The Philharmonic Test-Drives New Ideas for Funding : Music: The orchestra is seeking fresh sources of revenue to reduce its million-dollar debt.

What a deal: Test-drive a brand-new Mercedes and get two tickets to the Los Angeles Philharmonic, absolutely free.

This offer is not yet available at a Mercedes-Benz dealership near you--and maybe never will be. But that promotional gimmick represents just one among many unorthodox ideas being bandied about administrative offices of the Philharmonic these days, as the orchestra prepares to launch a war against the recession.

Like other symphony orchestras across the country, the Los Angeles Philharmonic has begun a process of downsizing its budget and aggressively pursuing new sources of revenue to maintain a strong financial base in trying times--as well as to help erase the orchestra’s $1.15-million deficit.

The Philharmonic carries a deficit for the first time in several years. Usually financially healthy, it has ended up in the red only three times in the last 13 years. While facing the same fund-raising difficulties as other arts organizations last season, the Philharmonic furthered its deficit by undertaking two ambitious projects: an expensive European tour and starting up the Hollywood Bowl Orchestra.

A three-year union contract protects the 106 musicians from salary cuts and wage freezes, and Ernest Fleischmann, Philharmonic executive vice president and managing director, insists that the Philharmonic’s programming will not suffer in an effort to save money. But cuts in the administrative budget and salaries paid for high-priced guest artists are in the offing--as well as a stronger push to establish promotional tie-ins with the corporate world.

As of June 30--the end of the orchestra’s 1991 fiscal year--the Philharmonic laid off four administrative staffers, and a wage and hiring freeze among administrative employees went into effect. The Philharmonic’s board of directors has requested that the 1991-92 operating budget be cut by 3%--shaving just under $1 million off its $33 million annual budget.

“We’re looking at everything, and the implications,” said Fleischmann. “We’re still very much in the middle of it.

“Philosophically, I am hopeful that we will survive this,” Fleischmann continued. “In former times, when there was a recession, or there was trouble, somehow people have turned to the arts not only to provide solace and inspiration, but to use the arts as a banner under which to rally.”

The Philharmonic’s ticket sales have remained strong during the 1990-91 season, even increasing slightly since the previous year--it sold 252,865 tickets in 1990-91 versus 243,656 in 1989-90. The biggest problem, report officials at the Philharmonic and other orchestras around the nation, is not attendance, but private and corporate fund raising.

And orchestras can no longer depend on government support to see them through. Fleischmann said that 10 years ago, the L.A. Philharmonic received at least 5% of its budget from government sources; in 1991, the figure is 3%.

Fleischmann believes not only the recession but also a tarnished image of the arts following a year of conflicts over content with the National Endowment for the Arts have left corporations even more skittish and unwilling to donate funds.

“Although the so-called pornography controversy of the NEA hasn’t been directly concerned with symphony orchestras, the whole arts community has been hurt by the issue; the issues have been raised in such a perverted way,” he said. “The psychological effect of that cannot help but have an effect on the corporate and private sector.”

Though less panicky than other musical organizations around the nation, the Los Angeles Philharmonic needs more than a budget cut to solve its financial problems. Sources close to the Philharmonic say it is $1.15 million in the red; a Philharmonic spokeswoman said the orchestra could not provide an exact figure because analysis of last year’s budget is “still in process.”

Part of the deficit includes a just-under $400,000 debt resulting from the orchestra’s otherwise successful six-city European tour in the spring, which took place in the wake of the Gulf War. Most foreign tours cost more than they take in. But nervousness about a potential Middle Eastern conflict and possible cancellation of the spring tour left the Philharmonic without corporate backing for any of its nine concerts except in Berlin, where Mercedes-Benz acted as sponsor.

Canceling the tour would not necessarily have shrunk the bill, Fleischmann noted; the Philharmonic would have been liable for damages if it failed to honor contract agreements with European presenters.

The Philharmonic also expects to run up a $500,000 deficit when it heads to the Salzburg Festival in Austria next August. Although the tab is steep, Fleischmann acknowledged that an invitation to Salzburg, one of the most prestigious summer music festivals in Europe, is an offer one can’t refuse. The L.A. Philharmonic will be the first U.S. orchestra to be in residence for both opera and symphony concerts at the festival.

A smaller deficit, which Fleischmann describes as a “planned deficit,” has been caused by the start-up of the new Hollywood Bowl Orchestra, which made its debut at the Bowl on July 2. Fleischmann said those start-up costs were about $250,000, which the Philharmonic expected would take three years to recoup.

