Orchestra leadership in flux, financial picture gloomy

As it faces its most serious financial threats in years, the Philadelphia Orchestra yesterday began a leadership transition that will bring, in quick succession, change to the executive office, board room and podium.

Rather than leaving July 31 as previously announced, president and chief executive officer James Undercofler stepped down yesterday, an orchestra spokeswoman said. No successor has been found.

To help cover the leadership gap, the orchestra is putting in place Villanova businessman Frank P. Slattery Jr. as acting executive director and CEO.

Slattery, former chairman of the board of Main Line Health Systems and, for 25 years, CEO of LFC Financial Corp. in Radnor, took over this week. He will serve pro bono.

Undercofler will be available to the orchestra through July as an adviser.

The move is aimed at bringing "stability" to a "chaotic" leadership atmosphere, said one key board member who asked that his name not be used.

Slattery, 71, is a Princeton- and University of Pennsylvania-educated lawyer by training whose father was mayor of Wilkes-Barre; his wife, Mollie D. Slattery, until recently was a Philadelphia Orchestra board member. He arrives at the orchestra as it searches for a new music director, as the board continues to try to identify a new chairman, and as the entire organization attempts to sort out a number of divisive issues.

Chairman Harold A. Sorgenti steps down in August, but a chairman-elect is expected to ease into the position earlier, perhaps as soon as this month.

In a bit of irony yesterday, the orchestra celebrated the successful conclusion of its $125 million endowment campaign - a sum that was predicted to ensure financial security - with a donor party at the Kimmel Center as Slattery began to anticipate ways to blunt the effects of a devastated economy on ticket sales and contributions.

"As months go by less seats are going to be filled in Verizon Hall," he said yesterday. "It's going to be hard for people to spend $65 per ticket [prices range from $10 to $125]. No matter what we budgeted for philanthropy, it's going to be less. I don't want to be doom and gloom, but there's a real issue."

When he runs down the list of potential revenue sources and expense cuts, Slattery said he comes up with limited options. Raising ticket prices would be "hard to do"; money from government sources is unlikely; expenses have been cut as far as possible, he said.

"We go to people who heretofore have been friendly to the orchestra and the arts and talk to them about some form of relief," he said.

Slattery said he did not know what the orchestra's deficit this year might be. But tickets sales account for only part of the mystery.

In recent years the orchestra has balanced the budget by using bequests - donations left in donors' wills - which of course cannot be predicted.

The orchestra is also counting on a grant from the state of nearly $3 million, which leaders say might not materialize.

"Near as I can tell, any city, state or federal government grant is in jeopardy," said Slattery. "Is this one in jeopardy? I have no idea."

One of his charges, he said, is developing consensus on a board riven by a number of questions. Among them:

Should the current musicians' contract - which calls for a minimum salary of $131,040 next season (this season's is $124,800) - be reopened to help cut expenses?

Should the new administrative leader be CEO, or should the board chairman? And to whom should the new music director report?

Can forays into live broadcasts of concerts to remote locations be continued and expanded, and can they eventually produce substantial income?

"The thing that this organization needs is a good long-term strategy, with a group of board and staff and musicians who want to follow that strategy," said Slattery.

On the possibility of the board's proposing give-backs in the musicians' contract, Slattery said: "I'll let the board debate that one. Once I know the facts I will certainly have a recommendation."

Undercofler, who was hired with the charge of improving relations between musicians and administration, strongly disapproved of renegotiating the current three-year contract, which was ratified in September 2007.

The question of whether the president also functions with CEO authority will surely be salient information to anyone interested in the job. Though board members and Undercofler declined to speak publicly about his departure, sources close to the matter say he and certain board members disagreed about the extent of his authority to act as CEO.

The Phillips Oppenheim search firm, which is active in high-profile cultural executive searches, has been charged with developing language for a job description.

The position will be advertised as "president and CEO," an orchestra spokeswoman said.