The Philadelphia Orchestra and Kimmel Center have initiated a corporate alliance that would consolidate their governance under a single parent company.
While not a full merger, the new structure promises the orchestra greater control over the Kimmel — its landlord — than is currently the case. Philadelphia Orchestra president and CEO Matías Tarnopolsky will become leader of the new parent company upon finalization of the deal, and Kimmel president and CEO Anne Ewers will retire.
The affiliation was approved Thursday afternoon by the respective boards of the two organizations in separate, simultaneous meetings at the Broad Street arts center.
While pressures brought on by the pandemic sparked talks toward the move, the benefits of the new structure are independent from the pandemic shutdown and abrupt disappearance of ticket revenue, leaders say. The move aims for a coordinated effort in a number of areas that are important at any time, but especially critical now as the orchestra and Kimmel prepare to lure patrons back to live events this fall.
“All of these things we just do in parallel lines we need to start doing together,” said Tarnopolsky, citing the goal of increased artistic collaborations between the orchestra and Kimmel, as well as coordinated branding and marketing, fund-raising, and renovation and scheduling of the Kimmel’s spaces, which include the Academy of Music and Verizon Hall.
“It’s really a coming together of strengths, and that to me is very exciting,” said Ewers, who plans to join the Kimmel board after she steps down from her paid post.
Some implications of the new governance structure are not yet known. The center’s seven other resident companies — which include Pennsylvania Ballet, Philadanco, the Philadelphia Chamber Music Society, and others — were informed of the change in the past week or so, and are still figuring out what it will mean to them and the rental fees most of them pay.
The current system for scheduling time in the halls and operational issues around their use is complicated, said Opera Philadelphia chief David Devan, and if some of those protocols could be streamlined, groups might be able to focus more on artistic matters.
“My gut is this is an opportunity for the resident company ecology to get stronger through this,” Devan said.
The efficiencies of the new organizational structure are clear, said Philly Pops chief operating officer Karen Corbin, but “our one area of conflict has traditionally been on scheduling,” she said. The Pops, for instance, has had matinees for its Christmas shows for decades, Corbin said, but for this coming season was not able to secure any matinee slots. “We hope that we’ll be able to make progress in maintaining our matinees and our Christmas schedules in working directly with the Philadelphia Orchestra to the benefit of our patrons.”
The quasi-merger is among the first in an expected wave of changes at cultural organizations in the region as they come back to life post-pandemic and with a greater awareness of social justice.
Eye on philanthropy
One major factor driving the unified structure is fund-raising, which has often proven tough for the Kimmel. The arts center shifted its business model more than a decade ago, dropping many of its own artistic presentations, like its visiting orchestra series, while focusing more on revenue-producing activities. The Kimmel now brings in about 93% of its operating costs through earned revenue, much of it from its lucrative Broadway series, with the rest from philanthropy.
Ewers has raised tens of millions of dollar for programs, endowment, and renovations since taking over in 2007. But the lack of a stronger fund-raising arm left the Kimmel Center vulnerable when the pandemic hit, and even well before the shutdown it was having trouble raising the kinds of funds required to thrive.
A fund-raising effort begun in 2015 to land north of $100 million in naming opportunities for renovations at both the Kimmel and Merriam Theater, as well as maintenance and programs, has — at least so far — failed to bring in any major naming deals.
An initial plan to fund renovations at the Merriam, acquired by the Kimmel from the University of the Arts in 2016, was abandoned in 2019 after a proposal to erect a residential tower over the theater failed to attract a willing developer.
Ewers expects fund-raising to be more effective under the new unified structure.
“When you think about our audiences, individuals, corporations, foundations, and government, it’s confusing now. But having one vision and one idea will be a lot easier for folks to rally around,” she said.
A potentially major fund-raising opportunity is right around the corner. The naming rights for Verizon Hall, the orchestra’s home, are set to expire in 2023.
In addition to the Merriam renovations, the Kimmel and orchestra face a long list of capital needs with a combined price tag well into the tens of millions. A substantial project to weather-seal the Academy of Music has begun. A master plan to renovate the lobby of the Kimmel has rolled out in phases. Tarnopolsky would like to have more control over the visitor experience, perhaps by renovating spaces for donors, visitors, and artists.
“We’re going to need to recalibrate priorities around how we spend money fixing up the Academy, the Kimmel Center, and the other venues,” he said.
New cafe, fate of jobs
One coming improvement is in the design phase and preparing for construction. The prominent space now taken up with a ticket booth along the Spruce Street side of the Kimmel is set to be replaced with a more public-friendly glass-walled cafe, opening early in the 2021-22 season that starts this fall.
It was unclear whether any jobs would be lost. While some cost savings are expected, Tarnopolsky said that being able to seize certain opportunities was the primary reason behind the change.
“I hope that people will start seeing the fruits of greater collaboration between the different genres and the different companies that appear on all the stages of the Kimmel Center,” he said. “I hope they will start seeing music happening on a regular basis in Commonwealth Plaza.”
The basic offerings on the Kimmel’s stages — the Philadelphia Orchestra in Verizon Hall, Broadway at the Academy, chamber music in the Perelman — are not expected to change.
The idea of a merger between the orchestra and Kimmel has been floated several times since the performing arts center at Broad and Spruce Streets opened two decades ago. This version of an alliance began with talks starting about eight months ago.
When finalized, the new corporate structure would maintain the current two separate boards and create a parent company with a new board made of seven representatives each from the Kimmel and orchestra boards. It would be co-chaired by the chairs of each group, currently Ralph W. Muller for the orchestra and Michael D. Zisman from the Kimmel.
The deal is subject to obtaining all necessary regulatory approvals, the groups said. The new entity would be called “The Philadelphia Orchestra and Kimmel Center, Inc.”
The deal is subject to review by the Pennsylvania attorney general, a spokesperson for that agency said, adding that the office “looks forward to reviewing the terms and financial aspects of the arrangement involving the historic Philadelphia Orchestra and one of the country’s most important cultural venues, Kimmel Center.”
As for Tarnopolsky’s new role as leader of the parent company, the Buenos Aires-born, London-raised manager has deep experience as both impresario and orchestra executive. Before taking over the orchestra in 2018, he had been artistic and executive director of Cal Performances at the University of California, Berkeley, a major arts presenter with multiple venues.
The Kimmel and orchestra have collaborated on many projects in the past, such as concerts and renovation projects, but the new structure is seen as a way to make them happen more easily and frequently.
“We need to do a better job, and that requires big moves,” Tarnopolsky said. “Collaboration is the only way forward.”