Chapter 9 Case
Case 9-4: Cost Volume Profit (CVP) Analysis and Strategy: The ALLTEL Pavilion
The ALLTEL Pavilion in Raleigh, North Carolina is an outdoor amphitheater that provides live concerts to the public from April through October each year. The seven-month season usually hosts an average of 40 concerts with 12 year-round staff planning and managing each season. SFX Entertainment Inc. operates the pavilion. SFX is the largest diversified promoter, producer, and venue operator for live entertainment events in the United States. Upon completion of pending acquisitions, it will have 71 venues either directly owned or operated under lease or exclusive booking arrangements in 29 of the top 50 U.S. markets, including 14 amphitheaters in nine of top 10 markets.
History/Development
The ALLTEL pavilion was built in 1991 by the City of Raleigh and Pace Entertainment Company of Houston, Texas. The management of the pavilion was contracted to Pace Entertainment and Cellar Door Inc. of Raleigh, NC. Hardee’s Food Systems, Inc. of Rocky Mount, NC, the original sponsor of the amphitheater, paid an annual fee to carry their name and logo on all signs and ads regarding the amphitheater. On February 3, 1999 the title sponsor for the amphitheater became ALLTEL Corp. The demand for the outdoor facility came about because the rapidly growing city of Raleigh lacked a major entertainment complex. So, in the mid to late 80s and early 90s Pace Entertainment and the City of Raleigh came to an agreement to build the facility. The City of Raleigh would own the land while Pace Entertainment would assume sole operations of the facility and Cellar Door would do the booking for all the concerts.
In 1998, SFX Entertainment Inc. acquired Pace Entertainment Inc. The amphitheater facility and its employees became part of SFX Entertainment Inc. Also, in 1999 SFX Entertainment Inc. acquired Cellar Door Inc. and merged with Clear Channel Communications Inc., the largest owner of radio stations
The ALLTEL Pavilion in Raleigh, North Carolina is an outdoor amphitheater that provides live concerts to the public from April through October each year. The seven-month season usually hosts an average of 40 concerts with 12 year-round staff planning and managing each season. SFX Entertainment Inc. operates the pavilion. SFX is the largest diversified promoter, producer, and venue operator for live entertainment events in the United States. Upon completion of pending acquisitions, it will have 71 venues either directly owned or operated under lease or exclusive booking arrangements in 29 of the top 50 U.S. markets, including 14 amphitheaters in nine of top 10 markets.
History/Development
The ALLTEL pavilion was built in 1991 by the City of Raleigh and Pace Entertainment Company of Houston, Texas. The management of the pavilion was contracted to Pace Entertainment and Cellar Door Inc. of Raleigh, NC. Hardee’s Food Systems, Inc. of Rocky Mount, NC, the original sponsor of the amphitheater, paid an annual fee to carry their name and logo on all signs and ads regarding the amphitheater. On February 3, 1999 the title sponsor for the amphitheater became ALLTEL Corp. The demand for the outdoor facility came about because the rapidly growing city of Raleigh lacked a major entertainment complex. So, in the mid to late 80s and early 90s Pace Entertainment and the City of Raleigh came to an agreement to build the facility. The City of Raleigh would own the land while Pace Entertainment would assume sole operations of the facility and Cellar Door would do the booking for all the concerts.
In 1998, SFX Entertainment Inc. acquired Pace Entertainment Inc. The amphitheater facility and its employees became part of SFX Entertainment Inc. Also, in 1999 SFX Entertainment Inc. acquired Cellar Door Inc. and merged with Clear Channel Communications Inc., the largest owner of radio stations