How to Save a Symphony

It seems fitting that San Diego billionaire Irwin M. Jacobs, a former university professor who built his fortune from digital wireless communications technology, would communicate the stunning news via e-mail:

“The amount we have in mind is $100 million.”

Symphony executive director Douglas Gerhart cried when he found the Dec. 26 missive in his e-mail when he stopped by his office over the holidays. He knew that Jacobs, 68-year-old founder and chief executive of Qualcomm Inc., and his wife, Joan, 69, planned to make a sizable gift to the symphony--”but I dared not dream of $100 million,” the largest single donation ever made to a symphony orchestra.

Gerhart did not tell anyone about the e-mail for a few days. “It was such an enormous, life-changing event for the San Diego Symphony, and I wanted to process it for a while,” he admits. “I needed a few days to absorb it and celebrate it very privately.”

Plenty of other symphony supporters spilled tears in their champagne when Gerhart made the announcement Jan. 14, before a gathering of about 1,500 people at Copley Symphony Hall. “People I did not even know came up to me with tears in their eyes, talking about how they dreamed of a day like this one,” Gerhart says.

The orchestra closed the ceremony by playing Dvorak’s “New World” Symphony, one of Irwin Jacobs’ favorite pieces and certainly apt for the moment. Although the gift will be made over time--$5 million a year for 10 years, followed by a $50-million bequest--when all the money’s in the bank, the donation will result in The San Diego Symphony, with an annual budget of $8.8 million, sitting atop an endowment about twice that of the Los Angeles Philharmonic, which has an operating budget of about $50 million.

The Jacobses also plan to donate $2 million annually for orchestra operations during the next 10 years, raising their total contribution to $120 million.

Still, as jaw-dropping as the gift might be, the donation represents neither the first chapter--nor the last--in the story of the San Diego Symphony. Just six years ago, the orchestra found itself in the midst of a very different chapter: Chapter 11--bankruptcy--forced the organization to shut down for two years beginning in 1996.

Nor was that the first time the orchestra had faced financial disaster. Although the board of directors stopped short of filing for bankruptcy, the San Diego Symphony ceased operations in 1987 to raise money to pay off its many creditors.

Much has been written in the press about the orchestra’s Chapter 11 filing--but little about how it was able to come back to life, four years before the Jacobs donation made philanthropic history. Symphony officials and the Jacobses themselves describe their donation as the result, rather than the cause, of the orchestra’s rebirth.

Call this story Chapter 12: the tale of how, from the 1996 bankruptcy to the symphony’s rebirth in 1998, the musicians, the community, a key $2-million donor, local politicos and a popular thirtysomething conductor with innovative--some call them crazy--ideas rallied to save The San Diego Symphony.

How do you bankrupt a symphony orchestra? The same way you bankrupt any other business: Spend more money than you’ve got.

In the case of the San Diego Symphony, the number of opinions on how black turned to red is roughly equal to the number of people you ask. Chalk it up to some combination of weak board leadership, faulty management, a slate of expensive guest artists, and an aggressive audience-building campaign that slashed ticket prices but ate into potential revenues.

Although a symphony goes bankrupt just like any other business, the game of rebuilding a nonprofit arts organization must be played by different rules. This is especially true of a symphony orchestra--because no matter what the financial constraints, a symphony still needs the same number of musicians to be a symphony. You can’t save the company by laying off the string section.

The situation is further complicated by musicians’ union contracts and audience expectations: An orchestra must commit to an annual season of performances, eliminating flexibility in matching supply to demand.

The story of the San Diego Symphony’s bankruptcy is typical, observes Charles Olton, chief executive and president of the American Symphony Orchestra League, a New York-based service organization. “I think that the success of a nonprofit organization is fundamentally dependent on the quality of leadership,” he adds.

Olton says statistics refute the common misconception that orchestras are closing in mass numbers because the classical music audience is dying off. Actually, the audience for classical music has never been bigger, according to the league’s statistics. It reports that 32 million people attended a symphony concert in 2001, up from 27 million 10 years ago.

Olton says that only 10 major orchestras among the league’s 900-orchestra membership have gone bankrupt in the past 15 years. He adds that many of the orchestras that went bankrupt have regrouped and come back to life. Some cities that lost orchestras to financial difficulties formed new organizations with new names: Kansas City Philharmonic, for example, dissolved in 1982, to be replaced by a new orchestra, Kansas City Symphony, later that year.