But, Fleischmann added, the Philharmonic now predicts that bill will be paid off much sooner, due to the success of the Hollywood Bowl Orchestra’s first recording, “Hollywood Dreams,” an album that ranks No. 4 on Billboard’s Adult Alternative/Classical crossover chart. By the end of 1992, Fleischmann said, that deficit will stand at “less than half” of the expected $250,000.

Fleischmann also predicted that the Hollywood Bowl Orchestra will make money on its December tour of Japan. While cautioning that the glut of American artists visiting Japan is making the country less a land of gold for touring orchestras recently, Fleischmann noted that the glamorous phrase Hollywood Bowl still affords a certain cachet in Japan.

“The Bowl--that goes back to the old movie days; it’s a well-known concept over there, and lots of visitors from Japan head for the Bowl,” Fleischmann said. “I won’t say it’s as famous as Disneyland, but it’s up there. It has a kind of mythical quality.”

Fleischmann added that public interest in the Philharmonic’s music director-designate, 33-year-old Esa-Pekka Salonen, has fueled ticket sales recently.

But Fleischmann and orchestra spokespersons say the L.A. Philharmonic still needs to watch the budget--and will test several new budget-cutting measures in the coming year.

Fleischmann said the Philharmonic, like other orchestras, has begun to wonder whether high-priced, big-name guest artists are really worth the cost. “What is already happening, nationally and internationally, is that many of the presenters, producers of concerts and opera, are resisting the enormous fee demands that are being made by so-called superstar artists,” Fleischmann said. “We don’t always have to present Signore A or Madame B, who gets $30,000 or $50,000 a night, but can have Miss C and Mr. D, who get $3,000 or $5,000 a night, and still have quality performances--and sometimes rather more interesting and exciting performances.”

Where name value may mean less when it comes to guest stars in upcoming years, however, it is likely to mean much more when it comes to wooing corporate sponsors, Fleischmann said.

While he pointed out that corporations have always been drawn to the affluent “demographics” of the Philharmonic audience, he added that sponsoring corporations will no longer settle for a discreet mention somewhere in the back of the program. They want their name out there, front and center.

And Fleischmann does not object. “The sniping that goes on both from certain types of artists and the media about corporate sponsorship of the arts is rather misplaced,” he said. “I have always felt that we have to give value for money.”

Do not expect to see “Buy Bud Lite” emblazoned on the back of the cellos--but do be prepared to see an occasional Mercedes parked on the plaza at the Music Center, said Philharmonic special projects coordinator Corinne Schulman. Schulman said the Philharmonic plans to hold another private concert for Mercedes dealers and their clients, this one in November, 1992--and will make sure the product gets prominent display at winter concerts for the general public sponsored by Mercedes-Benz. The Philharmonic hopes all this will make the auto maker more kindly disposed to funding the Philharmonic’s visit to Salzburg.

And, yes, they are talking about free tickets for people to test-drive a Mercedes. “We encourage that type of thing when we enter into agreements with corporations,” Schulman said.

L.A. Philharmonic violinist Barry Socher said that, in the past, musicians have volunteered their services for promotional stunts--such as offering exemplary volunteers a gourmet dinner cooked by an orchestra member, or a nature hike featuring a Philharmonic member as the guide to the joys of the forest.

Socher hopes, however, that the drive for aggressive fund raising does not cause a repeat performance like the one where Philharmonic members were guests of the Ojai Festival one year. There, over-enthusiastic festival promoters promised sponsors they could have dinner dates and other social meetings with the musicians--but forgot to ask the musicians. Many of those plans were hastily canceled. “A lot of people are willing to do that kind of thing--but it’s usually pre-arranged ,” Socher said pleasantly.

As evidence of the Philharmonic’s intention to protect its programming from the recession, spokeswoman Norma Flynn said that, within the next few years, the Philharmonic plans to announce several new commissions planned to receive premiere performances in the 1993-94 season, the orchestra’s 75th anniversary. The list includes a “major orchestral work” to be composed by Gerald Levinson in cooperation with the Koussevitzky Music Foundation and the Pew Charitable Trust.

And Fleischmann said he has no plans to adopt programs that feature classical music’s greatest hits in order to improve ticket sales. “I think once you start playing around with quality, you risk alienating your audience more than any other way,” he said.

Fleischmann also asserts there will be no major cuts in community service and educational programs for the public, despite the fact that none of those things provide any immediate revenue.

“You’ve got to look at the longer-term view here,” he said. “Obviously, with the neglect of the arts in our general education for the last 30 or 40 years in this country, if the arts institutions are going to have any audiences to play to, they’re going to have to do a lot of the educating of those audiences themselves.”

Contributing to this story was Times Staff Writer Allan Parachini.