It's a strange year when red ink can look like success, but that's how the Toronto Symphony Orchestra sees its $475,490 operating deficit for 2010.
Andrew Shaw, the orchestra's CEO, said Wednesday the TSO budgeted for a somewhat greater loss for 2009-2010, after deciding the sacrifices that would be needed to record a fourth straight surplus would damage the orchestra's development.
"Our orientation is towards growth and artistic achievement," Shaw said.
During 2009/2010, the TSO invested more money than ever in new commissioned works, recorded a Shostakovich symphony on its own record label and increased the holdings of the TSO foundation by almost 23 per cent, to $26.2-million.
Fundraising for the orchestra's operations, however, dropped by over $1-million compared with the previous year, and box-office revenues sagged slightly. Shaw said economic uncertainty drove people toward cheaper and fewer tickets, and a slump in the stock market thinned out gifts of appreciated stock. Small donations by individuals, however, remained strong.
The TSO's accumulated deficit rose to $9.36-million, about $2.3-million more than the deficit the orchestra carried when it teetered near bankruptcy in 2001. But Shaw said that the cash-flow squeeze of 2001 doesn't exist today, and that the orchestra's deficit financing is stable and affordable, thanks in part to super-low interest rates.
"The cost of carrying our deficit is negligible, about $50,000 for the year," he said. "The deficit isn't an issue in terms of running the business. The plan is to make decreases over time, but not to devote the organization's resources to eliminating it."
Funds were available within the TSO foundation to erase the year's operating deficit, but the orchestra decided to leave the cash where it was. "I'm keen on money staying in the foundation and growing," Shaw said.
Revenue for the year was just under $22.7-million. The TSO pared expenses in all categories, but still spent more than it earned: a little over $23.1-million.
As for the future, Shaw said negotiations with the musicians for a new collective agreement will begin soon. The existing three-year deal runs out in July, 2011.
Whatever happens during those discussions, Shaw said there may be more red ink flowing for the orchestra this year and next.
"Our objective isn't necessarily to break even next year," he said, adding that the TSO is willing to weather a few modest deficits to maintain the level of its offerings.