In California, the Sacramento Symphony folded in 1995 and was never revived. But another local orchestra, the Sacramento Philharmonic, was formed in 1997, with a different administration and, for the most part, different musicians. The financially troubled San Jose Symphony announced on Tuesday that it will go dark for an estimated six to 18 months, beginning Saturday, for reorganization.

Although the league’s Olton says the symphony orchestra world remains generally healthy, he acknowledges that unique challenges face an orchestra in its quest for survival.

Because it relies on donations as much as earned income, an orchestra must win the support of the community. It also must be financially sound. Orchestra donors must believe they’re not throwing good money after bad, and that their dollars can be leveraged into future gifts--a particularly difficult sell for a strife-ridden orchestra that has already closed its doors twice.

It took that kind of reassurance for the Jacobses, longtime donors to the San Diego Symphony, to finally commit to the impressive sum of $120 million.

“One of the things that has always been important for us is: What kind of acceptance is there in the city?” Irwin Jacobs said in an interview at his office at Qualcomm headquarters in San Diego. On the table next to him is one of the latest innovations using Qualcomm technology, the camera phone--already being sold in the Far East and due in the U.S. in about six months.

Framed on one wall hangs a cartoon that ran in the San Diego Union-Tribune: a musical score bearing the title “The San Diego Symphony Endowment Sonata by Irwin and Joan Jacobs.” The musical notes are replaced with little dollar signs.

Even as the musical community celebrates their donation, Irwin and Joan Jacobs point to an earlier, more modest gift to the San Diego Symphony--$2 million from local businessman Larry Robinson in 1997--as the first step in building the confidence necessary for them to sign that very large check.

There was another brief chapter in the symphony’s history just before Chapter 11--Chapter 7. On May 31, 1996, the symphony filed for Chapter 7 bankruptcy, which would have called for the liquidation of all of the orchestra’s assets to pay off creditors.

On Jan. 31, 1997, that bankruptcy was converted to Chapter 11--under which the organization is relieved of the immediate pressure to sell assets, allowing for the possibility of reorganization. The change was made possible largely through the efforts of Robinson, who was determined to save the symphony despite what he calls stiff opposition from some San Diego community leaders.

One of the symphony’s valuable assets was Copley Symphony Hall, formerly the Fox Theater, a 1929 French Rococo-style movie house given to the symphony in 1984. Another was the orchestra’s music library.

In dollars, the sheet music used by the orchestra is worth somewhere between $100,000 and $300,000, but to the musicians, the library is invaluable. “It’s the heartbeat of the orchestra,” says the symphony’s librarian, Nancy Fisch. “All the music has the markings of the musicians on it, the fingerings and bowings for the strings; if they play the flute, where they take their breaths. All of this is missing when you buy new music.”

The music also contains corrections, as well as marks and notes made by noteworthy music directors and guest directors, and often their valuable signatures.

Those involved in the decision-making--including a mayor’s task force of musicians, orchestra officials and community leaders--describe the debate between Chapter 7 and Chapter 11 as long and contentious. While both sides believed that San Diego needed an orchestra, some believed that goal could best be accomplished by starting over with a completely new organization.

Others, including donor Robinson, saw things differently.

Oddly enough, Robinson, who was to become the orchestra’s chief financial savior, did not get involved with the orchestra until just after the bankruptcy. An old acquaintance, former UCLA music professor Jack Wheaton, had been named president of the musicians’ union serving San Diego, and invited Robinson to lunch.

“I was a fan of the symphony but certainly not a regular participant,” Robinson said. “But that started my curiosity as to why the organization had slipped into bankruptcy, and why it was so desperate.” As a result, a few weeks later, Wheaton invited Robinson to a meeting of the symphony’s board of directors.

“I listened to these people for an hour or so and said, ‘This is hopeless,’ ” Robinson recalled by telephone from his home in Rancho Santa Fe. “These people were in a very bad mind-set--their lawyers had persuaded them that all they could do is file a Chapter 7 bankruptcy, which is a liquidation.

“My background is law, though I haven’t practiced law for a long time, and my simplistic notion was that things didn’t have to be so absolute. The lawyers were setting about to sell the assets.... I said, ‘If the die is cast, there won’t be anything left to resuscitate.’ ”

Robinson came up with this idea: He would donate $2 million to the orchestra to pay off outstanding bank loans. The banks had agreed to partially forgive the debts if some portion was paid.

Robinson would also purchase Copley Symphony Hall for about $100,000. He didn’t plan to keep it--just to provide a safety net against creditors in case the financially fragile symphony suffered another bankruptcy. He plans to eventually deed the building back to the orchestra.

