Announced today, the Toronto Symphony Orchestra (TSO) has released their annual general report, and the results speak for themselves.
The TSO has proclaimed a stunning $2.3M surplus, effectively reducing the TSO’s accumulated deficit down from $6.8M in the 2017 fiscal year, to $4.5M.
The success is largely due to a four-year plan (now entering its third year) devised by interim CEO Gary Hanson, who was brought on in 2016 to help stem the TSO’s ongoing revenue issues. The mantle has now been passed to the TSO’s CEO Matthew Loden, who started this past July.
“Steering the TSO is no easy task — course-correcting can prove even more challenging”, said Catherine Beck, Chair, Board of Directors. “…I am personally grateful, that Interim Chief Executive Officer Gary Hanson came out of retirement in 2016 to assist his hometown orchestra. By developing and initiating the four-year strategic plan, Gary has set a course that ensures the institution flourishes in the short and long terms.
The TSO’s revenue struggles have been complex, but the biggest issues have been attributed to debt, high spending, and a decline in revenue.
While the TSO continues to tackle each of these three factors, the 2018 annual report shows most gains in a strategy known as dynamic ticket pricing. This approach eliminates static prices in favour of a fluctuating model that accounts for current market conditions, such as weather and competition with other notable events happening in the city. In essence, tickets are treated like stocks, which rise to match the ebb and flow of the marketplace, thus attributing a fair market value to the TSO’s tickets through supply and demand.
One particularly notable aspect to Hanson’s four-year plan is massive cost-cutting. Besides programming, administration expenses have been slashed by nearly 23% ($3.4M in 2018 from $4.4M in 2016). Marketing expenses have been cut by a stunning 30% ($3.2M in 2018 from $4.6M in 2016).
Hanson describes the cuts as “restoring net operating revenues, slowing the growth of fixed expenses, and increasing annual renewable fundraising — and doing so simultaneously”.
The question remains just how long they can continue cutting until it begins to show — especially in the growth of the TSO audience, which can really only grow through marketing campaigns.
This year also marks the second year of the TSO’s “Transition Fund” which calls for a total of $12M over and above annual fundraising to help stem spending overruns and debt accumulation from prior years. The report shows the TSO have now raised $9M, leaving them just $3M shy of reaching their goal.
This year’s annual report signifies a positive step forward for the TSO to move forward, after a year of change. Along with the departure of music director Peter Oundjian and the hiring of a new CEO Matthew Loden, the TSO announced a new Artistic Director in Gustavo Gimeno, who will take the baton beginning 2020.
Nothing is certain, but the TSO have never looked more poised for success than they do today.
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