The Financial Strengths of the Utah Symphony

Topics: Opera, Performing arts, Music Pages: 8 (3107 words) Published: June 22, 2012
Financial and Leadership Strengths and Weaknesses of the Utah Symphony The financial strengths of the Utah Symphony will now be addressed. One financial strength of the Symphony is the amount of endowments it receives. There are two groups, I and II, which receive endowments. The Utah symphony is in group II and that group gets an average of $8.8 Million per year (Delong & Ager, 2005, p. 4). Another major strength would be the amount of revenue brought in by performances. The 2000-2001 season saw revenue at over $3 million and the projected amount for the next season is over $4 million. The total amount between contribution, endowments, and revenue is over $12 million for the 2000-2001 season and is projected to be over $13 million for the next (Delong & Ager, 2005, p. 15). The financial weaknesses for the Symphony are almost as much as the strengths however. The major weakness in this organization is the salaries and benefits for the musicians. Because they are under contract, the musicians have a set salary with periodic increases. The expense for this is over $10 million (Delong & Ager, 2005, p. 15). This ends up being a huge expense and leaves very little in the way of profit. Another item that adds to the financial weakness is the fact that ticket prices are projected to only increase by 1% while expenses are expected to increase by at least 2.5% (Delong & Ager, 2005). With expenses increasing by a greater rate than income, this will have a detrimental effect on the symphony organization’s financial outlook. Now the leadership strengths and weaknesses will be addressed. The strength is having Keith Lockhart as the music director. He is known as a top rate conductor and also cares deeply what happens to the Symphony. His leadership is shown in the fact that after being hired in 1998, by 2001 the Symphony had a year-round schedule with over 200 performances. (Delong & Ager, 2005, p. 4) Also, the fact that Mr. Parker and Mr. Peterson did not want to do anything to compromise the relationship with Mr. Lockhart and that if he said no the merger would not go through shows how valued he was to the organization. As far as leadership weaknesses go, one potential weakness is the fact that Scott Parker was moving to New York and Chase Peterson would be taking over as chair of the Symphony. This happened in the middle of merger negotiations and so the new chair would have to be brought up to speed. The opinion of the new chair might also differ from the old one. This was not made clear in the case study, but could be a potential issue. The big weakness in this case was the fact that the CEO of the Symphony up and quit and so there was no well-defined leader. That created an argument for the merger, however. The fact that Ann Ewers would take over as CEO of the entire organization alleviated the need to find another CEO. How Ann will Deal with Finance and Leadership Weakness of Symphony The first area to be addressed is the financial weakness of the Symphony. The first thing Ann should do is to re-negotiate the salary of the musicians. She should find out from people involved in the last negotiation to find out what the problems were and then address them in the new negotiation. She will have to try and influence them to accept a lower wage, at least temporarily. She can use the ingratiation approach and tell them how important they are to the success of the Symphony, but some changes have to be made. From there, rational persuasion can be used. She should show them the financial graph from the previous year and the forecast for the next season. By seeing the financial situation of the Symphony, this will hopefully show them that the changes in pay must be implemented. She should point out that if these changes are not implemented that the viability of continuing could be in jeopardy. This would create a mutuality of interest. By agreeing to a pay cut, more performances could continue and their...
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