Robinson says some members of the mayor’s committee--including then-Mayor Susan Golding--fought his plan at every turn. (Golding did not return calls for comment.) He still sounds wounded when he recalls those days: “I felt utterly isolated and alone.”

Others involved in the situation, including Irwin Jacobs, describe the conflict as a simple difference of opinion. In either event, Robinson’s plan won out.

Symphony observers are unanimous on this point, however: Robinson’s plan would not have worked without the cooperation of the musicians, who went unpaid for weeks before the bankruptcy but remained ready to support the orchestra.

“Part of this has to be the willingness of a lot of the musicians to stick around and hope,” says Jim Plank, a symphony percussionist since 1962.

“There were financial pressures; a few people took jobs with other orchestras,” Plank says. “When the orchestra resumed, there were some different faces there, no question--but a surprisingly large number of the same faces, given the length of time.”

There was a lot of that sort of leniency in the community, says Judge Louise Adler, who presided over the bankruptcy. “I wasn’t pushing it very hard, because I thought that the stages of grief, if you will, had to be gone through in order for people to realize it was worth trying again,” she says. “No one was pushing, the creditors weren’t pushing--and of course the biggest constituency of creditors was the musicians themselves.”

After Robinson’s donation, other donors, including the Jacobses, rallied to contribute the additional several million needed to launch a comeback season in 1998--beginning with a series of outdoor summer pops concerts at Navy Pier, followed by concert series at Copley Hall.

Robinson’s donation “was the key gift in getting things started, keeping the hall, keeping the music library intact--and, to us, indicating that there was other support around the city,” Irwin Jacobs said. Adds Joan: “That was very important to us; we had begun to feel that we were the only ones who thought it was important enough.”

“If we had failed, it certainly would have secured the idea that a symphony could not exist in San Diego. We only had one shot at this,” Jung-Ho Pak says.

Pak, 40, recently completed his final season as artistic director of the symphony; he announced his resignation last March, saying he wanted to pursue other opportunities.

But for the last six years--including the two the symphony went dark, the young Californian led an aggressive campaign to update the orchestra.

The symphony needed more money--but Pak insists that equally important to its rebirth was a new marketing approach. While the orchestra continued to rely on traditional programming, Pak’s reign broke with tradition in terms of presentation.

Pak was 34 when the symphony went bankrupt. He had served for about a year as assistant conductor to Yoav Talmi. From 1996 to 1998, Pak remained based in San Diego while continuing his other commitments as music director of New Haven Symphony in Connecticut and in academic posts at USC and the San Francisco Conservatory of Music. At the same time, he served as the volunteer champion of the San Diego Symphony.

“It was an amazing experience to see such a major city lose an orchestra,” Pak observes.

“We were struggling with a tremendous amount of distrust and disdain. One of my first jobs was to go out in public and speak at every Rotary Club, every women’s group, and just tell my story, over and over.

“A lot of orchestras believe they have a right to exist. Having watched an orchestra go through a bankruptcy, I don’t believe that at all,” Pak continues. “I believe an orchestra has to continually prove its relevance.”

Once the symphony had the money to start back up, Pak says there was still much work to be done to update the orchestra. One technique involved rigging rock-concert-style video screens at Copley Symphony Hall. “I created a special video element within the show each week--we’d bring in a three-camera, in-house video team, so at intermission you would see an up-close interview with the guest artist,” Pak says. “I think that’s the future of the performing arts; we have to use every tool in our arsenal to try to reach the audience.”

Among Pak’s pet projects was the Light Bulb series, which employed a variety of nontraditional means to help audiences connect with the music. Pak frequently invited leaders from nonmusical fields to appear with the orchestra. One concert, titled “The French Connection,” brought a French chef on stage to cook, illustrating some of the parallels between food and music. For a Halloween concert, Pak invited the county coroner to conduct “Dance of the Dead” from Gounod’s “Funeral March of the Marionettes.” Copley Hall was decorated as a haunted house.

The Jacobses remain good-naturedly skeptical about some of Pak’s onstage stunts (the technology-minded couple likes the video screens, comparing them to the use of supertitles to translate opera into English), but symphony officials say that Pak’s nontraditional approach helped increase attendance at pops concerts as well as the orchestra’s regular season of classical fare.

“I think that’s why public opinion changed; the endowment gift was a byproduct of how the Jacobses saw that a city could finally love an orchestra,” Pak says. “If we had not been successful in terms of turning around people’s perception of the symphony, garnered larger audiences, garnered younger audiences--I don’t think they would have jumped into the deep waters of an endowment.”

