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The Sydney Symphony A presentation by Rachel Hadfield Director of Finance.

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Presentation on theme: "The Sydney Symphony A presentation by Rachel Hadfield Director of Finance."— Presentation transcript:

1 The Sydney Symphony A presentation by Rachel Hadfield Director of Finance

2 Job Overview

3 Director of Finance Job Overview Financial Management –Business Analysis –Financial Reporting (internal and external) –Budget Preparation Risk Management –Development of Company Calendar –Board Secretariat –Board Governance –Internal Audit –Records Management –Risk Identification and Accountability –Legal Liaison

4 Director of Finance Job Overview (cont.) People –Pay, Employee Records –Human Resources Recruitment Induction Training Performance Management Systems –Enterprise Bargaining –Consultative Committee Liaison IT –Systems Development –Network Integrity –Admin Staff Skills –Productivity Improvements Office Management –Maintain Productive Office Environment

5 Business Services Team Director of Finance Management Accountant Business Analyst (PT) Business Services Assistant IT Manager HR Manager

6 Sydney Symphony Context

7 SSO established as part of the ABC, only 24 players Start of annual concert seasons State and Local Government agree to establish an orchestra in Sydney Eugene Goossens appointed first Chief Conductor "Sydney must have an Opera House" - Goossens chooses Bennelong Point Sir Charles Mackerras appointed first Australian Chief Conductor Mary Vallentine appointed Managing Director Stuart Challender appointed Chief Conductor Edo do Waart appointed as Chief Conductor and Artistic Director Federal Government increased player numbers (104) and salaries SSO corporatised with Federal Government support $2.5M 'Creative Nation' funding provided to SSO Nugent report requests orchestras to build up reserves Administration Staff reduced by 20% Libby Christie appointed Managing Director Gianluigi Gelmetti starts as Chief Conductor and Artistic Director 1932 1936 1946 1947 1948 1982 1986 1987 1993 1994 1995 1997 1999 2002 2003 2004 Evolution

8 Australia's Flagship Orchestra Sydney Symphony is Australia's flagship orchestra: –Largest audience reach –Longest history –Largest government funding –Largest subscriber base –Largest revenue –Largest administration team –Home town is Australia's largest city –Home venue is Australia's premier venue – Sydney Opera House The Sydney Symphony concert experience can be perceived as elitist. Marketing efforts, outreach programs and free events are attempting to break down this perception

9 Australia's Flagship Orchestra (cont.) Government Funding v RevenueShare of Voice Paid v Unpaid Audience Reach Equity v Liabilities

10 2003 Financial Results

11 2003 Financial Overview Net Surplus of $593k Net concert result exceeded budget by $566k (and 2002 by $843k) despite various obstacles throughout the year (eg Agerich cancellation) Significant savings in operating expenditure particularly in marketing Corporate sponsorship target not met Orchestra costs were under budget due to the number of vacancies Admin Expenses variance due to impact of Fixed Asset Review

12 Noteworthy Results - Income Ticket Sales –+17% growth in ticket sales on 2002 –Increased reliance on the single ticket market, which represented 52% of sales in 2003 (46% in 2002) Development –+14% growth on 2002 –+$615k in corporate sponsorships Commercial Work –Incredible success achieved with net contribution of $689k, +11% of budget Funding –+ 1.871%, relates to a loss in real terms of $194,331 Interest –Increased interest income in line with the cash surplus generated in the year and interest rate rises

13 Noteworthy Results - Costs Marketing –+3% increase in efficiency with $4.39 in single ticket income generated for each dollar of performance marketing spent Orchestral Salaries –+14.8% increase for all musicians –Savings resulted however from the number of vacancies Fixed Asset Review –Long overdue audit completed of Company assets with $441k impact on Administration expenses for the year

14 2003 Reversed A Decreasing Trend In Profitability Profit ($m) Revenue ($m) Expenses ($m)

15 Increasing Orchestral Salaries…. Operating Loss (excluding government funding) ($m) Employees ($m) Artists ($m) Revenue (excluding government funding) ($m) Expenses ($m) Admin ($m) Increasing orchestral salaries Depreciation ($m) Once off depreciation expense

16 Have Been Matched By Increased Ticket Sales And Commercial Revenue Operating Loss (i.e. excluding government funding) ($m) Ticket Sales ($m) Sponsors/Donations Revenue (excluding government funding) ($m) Expenses ($m) Other 2003 growth driven by increased ticket sales Mostly an increase in orchestral hire revenue

