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“Utah Symphony and Utah Opera: a Merger Proposal”

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“Utah Symphony and Utah Opera: a Merger Proposal”
“Utah Symphony and Utah Opera: a Merger Proposal”
Financial Strengths and Weaknesses of the Utah Symphony Before the Merger
The financial state of the Utah Symphony before the merger was grim. It was understood by the symphony’s chairman of the board, Scott Parker, that the situation was getting worse. This was aggravated by the downturn of the economy and the event of 9/11. However, even before the economic downturn and 9/11, the symphony was very close to a deficit situation (Delong & Ager, 2005). Scott Parker assumed the chairmanship to try to mitigate the situation.
The average endowment or contributions for a Group II orchestra like the Utah Symphony is $8.8 million in FY 2001-2002. The endowment for the symphony is considered in the top end within its group. To be able to accumulate more than the average Group II orchestra is a financial strength. In January 2002, the total endowment for the Utah Symphony was $10 million. At the same time that the symphony is above the average orchestra within its group, it is also spending substantially.
Artistic costs constitute the major expense category of expense for the orchestra (see Table 1). The symphony does not own its facilities. The building that houses the offices and the Abravanel Hall where the symphony performs are owned by the county. Most of the symphony’s cash (+90%) is allocated to orchestra and development (fund-raising) staff salaries, benefits, and payroll taxes.
The orchestra musicians are unionized with annual salaries of $50,000 to $85,000. This is considered “too high given the size and status of the symphony” (Delong & Ager, 2005). Having a higher salary is advantageous in attracting quality musicians but this also becomes a financial weakness. Since the orchestra musicians are covered by a collective bargaining agreement, wages cannot be adjusted. Their salaries are set in collective bargaining agreements signed by both labor and management representatives. Per collective agreement the



References: Armstrong, M. (2009). A handbook of human resource management practice. London, UK. Kogan Page. Bennis, W Czerniawska, F. (2005). From bottlenecks to blackberries: How the relationship between organizations and individual is changing. Managing consultancies organization. 2, p. 8-16. Delong, T DiMaggio, P. J. and Muchtar, T. (2004). Arts participation as cultural capital in the United States, Poetics 32, p. 169-94. Flanagan, R Kanter, R. (1999). The enduring skills of change leaders. Leader to leader. 2, p. 1-19. McClatchey, J.D Schuler, R., and Jackson, S. (2001). HR issues and activities in mergers and acquisitions. European management journal. 19.3, p. 239-253. Singer, M Sloan, A.P. (1990). My years with General Motors. New York, NY. Doubleday.

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