Pak’s decision to leave the San Diego Symphony was announced months before the Jacobses’ gift--and he says it would not have changed his mind. He chose to leave partly because of the fatigue caused by his multiple careers--and a 3-year-old daughter--and partly because “I had a vision of creating an even more theatrical and dramatic experience with classical music. I’d like to try that with a different kind of an organization--the model of a symphony orchestra is surprisingly corporate. I’m still a dreamer, I’m still an entrepreneur. I’m still as crazy as ever.”

San Diego is the nation’s seventh largest city. While the American Symphony Orchestra League does not provide specific rankings for orchestras based on either budget or musical reputation, the organization confirms that, in budget, the San Diego Symphony ranks in its second tier--meaning that it falls somewhere between the 25th and 40th largest orchestra in the country.

Its musical status is less easily assessed--but even supporters acknowledge that the San Diego Symphony is not yet a world-class orchestra. “Heard often over the past three decades, the San Diego ensemble remains promising--and no more,” wrote Times reviewer Daniel Cariaga of the orchestra’s first winter concert in 1998.

While many of its musicians returned after the bankruptcy, some of the most talented left the city to join other major musical groups. Observers believe it will take 10 years to see whether the Jacobses’ donation launches the orchestra’s operating budget and artistic reputation into the same rank as the city’s population.

On the management side, board members and staff seem to have confidence in Gerhart, hired two years ago after turning around bankrupt orchestras in Birmingham, Ala., and Tulsa, Okla. Gerhart is an executive cautious enough about the future that he has announced the $100-million gift as the halfway point toward a campaign to raise an endowment of $200 million.

The Jacobses’ operating-budget donations will allow for staff expansion, and new office space, and aid in the symphony’s plan to rebuild its stage floor--a $480,000 undertaking approved before the donation was in place.

Artistic progress may take a little longer.

“It’s a superb gift that will give the symphony the financial underpinning to focus on making art, developing a fine orchestra and getting a good music director,” says Ian Campbell, general director of San Diego Opera. “I think a decade from now, and it will take that long, we will have a very high-quality symphony.

“I think anybody who thinks money solves artistic issues overnight is crazy, because orchestras are made up of people,” he adds. “But because the symphony will be more stable, they will attract many good candidates every time a vacancy occurs.”

Although the change won’t happen overnight, it could happen more quickly than the usual replacement-by-attrition. Currently, substitutes fill 28 of 79 positions. The plan is to fill those slots with permanent members after a new music director is appointed to approve the new hires.

The donation should allow the symphony to entice a more attractive candidate for the job. Warren Kessler, a San Diego urologist who is past chairman and a former symphony board member, is heading up the search committee, and says the process could take more than a year. In the interim, Kessler says, potential candidates will be invited to join the orchestra as guest conductors.

Guests in recent and upcoming concerts include Daniel Hege, music director of New York’s Syracuse Symphony Orchestra; David Robertson, music director of France’s National Orchestra of Lyon; and Miguel Harth-Bedoya, associate conductor of the Los Angeles Philharmonic.

The current musicians’ contract expires in 2006 and calls for the gradual expansion of the season from 26 work weeks to 41. The contract also raises base salaries from $25,950 to $45,750. That security should make the orchestra more competitive in attracting top players.

“I think what it means is that the community will start looking at the symphony differently,” says Richard Levine, orchestra cellist since 1973. “Everyone won’t have to preface everything they say about the symphony with ‘financially troubled’; we can be the San Diego Symphony.”

Irwin and Joan Jacobs firmly agree. “The whole mix of the population is changing. We’re not a Navy town anymore,” Joan says. “And people are retiring here; they’re coming from the East where they are accustomed to going to the symphony.”

With a wink, Irwin makes a reference to Qualcomm Stadium, the city-owned facility that was renamed in 1997 after Jacobs’ company agreed to pay $18 million to complete an expansion project. “Some people think it’s more important to have a stadium, or whatever. But it’s amazing how many people have written to us and said that they’re so happy that the symphony is going to be stable, and that it will be here for many years to come.”

He adds that he hopes the donation will help lure a new music director of the stature of the Los Angeles Philharmonic’s Esa-Pekka Salonen and San Francisco Symphony’s Michael Tilson Thomas. “If we have three here in California, people are going to have to rethink their whole idea of culture out here,” he says. “That’s good competition to have.”

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Diane Haithman is a Times staff writer.