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Just Don’t Call It A Merger

Last week, the John F. Kennedy Center for the Performing Arts and the Washington National Opera (WNO) announced that both organizations have adopted a similar relationship that the National Symphony Orchestra (NSO) shares with the Kennedy Center. Officially, it is called an affiliation as the WNO retains their independent 501(c)3 status, but in a more practical sense the deal is a straightforward acquisition…

So when viewed from that perspective, it means the organization is now part of the Kaiser family. What this shouldn’t be called is a merger, a term I’ve seen tossed around here and there over the past week when referring to this deal. In a merger, two separate 501(c)3 organizations will combine into a single entity with a single board.

In the Kennedy Center/WNO deal, the latter organization will retain its board and 501(c)3 status but for all practical purposes the vision, artistic planning, and everything else that goes into defining the organization’s soul will fall under the auspices of the Kennedy Center. Yes, all of that material has to be approved by the WNO board but if you look at the Kennedy Center/NSO relationship as a guide, the hand on the rudder becomes clear.

This certainly isn’t implying that the affiliation and subsequent common law governance is a bad thing; quite the contrary, the deal has substantial promise and given Kaiser’s successful history it will be interesting to see how the relationship unfolds. To that end, some of the stickier points are related to what happens to existing WNO staff and musicians.

In the musicians’ case, they have maintained separate collective bargaining agreements between the WNO and Kennedy Center for quite some time. In the new arrangement, it wouldn’t be surprising to see those streamlined into a single master agreement but there will be the need to figure out the transition details as well as potential cross pollination issues between musicians that move back and forth between full time positions in the NSO and WNO; pensions, benefits, seniority, etc..

As for the WNO staff and executive managers, it will undoubtedly be more cut and dry, although that doesn’t mean there isn’t the potential for “tough decisions” which is just code for job cuts. In this unique situation the Kennedy Center will likely conduct an evaluation of current job descriptions and then determine staffing needs. Add to that number crunching related to converting benefit plans, compensation packages, etc. and it turns into a real bureaucratic thrasher.

And let’s be clear, everyone involved should embrace the bureaucracy. The last thing anyone wants is some sort of second class citizen employment structure where people do the same job but receive different compensation and benefits packages just because that is a less time consuming solution to implement.

Ultimately, what we’re talking about here is process and it would be fascinating to see a comprehensive report on this process in a year or so. I know I’d read it.

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