17 Business Analysis Metrics

18 “The Dashboard”

19 Cost per Full Orchestral Call Musicians work in 2-hour time slots – a call Depending on their position in the orchestra a musician has a max call count of between 260 and 300 calls per annum Management have little ability to work the musicians beyond this (exception being commercial work) Some instruments will never reach their call ceiling The strings however reach their call ceiling and thus represent the key limiting factor Therefore a full orchestral call represents a full string count of 16 1 st violins, 14 2 nd violins, 12 violas, 10 cellos and 8 double basses A program that requires instrumentation of 8:7:6:5:4 represents 0.5 of an orchestral call Understanding the contribution per orchestral call of a program is crucial in determining the profitability of various audience segments

20 Series Analysis

21 What’s Next?

22 'Sydney Sound' Create a distinctive 'Sydney Sound' that is internationally recognised and respected 1 Wider Audience Feels 'Sense Of Occasion' Create a sense of occasion that resonates with wider audiences and is delivered through innovative packaging and production 2 Broad Relationships Develop broader relationships to separate funding from ticket sales 3 Engaged People Attract, develop and engage all of our people to deliver success 4 Whilst making sure we remain financially secure and meet our educational and artistic obligations to the government Four Emerging Themes for Strategy 2004 - 2007

23 Create A Distinctive 'Sydney Sound' That Is Internationally Recognised And Respected 'Sydney Sound' Distinctive Internationally Recognised Internationally Respected World class performance venue Centre of world class music festival Australian guest artists and conductors world class Regarded as one of top 3 world orchestras International reputation for excellence and innovation Ambassador for Australia through sell-out international tours (sponsored) Distinctive Australian sound and repertoire Sydney Symphony an 'Australian icon' Promoter of young Australian musical talent

24 Wider Audience Feels 'Sense Of Occasion' Innovative use of electronic media to reach wider audience Younger average age of subscribers & audience International exposure through tours, recording and multimedia Range of affordable tickets Expanded schools involvement Range of venues across NSW, Australia and international Accessible To Wider Audience Wide Range Of Products Full-time education program with Sinfonia Vibrant contemporary music program and chamber series Quality and innovation of repertoire with good balance of core, commercial and popular Distinctive Well-recognised 'signature' events Buying SSO ticket a cherished event Every performance a major experience for the audience High client ticket demand and increasing subscriber numbers 'Orchestral musician' highly desirable career in Australia Classical music as popular art form for the masses GG as well known as Nicole Kidman in Australia 'Part of the city's fabric' Emotional Attachment Create A Sense Of Occasion That Resonates With Wider Audiences

25 Develop Broader Relationships To Separate Funding From Ticket Sales Broad Relationships Enhance Existing Relationships Develop New Relationships Maintain Government Support ƒ Protect orchestras' economic security through regulations Develop endowment fund Establish donations from non-audience members Bequests from Australian and international philanthropists Reduce reliance on government funding Separate funding by use eg education, guest artists, touring Education program becomes a major source of funding Enhance corporate funding pool through innovative partnerships Increase regular funding from audience members and current donors Robust 'In Memoriam' program

26 Attract, Develop And Engage All Of Our People To Deliver Success Engaged People Culture Of Excellence, Innovation And Cooperation Recognise Demands And Provide Support Provide Feedback And Development Recognition of achievement and effort Opportunities for professional development of musicians and admin staff Peer support for development needs Flexibility of working environment Working together towards common goal Recognition and appreciation of differing roles

27 Whilst Remaining Financially Secure And Meeting Our Educational And Artistic Obligations To The Government Financial Security Reserves = 20% Opex Government support maintained Sydney Symphony benefits from significant relationships Sydney Symphony continues to offer imaginative and new opportunities for supporters Competitive employment conditions for musicians and admin staff Educational Obligations Education programme must be retained Artistic Obligations Retain Opera House as main venue No change to 'programme led recovery' strategy No change in numbers of players Maintain existing subscriber base Continue to attract world class conductors and soloists Maintain regional touring Key Questions: Is Marketing Success sustainable? -Existing growth has depended on pushing staff and supplier limits -Existing advertising costs are low due to successful bargaining, however, this could fluctuate widely with economic factors Is there future growth in Commercial Events? - Key success factor is ability to be able to roster them

28 Questions


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