Utah Symphony Strengths
The most impressive financial strength that USO has is their endowment. By the end of 2002, their endowment was considered higher than average and they were considered at the top end of a Group II Symphony when compared to other symphonies nationally. The Utah Symphony endowment was $10 million. Another financial strength was the projected growth in contributions and revenues. Their performance revenues, contributions, investment income, guild income and other income is all projected to increase. The total contributions received by the end of 2001 were $12,398,548 while the projected contributions for 2002 is $13,763,674. This is a difference of $1,365,126. This is a good indication of their financial future. They also received $3,124,999 in Government grants in 2001.
The USO had a strong Music Director in Maurice Abravanel. His strong leadership skills took the USO to a renowned world-class organization that toured internationally. He secured recording contracts with many different recording labels. His leadership also secured the orchestra employees full-time professional status. They continue to have strong leadership strength in Keith Lockhart as he has led them in prominent concerts such as the 2002 Winter Olympic Games. They also perform over 200 concerts per year, which generates a significant amount of income. Keith also has directed over 600 concerts and created 50 television programs. This will help in marketing the USO.
Utah Symphony Weaknesses
One financial weakness for the USO is that there is approximately $100,000 bad-debt expenses which was due to pledges that weren’t actually paid. Also, the expenses of running the organization is projected to increase by $1,479,391 within the next year (2002). The majority of this ($1,404,159) is going to orchestra salaries, benefits and payroll taxes.
A leadership and financial weakness is the administrations inability to negotiate with union. An increase of 12.9% for the musicians from 2002 to 2003 could cause serious risk to the overall financial health of the symphony. Additionally, due to the union contract, the Symphony is under obligation to pay musicians salaries despite whether there are good or bad ticket sales.
A leadership weakness for the USO is that they currently lack a President and CEO. This could negatively impact the merger as the symphony’s key concerns, or their vision, may not be voiced or heard successfully during the implementation of the merger. Additionally, Keith Lockhart seems a little resistant to change and would prefer to use the current organizational model.
Key Steps for Utah Symphony
Anne Ewers will need to address the issues that pertain to the USO to ensure a successful merger. The most difficult issue will be the union contract. She should become intimately familiar with the current contract. It may even be wise to interview union representatives who are familiar with the previous “negotiations” so she can become familiar with the “lessons learned”. To address any of the issues, she will need to gain their trust. This could possibly be developed by interviewing several of the key players of the Symphony to ensure their concerns and opinions are heard and valued. This will also help with transparency when the merger takes place. Unfortunately, she may also need to consider a continuity plan in case the musicians go on strike. This would involve the potential of hiring temporary musicians.
Obviously Anne will need to analyze the budget and expense reports to see where she can cut expenses or increase profits. She needs to look into how the...