be that the gap between public announcement of balance and internal reality of deficits in 2009 and 2010 would need to be maneuvered carefully, and that the deficits in 2011 and 2012 might hinder fundraising. Communications under this scenario would focus on budget cuts to illustrate the proactive and fiscally responsible measures we have taken, would develop new terminology around endowment funding, would focus on the diminished size of the endowment to set the stage for the reset business model, and would set expectations that 2011 of 2012 will be challenging years. It would be more easy to manage two years of deficit spending than four years in our communications to the public and donors.”

      O RLY. Yeah, I think that was definitely their first big mistake.

      There’s lots more in the document I linked. Always the public was referred to as something to be massaged, convinced, etc…as a group of people who need to be “sold” things, not told them. In the eyes of leadership, we are clearly not partners; we are clearly not stakeholders. It’s very paternalistic and condescending. We’re quite capable of helping, thanks.

  2. Sarah

    Oh Lordy. I just love being manipulated. Makes me even more willing to contribute.

  3. Vipunen

    Thanks for a great analysis. I’ve been doing my own series of rebuttals–too lengthy to post here, but one point I’d like to make. Here and elsewhere the board members seem to wave off the fact that they were giving different financial information to different audiences. They respond that the Orchestra has to undergo an audit every year, and they are fiscally savvy businessfolks that know all about finances.

    To that, I say “Let’s look at what happened to the Southern Theater.” This organization also had a board providing oversight, and filed tax documents every year. It was all a house of cards—money designated for one purpose was shifted around, unwise financial strategies were hidden behind “balanced” budgets, and mounting debts were giving the lie to the “golden age” the theater was loudly trumpeting. And ultimately, the whole apparatus collapsed. When it collapsed, there was so little faith in anything the leadership said that no one was going to come to the rescue. This is why there is a broader need to see a comprehensive view of the Orchestra’s finances—vague assurances and abstract safeguards aren’t enough.

    • Very interesting point. I’d love to read a detailed comparison of the Southern situation and the MOA situation. I wasn’t paying much attention – well, any attention, really – to the whole Southern fiasco, so I wouldn’t be the person to take such a project on. But if anyone else wants to take that on, I think it would be very interesting…

      This problem is so massive it’s going to take all of our accumulated wisdom to solve it. And as depressing as it sounds, some of that wisdom may well come from examining other organizations’ collapses.

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