Jim Tobin wrote concerning high fees/salaries for conductors:

>(1) is it rational behavior on the part of arts organizations to
>spend so much beyond their means?

I suppose it depends on the amount of subsidies the organization expects to
receive.  Eventually, if "costs" are greater than receipts plus subsidies,
the organization will collapse.  I say "eventually", because you can stay
afloat for many years as long as you cover your fixed costs.  Once fixed
costs can not be covered, it's shutdown time.

>That is, if you have subsidies (private donations are subsidies just
>as much as government grants) are you dealing with the market or
>something else?

Subsidies/donations/grants are not part of a "pure" market, but pure
markets are unfortunately a rarity.  Actually, there is a "subsidy" market;
supply is based on the available monies held by government, business, and
private individuals/institutions intent on transferring these funds to
preferred sources.  Demand is made up of those organizations which search
for subsidies.  This market, in itself, can be a fierce one with numerous
outfits vying for limited dollars.

Of course, organizations want "name" conductors for prestige purposes
and to increase their audience.  In professional sports, we tend to think
that the "name" athletes paid many millions of dollars per year are a drag
on the economic viabilty of the organization and an abomination to boot.
However, many of these athletes bring to the organization more money than
the amount of their large salaries.  This can happen with conductors as
well.  As I've said before, the world of classical music is as much subject
to economic considerations as any other field.  That's why I have great
admiration for small businesses; with little exception, nobody's going to
give a small business any donations or grants, and Government will not bail
them out either.  They are on their own, and success is a true achievement.

Overall, I favor musical organizations taking some risks based on market
research and an inner drive to be distinctive and provide audiences with
exciting musical seasons.  But, there isn't much of this going on, and
playing it "safe" ultimately results in downfall.

Don Satz
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